VANCOUVER (miningweekly.com) – TSX-V-listed metallurgical coal miner Corsa Coal has reported an 89% jump in first-quarter coal sales, helping to lift revenues 54% year-on-year, as strong export shipments and price realisations led to improved financial results.

The Canonsburg, Pennsylvania-based miner said it sold 557 721 t of metallurgical coal in the three months ended March 31, as it reported strong growth of its sales market share in both the international and domestic markets.

“We continue to experience strong customer demand from our international customers, which has driven Corsa's sales volume growth and profits from our purchased coal and blending activity. Domestically, steel prices are at seven year highs and the market for low-volatile metallurgical coal is very tight owing to elevated demand from our customers,” CEO George Dethlefsen stated in a news release.

According to him, metallurgical coal prices remain at “healthy” levels, and the forward curve remains well supported through 2020. He pointed out that calendar 2019 and 2020 forward prices have risen by 14% and 18% respectively since the start of the year. “This supports the view that the seaborne market for metallurgical coal is expected to remain at profitable levels for a sustained period of time,” he advised.

Before adjusting for the sale of the Central Appalachia division, Corsa achieved record metallurgical coal sales volumes in the quarter. The company experienced strong growth in each of its three business lines, seeing produced tons rising 23% year-on-year, value-added services bought coal tons increasing 128% and sales and trading tons rising 390% from its launch in the first quarter of 2017.

During the quarter, Corsa achieved first production at the Horning mine, in Somerset County, Pennsylvania. Horning will provide Corsa with a high-quality, low-volatile coal, which will be used across several blends, and will help move the company closer to its stated goal of doubling metallurgical coal production from 2017 levels by 2019.

Corsa reported that it has encountered challenging geology at both the Casselman and Acosta mines, which resulted in reduced production and higher mining costs per ton for the quarter. 

At Casselman, Corsa is finalising the development of a main travel way to the northern part of the reserve base, and expects to be through this geologically difficult zone in late May. This area is a critical part of the mine plan, which will provide access to several years of economic reserves. 

At Acosta, Corsa expects production to increase as it receives the final regulatory approvals for the depth of cuts and as the coal seam regains its average thickness. “We view these conditions as temporary in nature and expect the mining costs per ton at these mines to return to forecast levels in the second half of the year, if not earlier,” Dethlefsen stated.

Corsa reported net and comprehensive income from continuing operations of $2-million, or $0.01 a share, for the first quarter, compared with $11.9-million, or $0.08 a share, for the first quarter of 2017.

Total revenue from continuing operations was $80.4-million.

Corsa achieved an average realised price per ton of metallurgical coal sold at its Northern Appalachia division of $118.46 for all metallurgical qualities in the first quarter, which is equal to about $164 to $169 on a free-on-board vessel basis, the company said, and comprises a mix of 22% sales to domestic customers and 78% sales to international customers.

For low-volatile product, Corsa achieved total sales of 388 367 t at an average realised price per ton of $133.92 in the period, which is about equal to $181 to $186 on a free-on-board vessel basis, the company said.

Corsa divested its thermal and industrial coal division in March 2018, becoming a pure-play metallurgical coal producer.

The company’s TSX-V-listed equity closed 12.12% higher on Wednesday at C$1.48 a share, having lost more than 27% since the start of the year.