New Elk Coal Production Has Commenced

AUSTRALIA - Mark Gray, Chairman And Managing Director, Allegiance Coal Limited reported that coal production commenced in the Blue Seam at the New Elk Mine, in Colorado. Commencement was delayed by three weeks against the Company’s target start date due to delays in obtaining approvals to mine operational plans from Mine Safety and Health Administration, a US Federal Government department tasked with regulating the safety of mining operations in the US (MSHA). The delay was due primarily to the impact of COVID on MSHA with the closure its office in Colorado coupled with key staff away on leave. There were no material issues in relation to any of the Mine’s operational plans.

The delay did however mean that the Mine could commence production in the knowledge that its first coal sales had been agreed, which they were not prior.

The forward sale of four Blue Seam cargoes solved a potential timing problem that the Company was facing with the planned closure of the Black Warrior River for one month from 23 June to 24 July 2021, during which the Company was planning to move both Blue Seam coal by rail, and Pratt Seam coal by barge (on the Black Warrior River), to Convent Marine Terminal for blending and sale. The Blue Seam sales allowed the Company to delay the Blue Pratt Seam blending strategy to align with the accelerated commencement of the second production unit in the Blue Seam, presently planned for early August 2021.