Allegiance Coal Limited (ASX:AHQ) entered into an agreement to acquire Short Creek Mine in Birmingham, Alabama from Drummond Company, Inc. on October 21, 2021. The acquisition cost is; $4.4 million in cash to Drummond and related entities to acquire the land and assets; and $11.5 million to replace the reclamation bond with the State of Alabama that follows the land and assets. The acquisition from Drummond involves; the purchase of the land over the deposit, the fixed assets (primarily a CHPP, a barge loadout, conveyors and stackers), and all existing permits to operate; and the lease of the mineral rights to the Mary Lee, Blue Creek and Newcastle seams under the Land for up to 23 years, in consideration for the payment of royalties ranging from 7% to 10% based on a sliding scale of the FOB sales price achieved.

In conjunction with the acquisition, Allegiance Coal completed the AUD 30 million ($22.61 million) private placement. Funds raised from the Placement will be applied towards the acquisition of the Short Creek Mine operating coal mine: AUD 6 million to Drummond for the acquisition of land and assets; AUD 15.8 million to the State of Alabama to replace the reclamation bond; and AUD 8.3 million working capital. As of August 10, 2022, the transaction is expected to close within next six months.