National Coal Corp. has started construction of a new mine which will add 480,000 tons per year to the company’s production, generating some much needed cash.
“With the beginning of construction on Mine 12, the Company reaffirms its focus on lower costs, higher selling prices, and improved margins. This mine should help us achieve one of our key goals — generating free cash flow,” Daniel A. Roling, president and CEO of the Knoxville-based company said in a statement released Thursday.
The new mine comes at a good time for National Coal, which has been selling some assets to pay of
f debt and last month executed a 1-for-4 reverse stock split.
“I am also pleased to announce that a contract for the initial production has been signed, which will result in the Company’s average selling price increasing by about 10% during 2011. Even though we are eager to participate in this kind of organic growth, it should not go unsaid that we are also focused on the challenge to refinance our debt,” Roling said.
The new mine is expected to begin producing coal in the fourth quarter of this year.
Read National Coal’s full release here.
File photo submitted by National Coal Corp.