For the period ended March 31, the British Columbia-based company had net earnings of $2.6 million, well above the net loss of $1.6 million it posted in the first quarter of last year.
The average per-tonne cost of coal sold from Quinsam was $118.82, lower than the anticipated $125/t average thanks to an international shipment quality penalty.
Production at the complex during the quarter was 118,789 tonnes from a raw coal production of 205,090t, at a cost of $73.09/t.
“Positively affecting the production cost of coal during the first quarter of 2009, compared to the last quarter of 2008, was the effect of the depillar tonnes mined versus the development tonnes mined,” Hillsborough noted, adding that production costs continued to be higher because of thinner seams in its current production area.
Despite continued “very strong demand” for Quinsam’s thermal product, the producer said it was not able to garner increased prices from one of its two remaining cement customers due to the current terms of the supply contracts.
Positively, the low domestic prices were offset by significantly higher international cost shipments delivered in March.
“One major cement contract came to an end in November 2008 and this coal is now being directed into the international market,” the company said.
Hillsborough also focused on its Peace River Coal project in the first quarter, finalising a $104 million capitalisation program. The complex should enjoy both a reduction in per-tonne operating costs and a jump in production by performing its own mining operations.
With regards only to the PRC investment, the company was able to record a first-quarter equity income of $1.1 million.
The 91-worker underground Quinsam operation, wholly owned by Hillsborough, has an annual production rate of 520,000 clean tonnes.
Located near Campbell River, British Columbia, Quinsam started as a surface operation in 1987 and underground room and pillar production commenced in 1990. The entire complex is now underground.