For the period ended August 31, the company reported a loss of $1.92 million and a comprehensive loss of $8.38 million, a relatively better picture year-on-year from its loss of $2.25 million and comprehensive loss of $4.63 million in 2011.
For the nine-month period, its $7.79 million loss compared with a loss of $10.43 million over the same period last year.
Cline officials said that no revenues from coal sales have been recognized, and that it was working to secure long-term off-take arrangements.
Cline is also aiming to secure sufficient funding to continue the development and expansion of the New Elk mine while keeping mineral claims and the mine’s title in good standing.
The mine has retained a workforce to maintain it during its closure and keep its assets in preparation for a rapid restart as the economy allows.
The company’s plan in the short term is to navigate the market’s choppy waters by conserving financial resources while seeking the additional capital and making efforts to seal long-term coal contracts with steelmakers.
“Current market conditions for coal producers continue to be challenging,” chief executive officer Ken Bates said, noting that weak demand and declining prices were continuing throughout the industry.
In fact, a benchmark industry contract price settlement for the final quarter of 2012 dropped $US55 per ton from the previous quarter settlement of $225/t.
“We are taking a longer-term view of the metallurgical coal market as our industry faces this current cyclical downturn in demand, focusing on China and India,” Bates said.
Looking ahead, Cline officials said that market forces must guide the productive capacity at the New Elk mine during the weaknesses in the demand cycle; thus, its sales and production expectation hinged largely on demand factors as opposed to productive capacity, as it normally would when the complex was actively mining.
“It is not possible to predict the timing, extent or turnaround of the economic and recessionary pressures currently affecting the coal market, but we believe the market will rebound over time and that the coal asset at New Elk is being positioned for long-term supply growth,” Bates said.
In July, Cline confirmed it would temporarily shutter New Elk and furlough 78% of its staff just days after announcing a major lift in the mine’s resource.
New Elk currently counts 619 million tons of measured and indicated coal and 105Mt of inferred coal.