Strategic Natural Resources (LON:SNRP) says it is looking forward to this time next year when its first coal will have been mined, washed and delivered to port for its first shipment under the Trasteel contract.
The firm today released its final results for the year to 28 February 2011, in which it said its plans had been converted into reality.
Its operational performance had resulted in a loss before and after tax for the year of £2.7million compared to a loss of £436,000 in 2010, said the company.
The increase in losses was attributable to a number of factors, it said, including an increase of administrative expenses, an impairment charge, restructuring of a shareholding, and a settlement of claims following an arbitration court ruling.
Highlights of the year to February were the completion of the firm's export feasibility study and the raising of £5.075million through new and existing institutions.
In early April this year the firm revealed that it had signed an off-take deal with Swiss-based Trasteel International for its Elitheni coal project.
The agreement is for an initial 2 million tonnes of coal. However Trasteel has also been granted the right of first refusal on the next 2 million tonnes.
The coal from Elitheni will be shipped through the Port of East London in the Eastern Cape of South Africa and first shipments are expected to begin in June 2012, and Strategic Natural Resources reckoned it will ship around 500,000 tonnes in the first year of operation.
The company pointed out that this represented less than one per cent of the already proven 150 million tonne Elitheni coal deposit. In March it said it had earmarked US$2.5 million for a drilling exploration programme designed at increasing its resource base.
Looking ahead, chairman Richard Henry Ringrose Latham said today: "The attention of the board is now firmly focussed on the mine development programme to achieve the production targets needed to fulfil the Trasteel contract as well as the financing plan which will be needed to accomplish the investment required.
"The company has a great deal of work to complete both in terms of mine development, readiness of the logistics chain as well as ensuring the coal terminal at the port of East London is fully operational."
He said the planned mine development is well in hand, with detailed mine planning and a related procurement strategy already completed.
He added that the company had restarted a drilling programme with an estimated budget of US$2.5mln to: find more coal, target high value areas, improve the resource categorisation, and begin exploration of the significant opportunity in phase 5.