Atlantic Coal

Stockton’s- 4 million tons of raw coal, or ‘run-of-mine’ coal (ROM), which, after the washing process equates to approximately 2 million tons of washed anthracite.

The mine presently produces around 200,000 tons of anthracite a year. (Stockton a mine life of about 10 years from now, at 400,000 t)
  
Atlantic’s product is selling at between US$95 and US$145 a tonne and costs around US$85 to mine

On the market anthracite per tonne selling price has been between $115 for industry up to $150 for home use. (09-04) Atlantic has historically sold around 40% of its output to steel makers, 30% to other industry and 30% for home heating, the highest-margin of the three but only for the colder months from November to March.  

Positive

hydraulic excavator - significantly increase production and reduce the cost base,get to 400,000 tons per year.’ last piece of the colliery’s $10 million redevelopment and could be assembled in the very near future. 

cash flow positive from operations 

Solely based on current assets & liabilities the short term sp should be anywhere between 1.3 and 1.8p


Contract

Renegotiated with the Pagnottis to stop selling the 100,000 tons of ROM coal a year at a fixed price, and instead effectively pay a deferred consideration. This, says Atlantic, will save it $10m-plus over the mine's life. 

deal with coal broker Xcoal,  ‘taking 5,000 initially and have agreed to take up to 150,000 tons of clean coal or, if production is great they can take 50% - so if we were to produce 400,000 tons they could take 200,000 of it. We see this as a strategic partnership rather than just a one-off contract.’


Major shareholder recently bought the loan lote, indicated they will not sale as cheap.

FLOODS ravaging Queensland are expected to drive global coking coal prices more than 20 per cent higher for the second quarter.

Analysts expect production to be around 100,000 clean tons this year (2010), rising to 200,000 in 2011.

The market for anthracite in Pennsylvania, meanwhile, has tightened considerably following the closure of a neighbouring mine, which has actually left Atlantic struggling to meet demand.

completing the relocation of the Norfolk Southern Railway, (nOV 2010), to provide access to coal reserves under the tracks that traverse the southern pit area. This will contribute positively to production.

Negative

 £1 million convertible loan agreement for a further year, (end Dec 2011) which gives the company’s management breathing space to consider its options. coupon of 13.75 percent it could prove expensive to ponder the alternatives too long.  


Future target

Fox-Davies analyst predicts Atlantic’s turnover this year (2010) will be US$11.8 million, rising to US$21 million in 2011, delivering EBITDA of US$10.7 million.


next 12 months to add 30-40m tons, which will give us a mine life of around 30-40 years,’ plans to acquire sites on a royalty basis, and so not risk large amounts of cash up front. Atlantic thinks it will be able to pay a royalty to each mine’s owners of around $4 a ton and so still maintain a significant profit.

iNTERMIN: Although the six monthly figures show a distinct improvement, it is important to recognise that the true benefits of all the restructuring and development initiatives have not fully impacted this current reporting period.

 As we continue to move into the coal basin we expect raw coal production to increase dramatically.