Orpheus reports sharp sales drop from ADK coal mine
Thursday, July 31 2014 - 12:17 AM WIB
ASX-listed Orpheus Energy Ltd said that coal sales volume from its ADK coal mine in South Kalimantan in the second quarter of this year totaled only 7,955 tons, a sharp drop of 89 percent from nearly 73,000 tons in the same quarter of last year, as production was curtailed by poor weather condition and a change in mining contractor.
?In the June quarter, Orpheus's ADK production was dramatically impacted due to continuing very poor weather, causing myriad issues, as well as having to appoint a new mining contractor,? the company said in a statement on Wednesday.
?Only 3,258 tons of coal were mined from the ADK project and 4,697 tons were traded for a total sales volume of 7,955 tons,? it added.
Orpheus achieved an average sale price in line with the benchmark Indonesian Coal Index (ICI) price for the sales of 4200GAR thermal coal in the June quarter, the company said. During the June quarter, the ICI averaged US$37.50 per ton, which was a 2.8 percent decrease from the March quarter, following on from a 1.7 percent drop over the previous quarter.
?Post reporting date, 10,287 tons of coal has already been shipped in July, from stockpiled ADK coal and trading, and the new mining contractor reports that production at the ADK project is underway, forecasting 30,000 tons per month in August, then increasing to 40,000 tons per month after that,? Orpheus said.
Over the last quarter, the company has continued to implement an aggressive cost reduction strategy to further reduce the company's monthly administration costs. These measures include continued deferment of directors' fees, continued deferment of executive salaries by 50 percent, further reduction of Indonesian operational workforce, and some office rental abatement through sub-leasing.
To provide working capital cover for the company, the directors provided a further loan to the company in the sum of A$250,000 on 23 June 2014. This loan is in addition to the directors' loan in the sum of A$200,000 made last November 2013 and announced in the company's half-year report. Consequently, the total directors' loans outstanding are A$450,00 plus applicable discounted interest. ?It is envisaged these loans will be repaid from the proceeds of the Indonesian assets sales,? said Orpheus, which as a 50 percent stake in the ADK coal mine.
Editing by Reiner Simanjuntak