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Paringa Resources Limited (ASX:PNL) is in the energy sector. It is into the business of development and exploration of mineral resource properties in the United States. The company has an interest In the Buck Creek Mine Complex situated in Illinois coal basin.
On 31 January 2019, the company announced that it has signed a sales agreement with Big Rivers Electric Corporation (BREC). The agreement states that Paringa will sell up to 1,400,000 tons of coal from 2019 to 2023 from its Poplar Grove Mine. The sales agreement with BREC takes Paringaâs total 5-year contracted sales position to 6,800,000 tons, including existing sales agreements with LG&E and KU and OVEC-IKEC.Â
Big Rivers Electric Corporation is a wholesale electric power and services provider company, providing its service to three distribution cooperative members across twenty-two counties.
The Poplar Grove Mine has direct barge access to the Green and Ohio River systems. This access provides the company with a significant transportation cost advantage over many other coal operations in the region since BREC has its two plants R.D. Green and D.B. Wilson which is located very close to Paringa on the Green River.
As per the coal sales agreement, Paringa has a contract to deliver a minimum of 1,280,000 tons and a maximum of 1,400,000 tons of 11,250 btu/lb product from its Poplar Grove Mine, with a minimum of 220,000 tons and a maximum of 250,000 tons in the year 2020. The contract to deliver however is over a 5-year span at annual fixed pricing and on a mutually agreeable delivery schedule. The pricing terms are in line with Paringaâs existing sales contract with LG&E and KU.
The Chief Executive Officer of the company, Mr. Egan Antill, the company is delighted to enter into a coal sales agreement with a high quality, locally owned organization such as Big Rivers Electric Corporation. This will complement the existing coal sales agreements of the company with LG&E and KU and OVEC-IKEC. The company has expanded its contract positions with three high-quality customers to 6.7 million tons, which provides clear revenue visibility for a significant portion of their production over the next five years to a diversified customer base. The coal sales contracts of the future are focused on delivery from 2020 onwards.
Now let us quickly have a glance at the Paringa Resources Limitedâs stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $0.170 and increased with a market capitalization of $77.9 million. The stock opened at $0.170 with its day low at the same price; however, the dayâs high price touched $0.180. The stock has generated negative returns of 24.44%, 15.0% and 10.53% over the last six months, three months and one-month period respectively. It has a 52-week high price of $0.393 and a 52-week low of $0.150, with an average volume of 200,724 approximately.
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