Q1 2013 sales volumes were 149,453 tons compared to 117,192 tons sold in Q1 2012 and 153,841 tons sold in Q4 2012. Volumes (both thermal and metallurgical) were significantly higher than Q1 2012 due to improved mine operating efficiency implemented in the second half of 2012. As described in the 2012 MD&A, the Company made important management and operational changes during 2012, which resulted in improved production performance in the last half of 2012 and Q1 2013.
The decline from Q4 is explained by the mine transition, as well as lower than expected volumes from two new customers. Both customers were burning off inventory from their previous suppliers and requested temporary curtailments. Contracted volume levels have recently resumed.
Overall Q1 2013 average pricing was $93 per ton compared to $109 per ton realized in Q1 2012 and $96 per ton in Q4 2012. Metallurgical coal pricing was lower due to the February termination of a 4,000 ton per month contract as described in the Q4 2012 MD&A. Metallurgical volumes for the remainder of the quarter were primarily used in a blend product, which realized a lower price. The Company secured a new off take arrangement for metallurgical volumes starting in Q2 2013, albeit at a lower price.
Q1 2013 thermal pricing was $88 per ton in Q1 compared to $103 per ton in Q1 2012 and $90 per ton in Q4 2012. Q1 2012 pricing was unusually high due to several one-off factors and is not a meaningful comparative. The $2 per ton price decline to Q4 2012 relates to lower quality coal being sold into the power market partially offset by higher pricing achieved on our new contracts. At the Bear Creek mine, coal quality has been declining the last 2 quarters as that mine nears the end of its useful life. The Company believes this price decline is temporary and that average thermal pricing will improve back over $90 (and on increased volumes) once the Knight mine (which replaces the Bear Creek mine) achieves full production during Q2.
Cost of Product Sold, Cost of Royalties, Transportation & Other (RTO)
Q1 2013 cost of production sold was $56 per ton compared to $68 per ton in Q1 2012 and $49 per ton in Q4 2012. The significant improvement over Q1 2012 was due to the operational changes made in mid- 2012, which substantially improved operational efficiency. These changes were described in our 2012 MD&A.
Q1 2013 cost of production sold was higher than Q4 2012 due to the inefficiencies associated with the mine transition as previously described. Q1 coal production was148,000 tons, compared to 174,000 tons produced in Q4 2012 resulting in higher cost of production sold on a per ton basis. Going forward, the Company's objective is to increase production substantially, which is expected to reduce average production cost per ton sold in future quarters.
Q4 royalty, transportation and other (RTO) costs were $19 per ton sold, which was slightly lower than Q1 2012. The Company expects RTO to trend in the range of $18 to $20, on average.
First quarter 2013 EBITDA was $1.87 million, a slight improvement over the $1.85 million in EBITDA realized in Q1 2012. EBITDA per ton was $12 compared to $16 per ton in Q1 2012.
In Q1 2013, the Company recorded a loss of $1.8 million compared to a loss of $1.2 million in the previous year.
In addition to the operational factors described in the previous sections, a number of other factors contributed to the increased 2013 loss including increased depreciation, amortization and depletion arising from a larger asset base, increased financing charges related to additional equipment financing and debenture issuances in 2012, increased debenture issue amortization and accretion expenses and an unrealized foreign exchange loss on the Company's US$ denominated debenture.
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