Natural Resource Partners made the announcement yesterday that the partnership had received a force majeure notice from Pinnacle Mining Company. This notice allows Pinnacle to forego payment of the minimum royalties due under the lease terms until the mine is again in production.
As previously reported, the mine was idled in early September following a ventilation disruption most likely caused by a lightning strike. PinnOak Resources had employed Polish technology from the Central Mines Rescue Station in Bytom to put out the mine fire with the Polish GAG jet engine used from October 1 through to October 19 and operated by Polish technicians on a 24/7 schedule. The purchase and operation of the equipment was handled by US-based international mining services company, MICON.
"Based on all of the information we have been provided we believe the disruption caused by the lightning is over. However, even though Pinnacle management is working diligently with government officials and the UMWA to safely reopen the mine, it is uncertain at this point when they will be allowed to do so," said CEO Nick Carter.
Pinnacle had previously revised it fourth quarter earnings outlook.
"If Pinnacle does not sell any coal from the mine in the fourth quarter it would result in a loss of approximately US$1.6 million in coal royalty revenue. Pinnacle is working diligently with both federal and state agencies, as well as its employees' union, to get the mine safely back in production as soon as possible."
Due to Pinnacle, NRP slightly revised its guidance for 2003, anticipating net income will be between US$36 and US$38 million.
