Corsa Coal Corp. (TSXV: CSO) on Nov. 30 provided an update to its fourth quarter guidance and announced the decision by its board of directors to proceed with the implementation of a consolidation of the issued and outstanding common shares in the capital of the company on the basis of one post-consolidation share for each 20 pre-consolidation shares.
Subject to the approval of the TSX Venture Exchange, the consolidation is expected to be implemented pursuant to articles of amendment filed in accordance with Corsa’s governing corporate law statute, the Canada Business Corporations Act. The Shares are expected to begin trading on a post-consolidation basis on or about Dec. 7.
In response to the current strength in metallurgical coal prices, Corsa has taken steps to increase sales volumes of met coal. Corsa expects metallurgical sales volumes from its Northern Appalachia (NAPP) Division, which operates in Pennsylvania and Maryland, to be approximately 250,000 tons during the fourth quarter of 2016. All of the Q4 2016 sales volumes are contracted at fixed prices and Corsa expects to realize approximately US$100 per ton (FOB Mine), which would represent a 44% improvement over Corsa’s average realized metallurgical coal price per ton sold in the third quarter of 2016.
Corsa expects prices in the first quarter of 2017 to improve further relative to Q4 2016 as lower-priced, legacy domestic 2016 contracts expire (these legacy contracts represent approximately 45% of Q4 sales volumes). For 2017, Corsa expects the vast majority of its sales to be with international customers, given the higher expected price realizations as compared to domestic sales. Corsa has committed about 70% of its volumes in Q1 2017 at prices that reflect current market conditions. Pricing guidance for Q1 2017 will be updated after the contract benchmark for met coal is settled, likely to be in the second half of December.
Corsa expects to further increase sales volumes in 2017 by purchasing and reselling metallurgical coal produced by third parties in the Northern and Central Appalachian regions and through sales of metallurgical coal produced from the company’s Acosta Deep Mine in Somerset County, Pennsylvania. As previously announced, the Acosta Deep Mine is expected to commence production in the second quarter of 2017. Additionally, Corsa is taking steps to restart the Shade Creek preparation plant and loadout facility, which is on the Norfolk Southern rail line, and is anticipated to be operational in Q1 2017.
Corsa is a coal mining company focused on the production and sales of metallurgical coal, an essential ingredient in the production of steel. Corsa also offers high heat content, low delivered cost coal to major utilities and industrial users in the Southeast region of the U.S.