“We are starting to see pricing inch up in international markets, which will hopefully lead to additional export opportunities” next year, Armstrong said. “So far, we have sold a small amount of coal to the export market and we see that as an opportunity going forward.”

Armstrong was founded in 2006 to mine in the high-sulfur IB, and its majority owner is Yorktown Partners LLC. The company sells coal mainly to regional electric utilities and is the fifth-largest producer in the IB and second-largest in western Kentucky, behind Alliance Resource Partners. Armstrong controls an estimated 425 million tons of coal in Ohio and Muhlenberg counties, as well as McLean, Union and Webster counties in western Kentucky. The coal averages 11,500 Btu/lb, 5.1 lb/MMBtu sulfur and has a very low chlorine content.

In the July-September period, Armstrong Coal’s production and sales both increased to 2.4 million tons from 2.1 million tons a year earlier. The rise mainly was due to higher production at the Lewis Creek underground mine in Ohio County, with mine development completed in mid-2013. The Kronos underground mine in Ohio County also experienced improved operating efficiencies, leading to increased output.

Those gains were partially offset by a decline in production at the Midway surface mine in Ohio County, which struggled with poor geological conditions.

Armstrong had revenue of $108.2 million in the third quarter, up from $94.7 million in the comparable period of 2012. Average sales price per ton in the latest quarter was $44.63/ton, down from $45.61/ton in the third quarter of 2012.

Overall, Armstrong posted a net loss of $7.9 million in the third quarter, compared with a loss of $5.3 million for the same period of 2012. The increase in net loss largely was related to an increase in interest expense from higher average borrowings and an increase in the average interest rate in 2013 as well as higher operating costs year-over-year, the company said.

For the first nine months of 2013, Armstrong had revenue of $310.7 million, versus $287.9 million for the first three quarters of 2012. Coal production increased to 7.1 million tons from 6.6 million tons in the same period of 2012. Sales, meanwhile, rose 8.5% to 6.9 million tons, up from 6.3 million tons in the same period last year.

The average sales price of the company’s coal decreased to $45.16/ton in the first nine months of this year, from $45.41/ton for the same period of 2012. Armstrong blamed the slight decrease was blamed on “unavoidable customer mix, partially offset by annual price increases on our multi-year coal supply agreements” and the settlement of a governmental imposition claim in August associated with additional mining costs incurred from constructing a federal Mine Safety and Health Administration-mandated safety bench at the Equality Boot surface mine in Ohio County in November 2011.

Martin Wilson, Armstrong Energy president, said the company had “very little coal left to sell for the remainder” of 2013. “We have 8.4 million tons committed in 2014. Based on this, we feel like we’re in a strong position for the remainder of this year and next.”