CALGARY — Weaker sales of metallurgical coal dragged on both profits and revenue at Grande Cache Coal during the third quarter of fiscal 2011, the company said Wednesday.
The Calgary-based company (TSX:GCE) reported a modest decline in profits for the quarter ended Dec. 31, booking net earnings of $4.3 million or four cents per share.
Grande Cache reported net earnings of $4.5 million or five cents per share during the comparable quarter the year before.
A rise in global coal prices could not compensate for production problems that hampered the company’s sales figures, Grande Cache said.
It said weak sales dragged quarterly revenue down to $50.6 million from $60.4 million recorded the previous year.
Lower than expected production from the company’s new No. 8 surface pit resulted in quarterly sales of 290,000 tonnes, down from year-earlier levels of 470,000 tonnes.
Production problems at the pit previously forced the company to lower it’s sales guidance or the year, to between $1.5 million and $1.6 million tonnes. Grande Cache also pegged the average cost at roughly $125 to $130 per tonne, up from previous guidance of $110 to 115 per tonne, due to increased mining costs.
Grande Cache’s leases cover over 22,000 hectares of the Smoky River coalfield in west-central Alberta. The company’s main mine is north of Grande Cache, Alta., about 360 kilometres west of Edmonton.
Grande Cache shares were up five cents to $10.17 in afternoon trading on the Toronto Stock Exchange.