TORONTO (miningweekly.com) – TSX-V-listed coal producer Corsa Coal has reported a fourth-quarter net loss of $106.35-million for the three months ended December 31, as realised prices for both its main operating segments fell.
The company’s coal operations were conducted through the Somerset, Pennsylvania-based Northern Appalachia division (NAPP) which was mainly focused on metallurgical coal production in Pennsylvania and Maryland with sales in North America, Europe, South America and Asia; as well as the Knoxville, Tennessee-based Central Appalachia division (CAPP), which was focused on thermal and industrial coal production in the Central Appalachia coal region, with sales in the south-eastern region of the US.
Revenue in the three-month period nearly halved to $26.6-million, as Corsa saw a significant year-on-year contraction of tons sold. NAPP sales fell 46% to 171 000 t, while CAPP tons sold fell 36% to 149 000 t.
Corsa said NAPP productivity improvements and cost reduction efforts had been successful in outpacing the decline in average realised coal prices, with the cash production cost per ton sold for metallurgical coal decreasing 34% from $94.21 to $62.11 in the quarter, compared with the same period in 2014, versus a 22% decline from $88.76 to $69.15 in average realised sales price per ton sold year-on-year. These efforts led to cash operating margin and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rising in the quarter to $14 000, against a negative adjusted Ebitda of $7.45-million in the fourth quarter of 2014.
Corsa advised that the NAPP continued to aggressively manage its cost structure. With the exception of the Horning mine, the mines idled during the first quarter 2015, as well as other inactive deep-mining operations, were sealed in an effort to significantly reduce idle mine costs.
The division incurred idle mine costs of $2.94-million during 2015, which was expected to dramatically decline this year as a result of these mines being sealed. Further, Corsa also consolidated its coal processing plants in the second quarter 2015 and again during the fourth quarter of 2015, resulting in significant operating cost savings.
The CAPP division had also substantially completed the mine development for the Cooper Ridge Deep mine, which Corsa expected to enter full production during the second quarter. This mine was expected to strategically reposition CAPP into the specialty coal and industrial coal markets, which typically generated premium pricing.
Corsa expected total coal sales of 1.53-million to 1.83-million tons for 2016, with the NAPP division accounting for between 850 000 t to 1.05-million tons, including metallurgical coal sales guidance of 600 000 t to 700 000 t and thermal coal sales guidance of 250 000 t to 350 000 t.
The CAPP division sales were expected to total between 675 000 t and 775 000 t of thermal and industrial coal.
Corsa’s TSX-V-listed stock had gained 166.7% in the first quarter, to close at C$0.07 apiece on Thursday.