Shares of Coalcorp Mining (TSX T.CCJ, Stock Forum) climbed 21% to 17 cents Monday, after the company announced after Friday’s market close that it is undertaking a plan to restructure its operations.
Last December, the company appointed a new executive management team which began a comprehensive review of a strategic plan announced by Coalcorp last May.
“As a result of the concerns with the May 2008 Strategic Plan, the current management team has initiated an Operational Restructuring Plan designed to stabilize the current mining operations, preserve liquidity, reduce costs and establish a foundation for a sustainable business. Management will be working to implement the various items of the Operational Restructuring Plan throughout 2009,” says the company.
Coalcorp, which has interests in the La Francia coal mine and a number of coal exploration properties in Colombia, says its operational restructuring plan is a five-part plan including a revised strategic approach in the areas of coal contracts and sales, mining operations, port and rail access, overhead cost reductions, and controls, compliance and risk management.
In terms of coal contracts and sales, the company says it will implement strategies such as diversifying its customer base and increase variable or short-term indexed pricing versus long-term fixed pricing to address the sales of coal production from the La Francia mine. As for mining operations, the company says it plans to focus on an “optimized but smaller mining operation” to align with its current transportation capacity. For full details, see the company’s news release.
On the company’s Bullboard over the weekend, Loopae said:
At least we have a detailed update and a plan going forward. Still a lot of unknowns unfortunately. Cash on hand is 27 cents a share however we still have debt and lawsuits outstanding so I'm sure those will be taken into account in the share price. I don't think we will rocket on monday but at least we will have put in a bottom for the time being and some support at these levels should start to hold for good. I hope I'm surprised on monday but I'm just keeping it realistic. Either way the room isn't so dark anymore and we can see some light once again![sic]