Energy prices continue to climb with many analysts tagging the cause as a perception that there are global shortages. Coal, in particular, is seeing a great deal of strength throughout a time that typically sees a withdrawal in prices due to global demand tending to shrink a bit at this time of the year.
A few months ago analysts were talking about a pullback of up to $10 per tonne in coal, but to no avail; the price remains firm currently. Coal prices were riding in the area of $90 eight months ago and have seen a subsequent climb to over $120 per tonne for the majority of 2011.
The good thing for miners of the energy source is that the second half of the year tends to bode well for coal which should further support its resiliency to drop much below these levels and even possibly support a mild climb upward. This, of course, goes without mentioning the more than 400 workers at BHP Billiton coking coalmines in Queensland, Australia that went on strike yesterday which could stoke the price of coal as well.
Consequently, miners that had solid financial performance during early quarters this year could really be in for a positive jolt for the second half of 2011. One such junior is Calgary, Alberta-based CanAm Coal Corp. (TSX-Venture:COE), a well-diversified company with a portfolio of both developmental and producing projects.
CanAm has a 50% ownership in three Alabama coal operations that are currently churning-out high quality metallurgical and thermal coal for local and seaborne markets. That’s the production end that generates revenue while it’s grooming its developmental prospect which includes exclusive rights to a proprietary Coal to Liquids technology and a 50% joint venture company (RPS Fuels LLC) and its technology which converts waste coal into an engineered fuel product.
Moreover, CanAm controls the Buick Coal Property and its nearly 200 million tons of indicated and 103 million tons of inferred coal resources in Colorado.
Today, CanAm disclosed information on its coal sales from the first quarter ending April 30, 2011 which boasted strong results from its Powhatan Mine in Alabama. Sales surged more than threefold for the quarter as compared to the same quarter in 2010. For the three months, the Company sold 30,655 tons of coal in 2011, toppling the 9,950 tons mark recorded in the year prior.
As compared to the previous quarter, sales jumped by more than 16,000 tons. A breakdown of sales showed the first quarter of 2011 consisted of 63% metallurgical coal and 37% thermal or steam coal.
CanAm is hoping to continue to see increased production as the shift has been completed from the previous contractor to its own people now working the mines and striving to increase production and efficiency. The transition is apparently reaping immediate rewards as a record production of 11,641 tons was reported in the month of March 2011.
Much like a miner, investors appear to be "digging" the news as shares of COE have found resurgence today; rising more than 12% to close off the day at 18 cents.
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