On 29 April 2019, the producer of high-quality coal Paringa Resources Limited (ASX: PNL) announced that it had supplied its first coal in western Kentucky region from the Poplar Grove
On 26 April 2019, an initial shipment of 1,500 tons was loaded into the barges at PNL’s Ainsworth Dock on the Green River to cornerstone consumer, Louisville Gas and Electric Company and Kentucky Utilities Company (LG&E and KU), which forms a part of the PPL Corporation (NYSE: PPL). Coal is sold by Paringa on a free-on-board (FOB) basis, and the onus lies with the company’s customers to transport it.
The above-mentioned supply of coal underwent the required sampling process and further analysis at the Ainsworth Dock, wherein it surpassed the key contract specifications, validating the coal preparation handling plant ramp-up performance. As an outcome, sales volumes are expected to soar in the upcoming weeks, with the further mining device being positioned. Besides, the second continuous miner has been deployed, after the permanent ventilation system has been established. Moreover, the slope conveyor has been stationed and is carrying RoM coal from the lower part of the slope.
Paringa has been doing the build-up work on a solid forward sales book. The company is sold out for this year and is roughly 70 percent booked for 2020 with leading regional power utilities. Commenting on the same, Mr. Egan Antill, Paringa’s Managing Director stated, that the sales from the Poplar Grove operation work are the main landmark for PNL turning into a notable coal producer in western Kentucky region. Committing to this success, the company aims to remain focussed to increase its operations towards nameplate capacity throughout this year. The company is also happy to work with the local businesses and contribute in generous numbers towards direct and indirect employment opportunities in the region, and they are thankful to LG&E and KU for their continued support extended as being the Company’s introductory customer towards this drive.
Last month, on 20 March 2019, Paringa announced that a term facility agreement for a US$56 million Term Loan Facility (TLF) with Tribeca Global Resources Credit Pty Limited had been sealed. The company had further stated that the earnings from this agreement would be used to refinance its present debt amount, sponsor the quick expansion of the Poplar Grove operation work and for general working capital.
In March 2019, Paringa had published its Interim Financial Report for the six months period ended 31 December 2018, with the following highlights:
- The company sealed two additional sales contracts for 2,050,000 tons of coal between (2019 to 2023 period) with major local utilities, complementing the Company’s existing cornerstone coal sales agreement with LG&E and KU.
- There was an appointment of U.S. based Chief Executive Officer & Managing Director Mr. Egan Antill.
- The market conditions in the Illinois Coal Basin have improved, and coal prices have moved significantly higher in response.
- As of December 31, 2018, the company had cash reserves of US$11.9 million and gross debt of US$21.0 million along with the net debt of US$17.1 million.
The company’s stock traded flat during the day’s trading session and closed at a price of A$0.170 (as on 29 April 2019).
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