Corsa Coal (TSXV: CSO), a major metallurgical coal producer in and around Somerset County, Pa., said Jan. 21 that during the fourth quarter of 2012 the company sold 57,000 tons of met coal at an average realized price of US$123 per ton in line with its published increased guidance of 55,000 tons.
For the fiscal year ended Nov. 30, 2012, the company sold 332,000 tons of met coal at an average realized price of $148/ton. The company sold 26,000 tons of thermal coal during the fourth quarter at an average price of $39/ton for a total for the fiscal year of 122,000 tons of thermal coal at an average realized price of $35/ton. For the 2012 fiscal year, the company produced a total of 373,000 tons of raw met coal from its own mines and purchased 218,000 tons of raw met coal from third parties.
“While the met coal market, as expected, continued to be weak for 2012 calendar Q4 and into calendar 2013 Q1, the Company has continued to be successful in achieving sales as a result of the quality of its low volatile met coal product,” Corsa said. “In addition to meeting its Q4 guidance, as at December 31, 2012 the Company already has sales contracts and purchase orders for 170,000 tons of met coal for 2013 of which approximately 25,000 tons have been shipped. This represents approximately 50% of 2012 sales already contracted for 2013.”
The company said it continues to actively market its high-quality low-vol met coal and is in discussions with domestic and international buyers. The company is currently shipping coal and continues to match its production to actual sales and said it does not have unnecessary inventories of unsold coal. For these reasons, the company said it is not in a position to provide a full production, sales and cost guidance for 2013 beyond the sales it has currently under contract until sales levels can be more accurately forecast. The company said it continues to be successful in reducing its cash costs.
Corsa reports data on new deep mines it has in the works
Corsa Coal noted that it has received the results of an updated technical review on the Acosta deep mine project and on the Keyser deep mine property as well as its surface mining projects. The company will be filing a technical report in Canada within the meaning of National Instrument 43-101 on this updated review within 45 days.
The Casselman is an underground met coal mine located in Garrett County, Md. This mine is about 31 miles by road from the company’s Wilson Creek prep plant in Somerset County, Pa. The mine commenced operations in late July 2011 and operates with two continuous mining units operating as a super section. The Casselman Report determined the Casselman mine has a proven reserve of 9.9 million tons of low-vol met coal from an indicated resource of 15.6 million tons.
The company said it continues to look to expand the Casselman mine and has obtained leases on 711 acres and options to lease an additional 736 acres adjoining or in close proximity of the current permitted area for this mine. These areas will require exploration and assessment before Corsa determines if it will exercise these options to lease. These additional areas are not contained in the Casselman Report.
- The Acosta Deep Project is located 20 miles by road from the company’s prep plant. This is a 6,540-acre property of which 940 acres is by lease and the balance (previously referred to as the Alumbaugh extension) is owned. It has indicated resources and probable reserves of low-vol met coal as follows: Upper Kittanning (probable 5.3 million tons); Middle Kittanning (probable 8.8 million tons, 2.7 million tons indicated); and Lower Kittanning (4.3 million tons probable, 7.9 million tons indicated). Calculations, based upon anticipated permit buffers, result in estimated mineable reserve footprints of 1,704 acres for the Upper Kittanning seam, 2,996 acres for the Middle Kittanning and 1,298 acres for the Lower Kittanning. The coal seams range from 100 to 600 feet deep. Permitting is in process. The company assumes for valuation purposes a production rate of 1.2 million to 1.4 million tons of clean coal per annum with operating costs of $39.99 per raw ton after screening at the mine, inclusive of preparation and refuse costs of $9.34 a raw ton, with capital costs of $7.09 a raw ton. The mine life is projected to be 15 years.
- The Keyser Property is where the company owns the rights to mine the Lower Kittanning coal seam under about 2,660 acres and has leased the rights to mine 970 acres in the Jenner and Conemaugh townships in Somerset County. This project is located 25 miles by road from the company’s prep plant. Exploration results indicate the presence of a total of 16 million tons of in-place, low-vol, coking coal within 2,419 acres of the currently anticipated mineable and permittable footprint of the Lower Kittanning seam. The Lower Kittanning seam is 100 to 600 feet below the surface with an average seam thickness of 3.45 feet. The upcoming report covers only the original 2,419 acres and does not include the 1,241 acres recently added to this property, since further drilling and permitting assessment will be required.
Several new strip mines are in the works
There are multiple surface mining permits in place with several others in the permitting process, Corsa noted.
- The Acosta 3 mine is a permitted site with a proven reserve of 63,324 tons of low-vol met coal and additional indicated resources of 366,151 tons of low-vol met coal.
- The Ankeny mine is a permitted site with a proven reserve of 187,811 tons of low-vol metallurgical coal.
- The Ash mine is currently in the permitting process and has an indicated resource of 379,686 tons of low-vol met coal.
- The Hamer mine is also currently in the permitting process and has a proven reserve of 49,833 tons and additional indicated resources of 207,310 tons of low-vol met coal.
- The Hastings (Semelsberger) mine is a permitted site with a proven reserve of 68,055 tons of low-vol met product.
- The Hemminger mine is a permitted site with a proven reserve of 151,932 tons of low-vol met coal.
While these are not material properties the technical report to be filed within 45 days will include these properties.
Corsa’s main operating subsidiaries are Wilson Creek Energy LLC and Maryland Energy Resources LLC (Casselman mine) based in Somerset County.