Canadian coal producer Grande Cache Coal Corp. said Feb. 13 that its third fiscal quarter (October-December 2011) coal production was 0.42 million tonnes, representing a 31% increase over 0.32 million tonnes produced in the comparable period of fiscal 2011.
Total coal sold during the fiscal third quarter was 0.42 million tonnes compared to 0.29 million tonnes in the same period of the previous year. Metallurgical coal accounted for 86% of the total sales volumes in the latest quarter.
The average selling price for met coal was US$235 per tonne during the fiscal third quarter, compared to US$189 per tonne in the comparable period in 2010. For the nine months ended Dec. 31, 2011, the average selling price for met coal was US$239 per tonne, compared to US$174 per tonne in the same period of 2010.
The new No. 12 South B2 underground operation commenced production during the third fiscal quarter. As expected, the No. 7 underground operation ran out of coal reserves in January, with the underground equipment and personnel moving over to the No. 12 South B2 operation.
In January, Grande Cache acquired additional coal leases from the government of Alberta covering over 7,000 hectares in the Smoky River Coalfield. Evaluation of the coal resources contained within these additional lease areas is ongoing.
Grande Cache also noted in the Feb. 13 earnings statement the in-process purchase of Grande Cache by 1629835 Alberta Ltd., a newly-formed entity owned by Winsway Coking Coal Holdings Ltd. and Marubeni Corp. Grande Cache has agreed with the purchaser to extend the outside closing date to complete the deal from Feb. 28 until March 6 in order to provide sufficient time to complete the arrangement following a Winsway shareholder meeting.
“Continued softening of steel markets has resulted in an easing in the demand and price for metallurgical coal,” Grande Cache said about prospects in 2012. “Additionally, port service is expected to be interrupted during the second half of March as the corporation’s primary export terminal will be installing new equipment. As a result, the corporation is reducing its annual sales volume outlook for fiscal 2012 to approximately 1.7 million tonnes. Achieving the revised sales volumes is contingent upon adequate rail and port services as well as the fulfillment of existing contracts and realization of projected spot sales. The corporation had previously expected annual sales volumes to be in the range of 2.0 [million] to 2.2 million tonnes.”
Industry benchmark pricing for the first calendar quarter of this year was settled at US$235 per tonne for the highest quality coking coal. Grande Cache said it anticipates that its average met coal sales price for the first calendar quarter (the fourth quarter of its fiscal year) will be in the range of US$205 to US$215 per tonne, which includes quarterly contracts, shipments contracted at annual prices and spot sales.