Settlement Agreement Reached In Deer Run Suit

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Parties in a lawsuit that has been pending for four years reached an 11th hour settlement agreement on Friday, Oct. 19, that could pave the way for Deer Run Mine in Hillsboro to reopen.

According to a company press release, Natural Resource Partners (NRP) will receive a payment of $25 million from Foresight Energy, parent company of Deer Run Mine.  Additionally, the lease will be extended through the end of 2033 and amended to provide $11 million of non-recoupable annual minimum payments to NRP.

"We are pleased to have reached a mutually beneficial resolution in these lawsuits," Robert D. Moore, president and CEO of Foresight Energy said in the release.  "These agreements provide us with long-term control of our coal reserves and operational flexibility at Hillsboro Energy's Deer Run Mine.  We look forward to continuing our relationship with NRP in the future."

The minimum payments in lieu of royalty had been at the heart of the lawsuit filed in November 2015 in Montgomery County Circuit Court. Foresight leases the coal rights from NRP for royalty payments, or in the event no coal is being mined, minimum payments in lieu of royalty.  When the mine was idled in March 2015 by an underground combustion event, Foresight claimed the fire was an act of God, terminating the lease.

NRP disagreed, and filed a lawsuit in November 2015.  

NRP claimed on their 2017 year-end SEC filing that Foresight had owed $76 million since the mine was idled.  The minimum payments under the terms of the lease that was in effect then were $7.5 million a quarter–$30 million annually.

According to Montgomery County Circuit Court records, the settlement agreement was reached on Friday, Oct. 19.  An anticipated three-week bench trial was scheduled to begin the following week, on Monday, Oct. 22.

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