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Market:	ASX / AIM
Sector:	Coal
EPIC:	CCD

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Caledon Resources

Caledon Resources (ASX: CCD, LON: CDN) is a coking coal producer and explorer in the Bowen Basin of Queensland, Australia. It acquired the mothballed Cook Mine in late 2006 and has since recommissioned the operation and introduced an innovative new underground mining methodology.

The Company also purchased the nearby Minyango exploration concessions in 2006 and has conducted a number of drilling programs in preparation for a feasibility study.

Caledon Resources pares losses, outlook more encouraging for coal

Friday, August 28, 2009 by Proactive Investors

AIM and ASX listed Australian coking coal producer, Caledon Resources (ASX: CCD; AIM: CDN) has pared losses for the six months to 30 June 2009.

Revenues increased from A$30.4 million to A$39.6 million for the six months to June 30, 2009.

Gross profit was $0.5m compared to a loss of $5m. Lost for the period was $7.7m, $9.5m previously.

Cash at bank increased during the period from $15.6 m to $28.8 m.

Caledon operates the Cook mine in the Bowen Basin of Queensland. It also owns the nearby Minyango exploration concessions and has conducted a number of drilling programs in preparation for a feasibility study.

The large downturn in the coking coal market early in the year, saw Caledon wind back productive capacity and reduce the workforce by almost a quarter to preserve cash.

This increased planned unit costs (due to the absorption of fixed costs on lower output), but also resulted in additional costs such as redundancy payments and take or pay penalties for under utilised rail and port capacity.

Production for the first six months was in line with expectations for the period, despite these effect.

Mark Trevan managing director of Caledon said the outlook is now much more encouraging as China has unexpectedly increased its imports to a level that has effectively replaced the demand lost from more traditional Asian and European markets. Indian demand had also proven resilient.

Treven said the company plans to increase production whilst maintaining current manning and equipment levels.

He said the impact of this will start to be seen in the fourth quarter and will result in current year production and sales at the upper end of the previously advised range of 450-500kt, with further growth in 2010. And that "the outlook going forward is more encouraging.”

The company said it is is currently involved in discussions with a number of parties which may or may not lead to an offer.

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