Gloucester continues expansion efforts

GLOUCESTER Coal had up to 16 drill rigs operating in the June quarter while coking coal sales were up 64% year-on-year.
Gloucester continues expansion efforts Gloucester continues expansion efforts Gloucester continues expansion efforts Gloucester continues expansion efforts Gloucester continues expansion efforts

Leighton works at the Duralie mine.

Blair Price

Commodities trader Noble Group owns at least 92% of the New South Wales coal producer with its $12.60 per Gloucester share offer set to end on August 4.

 

While there was plenty of corporate buzz surrounding Gloucester’s failed merger with Macarthur Coal, the company’s two mines in the Gloucester Basin focused on producing more coking coal to take advantage of strong global demand.

 

Coking coal sales reached 215,000 tonnes for the recent quarter, up nearly two-thirds from the same period a year ago, while thermal coal sales of 312,000t fell 26%.

 

The Duralie mine produced 441,000t of run-of-mine coal for the June quarter, up 5% year-on-year, while annual production for 2009-2010 was up 6% from the previous year to 1.69 million tonnes.

 

Gloucester plans to lift the mine’s ROM production to 3Mt per annum and continue mining for nine years through its Duralie Extension project.

 

The company expects state government approval of the environmental assessment during the “next quarter” and said submission by the public and various agencies to the EA have been processed.

 

Bowens Road North lifted output 18% year-on-year to 226,000t ROM coal in the recent quarter while annual production to the end of June was marginally lower than the previous year at 933,000t.

 

Pit development at the Roseville operation is continuing with 58,000t produced in the June quarter compared to a mere 13,000t a year ago.

 

The upgrade of the Stratford Coal Preparation Plant is on track to increase throughput to 4.3Mtpa by late 2010 while the next upgrade is targeting capacity of 5Mtpa by 2013.

 

Gloucester recently expanded its coal reserves by 31% to 74.8 million tonnes and its coal resources by 16% to 278.8Mt.

 

With a peak of 16 drilling rigs at work during the recent quarter, exploration expenditure hit $8.6 million compared to $3.4 million in the previous three months.

 

Gloucester also acquired three CAT785C XQ dump trucks using $US8.5 million of financing through its $33 million Chattel Mortgage Facility.

 

The company ended June with a $27.8 million of cash on hand.

 

Gloucester shares are unchanged at $12.46 yesterday.

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