The company said it reached significant milestones during the quarter as the one millionth tonne of PCI coal produced since operations began was shipped in April, and in June the company successfully completed its first commercial shipment of coking coal to a customer in Europe.

Operating profit for the first quarter was $C1.5 million with a net income of $C83,000.

Like many other Canadian coal producers, Pine Valley continued to incur the cost of fuel surcharges – an offshoot of continued high commodity cost of oil in world markets. Total fuel surcharge costs for the quarter were $C4.65 per tonne of product coal sold compared to $C2.93 per tonne for the 2005 June quarter.

Looking ahead, Pine Valley expects to realise sales of about 650,000t of PCI and 350,000t of coking coal product in the fiscal year ending March 31, 2007.

“The company's financial results are highly dependent upon factors including supply and demand in both the steel and metallurgical coal markets, coal prices, production and sales volumes, the US/Canadian dollar exchange rate and production costs, including strip ratios,” Pine Valley said on Monday.

The company said it pricing settlements had been consistent with the average of mid to high $US60/t for low-volatile PCI coal and $US90-$US115/t for coking coal.