The producer reported total revenues of $US22.1 million in the September quarter, a 19% jump year-on-year from $18.6 million.

The revenue was achieved primarily through the sale of 286,447 tons of coal, which was an increase of 5.9% year-on-year.

While it posted a net loss for the quarter of $663,950, the result was an improvement over the $8.4 million net loss reported in the third quarter of 2008.

Average tonnage prices were also up, rising 15.2% year-on-year from $65.08/t to $75/t.

“Despite a number of economic challenges, our results continue to strengthen and show improvement, most dramatically in our reduced loss and our improved cash flow,” NCC president and chief executive Daniel Roling said.

“As we look forward to the future we are mindful that even though our anticipated tons to be sold are less than originally contracted, we have not seen any further deterioration since mid-summer. We continue to see opportunities for investing in our Tennessee operations and are planning to be well positioned to benefit when the market improves.”

The producer renegotiated several existing supply agreements in 2008, which led to the higher selling price and higher revenues the company is now realizing from its Tennessee mines.

Roling reiterated that better pricing played a significant role in cash generation.

“As I have said before, the integrity of our contracts has allowed us to move forward in this extremely challenging economic environment,” he said.

The company’s third-quarter coal production hit 201,121t, a 24% drop year-on-year and 14% lower quarter-on-quarter.

“On a quarter-to-quarter basis, total tons decreased 14 per cent, while total production costs declined only 4.5 per cent, resulting in higher per ton costs,” the company noted, adding that further cost improvements are expected in the final quarter.

Looking ahead, the producer has already spent $5.5 million for the year to date to maintain mining equipment and development, but is anticipating an investment of $600,000 to maintain its existing Tennessee operations.

Despite lowering its capital expenditure levels as 2009 comes to a close, the company feels “significant opportunities exist” to increase production in enough time for a coal demand recovery.

Roling has a bullish perception of the industry’s future:

“I believe a recovery in economic activity will stimulate demand for both electricity and coal. Increases in consumption through 2010, even slight increases, should help reduce coal stockpile levels in the electric utility sector to more normal levels.

“With that said, I believe it is highly likely an improving economy will result in increased demand for energy, especially coal, among utilities, industrial customers, and steel companies, resulting in a much stronger operating environment for coal producers.”