Phoenix Coal Inc a leading producer and consolidator of thermal coal reserves in the Illinois Basin announced its financial results for the fourth quarter and year ended December 31st 2008. Unless otherwise noted, all reserves and resources are expressed in imperial tons, and all financial information is expressed in U.S. dollars.

Phoenix Coal said that for the fourth quarter and year after market including a net loss and increased revenue for the year. Its net loss was CAD 8.1 million for Q4 2008 as compared to CAD 15.9 million in the same quarter last year. For the year, net loss was CAD 31.4 million for fiscal 2008 as compared to CAD 26 million in 2007.

For fiscal 2008, revenue increased by 14.2% to CAD 76.7 million as compared with CAD 67.2 million for fiscal 2007, mainly as a result of contractual price increases from existing sales contracts and new sales contracts with better pricing terms. The company’s cost of sales also increased by 15.6% to CAD 71.9 million in 2008 from CAD 62.2 million in 2007

Highlights for 2008:

1. On June 27th 2008 Phoenix Coal Corporation completed a reverse takeover of Phoenix Coal Inc formerly Marimba Capital Corp which was previously listed on the TSX Venture Exchange;

2. Concurrent with the RTO, the Company raised $97.8 million, net of issuance costs, in a prospectus offering of 62.9 million subscription receipts priced at Cdn$1.75. In connection with the RTO, each subscription receipt was exchanged for one unit, with each unit consisting of one common share and one half common share purchase warrant exercisable until June 25th 2010 at CAD 2.25.

3. On July 29th 2008, the Company’s subsidiary, PACT Resources LLC received the required permitting from the Kentucky Department of Natural Resources and the US Army Corps of Engineers for the Pratt mine to begin development and production;

3. At the end of July, the Company closed the acquisitions of C&R Coal Inc and Renfro Equipment Inc.

4. On September 26th 2008, an environmental activist group protested the COE pending issuance of a Section 404 permit for the Company’s KO Mine. Consequently, on October 6, 2008, the Company declared force majeure on all of its sales contracts

5. During the month of December and subsequent to, the Company received the required permits from the KDNR and the COE for its Winn North and Radio Hill reserves

6. During the month of December and subsequent to, the Company renegotiated two of its coal supply agreements and came to proposed terms on a third agreement, resulting in changes in quality specifications, deferment of volume and extinguishment of future obligations;

7. At December 31st 2008, the Company had approximately CAD 40.6 million in cash, cash equivalents and short-term investments

Mr David A Wiley president & CEO of Phoenix Coal said that “Since becoming a publicly traded company last year, we have made significant progress towards creating a sustainable platform ready to support a long term, larger operation. We’ve invested in new equipment and stronger management that will be the foundation of our company for years to come. We have been successful in resolving our permitting issues and renegotiating some of our sales contracts, which will put us in a better position to capitalize on market opportunities. Going forward in 2009, we expect to obtain the final outstanding permit for the KO mine, continue to work with our customers in a mutually beneficial way increase our operating margins and focus on growth initiatives.”

Source : steelguru.com

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