Background on James River Coal $JRCC

• James River sells ~29% metallurgical coal and ~71%  thermal coal.
• In 2011, JRCC acquired of International Resource Partners for $516 million, which had reserves of 61 million tons of metallurgical coal and 75 million tons of thermal coal, greatly increasing exposure to metallurgical coal.
• JRCC issued several debt instruments to fund acquisition. The Company issued $230 million of 3.125% convertible senior notes due 2018, $275 million in senior notes due 2019 and entered into an agreement to increase its revolver to $100 million (previously $65 million).
• JRCC is one of the highest cost producers, with an average cash cost per ton of $78 in 2012, making it particularly sensitive to declining coal prices.
• High cost at JRCC comes from the geology, which means that there is a limit to improvements that could be achieved through bankruptcy.