Master limited partner, Natural Resource Partners LP (NRP) has recently acquired the third of its planned seven acquisitions of coal reserves at the Deer Run mine in Illinois from Colt LLC, an affiliate of the Cline Group. The partnership paid roughly $55 million for these assets.
The Deer Run mine is located near Hillsboro in Montgomery and Bond Counties, Illinois, has the potential to produce roughly 8 to 10 million tons per year when the longwall is in full production. The estimated life of the mine is expected to exceed 20 years. Going forward, Natural Resource expects net income to exceed $40 million per year from the mine.
The coal reserves at the mine are leased to the mining company Hillsboro Energy, an affiliate of the Cline Group. Natural Resource indicated that the construction of the new longwall mine is well underway. The partnership expects the mine to start production by the end of 2010. However, commencement of longwall production is expected in early 2012.
This acquisition is a part of Natural Resource’s plans to acquire about 200 million tons of reserves. To date, Natural Resource has paid $105 million of the $255 million slated for the acquisition. The said acquisition of Deer Run mine was funded from the partnership’s credit facility.
Natural Resource expects the future acquisitions under the plan to be subject to the completion of certain milestones relating to the new mine’s construction. The partnership anticipates completing additional acquisitions worth $135 million in 2011 and $15 million in 2012.
Houston, Texas-based Natural Resource Partners L.P. is principally engaged in the business of owning and managing mineral reserve properties. The company owns coal reserves and coal handling and transportation infrastructure in the three major coal producing regions of the United States – Appalachian, the Illinois Basin and the Powder River Basin.
Over the years, the partnership has demonstrated solid expansion through its inorganic growth strategy. We believe this strategy offers visible upside potential to unit holders in the long term. Additionally, we expect Natural Resource Partners’ cash generating ability, sizeable cash position and strong balance sheet to allow the partnership to maintain its consecutive distribution increases and give it flexibility in financing its acquisitions.
Natural Resource currently has a short term Zacks #3 Rank (Hold). However, we maintain our long term Outperform rating on the stock.
The Deer Run mine is located near Hillsboro in Montgomery and Bond Counties, Illinois, has the potential to produce roughly 8 to 10 million tons per year when the longwall is in full production. The estimated life of the mine is expected to exceed 20 years. Going forward, Natural Resource expects net income to exceed $40 million per year from the mine.
The coal reserves at the mine are leased to the mining company Hillsboro Energy, an affiliate of the Cline Group. Natural Resource indicated that the construction of the new longwall mine is well underway. The partnership expects the mine to start production by the end of 2010. However, commencement of longwall production is expected in early 2012.
This acquisition is a part of Natural Resource’s plans to acquire about 200 million tons of reserves. To date, Natural Resource has paid $105 million of the $255 million slated for the acquisition. The said acquisition of Deer Run mine was funded from the partnership’s credit facility.
Natural Resource expects the future acquisitions under the plan to be subject to the completion of certain milestones relating to the new mine’s construction. The partnership anticipates completing additional acquisitions worth $135 million in 2011 and $15 million in 2012.
Houston, Texas-based Natural Resource Partners L.P. is principally engaged in the business of owning and managing mineral reserve properties. The company owns coal reserves and coal handling and transportation infrastructure in the three major coal producing regions of the United States – Appalachian, the Illinois Basin and the Powder River Basin.
Over the years, the partnership has demonstrated solid expansion through its inorganic growth strategy. We believe this strategy offers visible upside potential to unit holders in the long term. Additionally, we expect Natural Resource Partners’ cash generating ability, sizeable cash position and strong balance sheet to allow the partnership to maintain its consecutive distribution increases and give it flexibility in financing its acquisitions.
Natural Resource currently has a short term Zacks #3 Rank (Hold). However, we maintain our long term Outperform rating on the stock.
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