Corsa Coal (TSXV: CSO) sold 372,000 tons of coal at an average realized price of $81/ton in the three months ended Sept. 30 and 939,000 tons at an average realized price of $77/ton in the nine months ended Sept. 30.
The company reported Nov. 29 that it had Adjusted EBITDA of $8,245,000 in the three months ended Sept. 30, 2013 and $16,929,000 in the nine months ended Sept. 30, 2013.
The company’s sales guidance of 1,255,000 tons of coal for 2013 is comprised of 1,100,000 tons of thermal coal and 155,000 tons of metallurgical coal.
Keith Dyke, company President, stated: “During the third quarter, both the Kopper Glo thermal coal operations in Tennessee and the Wilson Creek metallurgical coal operations in Pennsylvania posted strong operating results with Kopper Glo increasing its tons sold from 2012 levels. The operations continue to improve in every area, including safety and cost reductions. Demand for our coal has remained firm in both markets and the Company expects the market pricing to improve in 2014. We have high quality coals in each of our market segments and we continue to expand and diversify our customer base. With high quality products and low operating costs, we will continue to execute the business plan and grow our company.”
He added: “The Company’s balance sheet is strong with cash of $16,931,000, total assets of $203,512,000 and total debt of $18,316,000 at September 30, 2013. The strong financial position of Corsa should allow us to take advantage of opportunities in acquisitions and internal expansion projects. The revenues and Adjusted EBITDA increases from year over year are encouraging, considering the market environment and in comparison to the performance of other public coal companies in North America.”
Thermal coal sales in the third quarter were 299,000 tons at an average realized price of $75 per ton FOB prep plant. Metallurgical coal sales were 73,000 tons at an average realized price of $104 per ton FOB prep plant.
The company said that thermal coal sales for the first nine months of this year were 866,000 tons at an average realized price of $75 per ton FOB prep plant. Met coal sales were 73,000 tons at an average realized price of $104 per ton FOB prep plant.
Corsa looks for ‘modest’ thermal coal recovery in Q2 2014
“As a result of global economic conditions and low natural gas prices, the thermal coal industry has experienced a slowdown in demand that began in the fall of 2011 and has continued with the result that prices have declined,” the company said. “While this weakness in the market has continued into 2013 and is expected to continue into 2014, the Company believes there may be a modest recovery in the demand and price for thermal coal beginning in the second quarter of 2014.
“While the thermal coal market, as expected, continues to be weak in 2013, the Company has continued to be successful in maintaining a high level of contracted sales. The Company has sales contracts for 846,000 tons of thermal coal for 2013. The current guidance for 2013 is thermal coal sales of approximately 1,100,000 tons, of which 866,000 tons were sold in the nine months ended September 30, 2013 leaving approximately 234,000 tons for the balance of the year. In addition, the Company currently expects thermal coal sales of between 200,000 and 250,000 tons in the first quarter of 2014. The Company continues to actively market its thermal coal and is in discussions with domestic utilities and industrial buyers.”
The met coal markets have been volatile in 2013, Corsa added. “The Company has continued to be successful in achieving metallurgical coal sales as a result of the quality of its coal. The current guidance for 2013 is metallurgical coal sales of approximately 155,000 tons, of which 73,000 tons were sold in the nine months ended September 30, 2013 leaving approximately 82,000 tons for the balance of the year. As the Wilson Creek division, which produces metallurgical coal, was acquired on July 31, 2013, the 2013 coal sales guidance only covers the period from August to December 2013. In addition, the Company currently expects metallurgical coal sales of 120,000 to 140,000 tons in the first quarter of 2014 based on current negotiations with existing and potential customers. The Company continues to actively market its metallurgical coal to domestic and international steel producers.”
New mines in the works at Kopper Glo and Wilson Creek
Kopper Glo, based in Tennessee and acquired earlier this year, has a number of underground and surface projects. The most advanced in terms of permitting are the Cooper Ridge Surface Project and the Cooper Ridge Deep Project.
- The Cooper Ridge Surface Mine is a contour surface thermal coal mine located in Claiborne County, Tenn., approximately 4 miles by road from the KG Preparation Plant. The mining permit process is underway with the permit expected in 2014.
- The Cooper Ridge Deep Project is an underground thermal coal mine located in Claiborne County, approximately 4 miles by road from the KG Preparation Plant. The mining permit process is underway with the permit expected in 2014.
Wilson Creek, which has most of its operations in Somerset County, Pa., has a number of underground and surface coal mining projects. The most significant are the Acosta Deep Project and the Keyser Project.
- The Acosta Deep Project is located 20 miles by road from the Wilson Creek prep plant. It is comprised of an approximately 6,540 acre property of which 940 acres is by lease and the balance is owned by Corsa. In October 2013, the company received the underground mining permit for the Acosta Deep Project from the Pennsylvania Department of Environmental Protection allowing the company to commence mine development in 2014 if warranted depending on market conditions.
- The Keyser Project is located 25 miles by road from the Wilson Creek prep plant. Corsa owns the rights to mine coal under approximately 2,660 acres and has leased the rights to mine 970 acres in the Jenner and Conemaugh townships in Somerset County. The mining permit application is underway with the permit expected in 2016.