Massey Energy Co. announced late Tuesday that the company had agreed to buy Cumberland Resources Corp. in a deal worth $960 million in cash and stock. Today shares of the company jumped around 7% in early trading.

Massey share price has reached to a 17 month high levels today. Shares of Massey were trading at $53.06 as of 3:24 p.m. in New York Stock Exchange after going to the level of $54.05 earlier in the day.

Massey Energy, the sixth biggest coal producer of U.S., said after the market closed on Tuesday that the company is going to acquire Cumberland Resources Corp., a coal producer in Appalachia, and its affiliated companies. The company would pay around $960 million in total. Massey Energy will pay $640 million in cash and $320 million in common stock.

Massey Energy has taken this move to expand its coal holdings in southwestern Virginia and eastern Kentucky. The acquisition of Cumberland will also allow Massey to eye on metallurgical coal, which is a higher priced commodity. The company is planning to become the largest producer of metallurgical coal by 2012. Massey currently plans to get around 20 million tons of metallurgical quality coal by 2012 and this acquisition of Cumberland would help the company to achieve this goal.

On the other hand, Massey Energy said the company will continue to look for further acquisition opportunities after Cumberland Resources Corp.