AMBRE ENERGY FILES COUNTERCLAIM AGAINST CLOUD PEAK ENERGY IN MONTANA
SALT LAKE CITY, UT — JULY 30, 2012 — Ambre Energy North America,
Inc. and one of its subsidiaries, KCP, Inc., today filed a legal
counterclaim against Cloud Peak Energy, Inc. and its subsidiary,
Western
Minerals, LLC. The counterclaim seeks to expel Western Minerals from
the Decker Coal Company partnership, which owns the Decker Mine in Montana.
KCP and Western Minerals are equal partners in the joint venture, but
the mine is managed by KCP.
“We are asking the court to oversee the disposal of Cloud Peak’s
interests in Decker,” said Everett King, president and CEO of Ambre
Energy North America. “We are concerned that Cloud Peak has a conflict
of interest resulting from its 100% ownership and control of the
adjacent Spring Creek Mine, which competes head-to-head with Decker.”
Ambre Energy also responded to earlier claims by Cloud Peak concerning
KCP’s role as manager of the mine. In its suit, Cloud Peak demands
closure of the mine after 2013, claiming that KCP and Ambre Energy are
frustrating what Cloud Peak insists was a closure plan agreed to before
Ambre acquired control of KCP last November. Ambre says there is no
agreement to close the mine.
Decker has been in operation for 40 years and continues to be a viable
mine. An independent report earlier this year estimated JORC coal
resources at Decker of 955 million short tons, which included 152
million short tons of proved and probable coal reserves. Since Ambre
acquired its interest in Decker in November 2011, its subsidiary KCP
has increased operational efficiency at the mine while meeting contractual
supply obligations, conducting all required reclamation activities and
maintaining a safe and productive workplace.
“Instead of welcoming the increased efficiencies, Cloud Peak is
complaining that Ambre is encouraging new customers to consider buying
coal from Decker,” added King. “Our approaches to potential buyers
of Decker Coal have resulted in strong expressions of buying interest
from current and past customers. We don’t understand why this is not a
good thing.”
Cloud Peak also has alleged that Ambre plans to engage in
“self-dealing transactions” designed to cut Cloud Peak out of
Decker’s future export-related profits. Ambre’s infrastructure
division is engaged in the permitting and pre-construction engineering
phases of two export infrastructure projects on the Columbia River in
the Pacific Northwest. However, any coal purchased from Decker for
export – by Ambre or any other company – would have to be purchased
at fair market value, in order to insure appropriate royalty payments
and production taxes.
Subject to the completion of the necessary export facilities – Ambre
Energy is currently developing the Morrow Pacific project and
MillenniumBulk Terminals – Ambre's international marketing division will seek to
purchase coal from western United States producers to fill existing
supply agreements with Asian buyers. This will include a proposal to
Decker for a long-term sales agreement, which will be submitted to the
joint management committee for approval. Ambre anticipates that this
offer and other opportunities to increase sales to U.S. domestic buyers
will permit the profitable operation of Decker for many years after
2013.
ABOUT AMBRE ENERGY:
Ambre Energy North America, Inc. is a subsidiary of Ambre Energy
Limited, a privately held company with predominantly Australian and
U.S.shareholders. It is headquartered in Brisbane, Australia with U.S.
headquarters in Salt Lake City, Utah.
Ambre Energy is developing new port infrastructure in the U.S. to
facilitate an emerging coal export and trading business, as well as
operating and co-owning U.S. thermal coal mines.
As an environmentally responsible energy company, Ambre also aims to
use its technological expertise to develop new, sustainable uses for
lowgrade and waste coals and to set new environmental standards for the
export of coal.
BACKGROUND:
The Joint Ore Reserves Committee (JORC) Code is a code of practice,
which sets minimum standards for public reporting in Australia and New
Zealand of exploration results, mineral resources and ore reserves. It
provides a mandatory system for classification of tonnage/grade
estimates according to geological confidence and technical/economic
considerations in reports prepared for the purposes of informing
investors, potential investors and their advisors.
A coal “resource” is a concentration of coal of intrinsic economic
interest for which there are reasonable prospects for eventual economic
extraction. Coal “reserves” are resources for which the level of
geological confidence and other information are such as to demonstrate
that the resource can be economically mined.
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