The Fayette Tribune, Oak Hill, W.Va.

Local News

May 6, 2013

Coal company buys over 10,000 acres

SEWELL MOUNTAIN — A coal company has acquired over 10,000 acres of coal seams on the Meadow River in Fayette, Nicholas, and Greenbrier counties, as well as the former site of Songer Whitewater Rafting on U.S. 19 in Fayette County.

Xinergy Corp., the publicly-traded company that purchased the property, is so far tight-lipped about its plans to develop what it is calling the Sewell Mountain project.

The property acquisition includes:

— 425 acres of surface and mineral property on the waters of Glade Creek and Little Glade Creek in Fayette County

— 10,899 acres of mineral property on the Meadow River in Fayette, Nicholas, and Greenbrier counties, commonly known as the Foulke Meadow River Lands

— 104 acres of surface and mineral rights in Fayette County known by locals as the former site of Songer

The company purchased the Sewell Mountain property from Heartwood Forestland Fund IV in October 2012 through a subsidiary, Whitewater Resources.

The company says the purchase will enable it to expand its high-quality mid-volatility metallurgical Sewell Seam coal reserves “in a highly advantageous region and situation.”

“Contained within the surface acquisition is the base infrastructure for the construction and long-term operation of a deep mine, preparation plant, and refuse facility. Planning and permitting commenced directly with production anticipated in 2015,” states Xinergy’s April report to investors.

The 10,899-acre parcel was sold expressly for deep mining purposes only.

A press release from the company last November said the Sewell project was on an 18-24 month development schedule.

“We would expect to be in a position within the next quarter or two to more openly discuss the project’s attributes,” said Xinergy Corp. CEO Matthew Goldfarb in a conference call on March 22.

“Until then, we will affirm our expectation that...we have a tremendous degree of confidence that Sewell Mountain will be value-creative whether we choose to ultimately develop the project or monetize it pre-development.”

The Songer site was purchased from Miller Ridge Properties for $1,109,756 on April 10.

An executive at Xinergy says its employees who travel quite a lot are staying at cabins on the property.

In a conference call to investors, a company executive referred to the property as “the second piece to the Sewell Mountain puzzle.”

Goldfarb anticipated the total acquisition costs for the entire Sewell Mountain project to be in the range of $10-12 million, perhaps spread over a couple of years. Approximately $5 million of that has been spent to date on acquiring property, signaling that more may be purchased in the future.

The company expects to complete a full technical report on the Sewell Mountain project this year.

How and whether the property will be developed is still a question, likely settled only after the company acquires its full land package.

“I think the way to look at (Sewell Mountain) is we had an opportunity to go and acquire something...at, we think, pennies on the dollar to its intrinsic value going forward,” Goldfarb told investors.

“I don’t think we need to determine now whether this is an asset that we put together and sell or something we develop ourselves and grow into over time. I think we have the luxury, given how small the capital is up front, to make that decision later.”

Company president Bernie Mason called the minability of the coal “fantastic.” And with two railroads and a navigable river, he said the marketability has “a tremendous amount of upside” for the company.

In close proximity to the Sewell Mountain project, the company also owns approximately 35,000 acres of coal reserves in northern Greenbrier County, where it has operated the 852-acre Blue Knob surface mine since April 2012, employing 35 people.

It is known as the South Fork site and, once in full production, Xinergy expects it to be its “crown jewel” asset.

It is the company’s only active mine. Two other facilities — True Energy in Wise County, Va., and Raven Crest Mining in Boone County — have been idled.

Late last year, the company began site preparation and construction of a coal prep plant and railroad coal loading facility at South Fork that will tie into CSX New River Coal District.

It is expected to be operational in July, permitting the company to increase to its optimum production levels on Blue Knob.

Last summer, Fayette and Greenbrier county officials became concerned that a coal company’s plans to haul coal by rail could interfere with the development of the Meadow River Rail Trail. This was based on an inquiry from a company employee to a Department of Transportation official working on the project.

At that time, an executive at Xinergy told The Register-Herald that he had no knowledge of the company pursuing any mining permits in Fayette County.

The state decided to move forward with the rail trail project despite the uncertainty.

Xinergy Corp. is based in Knoxville, Tenn., and produces metallurgical and thermal coal with reserves, operations, and properties in Virginia and West Virginia. It was formed in 2007 as a subsidiary of Ontario-based Xinergy Ltd., and produces metallurgical and thermal coal with reserves, operations, and properties in Virginia and West Virginia.

Xinergy of West Virginia, its subsidiary, owns several companies in the state — South Fork Coal Company, Sewell Mountain Coal Company, Whitewater Contracting, Whitewater Resources, and Kentucky-based Shenandoah Energy.

The Mine Safety and Health Administration (MSHA) cited Xinergy 33 times in 2012 for health or safety violations.

The company’s website, xinergycorp.com, contains descriptions and maps of each of the company’s current operations, as well as investor information.

— E-mail: cmoore@register-herald.com

1
Text Only
Local News
  • ee 1.jpg Energy Express makes impact on students’ lives

    Energy Express to him, Matt White says, is all about a “different experience.”

    July 24, 2014 2 Photos

  • maurices Fostering Self-Esteem

    The local Maurices is involved in a project aimed at making the school transition a little easier this fall for foster children in the area.

    July 21, 2014 1 Photo

  • Children’s Health and Safety Fair scheduled for August 1

    Montgomery General Hospital and Dr. Traci Acklin have announced that the 2014 Children’s Health and Safety Fair will be held on Friday, Aug. 1 from 10 a.m. to 2 p.m. at the hospital.

    July 21, 2014

  • Theater to hold auditions

    Open auditions are set for Tuesday and Thursday at the Historic Fayette Theater for the comedy/drama “Belongings”. Auditions will be held at the theater in Fayetteville at 7 p.m. each evening.

    July 21, 2014

  • asb carver 25 years and counting

    July 18, 2014 1 Photo

  • Taylor Made Free concert series

    The next free public concert in the Lively Family Amphitheater Summer Concert Series is a performance Saturday at 6 p.m. by popular band Taylor Made.

    July 17, 2014 1 Photo

  • Energy Express open house set

    Energy Express, an award-winning summer reading program serving 35+ children in Fayette County, will host a free open house for members of the Beards Fork SALS community. The event takes place on Thursday, July 24, at 10 a.m. to 12 p.m.

    July 17, 2014

  • rhody1.jpg Stages of life

    July 14, 2014 3 Photos

  • thurmond depot.jpg Explore town’s rail heritage

    Discover what life was like in one of the New River Gorge’s most renowned towns as you join National Park Service rangers and Operation Lifesaver on Saturday, July 19 from 10 a.m. to 2 p.m. to explore the historic railroad town of Thurmond.

    July 14, 2014 1 Photo

  • apt bldg1.jpg Demolition and disposal

    July 10, 2014 3 Photos