Straits Asia reports Q1 coal output, exploration
Thursday, April 29 2010 - 01:01 AM WIB
Straits Asia?s Q1 2010 results highlight a quarter in which solid production improvements have been achieved as both mines start to recover from operating constraints and difficulties carried over from 2009. Revenue grew to $153 million on the back of higher sales levels generated by record production at Jembayan. This was offset by higher costs and lower sales prices compared to Q1 2009, resulting in a net profit after tax of $11.2 million for the quarter.
The mine plans for both Jembayan and Sebuku were tailored to increase in-pit coal inventory levels and operating efficiencies going forward. At Sebuku, higher stripping ratios are required for the first half of 2010 to restore inventory levels that were largely depleted by strong sales in the second half of 2009, whilst at Jembayan, the ramp up continues in line with longer-term expansion plans resulting in higher waste movements over the first quarter.
| Q1 2010 | Q1 2009 | ||
| COAL OPERATIONS | |||
| Sebuku | |||
| Coal mined | t'000 | 285 | 648 |
| Product coal | t'000 | 244 | 531 |
| Sales | t'000 | 212 | 403 |
| Jembayan | |||
| Coal mined | t'000 | 2,080 | 1,251 |
| Product coal | t'000 | 2,091 | 1,232 |
| Sales | t'000 | 2,002 | 1,249 |
| Total | |||
| Coal mined | t'000 | 2,365 | 1,899 |
| Product coal | t'000 | 2,335 | 1,763 |
| Sales | t'000 | 2,214 | 1,652 |
Operations
Jembayan achieved record coal production of over 2Mt of coal, up by 75% from the same period in 2009, as the mine continues to develop and grow. Higher unit cash costs of US$49.8/t were largely the result of a 60% increase in fuel prices over Q1 2009 and the higher volumes of waste moved in order to track the mine?s expansion plans.
Sebuku performed in accordance with its mine plan and produced 244Kt of coal compared to 531Kt in Q1 2009, the reduction being a result of continued pit constraints as well as the need to create additional in-pit coal inventory. Cash costs increased to $54.0/t due to higher fuel prices as well as the mine plan?s high stripping ratios for the quarter.
Average selling prices for the Group were $71.63 for Q1 2010 (2009: $85.19).
Exploration
In March 2010, the Group announced that it had increased its JORC Resources to a total of 1,432Mt, with coal Resources at Jembayan increasing by 100% and at Sebuku by 240%.
A follow on drilling programme to start additional conversion of Jembayan Resources to Reserves is currently underway and the results are expected to be published in Q3 2010.
A programme to start the conversion of Resources to Reserves on Sebuku Island will be initiated as soon as the pinjam pakai permit for the Northern Leases is obtained.
Outlook
Operations in Q1 2010 have concentrated on recovering from some of the key difficulties experienced during 2009 and this focus will continue for at least the first half of 2010.
Target mine plans for 2010 highlight an improving stripping ratio and in-pit inventory levels as the year progresses.
Looking forward, the fundamentals of the seaborne thermal coal market remain favourable for producers. Approximately 30% of Straits Asia?s production is tied to index pricing for 2010, providing ongoing exposure to any future improvements in the market. (end of edited release)