For the first half of the year the company’s net loss was $40.7 million. The results follow a net loss of $18.6 million in 2007’s second quarter and a net loss of $25.9 million for the first fiscal half of last year.
Company chairman Peter Socha said the company was “pleased” overall with its performance in the quarter given the issues.
“The mines have performed well despite some headwinds from bad weather, raw material cost inflation, and the increasingly competitive market for skilled labour,” said Socha.
“Most importantly, the market has finally begun to turn in a positive direction.”
Officials also said that its acquisition of Cheyenne Resources’ reserves and permits has been closed, and mining commenced there under James River’s direction in July.
However, the most significant issue the producer has met in the last few years has been profit margin pressure.
“This pressure has been due to extremely low coal prices and rapidly rising costs, particularly in underground mining, due to changes in the safety and regulatory environment,” Socha said, adding that tight global markets have led to overall price rises in US coal.
“While we have seen very little benefit from these prices thus far in 2008 due to lower priced contracts that were signed in 2006 and 2007, we believe that our shareholders will begin to see the benefits during the remaining months of 2008 and a much greater benefit beginning in early 2009."
Socha also said that despite circumstances that were less than ideal, the company felt its mines had performed well over the quarter.
“Our operations in the Illinois Basin continued to be impacted by bad weather [but] things have improved dramatically so far in the third quarter," he said.
Looking forward, he noted that James River had made much progress with its coal sales and contracting area during the last several months and now seeks to find a balance between locking in cash margins while still maintaining leverage in the changing coal market.
“We believe that we have achieved this balance,” said Socha.
“We will continue to monitor market developments and layer in additional new contracts in the future."
