[miningmx.com] – SHARES in Keaton Energy gained nearly 13% by mid-morning in Johannesburg on news the company had lifted coal production for the first six months of its 2014 financial year 55%.
Mandi Glad, CEO of Keaton Energy, said in an announcement today that the firm’s
Vanggatfontein Colliery had delivered 616,668 tonnes of washed 2- and 4-seam thermal coal to Eskom in the second quarter.
This represented an increase of 17% over the previous quarter’s record 526,034 tonnes output and took deliveries for the interim period to 1.14 million tonnes which compares well against the 770,000 tonnes delivered in the previous half-year.
“We continued our trend of record production and cash generation during the second quarter of the 2014 financial year,” said Glad.
“Not only has Vanggatfontein settled into a steady-state production unit, but secondary cash generating activities performed strongly as we optimised the mine,” Glad said.
Keaton is not without its headwinds, however.
The company’s Vaalkranz colliery, the purchase of which was completed in January 2012 via the takeover of Leeuw Mining & Exploration for R74.8m, continued to trouble the company.
Glad blamed a 12% year-on-year decline in interim production at Vaalkrantz, an anthracite mine in KwaZulu-Natal province, to 154,145 tonnes on “challenging geological conditions and labour disruptions”.
Nonetheless, shares in Keaton Energy have recovered strongly since mid-June when it traded at a low of some R1.45/share. It was last quoted at R2.10/share, a 45% improvement in only three months.
Glad said in June she would return Keaton Energy to profit-making and earmarked production of five million tonnes/year in thermal and metallurgical coal. This followed a
difficult 2013 financial year characterised by below target output, a disappointing capital raising programme, and litigation.
High on Keaton’s agenda is completion of a proposed R182.4m (A$19.7m) bid for control of Xceed Resources in an effort to meet the five million tonnes a year target. If completed, Keaton will add another major open-pit coal deposit adjacent to Vanggatfontein.
“This, together with our internal pipeline of development projects, provides a solid growth platform for the group,’ said Glad.
The company is scheduled to report its interim production and financial figures in mid-November.
