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Armstrong Energy Faces Potential Bankruptcy

Armstrong Energy Inc. said in mid-August it was facing a possible bankruptcy filing as the small Illinois Basin steam coal producer continues to experience operating losses and the inability to repay an interest payment.

The St. Louis-based parent company of Armstrong Coal, which mines in western Kentucky, recorded a net loss of $17.2 million in the second quarter, up from a net loss of $15 million a year earlier, although total revenue actually was a bit higher at $60.9 million. Total assets including cash and cash equivalents dipped to $74.1 million at the end of June from nearly $90 million a year ago.

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Foresight Exports More Coal, Non-committal About Future of Deer Run

Strong export sales helped fuel higher steam coal output by Foresight Energy LP in the second quarter of 2017, but the company sold less coal at lower realized prices despite productivity gains, and recorded a net loss of $16.3 million for the April-June period.

Export deliveries of 2.2 million tons through the first half of this year compared favorably to the 1.3 million tons the St. Louis-based company shipped overseas during the first half of 2016, Foresight president and CEO Rob Moore told analysts during an August 11 phone conference to discuss earnings.

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New Knight Hawk Portal is Complete at Prairie Eagle Mine

Knight Hawk Coal LLC in late summer applied the finishing touches to a new portal at its flagship Prairie Eagle underground steam coal mine near Pinckneyville in Perry County, Illinois, and soon expects to reap the benefit of higher production from what essentially amounts to a new mine.

Knight, a family-owned high-sulfur coal producer in southern Illinois for nearly two decades, was using the new Prairie Eagle East Portal to shuttle miners into the operation in early September, according to Andrew Carter, who heads up sales for the company.

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Revenues Decline in Spite of Alliance Resource Selling More Coal in 2017

Alliance Resource Partners sold more coal in the second quarter of 2017 than a year ago, but its net income and total revenues declined because of anticipated decreases in coal sales prices. Joseph Craft, president and CEO of the Tulsa, Oklahoma-based company, told analysts during a July 31 phone conference that he expects electric utility coal purchases to pick up in the final months of 2017.

Alliance sold 8.5 million tons during the April-June period, up 6.3% from a year ago, due largely to good performances at its Hamilton longwall mine near McLeansboro, Illinois, its River View underground mine near Uniontown, Kentucky, and its Gibson South underground mine near Princeton, Indiana. Both River View and Gibson South are continuous miner operations.

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Warrior Met Continues to Improve Operations

In its second quarter earnings report, Warrior Met Coal reported net income of $129.9 million, compared to $108.3 million in the first quarter of 2017. The company reported adjusted EBITDA of $188.5 million in the second quarter of 2017, a 39% increase over the first quarter.

“Warrior’s highly successful second quarter validates our value proposition as the only publicly traded ‘pure-play’ hard coking coal operator in the U.S.,” commented Walt Scheller, CEO of Warrior. “Robust sales volume growth in a strong price environment resulted in a 167% increase in our free cash flow compared to the first quarter. We believe our ability to significantly grow our sales while maintaining our exceptionally low-cost structure will enable us to carry forward this strong performance over the remainder of the year.”

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