May 8, 2023 - After a challenging 2022, US-based metallurgical coal mining company Corsa Coal has managed to turn the corner, with the company on Friday announcing its first quarter of positive net income since the first quarter of 2021.
The Pennsylvania-headquartered firm also announced its highest adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), since the second quarter of 2019.
“The first quarter of 2023 adjusted Ebtida of $7.1-million exceeded, or was on par with, the 12 months total adjusted Ebitda in each of the last three years. This improved profitability was due to the impact of the higher priced sales contracts and the lowest cost per metallurgical ton sold since the fourth quarter of 2021; the combined effect resulted in our largest cash margin per metallurgical ton sold since the first quarter of 2017,” said CEO Kevin Harrigan.
Harrigan has acted as interim president and CEO since February 2022, but on Friday his appointment was made permanent. Daniel Bonacci, who also previously served on an interim basis, was appointed CFO.
"Both Mr. Harrigan and Mr. Bonacci have successfully navigated Corsa through a challenging period in 2022 with significantly improved profitability and adjusted Ebitda for the first quarter of 2023.
“The board is confident in their ability to manage Corsa going forward,” commented chairperson Ronald Stovash.
Harrigan said that, from an operational standpoint, Corsa's cash production cost per ton sold decreased modestly from the first quarter of 2022 and was down 9% from the preceding quarter, although there were still a number of mining and operational challenges.
“We consolidated our preparation plant operations early in the quarter and encountered some processing issues and increased idling costs. Our team quickly responded and these issues were resolved in early February with the plant operating as expected for the remainder of the quarter.”
The Casselman mine completed the development of the access to the North mine reserves midway through the first quarter. Harrigan said he expected the conditions would remain favourable in this new area of the mine and productivity and costs would continue to improve.
The Horning mine plan was successfully altered to mine around the geological issues that hampered 2022 production, allowing for the addition of a second production shift midway through the quarter, leading to increased availability of Horning's high-quality coal.
"The surface operations continued to expose a highwall in preparation for a contract highwall miner to start mining in the second quarter. This addition is expected to improve surface mine production, support additional spot market sales and lower our cash production costs per ton sold,” Harrigan said.
Corsa’s second quarter 2023 sales volumes were expected to be higher than the first quarter of 2023, owing to increased production from the surface mines and higher than historical levels.