Question-and-Answer Session
Christine Pietryla
Our first question comes from Brett Levy – Jeffries & Company.
Brett Levy – Jeffries and Company
I notice you have got a $200,000 bad debt expense. I know that's not a big number but I'm just wondering if it's indicative or more things to come.
Mike Castle
That was sales to a broker, quite honestly, quite some time ago. We had been receiving some pay downs on that and that ceased here recently. And we do anticipate collecting that but it was quite old and we actually had continuing discussions with that individual and it looks like we may end up having a good opportunity to collect that going forward on some additional business.
Brett Levy – Jeffries and Company
And can you quantify, you said you had the closure of two mines. Anytime of the one-time stuff during the quarter, is there any way of quantifying what that effect was?
Daniel Roling
We have not quantified it. It was meaningful but it's not a number that we're comfortable—well I shouldn't it's not a number we're comfortable putting out, we would be but it's we think that what is more important is that as we move forward and are able to show our costs on an ongoing basis that that will continue to show the progress we are making. But clearly our $67.00 per ton cost would be significantly lower if in fact we had not incurred those costs for mine closure, the transitioning cost into the new mines.
Mike Castle
One thing I will add, about half of that capex was simply due to development costs to get those mines open, so I do consider those a one-time cost, if you will, and it looks like one of the new mines, the [inaudible] mine, the new mine has significantly lower over-burden ratios that what we had been experiencing so cost should be significantly lower down there.
Brett Levy – Jeffries and Company
You said things have slowed down, at this point does it look like shifts will be lower in the second quarter than the first quarter?
Daniel Roling
No, we believe they will be higher as we progress through the year. The comment that I made refers to what we said at the fourth quarter. What we anticipate that the capability to produce versus our contracted tonnage. So was we move forward we will still hit our contracted tonnage but we won't be selling incremental tons onto the spot market because the spot market is not strong enough to justify doing that.
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