American Resources Corporation (NASDAQ:AREC) subsidiary American Carbon struck a deal to sell certain assets of American Carbon Corporation associated with the Deane Mining Complex for a total enterprise value of about $20.6 million.
The sale will further position American Carbon as a low-cost, streamlined, and pure-play growth platform in the metallurgical carbon industry, CEO Mark Jensen told shareholders in a statement.
Additionally, the sale aligns with the AREC board’s plan of action to unlock shareholder value with the sale of non-core, company assets.
“We are excited to get this letter of intent executed, which includes the commitment to closing the transaction along with the receipt of an initial upfront deposit,” CEO Jensen said in a statement.
The CEO highlighted several other initiatives from its strategic committee as part of its plan, including the spin-off of ReElement Technologies LLC into a stand-alone public company, a spin-off of American Carbon Corporation, to name a few.
“We continue to progress on each one of these action items, which we believe that each and collectively can represent a substantial increase in value of American Resources Corporation (NASDAQ:AREC),” Jensen added.
The consideration includes an upfront cash payment of $1 million, already supported by a $200,000 deposit, followed by ongoing quarterly cash payments amounting to $500,000, reaching a total cash consideration of $11.5 million.
Additionally, the buyer will assume and replace approximately $9.1 million in environmental reclamation bonds associated with the permits.
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