🕐27.09.10 - 09:54 Uhr

Atlantic Coal plc - Interim Results



Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining 27 September 2010 Atlantic Coal plc (Atlantic or the Company) Interim Results Atlantic Coal plc, the AIM listed open cast coal production and processing company with activities in Pennsylvania, USA, announces its interim results for the six months ended 30 June 2010. Overview: � Implementation of new mine plan at Stockton with significant investment in new equipment, including $3.5million Liebherr excavator � Significant increase in overburden production - 1.4 million cubic yards removed over the period (2009: 800,000 cubic yards) � Increased revenue of $4,827,508 (2009: $3,417,700) � Reduced loss of $1,487,973 (H1 2009: loss of $2,641,313) � Supply agreement with Xcoal Energy & Resources Inc.

(Xcoal) to purchase up to 150,000 tons anthracite per year, expanding sales into Asia � Historic supply agreement with Pagnotti Enterprises, Inc.

(Pagnotti) terminated, potentially saving up to US$10 million over the mines life � Ongoing strategy to act as a regional consolidator in the Pennsylvanian Coal Field Atlantic Coal Managing Director Steve Best said, "We are extremely pleased with the developments that we have made at Stockton over the last six months.

The arrival of the Liebherr R9250 19.6-yard bucket hydraulic excavator in April 2010 has resulted in production approaching record levels.

Although the six monthly figures show a distinct improvement, it is important to recognise that the true benefits of all the restructuring and development initiatives have not fully impacted this current reporting period.

This gives your Board great confidence for the future performance of the Company." For further information on the Company, visit: www.atlanticcoal.com or contact: Steve Best Atlantic Coal plc Tel: 020 3328 5670 Greg Kuenzel Atlantic Coal plc Tel: 020 3328 5670 Nick Naylor Allenby Capital Limited Tel: 020 3328 5656 Alex Price Allenby Capital Limited Tel: 020 3328 5656 Daniel Fox Davies Fox Davies Capital Ltd Tel: 020 7936 5230 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177 Elisabeth Cowell St Brides Media & Finance Ltd Tel: 020 7236 1177
Chairmans Statement Atlantic has continued to advance its active mine development plan to raise sales and production efficiencies at its primary asset, the Stockton Colliery, an opencast anthracite producing operation in Pennsylvania (Stockton).

Increased investment, the implementation of a new mine plan, equipment upgrades, the formation of strategic partnerships and an improved corporate structure have resulted in enhanced production and sales volumes.

We therefore believe that Atlantic is well positioned to take advantage of increased demand and pricing for coal. Stockton has a current reserve of 4.2 million tons of run-of-mine (ROM) coal which after processing, equates to approximately 2.1 million tons of washed anthracite.

The US and international coal market is robust and anthracite is in high demand which has led to strong summer sales for the Company.

This has coincided with improved performance at the mine following the arrival of the Liebherr R9250 19.6-yard bucket hydraulic excavator in April 2010.

Importantly, Atlantics capability to meet increased demands has been aided by the termination of a historic supply agreement with Pagnotti in Q1 2010, which has released circa 100,000 tons of ROM coal annually.

This ROM coal can now be sold at current sales prices.

The Board believe that this has been a positive development for the Company and has not only influenced its sales potential but has also resulted in estimated savings of US$10 million over the mines life based on current anthracite sales prices. The memorandum of understanding with Xcoal, announced on 13 April 2010, has also proved highly beneficial for the Company as we look to enhance the scope of our sales to take advantage of the current level of anthracite prices.

Xcoal is a private US coal marketing company which specialises in the export of US metallurgical coal to steel makers internationally, with contacts in Japan, China, Korea and Europe.

Prior to the strategic memorandum of understanding, Xcoal took an initial tranche of 5,000 tons of premium anthracite which contributed substantially to the Companys sales in the period ending 30 June 2010.

Under the memorandum of understanding, Xcoal has agreed to purchase up to the greater of 150,000 tons per year and 50 per cent.

of Stocktons annual anthracite production.

This provides the Company with a potentially highly significant cash flow and sales opportunity. Pennsylvania is a prime high quality coal region and with this in mind the Board has a defined expansion strategy to increase Atlantics position in the region through the acquisition of complementary assets.

The Board is committed to developing Atlantics asset base to optimise value for shareholders and in order to achieve this, believes that it is key to enter into a transaction which has the potential to deliver an upside for the Company.

With this is mind, as announced on 18 February 2010, talks with Maple Carpenter Creek, LLC (MCC) were terminated as the Board felt that unable to proceed on the basis of the terms proposed.

However, the Board continues to pursue its strategy and is currently evaluating a number of other opportunities with aim of building on the Companys regional presence. Operations Review The mine development plan at Stockton is beginning to prove successful and production is increasing towards the Companys aim of producing 500,000 tons ROM coal per annum.

Production has improved considerably and during H1 2010 levels of overburden removal totalled 1.4 million cubic yards (H1 2009 - 800,000 cubic yards).

By the end of September 2010 we expect overburden removal to have reached in excess of 2 million cubic yards compared with 1.15 million cubic yards for the same period in 2009.

As we continue to move into the coal basin we expect raw coal production to increase dramatically. These increased levels of production have been achieved through the effective implementation of efficiency measures, such as its re-negotiation of the Pagnotti Supply Agreement as outlined above.

Investment in on-site equipment has been a priority and the effect of the Companys �3.5 million investment in the Liebherr R9250 19.6-yard bucket hydraulic excavator has been particularly noticeable following its delivery on site in April. Financial Report Atlantic conducted a capital raising during the period which raised �500,000 in February 2010 for working capital purposes as we continue to implement our mine development plan to increase production at Stockton.

Additionally, post-period end in August 2010 the Company strengthened this through the placing of 427,500,000 new ordinary shares at 0.4p, which raised �1,710,000 to complete the last stage of infrastructure works at Stockton and, as announced on 31 August 2010, the Company refinanced its Loan Notes with Cornhill Capital and the annualised coupon rate of the Loan Notes has been reduced to 13.75 per cent.

(from 15 per cent.). The Group reports an increased revenue of $4,827,508 (H1 2009: $3,417,700) and a reduced loss of $1,487,973 (H1 2009: loss of $2,641,313) for the period. Board Changes As announced earlier today, from 30 September 2010 Greg Kuenzel, Atlantics Finance Director and Company Secretary, and Toby Howell, a Non-Executive Director, will be stepping down from the Board.

Greg will continue to work with the Company as Group Accountant on a part-time basis. Outlook Atlantic is well placed to take advantage of the current demand for anthracite.

The Board has invested heavily in equipment to improve the economics of the operation, including the Liebherr excavator which, having only arrived in April, has yet to fully impact performance.

The Company has also implemented a defined mine plan at Stockton to affect efficiency.

This includes completing the relocation of the Norfolk Southern Railway, which is expected to recommence shortly, to provide access to coal reserves under the tracks that traverse the southern pit area.

This will contribute positively to production. The Board continues to evaluate a number of assets within the Pennsylvanian Coal Field and believes that there is an opportunity to create increased value by implementing a regional consolidation play. Finally, I would like to thank the Board and employees for their hard work in building the foundations and contributing to the development of the Company and Atlantic shareholders for their continuing support. Adam Wilson Chairman
Condensed Consolidated Income Statement
6 months to 30 June 10 Unaudited $
6 months to 30 June 09 Unaudited $
Year ended December 2009 Audited $ Turnover 4,827,508 3,417,700 9,048,214 Cost of sales (5,830,851) (3,466,513) (7,355,354) Gross profit / (loss) (1,003,343) (48,813) 1,692,860 Administration expenses (908,637) (850,212) (2,298,161) Other gains / (losses)- net 757,278 (1,570,212) (1,124,539) Other income - - 141,848 Loss from operations (1,154,702) (2,469,237) (1,587,992) Finance income 14,869 13,290 21,246 Finance costs
(348,140) (185,366) (1,004,926) Loss from ordinary activities before tax (1,487,973) (2,641,313) (2,571,672)
Corporation tax expense - - -
_____ ___ _____ ___ _____ ___ Retained loss for the period attributable to shareholders (1,487,973) (2,641,313) (2,571,672)
Loss per share - basic and diluted (0.10) cents (0.21) cents (0.19) cents
Condensed Consolidated Balance Sheet
30 June 10 Unaudited $
30 June 09 Unaudited $
31 December 09 Audited $ ASSETS
Non-current assets
Property, plant & equipment 7,354,034 4,685,370 4,320,491 Land, coal rights and restoration 7,234,387 7,518,244 7,335,637 Trade and other receivables - - 201,823
14,588,421 12,203,614 11,857,951 Current assets
Inventories 1,088,479 1,352,840 1,761,047 Trade and other receivables 1,586,796 941,831 1,093,695 Other assets 236,654 740,728 236,486 Bank balances and cash 135,221 318,485 843,807
3,047,150 3,353,884 3,935,035 Total assets 17,635,571 15,557,498 15,792,986
EQUITY & LIABILITIES
Equity
Called up share capital 1,914,388 1,743,971 1,804,719 Share premium account 17,235,098 16,203,854 16,616,252 Merger reserve 15,326,850 15,326,850 15,326,850 Reverse acquisition reserve (12,999,288) (12,999,288) (12,999,288) Other reserves 263,426 121,786 263,426 Foreign currency translation reserve (2,934,687) (2,002,260) (2,352,466) Retained losses (22,644,842) (21,226,510) (21,156,869)
(3,839,055) (2,831,597) (2,497,376) Non-current liabilities
Borrowings 6,433,805 2,614,678 2,864,936 Accrued restoration costs 2,860,785 5,183,556 2,953,327
9,294,590 7,798,234 5,818,263 Current liabilities
Trade and other payables 4,311,143 4,214,683 3,517,161 Provisions - 2,592,000 - Borrowings 4,767,807 2,097,473 5,222,749 Accrued restoration costs 3,101,086 1,686,705 3,732,189
12,180,036 10,590,861 12,472,099 Total equity and liabilities 17,635,571 15,557,498 15,792,986
Condensed Statement of Comprehensive Income
30 June 10 Unaudited $
30 June 09 Unaudited $
31 December 09 Audited $ Loss for the year (1,487,973) (2,641,313) (2,571,672) Other comprehensive income:
Exchange differences on translating foreign operations (582,221) 1,319,754 969,548 Total comprehensive income for the period (2,070,194) (1,321,559) (1,602,124)
Condensed Consolidated Statement of Changes in Equity
Share Share Merger Share Option
Reverse Translation Profit &
Capital Premium Reserve Reserve Acquisition reserve Loss Account Total
$ $ $ $ $ $ $ $ As at 1 January 2009 1,640,945 15,604,095 15,326,850 121,786 (12,999,288) (3,322,014) (18,585,197) (2,212,823)
Share capital issued 103,026 599,759 - - - - - 702,785
Total comprehensive income for the period - - - - - 1,319,754 (2,641,313) (1,321,559)
. . . . . . . . As at 30 June 2009 1,743,971 16,203,854 15,326,850 121,786 (12,999,288) (2,002,260) (21,226,510) (2,831,597)
Share Share Merger Share Option
Reverse Translation Profit &
Capital Premium Reserve Reserve Acquisition reserve Loss Account Total
$ $ $ $ $ $ $ $ As at 1 January 2010 1,804,719 16,616,252 15,326,850 263,426 (12,999,288) (2,352,466) (21,156,869) (2,497,376)
Share capital issued 109,669 618,846 - - - - - 728,515
Total comprehensive income for the period - - - - - (582,221) (1,487,973) (2,070,194)
. . . . . . . . As at 30 June 2010 1,914,388 17,235,098 15,326,850 263,426 (12,999,288) (2,934,687) (22,644,842) (3,839,055)
Condensed Consolidated Cash Flow Statement
6 months to 30 June 10 Unaudited $
6 months to 30 June 09 Unaudited $
Year ended December 2009 Audited $
Cash flows from operating activities
Loss from operations
(1,154,702) (2,469,237) (1,587,992) Depreciation
519,083 528,405 1,001,142 Amortisation
111,549 168,205 348,852 Share options expensed
- - 81,071 Accretion, accrued restoration costs
262,462 102,630 806,106 Reclamation work performed
(986,108) (413,295) (1,300,649) Profit on sale of assets
- - (131,342) Foreign exchange (gain)/ loss
(757,581) 1,570,212 1,099,216 Increase in trade and other receivables
(180,403) (260,046) (414,676) (Increase) / decrease in inventories
672,569 (872,649) (1,280,856) Increase/(Decrease) in trade and other payables
711,615 399,781 (273,297) Increase/(Decrease) in provisions
- 432,000 (388,377) Net cash used in operating activities
(801,516) (813,994) (2,040,802) Cash flows from investing activities
Purchase of property, plant and equipment
(784,850) (146,308) (221,049) Payment for deposits
(168) (3,784) (6,164) Loans to third parties
(100,000) - (200,000) Purchase of available-for-sale financial assets
- - (441,827) Proceeds from the sale of available-for-sale financial assets
- - 1,014,995 Interest paid
(100,416) (28,969) (77,245) Interest received
- 13,290 19,451 Net cash used in investing activities
(985,434) (165,771) 88,161 Cash flows from financing activities
Proceeds from issue of share capital
783,350 826,000 813,087 Transaction costs of share issue
(54,835) (37,170) (33,116) Proceeds from borrowings
994,685 340,407 1,840,376 Repayments of borrowings
(565,000) (130,724) (156,612) Finance lease payments
(32,044) - (65,169) Net cash from financing activities
1,126,156 998,513 2,398,566 Net (decrease)/increase in cash and cash equivalents
(660,794)
18,748
445,925 Effect of foreign exchange rate changes
(47,792) (27,353) 70,792 Cash and cash equivalents at the beginning of the period
843,807 327,090
327,090 Cash and cash equivalents at the end of the period
135,221 318,485 843,807
Notes to the unaudited financial statements 1.

General information The principal activity of Atlantic Coal plc (the Company) and its subsidiary (together the Group) is the development and operation of the Stockton Colliery which comprises the Stockton Mine and an anthracite washing plant in Pennsylvania. The address of its registered office is 200 Strand, London WC2R 1DJ. 2.

Basis of preparation The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies.

As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information.

The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2009, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006.

It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union.

Statutory financial statements for the year ended 31 December 2009 were approved by the Board of Directors on 7 June 2010 and delivered to the Registrar of Companies.

The report of the auditors on those financial statements was unqualified, but includes an emphasis of matter regarding going concern.. The 2010 interim financial report of the Company has not been audited but has been reviewed by the Companys auditor, Littlejohn LLP, whose independent review report is included in this Interim Report. 3.

Accounting policies
Except as described below, the same accounting policies, presentation and methods of computation are followed in this condensed consolidated financial information as were applied in the preparation of the Groups annual financial statements for the year ended 31 December 2009.
(a) New and amended standards adopted by the Company The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2010.
IFRS 3 (revised), Business combinations, and consequential amendments to IAS 27,Consolidated and separate financial statements, are effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009.The revised standard continues to apply the acquisition method to business combinations but with some significant changes compared with IFRS 3.

All costs associated with acquisitions or potential acquisitions have been expensed during the period incurred in accordance with the revision of IFRS 3.
4.

Loss for the period
Loss for the period includes the following items which are unusual because of their nature, size or incidence:
6 months to 30 June 10 Unaudited $ 6 months to 30 June 09 Unaudited $ Year ended December 2009 Audited $ Foreign exchange gains/(losses) 757,278 (1,570,212) (1,124,539)
5.

Dividends
No dividend is proposed for the period.
6.

Loss per share
The calculation of loss per share is based on a retained loss of $1,487,973 for the period ended 30 June 2010 (30 June 2009: $2,641,313; 31 December 2009: $2,571,672) and the weighted average number of shares in issue in the period 30 June 2010 of 1,464,851,875 (30 June 2009: 1,267,144; 31 December 2009: 1,321,934,438).

No diluted earnings per share is presented as the effect on the exercise of share options would be to decrease the loss per share.
7.

Property plant and equipment
In April 2010 the Group acquired a new excavator for the cost of $3,499,220 via finance lease.

The purchase of this excavator was previously disclosed as a capital commitment in the Groups Audited Financial Statements for the year ended 31 December 2009.
8.

Called up share capital
Number � Authorised
Ordinary shares of 0.07 p each 20,000,000,000 14,000,000
There has been no movement in the authorised share capital during the period. Issued Number of shares Ordinary shares $
Share premium $ Total $ At 1 January 2010 1,385,846,350 1,804,719
16,616,252 18,420,971 Issue of new shares - 8 February 2010 100,000,000 109,669
618,846 728,515 At 30 June 2010 1,485,846,350 1,914,388
17,235,098 19,149,486
9.

Events after balance sheet date
Placing On 5 August 2010 the Company raised �1,710,000 through the placing of 427,500,000 new ordinary shares at a price of 0.4p per share. One warrant was issued at 0.65p per share along with every share issued.

The warrants are exercisable at any time up to two years from the date of admission of the placing shares to trading on AIM.
Secured loan note On 31 August 2010 Company announced that it had refinanced its �1 million convertible loan note with Cornhill Capital Limited ("Cornhill").

The annualised coupon rate of the Loan Notes has been reduced 13.75 per cent.

payable upon maturity and are now convertible into new ordinary shares in the capital of the Company at a conversion price of 0.55 pence per Loan Note converted.

In addition, the warrants issued to Cornhill in November 2009 have been cancelled and by way of replacement the Company has issued 86,956,522 new warrants to subscribe for new ordinary shares in the capital of the Company to Cornhill.

These warrants may be exercised by Cornhill at any time in the 4 years from the date of issue and have an exercise price of 0.575 pence per ordinary share subscribed for.
The Company also raised �57,000 through a placing of 14,250,000 new ordinary shares (the "Placing Shares") at a price of 0.4p per Placing Share 10.

Copies of report: Copies of these Interim results will be sent to shareholders upon request.

Otherwise, shareholders will be able to download a copy of the interim results from the Companys website www.atlanticcoal.com.

Further copies will be available from the Company Secretary, Gregory Kuenzel, at Atlantic Coal Plc, 200 Strand, London WC2R 1DJ. Independent Review Report to Atlantic Coal Plc Introduction We have been engaged by Atlantic Coal Plc to review the condensed set of Financial Statements in the half-yearly financial report for the six months ended 30 June 2010 which comprise the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated balance sheet, consolidated statement of changes in equity, condensed consolidated cash flow statement and related notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of Financial Statements. Directors Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the Directors.

The Directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies. The annual Financial Statements of the Group are prepared in accordance with IFRSs as adopted by the European Union.

The condensed set of Financial Statements included in this half-yearly financial report has been prepared in accordance with the requirements of the AIM Rules for Companies. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of Financial Statements in the half-yearly financial report based on our review.

This report, including the conclusion, has been prepared for and only for the Company for the purpose of the AIM Rules for Companies and for no other purpose.

We do not, in producing this report, accept or assume responsibility for any other purpose to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.

A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.

Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of Financial Statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with the AIM Rules for Companies.
Littlejohn LLP Chartered Accountants and Registered Auditors 1 Westferry Circus Canary Wharf London E14 4HD 24th September 2010
Lottie Brocklehurst St Brides Media & Finance Ltd Chaucer House 38 Bow Lane London EC4M 9AY T: +44 (0) 207 236 1177 M: +44 (0) 7917 010 468 F: +44 (0) 207 236 1188 www.sbmf.co.uk



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