For the first quarter ended June 30, the company reported revenues of $C75.69 million from the sale of 435,000 tonnes, 74,000t of which was carryover tonnage from last year at 2008 coal prices. The average per-ton price in the quarter was $174 ($US147).

The results were a 41% drop versus the June 2008 period, which saw revenues of $C130.39 million from the sale of 582,000t (159,000t from the previous year at 2007 coal prices). The average per-ton price in that period was $224 ($US221).

WCC said the reduction in sales prices was a result of lower contract prices for the 2010 fiscal year, at $US126/t for hard coking coal and $90/t for ultra-low volatile pulverized coal injection coal, versus $300/t and $248/t respectively during the 2009 fiscal year.

The sales price decline was partially offset by the strengthening US dollar.

Net income was also down significantly, from $C59.7 million in the June quarter last year to $3.38 million this year. The total includes $19.6 million in income from mining operations, $10 million in other expenses and an income tax expense of $6.26 million.

“Despite the backdrop of the global economic recession where demand for metallurgical coal has fallen, the company generated over $17 million of cash from operations during the first fiscal quarter 2010 through improved productivity and lower cash costs,” WCC said.

Income from mining operations was $19.6 million, or $45/t, with a drop in operating margin year-on-year from 41% to 26%.

“We have adapted to the market uncertainty by further reducing costs and increasing productivity, and as such, Wolverine and Brule are exceeding our expectations across all areas," WCC president John Hogg said.

"Our focus is to continue this process to ensure we meet the increase in demand we are currently experiencing from our customers. We are also reviewing immediate opportunities to expand production to maximize our full potential."

The company’s overall sales volume in the June quarter was 148,000t less than the comparable period last fiscal year due to significant steel production cutbacks in the midst of the economic recession.

At Wolverine, sales were up 19,000t and equipment availability was up despite a smaller workforce. However, the Brule mine saw a 227,000t decrease in production year-on-year, with the idling of mining and hauling in mid-March due to an inventory build-up that occurred with the PCI market drop.

“In order to retain a core of qualified and experienced workers, the company continued its waste stripping to expose coal,” WCC said, adding that the decision put it in a good position to respond to the recent economic upturn and allowed mining to recommence in mid-June.

The producer bought UK miner Cambrian Mining during the quarter. Two major West Virginia operations were included in the deal, Maple Coal and Gauley Eagle, which produce both metallurgical and thermal coal and have operations both underground and at the surface. WCC also received a 50.6% interest in Energybuild Group, a producer of anthracite and open cast mines in Wales.

In addition, WCC received a 45% interest of Xtract Energy and 20% interest in NEMI Northern Energy and Mining. The producer holds 100% of AGD Mining, a small gold and antimony mine holder in Australia.

Looking ahead, WCC noted that it had seen increased market demand for coal output from its US operations.

“A major metallurgical coal customer has resumed taking coal from the Maple mine and as such, the mine has recently reactivated equipment and increased its workforce by over 45 per cent,” the company said.

For the 2010 fiscal year, WCC has increased its output guidance and now expects to produce 2-2.2Mt of metallurgical coal from its two Canadian operations. Wolverine is anticipated to produce 1.4-1.5Mt of hard coking coal, while Brule will produce approximately 600,000-700,000t of ULV-PCI coal.

Shipment estimates are 2.4-2.6Mt, including 1.4-1.6Mt of hard coking and about 1Mt of ULV-PCI. All the 2010 production from WCC’s Canadian mines is under contract to international steelmakers.

For the remainder of fiscal 2010, WCC will produce and sell about 1Mt from its West Virginia mines, including 700,000t of thermal coal and 300,000t of coking coal. Fiscal 2010 cash price realizations are anticipated to be in the range of $US80-85/t.