Regency Mines (LSE:RGM) released an update on Wednesday regarding its MET coal production in the United States. The natural resource focused company with primary interests in hydrocarbons and battery metals holds a 47% interest in Mining Equity Trust LLC (MET), a joint venture with Legacy Hill Resources.
Operations at the mine in southwest Virginia are set to ramp up as equipment is relocated. One of the two highwall miners operating at the site has been moved to a new location, Kilgore, this month. The equipment should be able to continue operations for a period of 20 months and will now have the capability to work two shifts. The move should increase both production levels and profitability since Kilgore is also closer to the main customer which will reduce transport costs.
Andrew Bell, CEO of Regency told Mining Maven: “Once we are established on the new mining areas we can start to ramp up production quite considerably. Moving from the area where the highwaller has been to the area where it now is, saves about $5 per tonne on transport costs in supply the major customer.”
The other highwall miner is currently operating on a single shift as it completes mining of at the Mudlick location. Once the current reserves have been exhausted at Mudlick, which is anticipated to occur in late 2018 or early 2019, the machine will be moved to one of two available sites with the possibility of it also operating two shifts.
Regency also released sales figures for the past two months. October sales of coal amounted to 43,530 tons generating revenues of $2,015,816 for the joint venture. This compares with 44,020 tons of coal in September for total revenues of $1,959,036.
Bell believes the company is ‘firmly established now as a coal producer’ and comments:
As a producer, there’s always something going on, there’s always some new problem, they happen every day but the direction of travel is absolutely clear now, that we are going to build a quality business in metallurgical coal.
“As we develop we are going to wanted to do other things such as washing the coal, transporting some by rail, but these are issues for a little way down the track. The important thing is to establish a good base in the business we already have.”
Coal production is just one iron in the fire for Regency Mines who are expected to release their results in a week or so.
Author: Stuart Langelaan
Disclosure: The author does not own shares in any of the companies mentioned above