Cloud Peak Energy Inc. (NYSE:CLD), one of the largest U.S. coal producers, and the Crow Tribe of Indians today announced that the U.S. Department of Interior, through the Bureau of Indian Affairs (“BIA”) Rocky Mountain Regional Director Ed Parisian, has approved the Option to Lease Agreement and Exploration Agreement signed by the Crow Tribe of Indians and Big Metal Coal Co. LLC, a wholly-owned subsidiary of Cloud Peak Energy Inc. Cloud Peak Energy paid the Tribe $1.5 million upon BIA approval, as provided in the agreements, and will fund $75,000 in college and vocational scholarships annually beginning with the 2013-2014 academic year.
Cloud Peak Energy and the Crow Tribe signed the agreements on January 24, 2013, and the Tribe submitted them to the BIA for the required approval shortly thereafter. The terms provide for exclusive options to lease and develop up to an estimated 1.4 billion tons of in-place Northern Powder River Basin coal on the Crow Indian Reservation in southeast Montana, near Cloud Peak Energy’s Spring Creek mine and Youngs Creek Mining Company, LLC and CX Ranch properties. Cloud Peak Energy has now paid a total of $3.75 million in option payments to the Tribe and will make additional annual payments during the initial five-year option period that could bring total option payments during the initial period to $10 million. Upon any future exercise and required regulatory approval of a lease or leases, and development of mining, Big Metal Coal Co. LLC will provide preferential hiring, training, and promotion to qualified Indians and will make bonus, production tax and royalty payments to the Tribe.
“We are pleased to receive the Bureau of Indian Affairs’ approvals for our agreements with the Crow Tribe,” said Colin Marshall, Cloud Peak Energy’s President and CEO. “We have already begun preliminary work in support of exploration, including the opening of a project office at Crow Agency and engagement with Tribal landowners. I am pleased that the $75,000 in annual scholarships and option payments will bring immediate benefits to members of the Tribe at the start of what will be a long term partnership as we seek to develop the Crow Tribe’s natural resources.”
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