While its operating mines were producing 678,000 tonnes of saleable coal for the December quarter, Whitehaven was also able to concentrate on progressing its Narrabri underground development in the Gunnedah Basin.
Construction of Stage 1 of the bord and pillar project remains on schedule with surface works well advanced and excavation of the three drifts well underway.
So far Whitehaven has spent about $A65 million on the project and has awarded 90% of the contracts for Stage 1.
First coal is expected during the second quarter of the 2009-2010 year.
Management are well underway with a detailed design of Stage 2 of the project which includes installation and operation of a longwall. Management expect to lodge an application for approval within the next five months.
At its operating mines production during the December quarter was adversely affected by lower output at Canyon as it reaches the end of its life; “ongoing poor performance of a mining contractor” at Werris Creek; and government approval delays at the Sunnyside and Rocglen mines which set back start-up times.
Whitehaven has worked to turn around the issues taking control of Werris Creek and now expects a rate of 1.3 million tonnes per annum in the third quarter; increasing output at Rocglen expecting a rate of 1.2Mtpa by the third quarter; and beginning production at Sunnyside.
The production constraints in the December quarter did force Whitehaven to buy in coal to meet its contracts with sales rising by 33%.
The company also reduced metallurgical coal sales during the quarter in line with plummeting demand, but says its customers are still taking delivery of contracted tonnage.
Whitehaven has sales tonnages and prices fixed for the majority of planned production through to June 30 this year.
The company had $US505 million in forward $US/$A exchange contracts at the end of December at an average rate of $US0.7612/$A1.
During the quarter, $US200 million of par forward contracts were taken out at an average rate of $US0.6725/$A1.
For the rest of the 2009 financial year, Whitehaven has forward exchange contracts of $US211 million – 98% of expected $US revenue including $US future sale proceeds from the sale of 7.5% of Narrabri to EDF Trading.
Whitehaven shares were trading down 6.25% mid-morning today at $1.50.
