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Atlantic Coal (LSE:AIM), the AIM listed anthracite coal production and processing company with primary activities in Pennsylvania, USA, has announced its results for the six months ended 30 June 2013.
Overview:
· Increased profitability. A net profit of US$2,488,465 compared with a loss in H1 2012 of US$1,366,923
· Bolstered anthracite portfolio through the exercise of a lease option over the Pott and Bannon project which is estimated by the directors to hold extensive reserves and benefits from its close proximity to the Company’s Stockton project
· Independent audit confirmed a 29% increase in clean coal reserves achieved at Stockton to 1.77 Mt, further detail of which is contained in our announcement dated 11 June 2013
· Cost savings achieved at Stockton through a new blasting programme
· 37.4% increase in clean coal production compared with H1 2012 (H1 2012 – 59,642 tons, H2 2013 – 81,965 tons) but with production scaled back in Q2 2013 in response to depressed prices and reductions in demand from industry
Post-period end:
· Stockton mine currently working double shift in order to increase production to cater for anticipated increase in demand for the autumn/winter period
Atlantic Coal Managing Director Steve Best said, “This has been an exciting period with the Pott and Bannon site being brought into our Pennsylvania anthracite portfolio and having achieved substantially increased production compared with H1 2012. This has been against a background of falling prices and demand compared with last year but our flexible approach to operations at the Stockton Mine and continuing rigorous review of operations has enabled us to produce a healthy net profit. This has been particularly pleasing given the difficult market conditions.
“We remain very positive about the prospects for the Pennsylvania anthracite industry and are actively developing the Pott and Bannon mine plan with a view to commencing operations on site in the latter part of 2014. We also continue to look for new opportunities to acquire high quality, low ratio mining sites in the Pennsylvania anthracite belt that are either in, or can quickly be brought into, production as part of our strategy to become a major producer in Pennsylvania.”
Chairman’s statement:
“This has been a period of development for Atlantic Coal which has seen us add to our Pennsylvanian anthracite coal portfolio in line with our strategy to become a regional consolidator in this prime anthracite region. Production increased substantially (37.4%) on H1 2012 but this was against a background of depressed prices and reductions in demand from industry. We have, however, demonstrated the flexibility of our productive Stockton Colliery operation by reducing production and increasing sales from stockpile and also continue to rigorously review operations to maximise efficient working. Against this background, we are delighted to have delivered a substantial profit in the period and we are confident that we are well placed to build our revenues again during the coming months, when we anticipate strengthened demand to create a more positive pricing environment.
We started the period with the exercise of our lease option over the 410 acre Pott and Bannon mine in Pennsylvania and this lease has now been completed. The region in which we operate is anthracite rich, politically stable and has a solid customer base, making acquisition opportunities attractive. We believe the Pott and Bannon site to have extensive reserves and, being located only 25 miles from the Company’s Stockton Mine, which has established infrastructure and an experienced management team in place, we see this has an important transaction for Atlantic Coal. Further details on the Pott and Bannon site are contained in the announcement made on 21 January 2013” – Adrian Wilson, Atlantic Coal Chairman.
