FirstEnergy Corp. (NYSE:FE) May Get Less for Peak Mine

Analysis from FBR Capital says FirstEnergy Corp. (NYSE:FE) could lose some of the value of their Peak Mine when they decide to sell it, and that the sale may be accelerated because of it being placed on pattern of violation (POV) status

FBR said, "The Signal Peak mine has been placed on potential pattern of violation (POV) status. If this status is not remedied, FirstEnergy may be required to shut down this mine and take a write down. To be removed from POV status, a mine must undergo an inspection without any Significant and Substantial (S&S) violations, which sets a high bar considering the wide definition of this term. Alternatively,
FirstEnergy could sell the mine since a change in ownership would be grounds for removing it from POV status. Recall that a sale of Signal Peak is already contemplated as part of FirstEnergy’s plan to divest non-core assets. Given this new development, momentum for a sale is likely to accelerate but could pressure the consideration received. In its third quarter call, FirstEnergy indicated that the mine could be sold in the first quarter of 2011 or “not too much beyond that,”
depending on the ramp up in production levels. Since the POV letter was just issued, we have not had an opportunity to speak with FirstEnergy on this development (the caveat in our interpretation)."

FirstEnergy closed at $35.95 on Monday, falling $0.30, or 0.83 percent.