Forbes & Manhattan Coal Corp.
TSX : FMC

Forbes & Manhattan Coal Corp.

September 13, 2011 07:00 ET

Forbes Coal Reports Record Export Sales of 192,400 Tonnes for Q2 2012, an Increase of 110%, Reflecting Strong Demand from Export Markets

TORONTO, ONTARIO--(Marketwire - Sept. 13, 2011) - Forbes & Manhattan (Coal) Corp. (TSX:FMC) ("Forbes Coal" or the "Company") is pleased to provide an operations update for the second quarter of 2012. Export sales rose 110% compared to the first quarter of 2012 and total Aviemore Run of Mine ("ROM") production increased 26% when compared to the first quarter of 2012. References to Q1 2012 or the first quarter of 2012 mean the three months ended May 31, 2011. References to Q2 2012 or the second quarter of 2012 mean the three months ended August 31, 2011.

Second quarter highlights include:

  • Total export sales in Q2 2012 were 192,400 tonnes, 110% higher than Q1 2012.
  • Total domestic sales in Q2 2012 were 147,400 tonnes, 49% higher than Q1 2012.
  • Total sales in Q2 2012 were 339,800 tonnes, 78% higher than Q1 2012.
  • Total Aviemore ROM production in Q2 2012 was 64,200 tonnes, 27% higher than total Aviemore ROM production in Q1 2012.
  • Total Aviemore saleable production in Q2 2012 was 40,000 tonnes, 26% higher than total Aviemore saleable production in Q1 2012.
  • Commissioning of the second phase of expansion at Magdalena is on track for the third quarter of 2012.

"Our remarkable increase in export sales is a direct reflection of our ability to manage our throughput corridor and is supported by a strong demand for coal from the export markets" commented President and Chief Executive Officer Stephan Theron. "We are also very pleased with the continued production improvements at the Aviemore anthracite mine, and steady production at Magdalena. The next phase of expansion at Magdalena is on track for third quarter 2012."

Production

ROM production at Aviemore in the second quarter of 2012 was 64,200 tonnes, an increase of 27% when compared to the 50,700 tonnes produced in the first quarter of 2012. Saleable production at Aviemore was 40,000 tonnes, an increase of 26% when compared to the 31,800 tonnes produced in the first quarter of 2012.

Production at Magdalena remained consistent in the second quarter of 2012. ROM production in Q2 was 258,600 tonnes compared to 260,300 tonnes in Q1 2012. Saleable production in Q2 was 178,800 tonnes compared to 175,400 tonnes in Q1 2012.

Total saleable production in the second quarter of 2012 was 218,800 tonnes, a 6% improvement when compared to the 207,200 tonnes of total saleable production in the first quarter of 2012.

Logistics

In the second quarter of 2012, Forbes Coal dispatched a total of 160,200 tonnes to the Navitrade Terminal at Richards Bay. Of this, 97,700 tonnes were railed using 35 trains and 62,500 tonnes were trucked. A total of 167,500 tonnes were shipped via this terminal during the quarter, a 115% increase from the 78,000 shipped in first quarter of 2012.

The Company also participated in its first cape size load from Navitrade. A cape size load is typically 120,000 to 140,000 tonnes. This particular shipment, bound for Asia, was 140,000 tonnes of thermal coal, of which almost half, 50,000 tonnes, was derived from Forbes Coal.

At the end of August 2011, a combined 34,900 tonnes of coal remained in stock at the Navitrade terminal.

Sales

Total export sales in the second quarter of 2012 were 192,400 tonnes, a 110% increase when compared to first quarter 2012 export sales of 91,800 tonnes. Thermal coal accounted for the majority of export coal sales.

Total domestic sales in the second quarter of 2012 were 147,400 tonnes, a 49% increase when compared to the first quarter 2012 domestic sales of 99,000 tonnes.

Total sales in the second quarter of 2012 were 339,800 tonnes, a 78% increase when compared to first quarter 2012 total sales of 190,800 tonnes. This quarter also marked the first time that total export sales were greater than total domestic sales and Forbes Coal expects this trend to continue.

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