| Mon 15 Aug 2011, 11:07 | | FMC - Forbes & Manhattan Coal Corp - First Quarter 2012 |
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FMC
FMC
FMC - Forbes & Manhattan Coal Corp - First Quarter 2012
Forbes & Manhattan Coal Corp.
(Registration number: 002116278)
(External company registration number: 2011/011661/10)
Share code on the Toronto Stock Exchange: FMC
Share code on the JSE Limited: FMC
ISIN: CA3451171050
FORBES COAL REPORTS FIRST QUARTER 2012 RUN OF MINE PRODUCTION OF 311,000
TONNES, A 45% INCREASE OVER THREE MONTHS ENDED FEBRUARY 28, 2011
Average monthly revenue was $6.5 million, a 65% increase over fiscal 2011
TORONTO, ONTARIO - August 12, 2011: Forbes & Manhattan Coal Corp. (TSX/JSE:
FMC) ("Forbes Coal" or the "Company") is pleased to announce its first
quarter financial results for the three months ended May 31, 2011. All
figures are in Canadian dollars, unless otherwise stated.
First Quarter Financial Highlights:
- Revenue of $19.6 million
- Gross profit of $4.2 million
- Consolidated EBITDA of $5.6 million and Slater Stand Alone EBITDA of $6.2
million (see non- GAAP measures)
- Cash and cash equivalents of $19.8 million
The average monthly revenue for the first quarter 2012 was $6.5 million. In
fiscal 2011, from the date of acquisition to February 28, 2011 (a seven month
period), average monthly revenue was $3.9 million. This represents a 65%
increase in average monthly revenue.
Production and sales also showed significant growth. Total ROM production
from all operations for first quarter 2012 was 311,000 tonnes, 45% higher
than total ROM production for the three months ended February 28, 2011.
Average combined monthly sales were 63,600 tonnes, 14% higher than average
combined monthly sales for the three months ended February 28, 2011. First
quarter average combined monthly sales were 44% higher than average combined
monthly sales for Slater Coal`s fiscal 2011.
"The growth in revenue is a result of the increased export sales and steady
ramp up at the Magdalena and Aviemore mines. Management expects this trend to
be maintained as Forbes Coal continues to sell in the expanding Asian coal
markets," said Stephan Theron, President and Chief Executive Officer.
"Management also expects Forbes Coal to raise its domestic profile though its
recent listing on the Johannesburg Stock Exchange."
Operational highlights
Forbes Coal continued to increase production at its two mines, Magdalena and
Aviemore. The Company launched Project Siyathuthuka (Zulu for "together we
are growing and improving"), the second phase of its ramp-up programme.
Operational highlights include:
ROM Production
- Total ROM production from all operations for first quarter 2012 was 311,000
tonnes, 45% higher than total ROM production for the three months ended
February 28, 2011.
- Magdalena produced 260,300 tonnes ROM underground and open pit combined.
- Average monthly ROM production at Magdalena increased to 86,800 tonnes from
58,200 tonnes, a 49% improvement from the three months ended February 28,
2011 monthly averages. When compared to Slater Coal`s fiscal 2011 monthly
averages Magdalena monthly ROM production increased 33%.
- ROM production at Aviemore for the first quarter 2012 was 50,700 tonnes.
- Average monthly ROM at Aviemore for first quarter 2012 was 16,900 tonnes.
This is a 29% improvement from Aviemore`s average monthly production for the
three months ended February 28, 2011. When compared to average ROM
production for Slater Coal`s fiscal 2011, first quarter 2012 monthly
production was slightly lower than the average monthly ROM production at
Aviemore.
Saleable Production and Sales
- Saleable coal production for first quarter 2012 was 207,200 tonnes. The
total calculated yield from plant feed was 66.6% in this period.
- Total sales of bituminous coal, anthracite and calcined products from first
quarter 2012 were 190,800 tonnes.
- Average combined monthly sales were 63,600 tonnes, 8% higher than average
combined monthly tonnes sold for the three months ended February 28, 2011.
First quarter average combined monthly tonnes sold were 44% higher than
average combined monthly tonnes sold for Slater Coal`s fiscal 2011.
- Export sales for first quarter 2012 were 91,900 tonnes, 3% higher than
average quarterly tonnes sold for the three months ended February 28, 2011
and 83% higher than average quarterly tonnes sold for Slater Coal`s fiscal
2011.
- Domestic sales in the first quarter of 2012 were 99,000 tonnes, a 14%
increase when compared to the three months ended February 28, 2011. When
compared to Slater Coal`s fiscal 2011 quarterly averages, domestic tonnes
sold increased 34%.
- Forbes Coal transported 133,900 tonnes of saleable product to the Navitrade
port during first quarter 2012, and shipped 78,400 tonnes during this time.
SUMMARIZED FINANCIAL RESULTS OF SLATER COAL
Summarised financial results (actual)
March 1, March 1, 2010
2011 May 31, 2010
May 31, 2011 3 Months*
3 months
Run of Mine (ROM) (t) 311,002 197,744
Saleable production (t) 207,189 134,976
Plant feed (t) 303,069 207,359
Yield (%) on ROM 66.6% 68.3%
Yield (%) on Plant feed 68.4% 65.1%
Inventory tonnes balance open 189,778 86,742
Inventory tonnes balance close 204,396 107,145
Sales (t) 190,827 114,573
Revenue 000,000`s ($) 19.6 9.7
EBITDA 000,000`s ($) 6.2 3.3
CDN$: US$ (average) 0.97 1.02
ZAR: CDN (average) 7.06 7.30
Selling price (average) sold production t (CAD$) 102.71 84.90
Selling pice (average) sold production t (US$) 106.12 83.24
Cash cost of sales and operating expenses CAD
000,000`s ($) 12.5 5.8
Cash cost of sales and operating expenses / sold
production t (CDN$) 65.47 50.20
Cash cost of sales and operating expenses/sold
production t (US$) 67.64 49.21
Capital expenditures 000,000`s (CAD$) 1.67 1.70
Capital expenditures per t of saleable
production $ 8.06 12.60
Numbers in the chart are derived from the Slater Coal stand alone financial
statements, these are not affected by the adjustments related to the purchase
price allocation or consolidation adjustments. See non GAAP measures.
(*)The Slater Coal results presented in the chart above for the three months
ended May 31, 2010 have not been reported in the Consolidated Financial
Statements of the Company as they are attributable solely to Slater Coal on a
stand-alone basis prior to its acquisition by Forbes Coal in late July 2010.
They are presented here for comparative purposes only.
NON-GAAP PERFORMANCE MEASURES
The Company has included in this document certain non-GAAP performance
measures that are detailed below. These non-GAAP performance measures do not
have any standardized meaning prescribed by GAAP and, therefore, may not be
comparable to similar measures presented by other companies. The Company
believes that, in addition to conventional measures prepared in accordance
with GAAP, certain investors use this information to evaluate the Company`s
performance. Accordingly, they are intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared with GAAP. The definition of these
performance measures and reconciliation of the non-GAAP measures to reported
GAAP measures are as follows:
EBITDA (Consolidated)
Three months ended
May 31 2011
$000`s
Net income (loss) for the period (1,005)
Add back
Amortization and depletion 2,928
Income tax expense 878
Foreign exchange gain/loss 308
Interest and dividend income 312
Accretion 537
Business combination transaction costs 19
Stock based compensation 1840
EBITA Forbes Coal Consolidated 5,817
EBITDA (Slater Stand Alone)
Three months ended
May 31 2011
$000`s
Net income (loss) for the period (1,005)
Add back
Amortization and depletion 2,928
Income tax expense 878
Foreign exchange gain/loss 308
Interest and dividend income 312
Accretion 537
Business combination transaction costs 19
Stock based compensation 1840
General and administration (Non Slater) 432
EBITA Forbes Coal Consolidated 6249
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 through its 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 the Magdalena bituminous mine and the Aviemore anthracite mine in
South Africa (collectively, "the Slater Properties"). The mines have a
substantial combined resource of coal and each mine has a projected life span
in excess of 20 years. Forbes Coal is in the process of increasing production
at both mines and looks to triple production from 2010 levels in the next
three 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.
Please refer to the Company`s NI 43-101 compliant technical report on the
Slater Coal Properties dated March 1, 2011 entitled "Technical Report on
Slater Coal and Subsidiaries, KwaZulu-Natal Province, South Africa",
available on the SEDAR profile of the Company at www.sedar.com. Additional
information is available at www.forbescoal.com.
Canada
12 August 2011
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Cautionary Note Regarding Forward-Looking Information This press release
contains "forwardlooking information" within the meaning of applicable
Canadian securities legislation. Forwardlooking information includes, but is
not limited to, statements with respect to the anticipated production results
at 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, forwardlooking 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 forwardlooking
information. The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Stephan Theron
President and Chief Executive Officer
+1 (416) 861-5912
Email: stheron@forbescoal.com
Sabina Srubiski
Investor Relations Manager
+1 (416) 309 2957
Email: ssrubiski@forbescoal.com
Date: 15/08/2011 11:07:13 Produced by the JSE SENS Department.
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