Shares of the AIM-listed Coal International(LSE:CLN), a coal mining company, were red-hot during midday trading, arriving at a price of 26.00 p after the company said it had received a bid approach.The company’s short announcement said that a preliminary approach may or may not lead to an offer being made for the company.
Just a few days ago, the company said their full year pre-tax loss widened, due in part to higher unit costs associated with the ramp-up of production during a period of weak prices for thermal coal.
For the year up to June, the coal mining company said pre-tax loss came in at £12.4 million compared with a restated loss of £8.1 million, while turnover rose to £18.1 million from a restated £2.9 million.
Coal International is planning to continue to develop its operating base at the Maple property in West Virginia, with the goal of bringing coal production to 1 million tons per annum by the end of the 2009 financial year.Chief executive Durand Eppler said the company has a solid operating base and significant reserve position, and can look forward to continued growth and further increases in production during 2008 and beyond.
The company expects first production from Peerless seam reserve blocks to occur in 2009.
The company successfully completed a placing earlier this year, raising in the region of £8.1m, leaving it well placed to increase output of higher margin metallurgical coal to satisfy strong demand. The group currently has ten additional mining permits in various stages of review between its Atlantic Leaseco and Maple properties.
Looking on the stock chart below, it seems that it had a fun ride over the year; however, since July, 2007 the stock accelerated downwards. At the moment of writing this article the stock was priced at 26.00 p. The company is to be valued £25.37 mln.
The market for coal will chill some day, but nobody knows when this day will arrive. Now the coal market is on its peak, yet there are no signs of it slowing down at the moment. Today Coal International is expanding its boundaries and looking for new resources. If the company fails to find rich resources – game over.
Reference
www.coal-international.com
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