PIRAEUS, GREECE, April 15, 2013 /PRNewswire/ -- NewLead Holdings Ltd. (NASDAQ: NEWL) ("NewLead") today announced that the Company has renegotiated previously announced agreements to acquire title and coal excavation rights in 5,000 acres of land in Kentucky containing 18.6 million tons of estimated coal reserves and ownership and leasehold interests in 18,335 acres of land in Tennessee containing 143.1 million tons of estimated coal, natural gas and other natural resource reserves. The agreements have also been modified to permit NewLead to extract coal and collect royalties.
Under the amended agreements, NewLead is not required to now fund the $66 million aggregate acquisition price of the two properties. Instead, NewLead must pay $850,000 per month through May 2013, which payments will be credited against the $66 million aggregate acquisition price. At that time, the remainder of approximately $40 million of the initial aggregate acquisition price will become payable in nine monthly installments, with a payment of approximately $23 million due a year after the last installment is due. NewLead is currently seeking financing for the $66 million aggregate acquisition price. While NewLead has signed a preliminary term sheet with a lending party to enable it to fund this transaction, no assurance can be provided that this or any other party will be able to provide the financing required in the timeline required, or at all.
NewLead is also pleased to announce that it has hired coal mining executives to lead its efforts in managing NewLead's commitment in the development of mineral interests in the United States. These executives shall be responsible for managing the daily operations of the coal mines and the excavation of coal from the properties.
Michael Zolotas, Chairman and Chief Executive Officer of NewLead, stated, "We continue to develop our commodity arm by hiring experienced professionals to help exploit this opportunity. In addition, by amending the agreements to allow NewLead to extract minerals from the coal mines, we are in a position to leverage these assets and commence supplying coal to our growing customer base. As previously announced, we have signed coal supply agreements expected to generate $873.5 million of revenue over a three year period."The estimated reserves stated above are as determined by independent appraisals. The methodology used by the independent appraisers was not compliant with the methodology required by the Securities and Exchange Commission ("SEC") in reserve reports and, accordingly, should not be relied upon. Such reserve information is only provided to give the best currently available information. NewLead is undertaking to obtain reserve reports that comply with SEC methodology. Such reports may differ materially from the information provided herein.
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