ATH Ath Resources

TIDMATH

RNS Number : 3340F

ATH Resources plc

14 June 2012

14 June 2012

ATH Resources plc

("ATH" or "the Group")

Trading Update

ATH Resources plc, one of the UK's largest coal producers, today issues the following trading update ahead of its interim results for the six months ended 1(st) April 2012 which are expected to be released at the end of June 2012.

International coal prices have fallen by some 21% since the beginning of the calendar year and by over 28% since the beginning of the Group's financial year. Whilst ATH has been able to successfully renegotiate a significant improvement to its two remaining legacy contracts and enter into some new fixed price contracts at prices well above those currently available, further reserve losses in recent weeks at Muir Dean, together with those previously announced in March due to increased old workings, coupled with reduced demand and pricing of its premium products have exceeded any gains made.

The ongoing weakening of international coal prices continue to adversely impact Group income and with commodity markets forecasting that this trend is set to continue, the Group is reviewing its mining plans in order to maximise cash generation through this difficult period. New sites will continue to be developed through the planning process, however, the opening of some sites may be delayed and capital expenditure kept to a minimum whilst coal prices remain subdued. As a result sales volumes this year are unlikely to exceed 1.6 million tonnes.

The Group confirms that it has now lodged an application for a judicial review of the Government's Carbon Reduction Commitment Scheme. However, the Group has yesterday received confirmation from the Environment Agency that it will have to purchase Carbon Credits totalling approximately GBP1.1m per year in July 2012 and July 2013 which would be reclaimable should the appeal be successful. The Group is seeking legal advice as to whether to seek interim relief from the Courts in respect of making these purchases.

As a consequence of the factors outlined above the Group's trading performance will be materially adversely impacted.

The Board continues to have discussions with its banking syndicate, primarily driven by external factors such as the downward movement in coal prices and the Carbon Reduction Commitment Scheme, in order to secure adequate facilities for the Group. The Group will provide further updates to the market as appropriate.

Amid a challenging operating environment, the Board will provide further details of the review of its development plans and financing arrangements in its forthcoming Interim Results.

-ENDS-

 
 For further information: 
 
 ATH Resources plc 
 David Port, Executive Chairman             Tel: +44 (0) 7836 693798 
 Alistair Black, Chief Executive            Tel: +44 (0) 1302 760 462 
                                            www.ath.co.uk 
 
 Seymour Pierce Ltd 
 Stewart Dickson (Nominated Adviser) 
 Richard Redmayne / Katie Ratner (Broker)   Tel: +44 (0) 207 107 8000 
                                            www.seymourpierce.com 
 
 Media enquiries: 
 Hudson Sandler 
 Andrew Leach / Charlie Jack / Katie        Tel: +44 (0) 207 796 4133 
  Matthews 
                                            kmatthews@hudsonsandler.com 
                                            www.hudsonsandler.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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