It's worth noting that these are bonded with collateral, meaning the gross liability is $247, but net it is likely smaller than that. Further, these are usually structured as payment streams so the actual impact to Contura is probably limited.
Would you be willing to elaborate?
The hard collateral seems to be fairly limited (Some ranch real estate, presumably worth 30M). There also seem to be some 220M in third party-bank issued sureties. However, will these sureties pay-out because Blackjewel is now bankrupt, or does the performance obligation still lie with Contura as the holder of the Permits in your opinion? (Press coverage seems to imply the latter, as they say Contura is still 'on the hook'. In which case, I assume, the surety bonds only pay out when Contura can't)
Wrt the payment stream characteristic: I assume you mean that the discounted value of the liability is smaller because it will be paid out over a couple of years? This would reduce the potential to give capital back to shareholders by ~ 225-240M in 3-4 years, with presumably the majority of that front loaded, so discounted at 10% perhaps 180-200M hit to current value?
From that perspective, It seems fair that the company lost ~20% since late June (other miners ~ 5%). The 15% difference implies market cap loss of ~150M. With stated liabilities as described above, that is still a little less than what the present value of the blackjewel liability comes down to.
However, if they manage to operate the mine break-even, they could push those liabilities out, and thereby earn 10-20% on cash payments that are deferred.
So to conclude, the market does not seem to overreact, and if anything, a mine closing scenario that would lead to pay-out in the next 3-4 years does not yet seem to be fully priced in (versus price levels of late June - Not saying those represent fundamental value or anything).
Thanks in advance
Edit: yes Contura will likely pay for it - unless a new operator comes in. Based on wording, it does not look like they are thinking of operating the mines themselves.
"As Blackjewel's bankruptcy process unfolds, we continue to believe that the best scenario for all stakeholders would be for Blackjewel, or an alternate third-party operator, to secure appropriate financing to run these mines and maintain the employment of the operating team for the foreseeable future," said Andy Eidson, interim co-chief executive officer. "As such, we will continue to work proactively with Blackjewel's new leadership, the State of Wyoming, and other involved parties to help move this process toward a positive outcome."
"Irrespective of arriving at a preferred solution that allows for the continued operation of the Belle Ayr and Eagle Butte mines, Contura fully intends to honor our obligations as permit holder for these mines,"
https://www.prnewswire.com/news-releases/contura-provides-update-on-ceo-search-300887360.html
