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CanAm's Coal Earnings Rose by 17 Percent
Green Technology Featured Articles
January 03, 2012

CanAm's Coal Earnings Rose by 17 Percent

By Narayan Bhat
TMCnet Contributor

Coal producer CanAm Coal Corp reported $8.7 million revenue in the third quarter, an increase of 17 percent from the previous quarter, as its mines across North America continued to increase exploration.


The company produced 94,261 tons of coal in the third quarter, an increase of 82,853 tons compared to 11,408 tons for the same quarter last fiscal.

In a press release, CanAm said the significant increase in production was mainly due to contribution of 59,027 tons of coal from BCC's (News - Alert) three operating mines in Bear Creek, Old Union and Gooden Creek.

However, the company's net loss was $497,764, an increase for $342,647 in the year-earlier period when CanAm's revenue was just $1.2 million.

Despite the production of coal rising, the company’s profit did not. The company said most of what it produced was lower-priced thermal coal.

There are many factors that took a hit on its margin, particularly higher general and administrative expenses following two acquisitions, higher interest costs for its debt securities, and other expenses related to stock-based compensation and equipment.

Interestingly, EBITDA improved to $1.7 million from a loss of $59,537 million.

CanAm said much of its time in the third quarter was devoted to completing and integrating the 50 percent stake of Birmingham Coal & Coke (BCC) it bought. BCC has four mines in operation: Bear Creek, Old Union, Gooden Creek and Powhatan, with average coal sales are now in excess of 30,000 tons per month.

“So far, we have now surpassed coal sales of 200,000 tons as compared to 33,000 tons last year. Our cash position continues to be healthy with cash on hand of $5.0 million, including $1.8 million of restricted cash associated with reclamation deposits, at October 31, 2011", said Tim Bergen, CEO of CanAm.


Narayan Bhat is a contributing editor for TMCnet. To read more of Narayan’s articles, please visit his columnist page.

Edited by Rich Steeves


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