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American Resources creates new cash flow stream by leasing non-core Deane Mining complex to Bluegrass Resources

American Resources Corporation (NASDAQ:AREC) said it has struck a multi-year lease for its Deane Mining complex to a high-quality, local, third-party operator, Bluegrass Resources. Under the terms of the lease, American Resources will receive an upfront cash payment of $100,000 a month for the first two months followed by a $20,000 monthly minimum until production. Once in production, American Resources will receive the higher of $5 per ton or 5% of gross sales generated from the Deane Mining complex. The lease is for a five-year period with renewable options from there on, noted the company. In a statement, American Resources CEO Mark Jensen said: “As one of the largest owners of mining infrastructure in our region, we are happy to have entered into this lease and partnership with a very reputable local operator. Our Deane Mining complex is a top-tier asset and idled complex, but does not happen to be in our current operational plan, nor in our next phase of growth plans over the next five years.” He added: “Given the current strength in the worldwide carbon markets, this lease allows us to continue to capitalize on the current environment by monetizing our noncore assets, help keep the community working and bring additional value to our shareholders. We have known the owners of Bluegrass Resources, for a number of years and have confidence in their ability to execute and create value for our shareholders and theirs.” READ: American Resources secures exclusive worldwide rights for new provisional patent to produce battery-grade lithium, cobalt and nickel American Resources’ Deane Mining complex, in Letcher County, Kentucky, contains a state-of-the-art, 800 ton per hour carbon processing facility, logistics infrastructure, and access to abundant onsite and nearby mining capabilities. The company, which supplies raw materials to the rapidly growing global infrastructure market, acquired the Deane Mining complex in December 2015 from Rhino Resources Partners LP and operated it until 2019. Jason McCoy, Manager of Bluegrass Resources noted that the company has owned and operated “numerous complexes over the years.” “Based on our extensive planning and due diligence, the Deane Mining complex is one of the top-tier. The American Resources team has kept this complex in pristine condition and coal ready, which enables us to move quickly in getting the complex back up-and-running and to create jobs within the region,” added McCoy. “The Bluegrass Resources team are excited to hit the ground running at this complex and take advantage of this structure and market environment for both our shareholders and American Resources shareholders.” American Resources is focused on the extraction and processing of metallurgical carbon, a key ingredient in steelmaking, rare earth minerals for the electrification market, and reprocessed metal to be recycled. The firm has a portfolio of operations in the Central Appalachian basin of eastern Kentucky and southern West Virginia where premium quality metallurgical carbon and rare earth mineral deposits are concentrated. Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive