CASE STUDY
The Client:
A well-established surface coal mining operator running a fleet of heavy production equipment across active mining sites, the company had built a reputation over decades for reliable output, disciplined operations, and steady expansion of its reserves and production capacity. Like most surface coal producers, the business depended on a small handful of massive, purpose-built machines — draglines, rope shovels, blasthole drills, and haul trucks — representing tens of millions of dollars in irreplaceable production capacity. These assets don’t just support the operation; they are the operation, and every hour of downtime or every dollar of inefficient capital tied up in them directly affects the mine’s economics. Coming off a period of strong production, the company was ready for its next phase: paying down expensive legacy debt and freeing up capital to fund further expansion.
The Challenge:
The mining operator’s existing equipment debt carried a rate structure negotiated years earlier, no longer reflective of the company’s improved credit profile or the scale of its operations. Refinancing that debt through a conventional lender meant a slow, document-heavy process, one that would require re-underwriting a fleet of specialized surface mining assets that most traditional banks simply don’t know how to value or lend against with confidence. Complicating matters further, the company didn’t just need to refinance — it needed to extract equity from its existing, unencumbered surface fleet to generate cash for expansion, all without disrupting day-to-day production or triggering a lengthy re-appraisal and title process on assets actively cutting overburden and hauling coal around the clock. Few lenders have the mining sector expertise to accurately value equipment like rope shovels and blasthole drills, and fewer still can move quickly enough to execute a rate-lowering refinance and a cash-out equipment transaction simultaneously, without asking the client to choose one priority over the other.
Solution:
First National Capital’s mining and heavy-equipment finance team understood the fleet from the outset — draglines, hydraulic shovels, rotary blasthole drills, haul trucks, dozers, and graders aren’t generic collateral, and pricing them correctly required real familiarity with how surface coal operations run and how that equipment holds value over time. FNC structured a $56.5 million transaction that accomplished both of the client’s objectives in a single, coordinated close: refinancing the company’s existing equipment debt at a materially lower rate, and executing a cash-out facility secured by the company’s in-place, in-use surface mining fleet to generate the liquidity the client needed to fund expansion. Because First National appraises and lends directly against the specialized equipment itself rather than defaulting to conservative, one-size-fits-all collateral assumptions, the company was able to unlock capital from assets already generating revenue on-site, without pulling equipment out of production or slowing operations for an extended diligence process. The result was a single, efficient transaction that lowered the client’s cost of capital and put growth capital in hand at the same time — proving that with the right lender, a debt refinance and a cash-out facility don’t have to be two separate, drawn-out processes, they can be one well-structured deal.
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