Cline Mining leads pack of coal names on the rise
Posted: June 02, 2008, 2:47 PM by David Pett
Mining
Reports of more hikes to coal price contracts alongside news that Coal India is on the hunt for assets gave Canada's top coal companies a boost on markets Monday.
According to a Reuters report, Chinese coking coal producers have hiked prices for June, due to soaring coking coal prices. The report said many producers in Shanxi, China's top coal and coke producing province, increased coke prices as the price of first-grade metallurgic coking coal reached around US$389.4 a tonne in the province.
Meanwhile, in a seperate report, Reuters said state-run Coal India is eyeing assets in Canada, Africa and Australia to meet the energy needs of the country. Coal India will also invite foreign firms to develop domestic mines. The report said coal accounts for 55% of the energy used in India.
Canadian coal companies whose shares were on the move today, included Western Canadian Coal Corp., up 10%, Grande Cache Coal Corp. up 5% and Fording Canadian Coal Trust, up almost 3%.
Cline Mining Ltd., is another big winner so far, rising more than 40% with 8-million shares trading hands. Cline announced in mid-May that it will go ahead with the acquisition of the New Elk metallurgical coal mine in Colorado. and purchased all of New Elk's existing coal property surface assets at New Elk for US$1.6-million plus the assumption of an existing reclamation bond worth US$967,000.
Since the announcement, the company's share price has risen 300%, including today's climb. Online chatter from some investors claims the company's coal potential is comparable to Grande Cache's, while others say Cline is a prime takeover candidate.
Late last week the company announced the retirement of chief financial officer, Allan Taylor, who joined the company back in 1983. Mr. Taylor will be replaced by Ernest Cleave. Cline also restated on Friday its financial statements for the quarters ended February 28, May 31 and August 31, 2007.
David Pett |
