RE: RE: profit sheet needed here for interest Royal Coal's total expenses per ton were coming out to over 100$/t while they sold coal at 73$/t. That includes taxes, royalties, etc. according to their last MD&A (on their website)
This company has been auger mining at Rosa for 1 1/2 years. I have not seen a breakdown of mining costs in their reports but the MD&A for the period ending dec 2010 says this about mining costs, whereas the more recent MD&A do not break down expenses into mining related costs.
Cost of goods sold includes 704,313$ directly related to mining, 189,490$ to transport to the wash plant and to customers and 180,224$ in depletion, accretion and amortization.
The company mined 14,117 tons of coal during that period and sold 7,489 tons of cleaned coal. They stopped using the contracted wash plant because it had very bad recoveries and was unable to process the fine auger mined coal. Sold cleaned coal at ~145/t.
Now most of the transport costs are cut out and the recovery from the company owned washplant is a big improvement over the recovery from the contracted plant. Contracted prices are also up. If the variable cost of production sat around 50$/ton then it is probably up to 65$/ton now with increased fuel prices. I'm not sure what the taxes/royalty/lease payments/amortization expenses will end up being/ton. As a rule of thumb I'd peg them at 60% of the mining cost because I am too lazy to try and guess the real numbers, as they are a moving target anyways when the company keeps buying new equipment. That brings costs to 110$/ton. There are still overhead costs to add in as well as the sandstorm payments.
In any case, unless I have a huge blind spot somewhere (which is not unusual for myself :P), then there is quite a bit of room for profit at the Rosa operation.
Am I missing something big here?