Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, June 29, 2011 /PRNewswire/ - Xinergy Ltd., (TSX:XRG and XRG.WT) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, is pleased to announce that its Board of Directors has authorized the Company to spend up to $17.6 million to purchase its securities in the open market pursuant to a normal course issuer bid. The Toronto Stock Exchange (the "TSX") has today accepted the Company's notice of intention to make a normal course issuer bid for its common shares ("Common Shares") and listed warrants ("Warrants") through the facilities of the TSX. The maximum aggregate value of the repurchase program reflects an amount equal to the net cash proceeds from the sale of the Elk Horn Interests. In light of the Company's strong balance sheet, anticipated growth trajectory and a current share price that the Company believes is significantly undervalued, the authorization reflects the Board's belief that the repurchase of Company's Common Shares and Warrants is a superior use of firm capital.
Xinergy intends to repurchase up to 3,297,572 Common Shares (being 10% of the public float of Common Shares) and up to 945,713 Warrants (being 10% of the public float of Warrants) over a 12 month period. The average daily trading volume for the six calendar months started December 1, 2010 to May 31, 2011 was 336,628 common shares and 45,509 warrants. The period of the normal course issuer bid will commence on July 4, 2011 and will terminate on July 3, 2012. Purchases under the bid will be made through the facilities of the TSX at the prevailing market price. All Common Shares and Warrants purchased under this bid will be cancelled. As at June 29, 2011, Xinergy had 57,514,832 Common Shares outstanding (including the 14,467,541 non-voting common shares held by Jon Nix) and 9,457,136 Warrants outstanding. The public float for such securities is 32,975,725 Common Shares and 9,457,136 Warrants.
Commenting on the repurchase program, Jon Nix, Xinergy's Chairman and CEO, stated, "Given our relatively low cost of capital, ongoing confidence in our business model and our expectation for a step-change in our production profile over the coming quarters, we believe our current stock price presents the Company with a compelling investment opportunity."
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky and West Virginia. Currently, Xinergy sells high quality coal to electric utilities and industrial companies throughout the south-eastern United States. For more information, please visit www.xinergycorp.com.
Forward-Looking Information
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Xinergy's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
SOURCE Xinergy Ltd.
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