Metallurgical coal producer Coronado Global Resources has altered its market guidance for the financial year ending December 31 2023 (FY23).
Coronado cited adverse operating conditions at its US-based Buchanan mine and unexpected downtime for repairs at its Queensland-based Curragh mining complex as the reasons behind the changes.
“During the September quarter, mining activities at the Buchanan mine were temporarily impacted by geological conditions in the coal seam that slowed production rates and impacted yield,” the company said.
“Those adverse conditions, related to a rock intrusion have now been addressed and operations are returning to normal. These types of intrusions are not uncommon, and the company’s highly experienced US team is capable of handling these issues when they arise.”
Coronado said that geological conditions were returning to normal and that it’s working towards recovering the lost tonnes in the fourth quarter of 2023 (Q4 2023) and Q1 2024.
“In mid-September, one of the draglines at Curragh experienced a mechanical failure in the propel unit. Repairs are already underway and expected to be completed no later than the end of October,” Coronado said.
“Production from Curragh in FY23 will be impacted due to the resulting delayed ability to move waste. Coronado is revising its plans for the balance of 2023 and full year 2024 to mitigate as much as possible the impact from these dragline repairs.”
Coronado’s original FY23 guidance included:
- a saleable production equalling to 16.8–17.2 metric tonnes
- average mining costs per tonne sold equalling to $US84.0–$87.0 ($133–$138)
- capital expenditure equalling to $US260–$290 million ($411–$459 million)
Its revised FY23 guidance now includes:
- a saleable production equalling to 16.2–16.4 metric tonnes
- average mining costs per tonne sold equalling to $US97.0–$102.0 ($153–$161)
- capital expenditure equalling to $US220–$240 million ($348–$380 million)
“Notwithstanding these two short term non-recurring operational challenges, net of the efficiency gains in capital expenditures, we expect this to have a minimal impact on year-end cash on the balance sheet of a maximum $US10 million ($16 million) reduction assuming none of the lost production can be recovered,” Coronado executive chairman Gerry Spindler said.