ATH Ath Resources

 

TIDMATH 
 
RNS Number : 9899T 
ATH Resources plc 
07 October 2010 
 

 
+-------------------------------+-------------------------------+ 
| Press Release                 |                7 October 2010 | 
+-------------------------------+-------------------------------+ 
 
                                ATH Resources plc 
                        ("ATH Resources" or "the Group") 
                            Pre-Close Trading Update 
ATH Resources plc (AIM:ATH), one of the UK's largest coal producers, today 
issues the following trading statement ahead of the Group's preliminary results 
for the year ended 3 October 2010 which are expected to be announced on 
Wednesday, 8 December 2010. 
Current trading 
As reported in the Group's interim announcement on 30 June 2010, sales volumes 
in the first half of the year were adversely affected by one of the worst 
winters Scotland has had for over 100 years.  The Board is pleased to confirm 
that sales in the second half of the year recovered strongly, with volumes for 
the full year approaching expected levels of 1.8 million tonnes. Sales prices 
averaged over GBP43 per tonne in the second half of the year, in line with 
expectations. However, unexpected geological conditions at the Group's 
Glenmuckloch mine during the second half of the year reduced coal production in 
the latter months and the Board has taken the decision to lower its estimate of 
remaining reserves by 50,000 tonnes.  Given that the mine is reaching the end of 
its life, this has led to an accelerated write down in the value of work in 
progress of around GBP750k. This write down, together with the one-off costs 
associated with recovering sales volumes from the Group's other mines has 
significantly impacted trading performance for the year. Despite this, the 
Group's Proved and Probable reserves now stand at a higher level than at any 
time in the Group's history at 8.5 million tonnes as reported below. 
Whilst the Group's cash position has been managed well with net borrowings at 
the year end in line with management expectations, during the next 12 months the 
Group is required to commit GBP14m of investment opening up both of the new 
Netherton and Duncanziemere sites. The Netherton site has been redesigned to 
enable substantial long term restoration savings to be made but initial 
opening-up costs will increase as a result. This investment, in conjunction with 
the continuing impact of its legacy sales contracts, which are well below 
current market prices, has led the Board to take an early review of the level of 
the proposed final dividend payable in January 2011. It is the Board's current 
intention, just for this year, to propose a reduction in the final dividend 
during this investment phase to 2.0 pence per share, making dividends for the 
full year, including the interim dividend, in total 3.0 pence per share (2009: 
6.15 pence per share). 
Coal reserve update 
As previously announced important planning consents were received in June 2010 
for Netherton, a site close to the existing Skares Road site, and Duncanziemere, 
an extension to the Laigh Glenmuir mine, in total adding 2.7 million tonnes to 
Proved Reserves. Since then a further 0.4 million tonnes at Netherton has been 
added to Proved Reserves following further investigation at the site with 
another 0.9 million tonnes added to Probable Reserves. In addition, 1.3 million 
tonnes has been added to Probable Reserves from extensions to the Group's 
existing mines. 
The Group's Proved Reserves currently stand at 6 million tonnes with Total 
Reserves of 8.5 million tonnes. This is an increase of 1.2 million tonnes (28%) 
in Proved Reserves during the course of the year. 
Outlook 
The Board changes following the sale of the assets of ATH Regeneration in July 
2010 are now complete with Alistair Black appointed Chief Executive and Andy 
Weatherstone joining as Group Finance Director at the start of October 2010. 
The new executive team believe that the investments being made in developing the 
Group's new mines, and its strong reserve base when combined with significantly 
improving selling prices which will become available as and when the legacy 
contracts fall away, will generate substantial improvements to future revenues 
and margins for the Group. The first of these legacy contracts expires during 
the next 18 months and the Group is already looking at opportunities to enter 
into new sales contracts with electricity generators. 
Consideration of new accounting standards 
In August 2010 the International Accounting Standards Board (IASB) issued a 
draft IFRIC Interpretation: "Stripping Costs in the Production Phase of a 
Surface Mine". The draft IFRIC, if issued in unamended final form, would have no 
impact on cash generated from operations, and is likely to improve reported 
profitability in the current year, but would result in a prior year write down 
in the historical level of work in progress recorded on the Group's balance 
sheet at the previous year end. It would also reduce the Group's current 
corporation tax liabilities. The Board is considering the full implications 
arising from any potential change and will update the market as soon as the 
position is clear.  It is, however, likely to consider an early change in 
accounting in this area if it concludes that it is appropriate to do so in order 
to remove any future uncertainty over the likely impact of the IFRIC.  If 
adopted, the reported profit under the new approach is likely to be at or above 
current market expectations. 
The information in this report relating to exploration results, mineral 
resources or mineral reserves is based on information compiled by Mr. Peter 
Morgan, a full-time employee of the Group, who is a Fellow of the Institute of 
Materials, Minerals and Mining. Mr. Morgan has sufficient experience which is 
relevant to the style of mineralisation and type of deposit under consideration. 
He has reviewed and consents to the inclusion in the report of the matters based 
on his information in the form and context in which it appears. A glossary of 
terms is available on our website - www.ath.co.uk. The information in this 
report relating to exploration results, mineral resources or mineral reserves is 
reported in accordance with the Pan-European Code for the Reporting of 
Exploration Results, Mineral Reserves (the PERC Reporting Code). 
 
                                    - Ends - 
 
 
 
For further information: 
+------------------------------------+--------------------------+ 
| ATH Resources plc                  |                          | 
+------------------------------------+--------------------------+ 
|                                    |                          | 
| David Port, Executive Chairman     | Tel: +44 (0) 7836 693798 | 
|                                    |                          | 
| Alistair Black, Chief Executive    |    Tel: +44 (0) 1302 760 | 
|                                    |                      462 | 
+------------------------------------+--------------------------+ 
|                                    |            www.ath.co.uk | 
+------------------------------------+--------------------------+ 
 
+------------------------------------+--------------------------+ 
| Seymour Pierce Ltd                 |                          | 
+------------------------------------+--------------------------+ 
| Sarah Jacobs / John Cowie          |     Tel: +44 (0) 207 107 | 
| (Nominated Adviser)                |                     8000 | 
+------------------------------------+--------------------------+ 
| Richard Redmayne / Katie Ratner    |                          | 
| (Broker)                           |                          | 
+------------------------------------+--------------------------+ 
|                                    |    www.seymourpierce.com | 
+------------------------------------+--------------------------+ 
 
Media enquiries: 
+------------------------------------+--------------------------+ 
| Abchurch                           |                          | 
+------------------------------------+--------------------------+ 
| Sarah Hollins / Mark Dixon         |     Tel: +44 (0) 207 398 | 
|                                    |                     7729 | 
+------------------------------------+--------------------------+ 
| mark.dixon@abchurch-group.com      |   www.abchurch-group.com | 
+------------------------------------+--------------------------+ 
 
Notes to Editors 
ATH Resources was listed on the AIM market of the London Stock Exchange in June 
2004 and operates three surface coal mines in Scotland; Skares Road, in East 
Ayrshire, Glenmuckloch in Dumfries and Galloway and Muir Dean in Fife. The Group 
is currently the third largest producer of coal in the UK producing 
approximately 2 million tonnes per annum. Coal is used to generate around a 
third of the UK's electricity and the Group holds coal supply contracts with 
four of the UK's main electricity generating companies. 
Further information on ATH Resources can be found at www.ath.co.uk 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 TSTGMMGGNVMGGZM 
 

ATH Resources (LSE:ATH)
Historical Stock Chart
From Jun 2024 to Jul 2024

ATH Resources (LSE:ATH)
Historical Stock Chart
From Jul 2023 to Jul 2024