Mergers and Acquisitions

John T. Boyd Company mining consultants have participated in most of the major U.S. coal mining company transactions occurring over the last decade, serving as technical advisors (consultants) to buyers, sellers, and merger participants. Our ongoing projects give us a unique insider's knowledge of the mining industry and probable mineral property values.

Seller services begin with assistance in formulating a proactive strategic sales program.

Seller Services

• Data room organization and oversight
• Coordination of field due diligence by prospective bidders
• Technical support
• Assistance during negotiation, etc.

Buyer Services

• Competitor analysis
• Synergy with current holdings
• Bid consultation
• Phased stages of due diligence and valuation

Where agreed upon by the participating bidders, BOYD mining consultants can work for multiple parties, although we prefer to work closely with one party during final bidding.

Consolidation of the mining industry continues to occur in the US and internationally in response to competition and to service a worldwide customer base.

With deregulation, many coal producers are also pursuing vertical expansion into user or consumption industries such as electric power development, transmission, and generation via partnering and/or direct investment.

These forms of expansion offer new opportunities to compete via:

• Larger economies of scale (size)
• Competitive (cost) advantages through multiple and/or alternative sourcing options
• Improved customer service and reliability

Mine Mergers and Acquisition Services

• Initial Desktop Assessment (to identify benefits and comparative values)
• Mining Reserve Base Estimation
• Mining Operation Analysis and Benchmarking
• Valuation - Mining Reserves, Plant and Mining Equipment, Coal Supply Contracts, Discounted Cash Flow Analysis, etc.
• Management Review
• Technical Consultants and Teaming with Legal and Financial Advisors

Example Projects Include:

• Conducted a coal reserve audit as part of an independent valuation of two major US coal producers engaged in a merger transaction. Evaluated reserves on all existing properties and prepared reserve tabulations and mapping.



• Retained as the consultant for the Beacon Group's acquisition of MAPCO Coal, Inc. Our assignment included reviewing:
  
  
  • Coal reserve base and quality.
  • Preparation and material handling facilities.
  • Existing surface and underground operations.
  • Ten-year mining and business plans.
  • Mine closure cost estimates.
    
    Identified deficiencies in the existing operations and provided recommendations to enhance efficiency and performance.
  
  
  
• Retained by a financial client to independent review the internal studies prepared by Alpha Natural Resources LLC and First Reserve regarding the acquisition and consolidation of the coal mining operations of AMCI, Coastal Coal, and Pittston – Virginia. Our due diligence review included:
  
  
  • Coal reserve base estimates
  • Mine plans (on an individual mine-by-mine basis)
  • Forecast of coal sales
  • Five-year financial plans
    
    Based on our assessment, we modified available estimates and projections and provided our independent views and opinions.
  
  
  
• Assisted in the evaluation of a potential acquisition of a 5 million-ton-per-year mining company with operations in southern West Virginia and eastern Kentucky. Conceptual mine plans developed for undeveloped reserve holdings considered reserve and seam conditions, longwall and continuous miner technology, and siting of preparation plant and coal handling facilities. Production costs were projected for four complexes over a 10-year period. Long-term viability of contract miner coal price structure was also reviewed.

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