NewLead Holdings, the name behind the recognized international shipping fleet of dry bulk carriers used to move primarily iron ore, coal, and other dry bulk commodities, as well as double-hulled product tankers used for transporting oil, reported inking of a 1.48M metric ton steam coal supply and delivery agreement today, valued at roughly $148M in revenue over the life of the contract.
This contract is bread and butter for NEWL and will kick off in March with the initial 130k metric ton delivery, to be followed by subsequent deliveries of 150k metric tons each month from April till the close of the year (10% variation on tonnage). Given market price for steam coal at the time of the deal's signing and mounting demand from emerging markets, the contract represents one of what are likely to be many more such lucrative shipping deals for NEWL.
The company plans to use in-house vessels or charter new ones from the market to accommodate this large deal and NEWL has put together a shrewd strategy for growing overall market share in the sector, while digging their feet in further here. The idea of reinforcing the revenue model's foundation with ample supply inputs makes perfect sense and the resulting profitability metrics for the overall business should make investors beam, as NEWL is working on building a self-contained profit loop here.
In conjunction with this announcement, the company is also reporting an extension agreement for the previously announced acquisitions (Jan 17) on properties representing some 161.7M estimated tons of coal reserves, which will help feed this and future shipping/supply contracts. NEWL has entered an agreement to extend the timeframe for obtaining title and mineral excavation rights on the 5k acres in Kentucky, as well as ownership and leasehold interests for the 18,335 acres in Tennessee, to March 5th of this year, in order to provide time to fully finance the planned work at the mines.
Chairman, President and CEO of NWL, Michael Zolotas, spoke of the milestone integration of the company's commodity and transport segments this announcement represents and assured shareholders that locking down both a sizeable, profitable supply contract and the means to furnish the supply itself, again at a handsome profit, would translate directly into bottom line returns they can feel. Zolotas was keen to note the creditworthiness of the buyer and tempted investors to take a closer look at the vertically integrated commodities/shipping model NEWL has assembled, underscoring the revenue generation potential and rock-solid future of the relevant sectors, while strongly suggesting this configuration represents a significant edge over competitors.
For more information on NewLead Holdings, visit NewLeadHoldings.com
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