Universal spent $A13.8 million on operating costs during the quarter, with the majority of it on development costs as the company’s Kangala mine nears its February production target.
The company reported a net loss of just over $9 million and closed the quarter with $5.8 million in the bank.
During the quarter Universal achieved a number of development milestones at the Kangala thermal coal project, including increasing proven reserves within the open pit area by 750,000 tons.
The box cut and wash plant are progressing as planned, as is construction of the hard park, haul roads, pollution control dam, discard facility and plant terrace.
The company also finalized a 100,000 ton per annum export thermal coal offtake agreement with Exxaro.
The company’s other thermal coal projects, Brakfontein and Roodekop, are both progressing through the approvals stage.
The Berenice coking coal project is in the exploration stage.
For the three months to June 2013 Continental Coal’s three operating mines produced 560,357t of run of mine coal, down 11% from the previous quarter’s record production level.
Production for the full financial year increased, however, boosted by a ramp-up at Vlakvarkfonetin and was up 13% to 2.2 million tons.
Production and operational improvements were achieved in the second half of FY2013 primarily as a result of Continental having a six full months of operations following the extension to the Ferreira mine, as well as the addition of production from Penumbra.
In the second half, ROM production increased by 19.4%, plant feed by 36% and export yields at Ferreira by 5.3%.
Domestic sales increased 3%, export sales by 16.2% and total thermal coal sales by 8.2%.
The company’s three development projects are awaiting various approvals.
Continental only provided financial results for the full 2013 year, during which it reported revenue of $US62 million, total production costs of $53 million and a gross profit for the financial year of about $9 million.
The company said it continued to host discussions regarding the sale of non-core assets and was still seeking a long-term offtake agreement and strategic partner for the De Wittekrans coal project, which is awaiting approval of a new order mining right.
During the second quarter, Zyl announced it would not go ahead with the acquisition of the Mbila project and settled all outstanding claims from the vendors.
Under the terms of the revised agreement, Zyl agreed to pay to the Mbila vendors the amount of $A350,000 by July 3 and a further $150,000 on September 25.
On payment of the second amount the parties have agreed to release each other from any further claims.
The company continues to hold a 24.86% interest in the Kangwane Central project, 70% in the Kangwane South project and is exploring the possibility of acquiring an additional interest in Kangwane Central.
At Kangwane South, Zyl granted a mining right for the project to Altius Trading, of which Zyl is the majority shareholder.
At Kangwane Central, Zyl and its project partners attempted to revise the project’s initial agreement but the memorandum of understanding lapsed and discussions continue.
During the quarter Zyl conducted a review of its operations.
As a result, it initiated major cutbacks, laid off the majority of its staff in South Africa and welcomed the resignation of an executive director.
The company spent a mere $975,000 across exploration and administration for a net loss of $296,000.
The company entered Q3 with $951,000.