The Corsa Coal Corp. board officially appointed Kevin Harrigan as president, CEO and director. The company also promoted Dan Bonacci as CFO and corporate secretary. Harrigan has served as interim president and CEO, and Bonacci has served as interim CFO since February 2022.
“Both Mr. Harrigan and Mr. Bonacci have successfully navigated Corsa through a challenging period in 2022 with significantly improved profitability and adjusted EBITDA for the first quarter of 2023,” said Ron Stovash, chair of the Corsa Board. The Board of Directors thanked them for their commitment, dedication and leadership over the past year, and expressed its confidence in their ability to manage Corsa going forward.
Corsa produced 235,000 tons of metallurgical grade coal in the first quarter, a 34,000-ton improvement over Q1 2022. The average realized price for the first quarter 2023 is the approximate equivalent of between $291 to $297 per metric ton (mt) on an FOB vessel basis. For the first quarter 2023, Corsa’s sales mix included 69% of sales to domestic customers and 31% of sales to international customers.
“This was Corsa’s first quarter of positive net income since the fourth quarter of 2021 and our highest adjusted EBITDA since the second quarter of 2019,” Harrigan said. “This improved profitability was due to the impact of the higher priced sales contracts and the lowest cash cost per metallurgical ton sold since the fourth quarter of 2021; the combined effect resulted in our largest cash margin per metallurgical ton sold since the first quarter of 2017.”
“We consolidated our preparation plant operations early in the quarter and encountered some processing issues and increased idling costs,” Harrigan said. “Our team quickly responded, and these issues were resolved in early February with the plant operating as expected for the remainder of the quarter.
The Casselman mine completed the development of the access to the North mine reserves midway through the first quarter. “We expect that the conditions will remain favorable in this new area of the mine and productivity and costs will continue to improve,” Harrigan said.
The company altered the Horning mine plan to mine around the geological issues that hampered 2022 production allowing for the addition of a second production shift midway through the quarter. Corsa’s surface operations continued to expose a highwall in preparation for a contract highwall miner to commence mining in the second quarter. “This addition is expected to improve surface mine production, support additional spot market sales and lower our cash production costs per ton sold,” Harrigan said. “We believe that many of the challenges faced in 2022 are now behind us and look forward to a year with improved contracted fixed prices, lower cash production costs and expanding margins that build on the positive momentum that started in the first quarter of this year.”
The price for spot deliveries of Australian premium low vol met coal opened the second quarter of 2023 at $300/mt FOB and was trading at $257/mt FOB in mid-April. As of mid-April, forward curve pricing for the balance of 2023 was trading at an average of $258.36/mt FOB. The forward curve for 2024 indicates pricing at an average of $278/mt FOB.
Corsa foresees higher second quarter 2023 sales volumes. The company has committed more than 930,000 tons at an FOB mine price of nearly $179/ton for the calendar year 2023. The price per ton is the equivalent of $287/mt FOB for Australian premium low volatile metallurgical coal.