Forbes & Manhattan Coal Corp.
TSX : FMC

Forbes & Manhattan Coal Corp.

December 07, 2010 16:59 ET

Forbes Coal Signs Agreements Increasing Export Capacity at Richards Bay Port

Potential to Increase Throughput by 960,000 Tonnes and Cash Flows by Up to $30 Million Per Annum Over a Three Year Period

TORONTO, ONTARIO--(Marketwire - Dec. 7, 2010) - Forbes & Manhattan Coal Corp. (TSX:FMC) ("Forbes Coal" or the "Company") is pleased to announce that it has entered into agreements with Transnet Freight Rail (TFR), and Grindrod Terminals Richards Bay, a division of Grindrod South Africa (PTY) Ltd., to export coal produced by Forbes Coal from the Slater Coal operations in Dundee through the Port of Richards Bay. The production target for Slater Coal for its fiscal year ending February 2011 is an estimated 680,000 tonnes of coal. Currently Forbes Coal conducts the majority of its coal sales in the domestic market and we continue to have the availability to ship 197,000 tonnes per annum from Richards Bay Coal Terminal in addition to the new agreements.

Highlights include:

  • Grindrod Terminals shall provide export capacity in the Terminal for the shipment of coal products as follow:
    • 2011 – 600 000 metric tons (m/t) per annum
    • 2012 – 720 000 metric tons (m/t) per annum
    • 2013 – 960 000 metric tons (m/t) per annum
  • At current coal spot prices, the increased throughput of coal could potentially lead to incremental cash flows of up to $30 million per annum.
  • Grindrod Terminals provides certain logistical, handling and stock piling services to shippers in connection with the shipment of bulk cargoes through the dry bulk coal Terminal known as the Navitrade Terminal (and its associated facilities), connected to berths in the Port of Richards Bay.
  • Grindrod Terminals will provide up to 70,000 t in stockpile capacity to receive the coal at the terminal.
  • F&M can deliver coal to the Terminal either by road or rail.
  • Forbes Coal entered into an agreement with TFR for the transport of the coal to the terminal in order to support the throughput capacity.

In releasing this information, President and Chief Executive Officer of Forbes Coal, Stephan Theron, commented, "These agreements fit very well with our strategic development plans. Throughput of coal from mine to port plays a major part in realizing shareholder value. In conjunction with the additional export capacity, we are in the process of commissioning a new continuous miner at the Magdalena Bituminous mine. This will allow for a significant increase in production to supply the increased export capacity."

About Forbes Coal 

The Company holds a 53.5% 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 Magdelena bituminous mine (the "Magdelena Property") and the Aviemore anthracite mine (the "Aviemore Property") and have a substantial resource base of bituminous and anthracite coal. The Slater Coal Properties are located in the Klipriver coalfield, near Dundee, in the KwaZulu Natal Province of South Africa and can be accessed via the N3, N11 Ladysmith and R102 Dundee tarred national highways that run between Johannesburg and Durban, South Africa. The other 46.5% of Slater Coal is beneficially owned by members of the Slater family. 

Cautionary Note Regarding Forward-Looking Information: 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, statements made with respect to the TFR agreement, the Grindrod Terminals agreement, the anticipate results with respect to the services to be provided, future financial or operating performance of the Company and its projects, statements regarding the 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
    (416) 861-5912
    stheron@forbescoal.com