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FMC
FMC
FMC - Forbes Coal - Press release year end February 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" or "the Company")
FORBES COAL SLATER OPERATIONS REVENUE INCREASED 124%
YEAR-OVER-YEAR
Based on Record Production Growth at Slater Coal Properties
TORONTO, ONTARIO - May 30, 2012: Forbes & Manhattan Coal Corp. (TSX/JSE:
FMC) ("Forbes Coal" or the "Company") is pleased to announce its financial
results for fiscal 2012 (12 month period ended February 29, 2012). Revenue
for the Slater Coal Stand Alone operations was $104.5 million compared to
$46.7 million for the year ended February 28, 2011. Consolidated revenue
was $104.5 million compared to $27.7 million for the year ended February
28, 2011. Consolidated gross profit was $17.4 million compared to $4.2
million one year ago. Slater Coal stand alone EBITDA was $27.3 compared to
$16.5 million for the year ended February 28, 2011.
"Our remarkable results over the past fiscal year is due to our focus on
growing our operations. The $20 million capital expenditure investment has
increased our revenue 124% year-over-year," said Stephan Theron, President
and Chief Executive Officer of Forbes Coal. "Asian demand for coal remains
consistently strong and Forbes Coal intends to continue implementing a
marketing strategy that targets this region. We are also very pleased with
the expansion and growth at our Aviemore anthracite mine. Domestic and
export demand for our anthracite product remains strong and as we grow our
share of this market, we are seeing increased demand. As a result, we will
continue to evaluate the expansion potential of this mine."
Slater Coal stand alone
Fiscal 2012 Fiscal 2011
(12 months ended Feb (12 months ended Feb
29, 2012 ) 28, 2011 )
Slater Coal $104.5 million $46.7 million
Revenue
Slater Coal $27.3 million $16.5 million
EBITDA
Year End Financial Highlights
Fiscal 2012 Fiscal 2011 *
(12 months ended Feb (14 months ended Feb
29, 2012 ) 28, 2011 )
Revenue $104.5 million $27.7 million
Gross profit $17.4 million $4.2 million
Consolidated $22.5 million $7.1 million
EBITDA
Cash and cash $9.5 million $15.2 million
equivalents
*Includes 7 months of operations from Slater Coal acquisition date until
February 28, 2011. All figures are in Canadian dollars, unless otherwise
stated.
During the twelve months ended February 29, 2012, the Company added $20.4
million to property, plant and equipment with significant mine development
and equipment purchased for the Magdalena and Aviemore operations. Items in
this development included the delivery of the second ABM 30 continuous
miner, three low profile coal scoops, a coal cutter machine and a new
horizontal face-drill. There were also infrastructure upgrades on the
conveyer and ventilation systems to facilitate increased production and to
develop additional sections.
The Company set record fiscal production and sales numbers during fiscal
2012 and had a strong start to fiscal 2013. Record production numbers were
set in February 2012 and Forbes Coal is continuing to target 1.3 million
saleable tonnes for the current fiscal year.
Fourth Quarter and Year End Production Highlights
- Aviemore fourth quarter run of mine production increased 125% and
saleable production increased 115% compared to the previous fiscal year
- Total export sales increased 179% year-over-over and fourth quarter
export sales increased 11% year-over-year
- Total sales increased 104% year-over-year
- Run of mine production in December increased 223% and saleable tonnes
rose 172% year-over-year in spite of a scheduled two week maintenance
closure
- Forbes Coal produced record tonnage in February 2012 of 138,000 tonnes
run of mine
Production (tonnes)
Fourth Quarter Fourth Quarter % change
2012 2011
(Dec 2011 - (Dec 2010 -
Feb 2012) Feb 2011)
Magdalena 214,800 174,500 +23%
Run of Mine
Aviemore 88,200 39,200 +125%
Run of Mine
Total Run of 303,000 213,700 +42%
Mine
Magdalena 171,300 135,800 +26%
Saleable
Aviemore 52,600 24,500 +115%
Saleable
Total Saleable 223,900 160,400 +40%
Production (tonnes) continued
Fiscal 2012 Fiscal 2011 % change
Year End Year End
(Mar 2011- (Mar 2010 -
Feb 2012) Feb 2011)
Magdalena 1,009,500 785,700 +28%
Run of Mine
Aviemore 281,300 148,200 +90%
Run of Mine
Total Run of 1,290,800 934,000 +38%
Mine
Magdalena 748,000 556,000 +35%
Saleable
Aviemore 175,700 92,000 +91%
Saleable
Total Saleable 923,700 648,000 +43%
Sales (tonnes)
Fourth Quarter Fourth Quarter % change
2012 2011
(Dec 2011 - (Dec 2010 -
Feb 2012) Feb 2011)
Export 106,000 95,100 +11%
Domestic 113,900 81,100 +40%
Total Sales 219,900 176,200 +25%
Sales (tonnes) continued
Fiscal 2012 Fiscal 2011 % change
Year End Year End
(Mar 2011 - (Mar 2010 -
Feb 2012) Feb 2011)
Export 578,000 207,200 +179%
Domestic 503,800 322,000 +56%
Total Sales 1,081,800 529,200 +104%
SUMMARIZED FINANCIAL RESULTS OF SLATER COAL
Summarized Financial Results (Actual)
Slater Coal
Three months ended *
February February
29, 2012 28, 2011
Run of Mine (ROM) (t) 303,029 213,753
Run of Mine (ROM) coal purchased (t) 10,685
-
Saleable production (t) 204,310 161,076
Saleable coal purchased (t) 19,591
-
Plant feed (t) 321,502 219,192
Yield (%) on ROM 65.1% 75.4%
Yield (%) on plant feed 63.5% 73.5%
Inventory tonnes balance open 82,425
220,728
Inventory tonnes balance close 41,109
189,778
Sales (t) 219,889 176,270
Revenue 000,000`s (CAD)
18.5 16.4
EBITDA 000,000`s (CAD)
2.9 6.1
CAD: USD (average) 1.01 1.00
ZAR: CAD (average) 7.86 7.01
Selling price (average) / sold 84.11 93.32
production tonnes (CAD)
Selling price (average) / sold 83.19 93.62
production tonnes (USD)
Cash cost of sales and operating
expenses 000,000`s (CAD) 14.0 9.5
Cash cost of sales and operating
expenses / sold production tonnes 63.71 53.70
(CAD)
Cash cost of sales and operating
expenses / sold production tonnes 63.01 53.88
(USD)
Capital expenditures 000,000`s (CAD) 2.95 9.80
Capital expenditures per t of saleble 14.46 60.84
production (CAD)
Summarized Financial Results (Actual) continued
Slater Coal
Twelve months ended *
February February
29, 2012 28, 2011
Run of Mine (ROM) (t) 1,290,799 933,993
Run of Mine (ROM) coal 32,345
purchased (t) -
Saleable production (t) 876,793 648,048
Saleable coal purchased (t) 46,904
-
Plant feed (t) 1,316,673 938,148
Yield (%) on ROM 66.3% 69.4%
Yield (%) on plant feed 66.6% 69.1%
Inventory tonnes balance open 74,704
189,778
Inventory tonnes balance close
41,109 189,778
Sales (t) 1,081,814 529,256
Revenue 000,000`s (CAD)
104.5 46.7
EBITDA 000,000`s (CAD)
27.3 16.5
CAD: USD (average) 0.99 1.02
ZAR: CAD (average) 7.44 7.09
Selling price (average) / sold 96.59 88.31
production tonnes (CAD)
Selling price (average) / sold 97.43 86.50
production tonnes (USD)
Cash cost of sales and
operating expenses 000,000`s 71.1 28.6
(CAD)
Cash cost of sales and
operating expenses / sold 65.69 53.98
production tonnes (CAD)
Cash cost of sales and
operating expenses / sold 66.25 52.88
production tonnes (USD)
Capital expenditures 000,000`s 20.41 14.84
(CAD)
Capital expenditures per t of 23.28 22.90
saleble production (CAD)
(*) The Slater Coal results presented in the chart above for the three and
twelve months ended February 28, 2011 have not been reported in the
consolidated financial statements of the Company in full. Only results for
a period from the date of acquisition (July 29, 2010) have been
consolidated.
NON-IFRS PERFORMANCE MEASURES
The Company has included in this document certain non-International
Financial Reporting Standars (IFRS) performance measures that are detailed
below. These non-IFRS performance measures do not have any standardized
meaning prescribed by IFRS 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 IFRS, 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 IFRS. The definition for these performance
measure and reconciliation of the non-IFRS measure to reported IFRS
measures are as follows:
EBITDA - Slater Coal stand alone
Three months Twelve
ended months ended
February 29, February 29,
2012 2012
$000`s $000`s
Net income (loss) for the
period 1,193 2,290
add back
Amortization and depletion
3,428 15,783
Income tax (recovery) expense
(1,704) 968
Foreign exchange (gain)
578 (553)
Interest and dividend income
(105) 722
Change in estimates on
contingent acquisition (545) (425)
liability
Accretion
(1,856) (316)
Business combination
transaction costs - 24
Mineral properties
investigation costs (Non- 127 317
Slater)
Stock based compensation
590 2,586
Loss on share-based payments
(26) 1,462
Unrealized (gain) on marked-
to-market securities (15) (69)
General and administration
(Non Slater) 1,240 4,560
EBITDA Slater Coal
2,905 27,349
EBITDA - Forbes Coal consolidated
Three months Twelve
ended months ended
February 29, February 29,
2012 2012
$000`s $000`s
Net income (loss) for the
period 1,193 2,290
add back
Amortization and depletion
3,428 15,783
Income tax (recovery) expense
(1,704) 968
Foreign exchange (gain)
578 (553)
Interest and dividend income
(105) 722
Change in estimates on
contingent acquisition (545) (425)
liability
Accretion
(1,856) (316)
Business combination
transaction costs - 24
Stock based compensation
590 2,586
Loss on share-based payments
(26) 1,462
Unrealized (gain) on marked-
to-market securities (15) (69)
EBITDA Forbes Coal
Consolidated 1,538 22,472
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It holds a
majority interest in two operating mines through its 100% 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 resource base 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
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 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.
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.
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, statements regarding foreign demand for coal,
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
Shareholders are advised that the full financial results and Management`s
Discussion and Analysis report are available on the SEDAR profile of the
Company at www.sedar.com. Additional information is available at
www.forbescoal.com.
Canada
30 May 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 30/05/2012 13:26:09 Produced by the JSE SENS Department.
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