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Grande Cache Coal stock sinks as quarterly loss widens to $12.2 million

8/10/05 8:31:00 AM
CALGARY (CP) - Grande Cache Coal shares plunged Wednesday after the company announced a $12.2-million quarterly loss and revised its full-year guidance, saying production costs will be higher and volumes will be lower because of transportation problems.

Grande Cache shares (TSX:GCE) fell to as low as $8.50 in early trading at the Toronto Stock Exchange, down $1.60 or nearly 16 per cent, but regained some ground later in the session.

At mid-morning, the stock was at $9.15, down 95 cents or about nine per cent,

The Calgary-based company said Wednesday that revenue in its first quarter ended June 30 was $9.4 million from the sale of 100,000 tonnes of coal. It said the low volume was primarily due to transport problems.

At June 30, Grande Cache had 200,000 tonnes of coal awaiting customer vessels. It shipped that amount in July and expects to ship 400,000 tonnes in the second quarter - four times as much as in the first quarter.

Grande Cache said it is lowering its fiscal 2006 guidance for metallurgical coal sales to 1.6 million tonnes, down from 1.7 million, and its oxidized coal sales guidance to 200,000 tonnes, down from 300,000.

The company also said its estimated average cost of sales will be $80 per tonne, up from $70 a tonne, due to first-quarter costs exceeding estimates and production delays encountered in the first quarter.

Grande Cache said it expects to return to an average cost of sales of $70 per tonne for the fourth quarter of the current fiscal year.