For the six months ending June 30, Caledon posted a loss which was 32% less than the first half of 2007 where a loss of $14 million was recorded.

However, the coking coal producer was buoyed by a move into positive cash flow mid-year.

Caledon chairman Robert Alford said the company’s move into operational profitability for the first time in June was “promising”.

He put the improvement down to the much talked about Magatar system which started operating at Cook in January and completed record production in June.

“Our new Magatar mining system is now running smoothly and coal production volumes are rising steadily,” Alford said.

“This achievement was despite significant operational challenges and an unprecedented period of tight labour and equipment availability in the industry.

“Caledon continues to target a production rate of 100,000 tonnes per month.”

Total coal sales for the six months ending June 30 were 200,000t and total run-of-mine production was 220,000t.

Revenue for the period was $30.4 million.

Caledon took over the mothballed Cook Mine in late 2006 and is exploring its nearby Minyango tenements.

The target production for both projects is 1 million tonnes per annum from 2009, rising to 4Mtpa by 2015.