TIDMATC
RNS Number : 2322D
Atlantic Coal PLC
14 May 2012
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
14 May 2012
Atlantic Coal plc ("Atlantic" or the "Company")
Unaudited Preliminary Results
Atlantic Coal plc, the AIM listed open cast coal production and
processing company with activities in Pennsylvania, USA, is pleased
to announce its unaudited preliminary results for the year ended 31
December 2011.
2011 Highlights:
-- Increased production and sales experienced at Stockton during
2011 - 207,005 tons of run-of mine ("ROM") coal mined and sales of
106,403 tons reached (2010: 207,873 and 97,342 respectively)
-- Strengthened revenues of US$13,991,971 generated for the
period (2010: US$10,720,103) and a net gross profit of US$226,946
(2010: loss of US$3,774,021)
-- Reduced Group loss of US$3,149,606 (2010: loss of US$5,091,659)
-- Purchase of a Komatsu PC2000 Hydraulic Excavator and a Reichdrill blasthole drill rig
-- Strengthened board in part to facilitate the roll out of consolidation strategy
-- Admitted shares to trading on the OTCQX Market International
platform of the Pink Sheets LLC ("OTCQX") in New York to broaden
investor base
Current Year Highlights:
-- Progress made to consolidate Atlantic's land position in
Pennsylvania to capitalise on growing regional demand for coal
o Option to lease the Pott & Bannon anthracite coal mining
property in Schuykill County believed to contain 4.1 million tons
("Mt") of clean coal
o Option to acquire anthracite mining assets for a purchase
price of US$35 million
-- 12% increase in production at Stockton and 24% increase in
average sales price experienced in Q1 2012 to 31,729 tons at
$166.30 (Q1 2011: 28,376 tons at $134.25)
-- Completion of the Norfolk & Southern Railroad diversion
providing access to approximately 1.0 million tons of previously
unworkable coal
Chairman's Statement
In tandem with overseeing and improving the production profile
of our Stockton Colliery anthracite mine, regional consolidation in
the Pennsylvanian anthracite fields was Atlantic's predominant
focus with much of the year spent evaluating various opportunities.
We were therefore delighted to announce post-period end that we had
acquired options over a number of sites, which, if acquired, the
Board believes would fulfil this strategy. Due diligence is
currently underway at the various option sites and further updates
will be made at the appropriate time.
Stockton
The Stockton mine site covers an area of approximately 900
hectares located in the Hazel Creek Valley, a prime anthracite
region with high quality coal reserves with demand for our product
in the industrial and heating markets. The buoyancy of the market
is demonstrated by the increased average price of US$142.33 (2010:
$124.43) received for our product during the year. Post period end,
prices increased further and during the first quarter of 2012, we
received an average price of $166.30.
During 2011 Atlantic mined 207,005 tons of run-of-mine coal
(2010: 207,873) and removed 3,257,776 bank cubic yards ("BCY") of
overburden (2010: 2,837,863). 233,241 tons of ROM coal was washed
(2010: 229,293) which produced 100,713 tons of clean coal (2010:
88,620). Sales for the year were 106,403 tons (2010: 97,349). The
run-of-the mine coal mined in 2011 is marginally lower than the
208,730 BCY and 105,403 tons of clean coal announced for the same
period in January 2012 as a result of adjustments made during the
audit for the year ended 31 December 2011.
As a result of various mechanical difficulties experienced with
the Company's excavators and a delay in the diversion of the
Norfolk and Southern railroad previously running through the
Company's site, we did not reach our targeted annual production of
300,000 tons of ROM for 2011. To address this we invested in a
second hand Komatsu PC2000 hydraulic excavator and ordered a second
Liebherr R9250 19-yard bucket hydraulic excavator. This excavator
is scheduled for delivery in H2 2012. Additionally, we carried out
an overhaul programme of the existing truck fleet and outsourced
the reclamation work at the Company's Gowen site which freed up two
Cat 777 trucks to provide additional haul truck capacity for the
two excavators working at the Stockton site.
Most importantly our production capacity was further improved in
April 2012 following the railroad diversion completion allowing
access to approximately 1.0Mt of ROM coal.
With this in mind, we commissioned an independent mining report
by Mine Engineers Inc. to evaluate our mine plan and operations at
Stockton. The report highlighted that, with the diversion of the
railroad now complete, production of 160,000 tons of clean coal is
achievable for the year to 31 December 2012. The projected 2012
strip ratio of 17:7 set out in the independent mining report also
compares very favourably with the 2010 and 2011 strip ratios of
approximately 32:1.
Acquisition Update
In January 2012 we announced the entry into a lease option
agreement with Pennsylvania based Reading Anthracite Company which
holds a permitted 410 acre anthracite mining property. We estimate
the site to contain Reserves of 12Mt ROM coal at 3.9 ratio. This
equates to 4.1Mt of clean coal, thus providing the potential to
more than double our existing anthracite reserves. Further detail
on the reserve estimates are contained in the announcement made in
January together with a statement by a qualified person within the
meaning of the AIM Rules for Companies. Importantly, the site is
located 25 miles from the Company's Stockton site which has
established infrastructure and domestic and international demand
for anthracite coal. We have a six month period during which to
conduct due diligence and, should we decide to proceed with the
acquisition, a consideration of c. US$6.0 million in cash and
shares will be paid to Reading Anthracite Company, along with the
grant of US$3.0 million of warrants in Atlantic at 0.75 pence per
share.
Additionally, on 15 February 2012 we announced that we had
entered into an option agreement to acquire additional anthracite
mining assets in Pennsylvania. This option, which is exercisable
entirely at the Company's discretion, has an exercise price of
US$35 million and the exercise period ends on 31 October 2012. As a
result of the size of the exercise price, the acquisition of the
assets in question would be likely to constitute a reverse takeover
under the AIM Rules for Companies and would therefore be, inter
alia, subject to shareholder approval. Due diligence is on-going
and further announcements will be made at the appropriate time.
Financials
During 2011 we raised a total of GBP12.3 million (before
expenses). This included a placing of GBP300,000 with the Blackrock
UK Smaller Companies Fund in January 2011 to satisfy market demand.
In February 2011 we successfully completed a further fundraising of
GBP12.0 million (before expenses), allowing us to order new
equipment and implement our mine plan at Stockton. Additionally, we
have been able to leverage our cash position to pursue acquisition
opportunities.
These funds to date have been used to:
-- Improve the capitalisation of the Stockton mine, including
truck engine rebuilds, fleet additions, completion of the railroad
diversion and outsourcing of the Gowen reclamation obligation
-- Secure options to acquire additional anthracite mining assets
-- Debt repayment
Corporate
On 30 August 2011, we announced that the Company's shares had
been admitted to trading on the OTCQX. We are confident that our
shareholders will benefit from this exposure and increased
visibility within the US where our primary asset is located.
Board Changes
In June and July 2011 we strengthened the Company's Board and
management team. Eddie Nelson joined the Board as Non-executive
Director in July 2011. Mr. Nelson is a qualified mining engineer
and his extensive experience in the coal sector throughout his 38
year career is beneficial to the Company.
We also appointed Mr. Barney Corrigan as Project Development
Officer during the period to focus on increasing our project
portfolio, resource base and production profile.
Outlook
The year ahead is set to be positive for Atlantic. With the
diversion of the railroad now complete, we are confident that our
production profile at Stockton will improve as underpinned by an
independent report which assesses our current mine plan and
equipment on site. Expansion is also at the forefront of our
strategy. With due diligence progressing well at both option sites,
we believe that the Company is in a strong position to build on its
current footprint in Pennsylvania. Through this we anticipate that
Atlantic will be positioned to capitalise on the rising demand for
coal in the US and internationally.
In the three months ended 31 March 2012, production at Stockton
increased 12% to 31,729 tons of clean coal compared to the
equivalent period in 2011 (Q1 2011: 28,376). During the period
Atlantic removed 715,691 BCY of overburden (Q1 2011: 658,785) and
85,911 tons of ROM coal was washed (Q1 2011: 62,000). At the same
time there has been a substantial increase in the average sale
price of Pennsylvanian anthracite with a Q1 2012 average price of
$166.30 per ton compared with a Q1 2011 price of $134.25, an
increase of approximately 24%.
Adam Wilson
Chairman
**ENDS**
For further information on the Company, visit:
www.atlanticcoal.com or contact:
Steve Best Atlantic Coal plc Tel: 020 3328 5670
Nick Naylor Allenby Capital Limited Tel: 020 3328 5656
Alex Price Allenby Capital Limited Tel: 020 3328 5656
Peter Rose FoxDavies Tel: 020 3463 5030
Simon Leathers FoxDavies Tel: 020 3463 5010
Hugo de Salis St Brides Media & Finance Tel: 020 7236 1177
Ltd
Elisabeth Cowell St Brides Media & Finance Tel: 020 7236 1177
Ltd
BALANCE SHEETS
As at 31 December 2011
Group Company
---------------------------- --------------------------
As at 31 As at 31 As at 31 As at 31
December December December December
2011 2010 2011 2010
$ $ $ $
----------------------------------- --- ------------- ------------- ------------ ------------
Non-Current Assets
Property, plant and equipment 10,037,008 6,915,151 316,614 2,047
Land, coal rights and restoration 7,980,327 7,621,494 - -
Investment in subsidiary - - - 9,923,011
Trade and other receivables 9,441 - 22,786,441 14,368,596
Other assets 43,752 236,467 - -
---------------------------------------- ------------- ------------- ------------ ------------
18,070,528 14,773,112 23,103,055 24,293,654
--------------------------------------- ------------- ------------- ------------ ------------
Current Assets
Inventories 1,471,210 1,241,232 - -
Trade and other receivables 1,833,404 1,310,932 652,456 35,318
Other assets 197,971 236,467 - -
Cash and cash equivalents 6,027,771 - 5,941,398 83,117
---------------------------------------- ------------- ------------- ------------ ------------
9,530,356 2,844,597 6,593,854 118,435
--------------------------------------- ------------- ------------- ------------ ------------
Total Assets 27,600,884 17,617,709 29,696,909 24,412,089
---------------------------------------- ------------- ------------- ------------ ------------
Current Liabilities
Trade and other payables 3,119,637 4,604,594 229,036 436,827
Borrowings 3,828,776 5,595,593 - 2,195,857
Accrued restoration costs 1,841,251 3,256,865 - -
---------------------------------------- ------------- ------------- ------------ ------------
8,789,664 13,457,052 229,036 2,632,684
--------------------------------------- ------------- ------------- ------------ ------------
Non-Current Liabilities
Borrowings 1,770,338 4,665,043 - -
Accrued restoration costs 4,054,350 3,923,710 - -
---------------------------------------- ------------- ------------- ------------ ------------
5,824,688 8,588,753 - -
--------------------------------------- ------------- ------------- ------------ ------------
Total Liabilities 14,614,352 22,045,805 229,036 2,632,684
---------------------------------------- ------------- ------------- ------------ ------------
Net (Liabilities) / Assets 12,986,532 (4,428,096) 29,467,873 21,779,405
---------------------------------------- ------------- ------------- ------------ ------------
Capital and Reserves Attributable
to
Equity Holders of the Company
Called up share capital 4,595,188 2,394,507 4,595,188 2,394,507
Share premium account 38,661,407 19,415,088 38,661,407 19,415,088
Merger reserve 15,326,850 15,326,850 1,111,305 11,824,997
Reverse acquisition reserve (12,999,288) (12,999,288) - -
Other reserves 131,837 352,518 131,837 352,518
Foreign currency translation
reserve (3,521,802) (2,672,814) (7,779,350) (6,975,265)
Retained earnings / (losses) (29,207,660) (26,244,957) (7,252,514) (5,232,440)
---------------------------------------- ------------- ------------- ------------ ------------
Total Equity 12,986,532 (4,428,096) 29,467,873 21,779,405
---------------------------------------- ------------- ------------- ------------ ------------
GROUP INCOME STATEMENT
For the year ended 31 December 2011
Group
----------------------------
For the year For the year
ended 31 ended 31
December December
2011 2010
$ $
-------------------------------------- ---- --- --- ------------- -------------
Revenue 13,991,971 10,720,103
Cost of sales (13,765,025) (12,700,591)
Gross profit/(loss) 226,946 (1,980,488)
Administration expenses (3,158,662) (2,181,545)
Other gains/(losses) - net 202,344 370,825
Other income - 17,187
------------------------------------------------------ ------------- -------------
Operating Loss (2,729,372) (3,774,021)
Finance income 50,153 -
Finance costs (470,387) (1,317,638)
Loss Before Taxation (3,149,606) (5,091,659)
Corporation tax expense - -
-------------------------------------- ---- --- --- ------------- -------------
Loss for the Year (3,149,606) (5,091,659)
------------------------------------------------------ ------------- -------------
Attributable to the equity
owners of the Parent (3,149,606) (5,091,659)
------------------------------------------------------ ------------- -------------
Loss per share attributable to the equity
owners of the Parent during the year:
Basic and diluted (0.09) cents (0.31) cents
All activities are classified as continuing.
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2011
Group
For the year For the year
ended 31 ended 31
December December
2011 2010
$ $
---------------------------------------------------- --- --- ------------- -------------
Cash flows from operating activities
Operating loss (2,729,372) (3,774,021)
Adjustments for:
Depreciation 946,592 1,067,976
Amortisation 418,303 315,270
Consultancy fees paid in shares - 52,407
Gain on Mayford debt settlement (78,388) -
Accretion and accrued restoration costs 481,843 1,718,279
Reclamation work performed (1,766,818) (1,824,347)
Provision for doubtful debts (16,522) 280,098
Foreign exchange gains (179,930) (379,142)
(Increase) in trade and other receivables (16,483) (219,431)
(Decrease)/increase in inventories (229,978) 519,816
(Decrease)/increase in trade and other
payables (1,228,486) 928,569
-------------------------------------------------------------- ------------- -------------
Net cash used in operations (4,399,239) (1,314,526)
-------------------------------------------------------------- ------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (4,264,457) (884,466)
(Increase)/decrease in deposits & escrow (508,055) 19
Loans granted to third parties - (100,000)
Loan repayments received from third
parties - 10,000
Interest paid (290,791) (203,844)
Interest received 50,153 -
---------------------------------------------------- --- --- ------------- -------------
Net cash used in investing activities (5,013,150) (1,178,291)
-------------------------------------------------------------- ------------- -------------
Cash flows from financing activities
Proceeds from issue of share capital 19,997,820 3,217,417
Transaction costs of share issue (1,027,569) (65,947)
Proceeds from exercise of options & 1,550,495 -
warrants
Proceeds from loans & borrowings - 1,206,321
Repayments of borrowings (3,944,281) (1,415,219)
Borrowing costs - (389,577)
Interest paid (284,628) (222,106)
Finance lease payments (664,934) (342,516)
-------------------------------------------------------------- ------------- -------------
Net cash from financing activities 15,626,903 1,988,373
Net increase / (decrease) in cash and
cash equivalents 6,214,514 (504,444)
Effect of foreign exchange rate changes (479,176) (46,930)
Cash and cash equivalents at beginning
of year 292,433 843,807
-------------------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of
year 6,027,771 292,433
-------------------------------------------------------------- ------------- -------------
The increase in deposits held in Escrow was the result of the
deposit paid on the Pott & Bannon option.
Significant Non Cash Transactions
During 2011 the Convertible Note was part converted into
107,264,476 ordinary shares
COMPANY CASH FLOW STATEMENT
For the year ended 31 December 2011
Company
For the year For the
ended 31 year ended
December 31 December
2011 2010
$ $
---------------------------------------------- --- ------------- --------------
Cash flows from operating activities
Operating loss (12,722,885) (6,535,581)
Adjustments for:
Depreciation 5,862 2,029
Foreign exchange losses - (4,443)
Consultancy fees paid in shares - 52,407
Provision for doubtful debts - 280,098
Impairment of investment 10,713,692 5,287,465
(Increase)/decrease in trade and other
receivables (127,670) 37,819
Decrease in operating payables (222,426) (41,988)
--------------------------------------------------- ------------- --------------
Net cash used in operations (2,353,427) (922,194)
--------------------------------------------------- ------------- --------------
Cash flows from investing activities
Loans to subsidiary (9,508,822) (2,625,921)
Repayments received from subsidiary 166,472 146,258
Interest received 50,153 -
Purchase of property, plant & equipment (324,935) -
Increase in deposits & escrow (502,799) -
Loans granted to third parties - (100,000)
Loan repayments received from third parties - 10,000
Net cash used in investing activities (10,119,931) (2,569,663)
--------------------------------------------------- ------------- --------------
Cash flows from financing activities
Proceeds from issue of share capital 19,997,820 3,217,417
Transaction costs of share issue (1,027,569) (65,947)
Proceeds from exercise of options & warrants 1,550,495 -
Borrowing costs - (389,577)
Interest paid (284,628) (222,106)
Repayment of borrowings (1,425,303) (850,219)
Proceeds from borrowings - 1,206,321
--------------------------------------------------- ------------- --------------
Net cash from financing activities 18,810,815 2,895,889
--------------------------------------------------- ------------- --------------
Net Increase/(decrease) in cash and cash
equivalents 6,337,457 (595,968)
Cash and cash equivalents at beginning
of year 83,117 726,015
Effect of foreign exchange rate changes (479,176) (46,930)
--------------------------------------------------- ------------- --------------
Cash and cash equivalents at end of year 5,941,398 83,117
--------------------------------------------------- ------------- --------------
The increase in deposits held in Escrow was the result of the
deposit paid on the Pott & Bannon option.
Significant Non Cash Transactions
During 2011 the Convertible Note was part converted into
107,264,476 ordinary shares
Notes to the Financial Statements
Basis of Preparation of Financial Statements
The Financial Statements have been prepared in accordance with
EU-endorsed International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations and the parts of the Companies Act 2006 applicable
to companies reporting under IFRS. The Financial Statements have
also been prepared under the historical cost convention other than
financial assets and financial liabilities at fair value through
profit or loss.
The Financial Statements are presented in US Dollars rounded to
the nearest dollar.
Atlantic Coal Plc, the legal parent, is domiciled and
incorporated in the United Kingdom.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's Accounting Policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial
Statements are disclosed in Note 2.
The financial information set out above does not constitute the
Company's statutory accounts within the meaning of Section 435 of
the Companies Act 2006. The figures for the year ended 31 December
2011 are based on unaudited accounts for the year ended 31 December
2011. The directors anticipate that the auditor's report, to be
issued with the Group's statutory accounts for the year ended 31
December 2011 will be unqualified.
The unaudited preliminary announcement has been prepared on the
basis of accounting policies set out in the Group's statutory
accounts for the year ended 31 December 2010.
The comparatives for the year ended 31 December 2010 are derived
from the statutory accounts for the year ended 31 December 2010.
These statutory accounts, which contain an unqualified audit report
under Section 495 of the Companies Act 2006 and which did not make
any statement under Section 498 of the Companies Act 2006, have
been delivered to the registrar of companies in accordance with
Section 441 of the Companies Act 2006.
The Company will announce its full audited financial statements
and accompanying notes later in May 2012.
Segmental Information
Management has determined the operating segments based on
reports reviewed by the Board of Directors that are used to make
strategic decisions. During the year Group had interests in two
geographical segments, the United Kingdom and the United States of
America ("USA"). Activities in the UK are mainly administrative in
nature whilst the activities in the USA relate to coal sales and
production.
The reportable operating segments derive their revenue from the
sale of prepared coal to industrial and retail customers.
For the year ended 31 December For the year ended 31
2011 December 2010
--------------- ------------ ------------------------------------------- ------------ ------------------------------------------
Intra-segment Intra-segment Total
balances balances
USA UK Total USA UK
$ $ $ $ $ $ $ $
--------------- ------------ ------------- -------------- ------------ ------------ ------------ -------------- ------------
Revenue
from external
customers 13,991,971 - - 13,991,971 10,720,103 - - 10,720,103
Gross
profit/(loss) 226,946 - - 226,946 (1,980,488) - - (1,980,488)
Operating
loss (720,182) (12,722,882) 10,713,692 (2,729,372) (2,521,462) (6,535,581) 5,283,022 (3,774,021)
Impairment - (10,713,692) 10,713,692 - - (5,287,465) 5,287,465 -
Depreciation 940,730 5,862 - 946,592 1,065,947 2,029 - 1,067,976
Amortisation 418,303 - - 418,303 315,270 - - 315,270
Capital
expenditure 3,361,886 320,235 - 3,682,121 3,662,757 - - 3,662,757
--------------- ------------ ------------- -------------- ------------ ------------ ------------ -------------- ------------
Total assets 20,680,975 29,696,909 (22,777,000) 27,600,884 17,497,225 24,412,089 (24,291,605) 17,617,709
--------------- ------------ ------------- -------------- ------------ ------------ ------------ -------------- ------------
Total
liabilities 37,907,730 229,036 (23,522,414) 14,614,352 33,781,347 2,632,684 (14,368,226) 22,045,805
--------------- ------------ ------------- -------------- ------------ ------------ ------------ -------------- ------------
A reconciliation of operating loss to loss before taxation is
provided as follows:
For the year ended For the year ended
31 December 2011 31 December 2010
$ $
---------------------------------------- ------------------- -------------------
Operating loss for reportable segments (2,729,372) (3,774,021)
Finance income 50,153 -
Finance costs (470,387) (1,317,638)
Loss before tax (3,149,606) (5,091,659)
---------------------------------------- ------------------- -------------------
Information about major customers
Revenues of approximately $2.633 million (2010: $1.565 million)
were derived from a single external customer. These revenues were
all generated in the USA.
Cash and Cash Equivalents
Group Company
---------------------- ----------------------
As at 31 As at 31 As at 31 As at 31
December December December December
2011 2010 2011 2010
$ $ $ $
-------------------------- ---------- ---------- ---------- ----------
Cash at bank and in hand 6,027,771 292,433 5,941,398 83,117
-------------------------- ---------- ---------- ---------- ----------
Loss per Share
The calculation of the basic loss per share of 0.09 cents (31
December 2010 loss per share: 0.31 cents) is based on the loss
attributable to ordinary shareholders of $3,149,606 (31 December
2010 loss: $5,091,659) and on the weighted average number of
ordinary shares of 3,583,708,122 (31 December 2010: 1,653,929,227)
in issue during the year.
The basic and diluted loss per share is the same, as the effect
of the exercise of share options and warrants would be to decrease
the loss per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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