News Archive

15 January 2009

ATH Resources signs new 800,000 tonne long-term sales contract

ATH Resources plc, one of the UK's largest coal producers, announces the agreement of a new long-term sales contract for the supply of 800,000 tonnes of coal from the Muir Dean mine in Fife to ScottishPower.

The coal will be supplied primarily to ScottishPower's nearby Longannet power station. ScottishPower is currently finalising the commissioning of Flue Gas Desulphurisation at Longannet, a project that will significantly extend the operational life of the power station and increase the capability to burn more locally produced coal.

The contract, which is the first for the Company with ScottishPower, is for a period of three years, starting in the second quarter of 2009, at selling prices to be set annually on the basis of prevailing international coal prices. Taking into account current pricing levels in the coal futures market, the Directors estimate that turnover under this contract over the three year period should exceed £40m.

The new agreement takes the level of coal to be supplied by the Company under long-term sales contracts to a total of over 4 million tonnes.

Tom Allchurch, Chief Executive Officer of ATH Resources plc, said "I am delighted that ATH Resources has signed another long-term sales contract demonstrating the continued strength of the coal market and the potential for a significant increase in our average selling prices over the next four to five years."

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Notes to Editors

ATH Resources is an AIM-listed operator of surface coal mines in the UK with five operational mines in Scotland; Skares Road, Grievehill and Laigh Glenmuir in East Ayrshire, Glenmuckloch in Dumfries and Galloway and Muir Dean in Fife. The Company is currently the third largest producer of coal in the UK producing approximately 2 million tonnes per annum. Coal is used to generate around a third of the UK's electricity and the Company now holds coal supply contracts with four 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%. 

In May 2006, the Group acquired ATH Regeneration a successful coal recovery, land remediation and regeneration business with a particular focus on colliery spoil heap reclamation projects. 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 brings to the Group will be a significant driver of ATH's organic growth going forward both in the UK and overseas and the business is actively pursuing a number of projects in Australia.

For the year ending 28 September 2008, the Group achieved turnover of £76.9 million, an increase of 9% on its 2007 year end, while Operating Profit increased by 8% to £11.9m for the same period.

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