Why the Allegiance Coal (ASX:AHQ) share price is climbing today

The company has updated its coal production guidance. Here are the details
The post Why the Allegiance Coal (ASX:AHQ) share price is climbing today appeared first on The Motley Fool Australia. –

The Allegiance Coal Ltd (ASX: AHQ) share price is on the move today following a trading update from the company.

Earlier today, the coal miner’s shares were up 7.21% to an intraday high of 59.5 cents. They have since partially retreated and are swapping hands for 56.5 cents apiece, a 3.67% gain on yesterday’s closing price.

What did Allegiance announce?

Investors are pushing the Allegiance Coal share price higher after the company updated its near-term production guidance from its Black Warrior and New Elk mines.

By November 2021, clean coal production from both its high-vol A hard coking coal Black Warrior mine and the high-vol B coking coal New Elk mine is forecast to exceed 100,000 tonnes per month. However, in the 2022 calendar year, this number is expected to reach 120,000 tonnes per month, slightly under an annualised rate of 1.5 million tonnes.

The improved guidance comes off the back of the Black Warrior mine in Alabama ramping up clean coal production efforts. Allegiance stated its strategy is to increase production from the mine, and transition from a domestic to an export focus.

The company is acquiring new large-scale mining equipment, as well as adding a night shift to increase production. The new excavator is expected to remove three times as much waste rock as the mine’s existing 3 excavators. In addition, 4 new 200-tonne haul trucks are set to replace some of the 18 60-tonne fleet.

Investors seem to have reacted positively to this news, pushing up the Allegiance Coal share price.

What’s happening at the New Elk mine?

The company also provided an update on its New Elk mine. It noted the start-up has been slower than planned due to some of the workforce contracting COVID-19 and the shortage of housing near the mine.

Discussions are currently being held with the mayor’s office of the City of Trinidad to create an immediate housing capacity. It’s projected the issue will be solved by the end of the year.

The mine has one production unit manned, but the second unit has been unable to restart so far. New employees are due to arrive on site this week to begin operations.

As a result, there’s been a delay in the shipment of 280,000 tonnes of coking coal to Asian steel mills. The first of four shipments are scheduled for completion this December, with the remainder in Q1 2022.

About the Allegiance Coal share price

Over the past 12 months, Allegiance shares have tracked upwards of 70%, with year-to-date gains of close to 50%. The Allegiance Coal share price reached a 52-week high of 78 cents in June before some profit-taking took place.

Based on today’s price, Allegiance commands a market capitalisation of around $195.6 million and has roughly 329 million shares outstanding.

The post Why the Allegiance Coal (ASX:AHQ) share price is climbing today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Allegiance Coal right now?

Before you consider Allegiance Coal, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Allegiance Coal wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why APA, Kathmandu, Nickel Mines, & Sigma shares are dropping

The Magellan (ASX:MFG) share price just hit another 52-week low, down 17% in a month
Qantas (ASX: QAN) share price higher as US plans to open air travel
Why this broker sees ~50% upside in the A2 Milk (ASX:A2M) share price
How could a share market correction impact cryptocurrencies like Bitcoin?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!