Regency Mines falls short of sales targets after 'maintenance problems'

Regency Mines’ MET joint venture saw September revenues and production fell short of expectations according to a report on Friday, though the company stood by its prior estimates for the ten-month period to June 2019.

MET, which is 47% owned by Regency, sold 44,020 tons of coal in September, down from expectations of 59,250 tons, while total revenues of $2m against previous estimates of $2.7m.

The estimates were derived from the daily achievements of the joint venture throughout August, and have also been applied to MET’s expectations for the 10 months ended June 2019, which envisage 692,196 tons of coal sales for $30.5m of total revenues.

Andrew Bell, chairman of Regency, said: "MET faced some maintenance and availability problems in September, and third-party sales still require to be built up to the planned levels. However, these issues have been promptly addressed and despite a planned 12-day downtime for one of the two high wall miners as it is moved to a new location, we expect October and November sales to revert to planned levels."

Bell added that the company has introduced a new location to introduce a second shift in response to high demand, also offering reduced haulage costs to key customers.

The company’s metallurgical coals are transported by rail to Hampton Roads, Virginia, the largest export terminal in the US, before being shipped to international customers or directly on to US power plants and steel plants.

Metallurgical coal, an essential and currently irreplaceable ingredient in primary steel making, is produced at MET’s operations at Richlands, Southwest Virginia.

The company also appointed Jamie Ketron as president and chief executive of MET subsidiary Omega Holdings, with Bell calling her “a highly qualified appointment to the role” after she served the company as chief financial officer.

Regency Mines’ shares were unchanged at 0.35p at 1126 BST.