Up 122% in a year, why is this ASX All Ords coal stock surging 19% on Monday?

The All Ordinaries Index (ASX: XAO) is up 0.4% today, with plenty of help from this rocketing ASX All Ords coal stock.

The high-flying stock in question is Coronado Global Resources Inc (ASX: CRN).

Coronado Global shares closed on Friday trading for 21.5 cents. In late morning trade on Monday, shares are swapping hands for 25.5 cents each, up 18.6%.

This sees the Coronado Global share price up an impressive 121.7% over the past 12 months, smashing the 3.6% one-year gains posted by the All Ords.

Here’s what’s piquing investor interest again today.

ASX All Ords coal stock leaps on strategic divestment

Investors are bidding up Coronado Global shares after the miner announced it has reached an agreement to divest its Logan Mining Complex in West Virginia.

Phoenix Coal Holdings will take ownership of the Logan Mining Complex, which includes coal mining properties, leases and mining permits, as well as a preparation plant and loadout facility.

The ASX All Ords coal stock said that Phoenix will pay a “nominal cash consideration” for the asset, after working capital adjustments. Importantly, Phoenix Coal will also assume a number of liabilities attached to the asset, including reclamation and post-closing operational obligations.

As such, Coronado said it expects the transaction to be free cash flow positive as it eliminates ongoing holding costs and future obligations for the company.

Management highlighted that the deal reflects Coronado’s ongoing strategy to optimise its asset portfolio and focus on core, higher-return operations.

What did Coronado Global management say?

Commenting on the divestment that’s boosting the ASX All Ords coal stock today, interim Coronado Global CEO Gerry Spindler said: “This transaction represents a further step in streamlining Coronado’s portfolio and focusing on our high-quality core assets.”

Spindler added, “The divestment transfers future obligations associated with Logan while enabling us to prioritise capital and operational focus elsewhere.”

The transaction remains subject to customary closing conditions. The miner expects the deal to be completed in July.

Here’s what else Coronado has been up to recently.

ASX All Ords coal stock’s ‘commercial reset’

After completing a two-year expansion program, Spindler said that over the March quarter, the ASX All Ords coal stock had “commenced a structural operational and commercial reset”.

He noted, “The reset involves restructuring mine plans, improved productivity and modified contractor arrangements designed to strengthen performance.”

According to Spindler:

Capital discipline remains a priority. Coronado will continue to pursue selective upgrades to plant efficiency and targeted equipment improvements where returns are compelling.

However, no new capital programs of the scale undertaken over the previous two years, are planned, or required, reflecting both the completion of the growth phase and the Company’s focus on cash and balance sheet improvement.

The post Up 122% in a year, why is this ASX All Ords coal stock surging 19% on Monday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Scott Phillips.