Forbes & Manhattan Coal Corp.
TSX : FMC

Forbes & Manhattan Coal Corp.

June 16, 2011 07:32 ET

Forbes Coal Reports 45% Production Increase for First Fiscal Quarter 2012 (March-May 2012)

Export Sales Up 61%

TORONTO, ONTARIO--(Marketwire - June 16, 2011) - Forbes & Manhattan (Coal) Corp. (TSX:FMC) ("Forbes Coal" or the "Company") is pleased to provide an operations update for the first quarter of fiscal 2012 (ended May 31, 2011). Total Run of mine ("ROM") monthly coal production increased 45% when compared to the fourth quarter of fiscal 2011 and export sales rose 61% compared to the quarterly average of fiscal 2011.

First quarter highlights include:

  • Total combined ROM production for the first quarter was 311,000 tonnes, 45% higher than total ROM production during the fourth quarter of fiscal 2011.
  • Average combined monthly sales in the first quarter of 2012 were 44% higher than the average combined monthly sales for fiscal 2011. When compared with the fourth quarter of 2011, first quarter 2012 sales increased by approximately 14%.
  • Average monthly ROM production at Magdalena increased to 86,800 tonnes from 58,200 tonnes, a 49% improvement from the fourth quarter of 2011. When compared to fiscal 2011 monthly averages, Magdalena monthly ROM production increased 33% during the first quarter of 2012.
  • Total export sales for the first quarter of fiscal 2012 were 80,800 tonnes, 61% higher compared to quarterly average for fiscal 2011.
  • Total domestic sales for the first quarter fiscal 2012 were 110,000 tonnes, 34% higher when compared to quarterly average for fiscal 2011.
  • Chief Operating Officer, Malcolm Campbell started his new role effective June 13, 2011, compared to previously announced August 1, 2011.
  • Mr. Johan Louw, previously Vice President Operations, will now take the role as Vice President Business Development and will focus on coal marketing, logistics and new projects.

"The positive results we have achieved reflect the success of the additional continuous miner at Magdalena and the steady improvements in made to rail performance leading to an increase in export sales," commented President and Chief Executive Officer Stephan Theron. "The production ramp-up is on track and management expects that a significant improvement in coal sales will directly translate into higher cash flows. We are also very pleased to have Malcolm Campbell officially on board as the Chief Operating Officer of the Company, based out of South Africa, and expect the operations team to leverage of his vast coal mining experience and knowledge base. Furthermore, a special thanks to Johan Louw for successfully leading the team up to this point. Johan will now have an opportunity to focus on coal marketing and business development projects."

Production

ROM production at Magdalena for the first quarter of 2012 was 260,300 tonnes. Average monthly ROM production at Magdalena during this period was 86,800 tonnes. This represents a 33% higher than the average monthly ROM production at Magdalena as compared to fiscal 2011 ROM production at Magdelena and a 45% increase compared to the fourth quarter results of 2011.

ROM production at Aviemore for the first quarter of 2012 was 50,700 tonnes, with average monthly ROM at Aviemore for the same period at 16,900 tonnes. This represents a 29% improvement from Aviemore's fourth quarter 2011 average monthly production. When compared to average ROM production for fiscal 2011, first quarter 2012 monthly production was slightly lower than the average monthly ROM production at Aviemore for fiscal 2011.

Total saleable production for the first quarter of 2012 was 207,200 tonnes, a 29% improvement when compared to total saleable production from fourth quarter 2011. Magdalena produced 175,400 tonnes and Aviemore produced 31,200 tonnes.

Logistics

Rail performance at the Company's siding facilities improved by 42% in first quarter 2012 when compared to fourth quarter of 2011. Management remains encouraged by these results as during this period, the Company was subject to an annual coal line shut down at the end of May 2011, which impacted rail performance for all South African coal operators.

At the end of May 2011, a combined 46,000 tonnes of coal was in stock at the Navitrade terminal.

Sales

Average combined monthly sales were 63,600 tonnes for the first quarter of 2012, representing a 44% increase to the average combined monthly sales for fiscal 2011. When compared to fourth quarter 2011, average combined monthly sales increased 14%.

Export sales for first quarter 2012 were 80,800 tonnes, 61% higher than average quarterly sales in fiscal 2011.

Domestic sales in first quarter 2012 were 110,400 tonnes, a 34% increase when compared to the fiscal 2011 quarterly average. When compared to the fourth quarter of fiscal 2011, domestic sales increased 43%.

Johan Odendaal, B.Sc.(Geol.), B.Sc.(Hons)(Min. Econ.), M.Sc. (Min. Eng.), a director of Minxcon and an independent Qualified Person, as defined in National Instrument 43-101 has reviewed and approved the scientific and technical information contained in this release.

About Forbes Coal

Forbes Coal is an emerging mid-tier southern African coal company. It holds a majority interest in two operating mines. The Company holds a 76.75% interest in Slater Coal (Pty) Ltd., a South African company ("Slater Coal") which has a 70% interest in Zinoju Coal (Pty) Ltd. ("Zinoju"). Zinoju holds a 100% interest in certain coal mines in South Africa (the "Slater Coal Properties"). The Slater Coal Properties comprise the operating Magdalena bituminous mine (the "Magdalena Property") and the Aviemore anthracite mine. The mines have a substantial combined resource of coal and each mine has a projected 20 year life span. Forbes Coal is in the process of increasing production at both mines and looks to triple production from current levels in the next two to four years using existing infrastructure and capacity. The Company has in-place transportation infrastructure allowing its coal to reach both export corridors and the growing domestic coal market. Forbes Coal has a strong balance sheet and an experienced coal-focused management team.

Cautionary Notes

The ability of the Company to increase production amounts has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically feasible.

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the anticipated production results with respect to the Slater Properties, future financial or operating performance of the Company and its projects, statements regarding the anticipated improvements in logistical support and anticipated improvements in sales, statements made with respect to prospects for the business of the Company, requirements for additional capital, government regulation of the mineral exploration industry, environmental risks, acquisition of mining licences, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, foreign operations, political and social uncertainties; a history of operating losses; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; not realizing on the potential benefits of the proposed transaction; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of mineral products; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; and, delays in obtaining governmental approvals or required financing or in the completion of activities. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Contact Information

  • Forbes & Manhattan (Coal) Corp.
    Stephan Theron
    President and Chief Executive Officer
    +1 (416) 861-5912
    stheron@forbescoal.com

    Forbes & Manhattan (Coal) Corp.
    Sabina Srubiski
    Investor Relations Manager
    +1 (416) 309 2957
    ssrubiski@forbescoal.com