Allegiance Coal Limited (ASX:AHQ) entered into a binding term sheet to acquire New Elk Coal Company, LLC from Cline Mining Corp. for $41 million on July 15, 2019. The terms sheet provides that the debt will be repaid by New Elk Coal Company, LLC to Cline Mining Corporation as $3 million in cash on completion of the acquisition of the shares in New Elk Coal Company, LLC; $3 million in Allegiance Coal Limited shares issued on completion; $5 million in cash to replace the Colorado State Mine reclamation bond on completion. The deal is subject to completion of due diligence by September 14, 2019, Allegiance Coal Limited raising funds to meet the cash payment part of debt reduction by June 14, 2020, raising sufficient working capital to bring the mine back to production, Allegiance Coal Limited’s shareholder approval, entering into transaction documentation with Cline Mining Corp., among others. Binding agreement has been concluded subject only to Allegiance raising the start-up capital in respect of which discussions are advanced with a broad range of equity and debt investors. The Acquisition is conditional only on Allegiance raising the Mine start-up capital which must occur prior to 15 July 2020, during which period Allegiance will continue to pay $0.150 million per month toward Mine care and maintenance. The transaction is expected to close before July 14, 2020. On September 23, 2019, Allegiance announced capital raising of $3.08 million by way of issuing 22 million shares at $0.14 per share in private placement. On January 22, 2020, Allegiance Coal Limited entered into binding agreement to acquire New Elk Coal Company, LLC from Cline Mining Corp. Allegiance Coal Limited shall pay $1 as the consideration amount. New Elk Coal Company, LLC is debt free, except for debt owing to Cline Mining Corp. totaling CAD 55 million ($71.7 million). Following the Initial Debt Repayment, there will remain in New Elk Coal approximately $30 million of debt owing to Cline (Cline Loan), which will be repaid by Cline receiving 60% of New Elk Coal’s retained earnings after New Elk Coal makes prudent provision for any preferred debt payments and obligations, and sustaining and working capital, until the Cline Loan is paid in full. As on March 2, 2020, Allegiance Coal Limited has secured a $2.5 million bridging loan from Nebari. The Loan is to bridge the working capital requirements of Allegiance through to the completion of a more substantial project debt funding package intended to contribute to the start-up capital requirement of the New Elk Mine. The Loan will be applied to Allegiance’s general working capital requirements in connection with both the Tenas metallurgical coal project pending receipt by Telkwa Coal Limited from Itochu of the $3.6M tranche 3 payment, and the New Elk Mine acquisition. As on April 9, 2020, Allegiance Coal Limited has received binding commitments for $1.98 million, before costs, pursuant to a private placement and which will be used for this acquisition. As on April 27, 2020, the transaction is expected to close on December 15, 2020 from July 15, 2020. As of May 11, 2020, the transaction is expected to close this year. As of June 5, 2020, Allegiance and Cline have agreed amendments to the New Elk Acquisition Agreement, as per the amendments, the cash payment to be made by Allegiance on completion as part of the settlement of the Cline Debt will therefore be reduced by approximately $5 million and will be funded through the release of funds presently held as security for the Reclamation Bond. As consideration for Cline waiving the $5 million cash settlement of the reclamation bonds, Allegiance must make a $6 million cash payment towards the settlement of the Cline Debt by no later than the commencement of the commercial production of coal and September 1, 2021, whichever occurs first. Allegiance will assume the remaining Cline Debt of approximately $31.6 million. If commercial production of coal does not occur by March 31, 2021, Allegiance must pay $1 million to Cline. Allegiance may, at its option, make this payment in cash, or shares in Allegiance. The $1 million (whether paid in cash or shares) will be applied towards the balance of the Cline Debt. As per the revised terms dated October 12, 2020, the terms remains the same except in two respects, in the commercial production condition has been removed and instead the Allegiance will simply issue $4 million of Debt Repayment Shares on completion. Shareholder approval has been received for the issue of $3 million Debt Repayment Shares and $1 million of Debt Repayment Shares will be issued from the Allegiance's placing authority. On completion, in addition to $1.00 in cash paid to Cline, Allegiance was to have paid $3 million in cash to Cline as part reduction of the Cline Debt. The $3 million of cash payment on completion has been waived by Cline and will be paid to Cline once the $5.2 million cash reclamation bond held by DRMS is released to New Elk Coal Company after Allegiance posts the insurance reclamation bond. The deal is secured by $2.5 million loan from Nebari. The Loan will be applied to Allegiance’s general working capital requirements in connection with both the Tenas metallurgical coal project pending receipt by Telkwa Coal Limited from Itochu of the $3.6 million tranche three payment, and the New Elk Mine acquisition. Cline has agreed to waive the condition requiring Allegiance to raise sufficient capital to complete the acquisition. The shareholders meeting of Allegiance will occur on September 21, 2020. The transaction is expected to close at the end of July 2020. Either party may terminate the agreement if the transaction has not been completed by the revised completion date. As per the announcement dated August 7, 2020, the transaction is expected to close before the end of October, 2020. As of October 12, 2020, the transaction is expected to close on October 16, 2020. As of October 19, 2020, merger did not take place on October 16, 2020, due to a delay in the public notification of the increase in the New Elk bonding requirements. Transaction is expected to close on October 26, 2020. The net proceeds received will be distributed to holders of the contingent value rights. INFOR Financial Inc. acted as financial advisor to Cline Mining Corp. and New Elk Coal Company, LLC. Byron Loeppky of Fasken Martineau DuMoulin LLP acted as legal advisor to Cline Mining Corp.