Forbes & Manhattan Coal Corp.
TSX : FMC

Forbes & Manhattan Coal Corp.

April 05, 2011 18:15 ET

Forbes & Manhattan Coal Announces 28% Production Increase for January & February 2011

Ramp-up Going According to Plan

TORONTO, ONTARIO--(Marketwire - April 5, 2011) - Forbes & Manhattan (Coal) Corp. (TSX:FMC) ("Forbes Coal" or the "Company") is pleased to announce that the Magdalena bituminous mine and the Aviemore anthracite mine have produced an aggregate total of 92,640 Run-of-Mine ("ROM") tonnes for the month of January 2011 and 97,638 ROM tonnes for the month of February 2011.

Highlights include:

  • Production for the two months is 28% higher than the monthly average for the financial year to date. Since acquiring the assets in August 2010, there has been a 34% improvement in production (excluding December 2010 maintenance period). 
  • A 53% improvement in total tonnes railed for January and February 2011, compared to the preceding 10 month average.
  • The average sales for January and February reflect a 63% increase in monthly sales compared to the monthly average for 10 months proceeding this period.

President and Chief Executive Officer, Stephan Theron, commented, "The first two months of 2011 shows that our ramp-up program is going according to plan and continues to gain momentum. The numbers are solid and establish a good baseline from which to start the new financial year. Magdalena has successfully started the new continuous miner section, the Talana rail siding in Dundee continues to improve and our increased export sales allow us to benefit from rising international coal prices".

Production

Monthly production from March 2010 through August 2010 was 71,660 ROM per month. From September 2010 through February 2011 (excluding December which is a maintenance shutdown month) it was 96,111 ROM. The total ROM production for the operation's financial year March 2010 to February 2011 is 933,993 ROM tonnes. Total saleable production for the financial year was 646,540 tonnes at a calculated yield of 68%. The targeted ramp-up schedule continues to gain momentum.

Production from the Magdalena bituminous coal mine in 2011 was 79,960 tonnes ROM in January and 79,251 tonnes ROM for February. The Aviemore anthracite mine produced an aggregate total of 31,067 tonnes ROM for the same period.

Logistics

Total tonnes railed for January and February 2011 increased by 53%. Total product dispatched by rail for January 2011 was 41,741 tonnes and 55,841 tonnes for February 2011. 19 train loads were moved out of the Talana siding during January and 24 train loads during February, reflecting a 53% improvement in total tonnes railed for these periods as compared to the preceding 10 month average. The Company continues to work closely with Transnet Freight Rail to improve rail performance from its Talana rail siding in Dundee, KwaZulu-Natal. The Company previously reported in December 2010 that it acquired additional export capacity through a contract with Grindrod Terminals. 

Sales

Total sales for January 2011 were 45,837 tonnes and 84,695 tonnes for February 2011. This brings the total sales of bituminous coal, anthracite and calcined products for the period March 2010 to February 2011 to 530,014 tonnes. The average sales for January and February reflect a 63% increase in monthly sales volume compared to the monthly average for 10 months preceding this period.

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 & Manhattan 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 18 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 triple 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 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
    or
    Forbes & Manhattan Coal Corp.
    Sabina Srubiski
    Investor Relations Manager
    (416) 309-2957
    ssrubiski@forbescoal.com