Caledon Resources says 2009 saleable coal production in line, to explore expansion opportunities in 2010

Caledon Resources (AIM: CDN) reported higher production in Q4 and said the saleable production of 485,000 tonnes it managed to achieve at its Cook coal mine operations in 2009 was in line with a previous announcement in December. It is still planning on a base production of 700,000t for 2010 and investigating options for further expansion.

Raw coal production in Q4 amounted to 162,000t, or a year-on-year improvement of 2%, and to 604,000 for the full year, which is 10% more than in 2008. Coking coal production for the quarter rose 3% year-on-year to 109,000t and 7% for the full year to 406,000t, while thermal coal production improved 20% to 79,000t in 2009.

Caledon sold 109,000t and 403,000t of coking coal in Q4 and full year 2009 respectively, marking an improvement of 4% and 1% respectively. Thermal coal sales dropped 81% to 7,000t in Q4, but climbed 15% to 76,000t in 2009.

Caledon said that the continuing strong demand from China and India, recommissioning of blast furnace capacity and reported sales of up to US$190/t are reinforcing forecasts of a significant increase in coking coal prices in the 2010 contract year, which will commence in April, while any increase would benefit the company from the start of Q2 2010.

A second field programme is still planned for Q2 2010 at the Minyango mine in Queensland, where no significant activity has taken place since the last update as the company is currently preparing a report on the recently completed first stage of field work for the ecological study required as part of the environmental permitting process.

The timing of the project is linked to that of the development of the proposed new coal loading terminal at Wiggins Island, which is expected to commence operations in 2013 after Caledon’s Wiggins Island Coal Export Terminal (WICET) executes the Wigging Island framework deed with the Queensland Government and Gladstone Ports Corp, enabling it to develop the port.

WICET is currently reviewing tonnage allocation requests for the first stage of the port development in preparation for commitment to take or pay contracts, which will be used as the basis for securing funding for the first stage.

Successful participants in this stage will be required to lodge a bid bond reflecting their share of costs to reach Financial Close which is scheduled for July this year.  http://www.proactiveinvestors.co.uk/companies/news/12712/caledon-resources-says-2009-saleable-coal-production-in-line-to-explore-expansion-opportunities-in-2010-12712.html