Ambre Energy, an Australian mining startup, has reached an A$60 million ($62.9 million) agreement with U.S. miner Cloud Peak Energy (NYSE: CLD), under the terms of which Ambre will gain complete control of the Montana Decker Coal Mine.
Cloud Peak sued Ambre over the summer, alleging that the latter planned to go against previous agreements to wind down operations since the mine was losing money by expanding the mine. According to Cloud Peak, it was set to be shut down within a year as it had run out of viable resources.
Cloud Peak claimed that Ambre did not provide detailed information on how it hoped to expand the mine.
Should the mine offer a payoff before March 31 of the coming year, Ambre was to pay $57m in cash to Cloud Peak.
From The Australian:
"Alternatively, Ambre will issue a promissory note to Cloud Peak for $64m payable at a later date," the statement said.
Ambre would also be responsible for replacing $70.7m of Cloud Peak Energy's outstanding reclamation and lease bonds for the mine.
U.S. federal mining data shows that the Decker mine saw production drop from 7 million tons in 2006 to 3 million tons last year. Also last year, the coal mine not only reported a net loss of $21.1 million but also predicted losses of $11.9 million for the current year.
In June, Ambre had planned to try to go public on the Australian Securities Exchange and raise A$200 million ($209 million), but the company decided to put it off until a later date.
Most recently in October, Ambre received permission from the Australian Securities and Investments Commission to delay the company’s annual general meeting, citing ongoing negotiations with a third party in regard to raising funds for working capital.