Hadn't looked into AHQ. Was curious about the mine and its history. Trying to see if there are any issues related to it and the reason why Cline failed yet AHQ can succeed. Thought i'd post what i saw.
It was Clines, only mine. No other income. Read that they had issues getting enough workers into the region. But the primary reason was that they could not find customers to sell it too - caused by oversupply and freefalling prices.
Its strange though, in the third quarter they mentioned that japan had just set the benchmark price for $170/t. And a lot of expectations of profitability was really good with calculations done at $168/t.
Looking at the toronto stock exchange at their income statement, they had 0 operating revenue for 2010-2014.Unfortunately I can't find the 2nd quarter 2012 quarterly report (which would be the main news of them imploding). The toronto exchange doesn't seem to have any reports at all.
Leading up to mining ie, before 2012- Spent between 68-110 million on refurbing and upgrading the mine.
- Spent 70 million on rail and port space.
Expectations at US$168 per tonne.- Transport and handling charges of $46 per tonne.
- Operating costs of $51 per tonne.
- Cash margin of $71 per tonne.
- Projected production rate of 3 million tonnes per year, giving free cash flow of US $213 million.
- A 24 mile rail line will be rebuilt to the mine in 2012 at a cost of $20 million.
- Had a plan to move to longwall mining be 2015. Which would cut $20 a tonne from the price.
"Cline is projecting coal production of 1.2 million tonnes for 2011, rising to 2.6 million in 2012 and 3 million tonnes in 2013. Current production is shipped by coal truck to a rail line. A 24 mile rail line will be rebuilt to the mine in 2012 at a cost of $20 million. This will provide quick access to steel mills and major coal export terminals at U.S. seaports"
2012-03-01 1st quarter report (search Cline-MDA-Q1-2012.pdf)
- "At the present time the supply side of the metallurgical coal market substantially exceeds demand, resulting in weak demand and coal pricing."
- "In April 2011, the ‘benchmark’ price for premium hard coking coal was $330 a metric tonne and has decreased to the present reported price of $215."
Coal prices had fallen a lot (but was half way into their freefall.)
2012-06-28 Sacked a number of staff (I think it was 300 - with 500 left) Moved from mining 2 seams down to 1.5.
2012-10-15 3rd quarter report- Was already shut down at this point in caretaker mode.
- Previous quarterly benchmark had falled $55/t to $170/t .
- Blamed the bankruptcy on not being able to find long term customers to sell it to.
So they should have been quite profitable even at this level (we know that prices kept falling after this). And based on their income showing zero. It seems that the oversupply simply meant they couldn't sell. Surprised they couldn't even sell at spot prices. (perhaps the toronto financial income records didn't load, rather than it being 0).
Anyway. I really wish I had the 2nd quarter report. I would like to know what their real mining costs were.
But the mine seems like its in good condition.
