CanAm Coal Corp. (TSX VENTURE: COE), (OTCQX: COECF) reported Nov. 1 that coal sales for the third quarter were 158,000 tons, more than double the second quarter coal sales of 77,000 tons and a 68% increase over the year-ago quarter.
For the first nine months of this year, consolidated coal sales were 302,000 tons, a 46% increase over the prior year. Third quarter coal production was 167,400 tons, including 21,300 tons of metallurgical coal.
CanAm holds an 80% ownership stake in Alabama’s Birmingham Coal & Coke (BCC) following its acquisition of an additional 30% interest effective on July 1. As of that date, CanAm began consolidating the financial results of BCC in accordance with generally accepted accounting principles and so the third quarter data is presented on a consolidated basis and includes 100% of BCC’s sales and production volumes.
The significant increase in both sales and production is attributable to an increase in the ownership in BCC and an improvement in production at all of the four operating mines, CanAm noted. Management and operational changes executed in the first half of the year at the Powhatan mine paid off and coal sales at that mine set an all-time high of 33,332 tons, the company said.
Operational challenges at the BCC mines, mainly resulting from an incident in the first quarter that damaged an excavator at the Gooden Creek mine, were ironed out and sales from BCC’s operations were 124,568 tons, the highest level since the first quarter of 2008. Sales of met coal were up 16% from the prior year but slightly down from the second quarter as shipments were somewhat hampered by inconsistency in coal quality.
Looking forward, CanAm said it is expecting continued growth in production and sales as it brings on newly-permitted mines. The Old Union 2 mine, which received final permitting in late August, started operations in early October, and permits for the Knight and Posey Mill 2 mines are expected in the near term.
Jos De Smedt, President and COO of CanAm, said: “CanAm achieved significant production and sales growth in Q3. The majority of this growth came from our acquisition of 30% of BCC but important operating improvements also positively impacted results. We look forward to building on this momentum with production from our new Old Union 2 mine starting in October. We are also in the final permitting stages for our Knight and Posey Mill 2 mines. Upon receipt of these permits, mining can commence within a short period of time. We look forward to building on our momentum in Q4 and into 2013.”
The company will release full third quarter financial results in late November.