JOHANNESBURG (miningweekly.com) – Dual-listed Southern Africa-focused coal producer Forbes Coal has posted notably improved financial results for the first quarter ended May 31, narrowing its 2013 fourth-quarter loss of $3.36-million to a loss of $20 000 in the first quarter of the 2014 fiscal year.

Revenue improved from $13.47-million in the fourth quarter ended February 28, to $20.51-million in the first three months of the 2014 financial year, which president and CEO Stephan Theron attributed largely to improved operational efficiencies and strengthened production volumes.

"We have been successful in continuing to reduce our operating expenses this quarter, which has been increasingly important as export coal prices decline further,” he commented.

In May, Theron said a reduction in operating expenses would be critical to provide some relief and cost containment in the face of softening coal prices, which dropped from an average of $96.59/t in the 2012 financial year to $81.87/t in 2013.

Operating expenses for the three months averaged $64.36/t, compared with $68.86/t for the fourth quarter of the prior year.

First-quarter saleable production from the company’s South Africa-based Magdalena and Aviemore operations increased by 18% on the prior quarter’s 214 000 t, to 253 000 t.

This came on the back of a 62% improvement in run-of-mine (RoM) production from the Aviemore mine, which improved from the 86 000 t produced in the fourth quarter to 138 000 t in the first three months of 2014.

Similarly, Forbes lifted underground RoM production at its Magdalena mine by 16% in the first quarter to 227 000 t, compared with 2013 fourth-quarter output of 196 000 t.

“Record production was achieved by both Aviemore and Magdalena in April and May,” said Theron.

In addition, while total ROM production of 447 000 t for the first quarter was below the targeted ROM production of 487 000 t – primarily as a result of “difficult” geology at Magdalena – it still represented a 23% increase on the 364 000 t produced in the prior quarter.

Further, the company improved its total sale of bituminous coal and anthracite products by 55%, offloading 261 000 t in the first quarter, compared with the 169 000 t sold in the last quarter of the previous year.

Export sales saw a 108% increase to 142 000 t, despite a significant slowdown in the anthracite export market during this period, while domestic sales of 119 000 t was an 18% increase on the fourth quarter of 2013.

Forbes Coal is targeting overall 2014 saleable production of 1.15-million tonnes of coal, an increase of 20% over the saleable production reported for 2013.