Cloud Peak Energy And Ambre Energy Announce Signing Of Deal for Ambre Energy's Purchase of Decker Mine Interest From Cloud Peak Energy

Cloud Peak Energy Inc.

, one of the largest U.S. coal producers and the only pure-play Powder River Basin (PRB) coal company, and Ambre Energy Limited, an Australian and U.S. thermal coal mining and export company, today announced that on August 29, 2014, their companies entered into an agreement for Ambre Energy to purchase Cloud Peak Energy's 50% interest in the Decker mine in Montana and related assets and assume all reclamation and other liabilities, giving Ambre Energy 100% ownership of the Decker mine. Upon completing the deal, Ambre Energy would fully replace Cloud Peak Energy's approximately $66.7 million in outstanding reclamation and lease bonds for the Decker mine. The closing of the transaction is currently anticipated to occur during 2014 and is subject to the satisfaction of various terms and conditions. Upon completion of the transaction, Ambre Energy will also grant Cloud Peak Energy an option for up to 7 million metric tonnes per year of its throughput capacity at the proposed Millennium Bulk Terminals coal export facility. The proposed new coal export facility at Millennium Bulk Terminals, which is owned 62% by Ambre Energy and 38% by Arch Coal, is currently in the permitting stage. It is being developed in two stages. The first stage is planned to have capacity of 25 million metric tonnes per year with the second stage taking annual capacity to 44 million tonnes. Cloud Peak Energy's options cover up to 3 million tonnes per year of Ambre's share of the first stage and 4 million tonnes per year of its share of the second stage. Cloud Peak Energy's throughput capacity will have an initial term of 10 years, with four renewal options for five-year terms. The Decker mine is located in Montana's Big Horn County, in the northwest Powder River Basin. Since operations began in the 1970s, Decker has produced approximately 300 million metric tonnes of coal. It is presently sold to the U.S. domestic market. The Decker mine is serviced by BNSF Railway and produces approximately 3 million metric tonnes of coal each year. Statements from Cloud Peak Energy CEO & Ambre Energy North America CEO Colin Marshall, Cloud Peak Energy's President and Chief Executive Officer, said, “We are pleased to have reached this agreement with Ambre Energy, which positions both our companies to meet anticipated future growth in Asian thermal coal demand. We look forward to completing the transaction in the near future and, longer term, to shipping our low sulfur Spring Creek coal to Asian markets through the Millennium Bulk Terminals facility. We wish Ambre Energy every success with the development of the terminal and with their strategy to develop the Decker mine.” Everett King, Ambre Energy North America's Chief Executive Officer, said, “This transaction is a very positive and productive outcome for both of our companies. Decker Mine has a sizeable resource and reserve base, produces some of the highest energy coal in the PRB and has the benefit of extensive infrastructure, including two rail loadouts and rail connections to existing and proposed west coast export terminals. The mine is geographically well-positioned for Asian markets via export through the Pacific Northwest. Taking full ownership of Decker Mine is another significant step for Ambre in developing coal exports through the U.S. Pacific Northwest. As well as building new port infrastructure, Ambre will now also be able to guarantee the supply of high quality U.S. coal to customers in Korea, Japan and the Asia Pacific region from its own mining operations.”