News Archive

05 October 2007

Pre-Close Trading Update

ATH Resources plc, one of the UK's largest coal producers, today issues the following trading update ahead of the Group’s Preliminary Results for the year ended 30 September 2007, which will be announced on Wednesday, 5 December 2007.

Trading has been in line with the Directors expectations for the year and operations continue to perform well. Sales and production are within forecasts at approximately 2.1 million tonnes (year to 1 October 2006 - 1.8 million tonnes) and the Group’s profit before tax is anticipated to be in line with market expectations. The growth in production during the year resulted in the Group recently selling its 10 millionth tonne of coal since commencing operations in 1998. International coal prices continue to rise and the Group is well placed to benefit from higher prices as long term contracts are renewed over time.

The land regeneration and coal tip washing business, re-branded as ATH Regeneration, continues to perform ahead of expectations. Operations at the existing site at Grimethorpe are coming to an end in mid 2008. A planning application has recently been submitted to facilitate the coal tip washing of the Group’s Langton site with a view to commencing operations during the course of 2008.

Strong growth is planned for ATH Regeneration and the Directors believe that there are significant opportunities to exploit the business’ intellectual property and market potential. Five new projects are being targeted in the UK which should enable production to be more than doubled by 2010.

In addition, a number of projects are being actively pursued in Australia. The Directors have identified a clear opportunity to build a presence in this much larger coal production market, where ATH’s successful coal recovery techniques are not presently employed.

Coal production in the mining business has been from four sites during the year, one of which, Grievehill (600,000 tonnes), is shortly coming to an end. This will be replaced by the mining of a further extension which, subject to planning, is expected to commence in early 2008. The planning application for this one million tonne extension is due to be determined at a local level in the next two months with full consent expected in February 2008. Following the application consultation process, the Directors are confident that consent will be achieved which is necessary for the mining plan to meet market expectations in 2007/8.

ATH is also expecting to receive in the near future the result of its appeal on the Muir Dean site (2.2 million tonnes) in Fife, which was the subject of a Public Inquiry in June 2007. The balance of the evidence presented to the Inquiry was in the Directors’ opinion very encouraging and the Group remains confident of a positive result.

The Group continues to aggressively pursue additional coal reserves. A planning application has recently been submitted at Rigg, close to the existing mine at Glenmuckloch, for 600,000 tonnes, with the potential of up to 1.3 million tonnes. A further planning application for an extension of 700,000 tonnes to Glenmuckloch itself is expected in November 2007. In addition, potential further extensions to operational sites of up to 2.5 million tonnes have been identified and are currently being assessed.

At 30 September 2007, the Group had estimated 3.5 million tonnes of Proven coal reserves and 5 million tonnes of Probable coal reserves*.

* For a full explanation of the definition of Proven and Probable reserves please visit the ATH website- www.ath.co.uk

 

For further information:
ATH Resources
Tom Allchurch, Chief Executive		Tel: +44 (0) 1302 760 462
tom.allchurch@ath.co.uk		www.ath.co.uk
Seymour Pierce Limited
Nicola Marrin		Tel: +44 (0) 207 107 8000
	Media enquiries:
	Sarah Hollins / Georgina Bonham	Tel: +44 (0) 20 7398 7715
	georgina.bonham@abchurch-group.com	www.abchurch-group.com

 

Qualified Person:

Information in this announcement relating to mineral reserves has been reviewed by Peter Morgan, Development Director for the opencast business. Peter has worked in the mineral industry for some 27 years and for the 17 years prior to joining ATH Resources in January 2006, at Wardell Armstrong, an international mining engineering and environmental consultancy. Peter is a Chartered Mineral Surveyor and Chartered Mining Engineer who is a fellow of the Royal Institution of Chartered Surveyors (FRICS) and a fellow of The Institute of Materials, Minerals and Mining (FIMMM) and accordingly is considered by ATH Resources to be a Qualified Person under the AIM Rules.

Notes to Editors:

ATH Resources is an AIM-listed operator of opencast coal mines in the UK with its current four operational mines, Skares Road, Grievehill, Glenmuckloch and Laigh Glenmuir in East Ayrshire in Scotland. The Company is currently the third largest producer of coal in the UK producing approximately 1.7 million tonnes per annum. Coal was used to generate 38 per cent of the UK’s electricity in 2006 and the Company holds coal supply contracts with three of the UK’s main electricity generating companies.

The management team has been in place since 1998. It acquired the rights to operate (and subsequently acquire) the Skares Road mine with support from The Alchemy Plan. Following ATH Resources’ incorporation in October 2003, and backed by a follow-on investment from The Alchemy Plan, the Company acquired the Garleffan mine in November 2003. Garleffan is currently being restored having finished coaling in June 2006. ATH Resources listed on the AIM market of the London Stock Exchange in June 2004.

In June 2005, having raised £18 million by way of an Open Offer, the Group acquired two new opencast sites, Grievehill and Glenmuckloch in Scotland. The acquisition increased the Group’s reserve base by 160% and provided longer term stability to the business.

In addition to its operating mines, the Company also has a number of other coal mining projects in Scotland and two through its French subsidiary, SRMMC including a series of six existing coal concessions in south-central France, covering an area of 36km, two with an estimated resource of approximately 4.5 million tonnes of recoverable coal.

In May 2006, the Group acquired Doncaster-based A Ogden & Sons Limited, now ATH Regeneration Ltd, a successful coal recovery, land remediation and regeneration business with a particular focus on colliery spoil heap reclamation projects. ATH paid net £9.5 million for the business. The acquisition, which was earnings enhancing, allowed ATH to build on its skills as a regenerator of land, whilst developing strong relationships with key English planning authorities. The company has been successfully integrated into the Group. The operational diversification that the acquisition brought to the Group should be a significant driver of ATH’s organic growth going forward.

For the year ending 1 October 2006, the Group achieved turnover of £54.1 million, an increase of 38% on its 2005 year end, while EBITDA was up 68% to £19.2 million for the same period.

Further information on ATH Resources can be found at www.ath.co.uk.

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