Toronto Stock Exchange: XRG
KNOXVILLE, TN, Feb. 27, 2012 /CNW/ - Xinergy Ltd., (TSX:XRG and XRG.WT)
("Xinergy" or the "Company"), a US Central Appalachian producer of high
quality thermal and metallurgical coal, today announced that it has
reached an agreement with a major customer for the early termination of
a thermal coal supply agreement (the "Contract"). The Contract was
terminated under terms negotiated between the parties and included
payment to Xinergy from the customer for the cancellation of committed
but undelivered tonnage.
"We are pleased to inform our stakeholders that we have been able to
negotiate a payment related to the termination of this thermal coal
agreement," said Jon E. Nix, Xinergy's Chairman and CEO. "We are
taking extensive steps to exercise cost cutting measures at our thermal
operations that include decreasing our work force with intentions of
lowering production to better match current production with committed
sales. These efforts are intended to preserve our permitted reserves
that are continuing to increase and position the company for the future
as market conditions allow. The decision to idle certain portions of
our thermal coal mining operations was a difficult one in light of our
high growth trajectory and the effects these cuts have on our employees
and their families. Given the current industry landscape, we have
determined that the foregoing actions best position the Company to
maximize the value of our thermal coal operations. We believe that our
low cost operations and strong balance sheet provides us with a
competitive advantage relative to most Central Appalachian producers
and positions us well to shift our near term focus to our met coal
business while we await a normalization of market conditions for
"We are committed to optimizing our higher margin metallurgical business
and will utilize idled equipment from these thermal coal mines in our
met mines," said Bernie Mason, Xinergy's President. "Expansion of
reserves, permitted reserves and acreage base has been underway for
several months at our South Fork and True Energy met projects and we
will elaborate on those details in the coming weeks."
The Company is currently assessing the effects of these actions on
production, sales, and other operations and will provide updated
guidance along with fiscal year 2011 and fourth quarter 2011 financial
results in the next few weeks.
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly
owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal
mining in eastern Kentucky, West Virginia and Virginia. Currently,
Xinergy sells high quality thermal coal to electric utilities and
industrial companies throughout the south-eastern United States as well
as metallurgical coal. For more information, please visit www.xinergycorp.com.
SOURCE Xinergy Ltd.
For further information:
Director, Investor Relations
Michael R. Castle
Chief Financial Officer