(Sharecast News) - North American metallurgical coal miner Bens Creek announced the proposed sale of its own highwall miner on Thursday, to Civil LLC, for total cash of $3.6m.
The AIM-traded firm described Civil LLC as a State of Georgia-registered limited liability company, authorised to conduct mining business in West Virginia.
Further to its mining update on 7 November, where Bens Creek said it was reviewing options for its owned highwall miner, and had received and was considering offers, it had now agreed the proposed sale of the highwall miner with Civil LLC.
The company said it would continue to have access to two highwall miners through its highwall mining contractor, Mega Highwall Mining (MHW).
It said the first highwall miner was currently being deployed on the Bens Creek site at the new permitted area, and the second was expected to be in place in January.
The two highwall miners from MHW would be sufficient to support the firm's production plans for next year.
Bens Creek said the cash consideration would be paid by Civil LLC in monthly instalments through to July 2023.
The company said it originally purchased the highwall miner for $2.5m cash in February this year, adding that it had a book value of $2.7m on 31 March as set out in its audited accounts for the 2022 financial year.
As it previously announced separately, Bens Creek also acquired its initial fleet of mining and earth moving equipment in August, which was subsequently financed by an equipment financing facility with McGinty Road Partners, totalling $6.1m as detailed in the firm's recent interim results.
The board said that as part of the financing, McGinty took a lien over the highwall miner and, as a result, $2m of the facility would be repaid to McGinty from the proceeds of the sale of the highwall miner.
Bens Creek said the balance of the funds from the sale of the highwall miner would be used for general working capital and operational purposes.
Ownership of the highwall miner would remain with Bens Creek until the payment obligations of Civil LLC were met in full.
In addition, as part of the sale of the highwall miner, the company also sold three 777C CAT 100-ton rock trucks to Civil LLC for $0.3m, payable in cash instalments over a period of three months.
"Having negotiated successfully with MHW for the provision of a second highwall miner the need for us to own a machine has been reduced and as such a sale seemed the appropriate course of action," said chief executive officer Adam Wilson.
"We are pleased to have achieved a positive result in the disposal."
At 1343 GMT, shares in Bens Creek Group were up 5.41% at 22.4p.
Reporting by Josh White for Sharecast.com.
Bens Creek (BEN)