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Natural Resource Partners L.P. Acquires First Significant Aggregate Reserves

01/03/2007

  • NRP acquires 70 million tons of high quality aggregate reserves
  • NRP expects 2007 cash flows from this acquisition to exceed $6 million
  • Creates additional platform for growth

HOUSTON, Jan. 3 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P. (NYSE: NRP) and (NYSE: NSP), announced today that it has acquired an estimated 70 million tons of high quality aggregate reserves from The Quadrant Corporation for cash consideration of $31.0 million, $23.5 million of which was paid at closing, and an assumed utility local improvement obligation of approximately $3.0 million. Of the 70 million tons, approximately 25 million tons included in the first closing are permitted and are currently being mined. NRP has agreed to pay Quadrant an additional $7.5 million when the remaining reserves are permitted, which is expected to occur in 2008. If the remaining reserves are not permitted in the next 10 years, ownership of the non-permitted reserves will revert back to Quadrant. The reserves are projected to generate 2007 cash flows from royalties in excess of $6 million to NRP based on estimated production of over 5 million tons per year. The transaction was funded through cash and NRP's credit facility.

The aggregates are located in DuPont, Washington approximately 18 miles southwest of Tacoma. The DuPont mine, which is operated by Glacier Northwest, a subsidiary of the Japanese conglomerate Taiheiyo Cement Corporation, is the largest source of aggregates serving the Greater Seattle-Tacoma market and one of the largest sand and gravel operations in the United States. Glacier has been mining the property since 1988 and will continue to lease the reserves from NRP. The aggregate lease is structured similar to NRP's leases on coal reserves.

"This acquisition is the first step in meeting our goal of moving into the aggregate space and developing another platform from which NRP can grow royalty revenues," said Nick Carter, President and Chief Operating Officer. "With the launch into the aggregate space we now have three growth platforms for NRP: coal royalties, coal handling and transportation, and now aggregates. The aggregates industry is very localized and fragmented, which will allow NRP the opportunity to become a consolidator in this industry."

Natural Resource Partners L.P. is headquartered in Houston, TX, with its operation's headquarters in Huntington, WV. NRP is a master limited partnership that is principally engaged in the business of owning and managing coal properties in the three major coal producing regions of the United States: Appalachia, the Illinois Basin and the Powder River Basin. The common units are traded on the New York Stock Exchange (NYSE) under the symbol NRP and the subordinated units are traded on the NYSE under the symbol NSP.

For additional information, please contact Kathy Hager at 713-751-7555 or khager@nrplp.com. Further information about NRP is available on the partnership's website at http://www.nrplp.com .

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements include the estimated reserves, revenues, as well as the accretive nature of the transaction. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward- looking statements. These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. These risks include, but are not limited to, decreases in demand for coal; changes in operating conditions and costs; production cuts by our lessees; commodity prices; unanticipated geologic problems; changes in the legislative or regulatory environment and other factors detailed in Natural Resource Partners' Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Natural Resource Partners L.P.

CONTACT:
Kathy Hager of Natural Resource Partners L.P.,
+1-713-751-7555,
or
khager@nrplp.com

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