Coronado pumps half-year profit, plans Curragh expansion
Coronado says new plans to expand its Curragh coal mine in Queensland will unlock “considerable value”.
Coronado Global Resources says its newly announced plans to expand its Curragh coal mine in Queensland will unlock “considerable value”.
The new plan for Curragh came as Coronado unveiled a near-doubling in net profit for the half year.
Coronado, which also owns coal mines in the US states of Virginia and West Virginia, declared a net profit of $US214.3m ($315.4m), up 92.7 per cent, based off a 54.1 per cent jump in EBITDA to $US405.4m.
It also announced an interim distribution of US41c per CDI.
The company, which listed on the ASX in October, said it had agreed to the early release from escrow of around 11 per cent of the company’s shares currently held by its pre-listing backers.
Coronado said the early escrow release of the CDIs — and their likely subsequent sale — would help improve liquidity and help it meet the free-float requirements for a potential inclusion in the ASX indexes. Those original backers will continue to hold another 69 per cent of Coronado’s shares.
The Curragh expansion plans will see the mine’s output climb to 15 million tonnes a year by 2023, up from the 12.9 million tonnes forecast for 2023 under Coronado’s prospectus.
Coronado bought Curragh from Wesfarmers in March last year for $US537 million and Coronado managing director Gerry Spindler noted that the mine had already delivered $US586m in EBITDA for the company.
“This new mine plan clearly demonstrates the attractive qualities of this asset and the many opportunities we have to unlock considerable value over the next five to ten years and beyond,” Mr Spindler said.
The expansion is expected to cost between $US80m and $US108.5m, or around $US50 to $US55 for each new tonne of capacity. That compares to average installed costs of around $US150 a tonne for other new coal developments.
Mr Spindler said he was pleased with the financial performance given some of the “operational challenges” of the first quarter.
“Our ongoing focus will be to improve operating margins, increase our proportion of metallurgical coal sales and enhance margins through blending coal products,” he said.
“This will allow us to continue to generate solid returns for our investors through variable coal market price cycles.”