SYDNEY - Coronado Global Resources has adjusted its annual coal production projection and anticipates increased mining costs due to complications at its Curragh and Buchanan operations.
Decreased Production Forecast
Coronado now estimates saleable coal production to range between 16.2 million metric tons and 16.4 million tons for the 12-month period ending in December. This revised projection is lower than the previously expected 16.8 million-17.2 million ton range.
Setbacks at Buchanan Mine
Temporary geological conditions in the coal seam had an adverse impact on mining operations at the Buchanan mine in the U.S., leading to reduced production rates and a lower yield. However, Coronado assures that efforts are underway to recover the lost tons in the 4th quarter of 2023 and the 1st quarter of 2024.
Mechanical Failure at Curragh Complex
One of the draglines at the Curragh mining complex in Australia experienced a mechanical failure in the propel unit in the middle of last month. Repairs are expected to be completed by the end of October.
Revised Mining Costs
As a result of these setbacks, Coronado now projects average mining costs per ton of coal sold to be between $97 and $102 for fiscal year 2023. This revised estimate is higher than the previous guidance of $84-$87.
Capital Expenditure and Cash Flow Impact
Despite the challenges, Coronado still anticipates capital expenditure for the current fiscal year to be between $220 million and $240 million, which is lower than the earlier forecast.
"While there may be some reduction in year-end cash on the balance sheet, we expect the impact to be minimal, with a maximum reduction of $10 million assuming no recovery of the lost production," stated Executive Chairman Gerry Spindler.