Average monthly revenue was $6.5 million, a 65% increase over fiscal 2011
TORONTO, ONTARIO--(Marketwire - Aug. 12, 2011) - Forbes & Manhattan Coal Corp. (TSX:FMC)(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:
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 $3.9 million. This represents a 65% increase in average monthly revenue.
Production and sales also showed significant growth. Total ROM production from all operations for first quarter 2012 was 311,000 tonnes, 45% higher than total ROM production for the three months ended February 28, 2011. Average combined monthly sales were 63,600 tonnes, 14% higher than average combined monthly sales for the three months ended February 28, 2011. First quarter average combined monthly sales were 44% higher than average combined monthly sales for Slater Coal's fiscal 2011.
"The growth in revenue is a result of the increased export sales and steady ramp up at the Magdalena and Aviemore mines. Management expects this trend to be maintained as Forbes Coal continues to sell in the expanding Asian coal markets," said Stephan Theron, President and Chief Executive Officer. "Management also expects Forbes Coal to raise its domestic profile though its recent listing on the Johannesburg Stock Exchange."
Operational highlights
Forbes Coal continued to increase production at its two mines, Magdalena and Aviemore. The Company launched Project Siyathuthuka (Zulu for "together we are growing and improving"), the second phase of its ramp-up programme. Operational highlights include:
ROM Production
Saleable Production and Sales
SUMMARIZED FINANCIAL RESULTS OF SLATER COAL
Summarized Financial Results (Actual) | ||
Slater Coal | ||
March 1, 2011 | March 1, 2010 | |
May 31, 2011 | May 31, 2010 | |
3 months | 3 months * | |
Run of Mine (ROM) (t) | 311,002 | 197,744 |
Saleable production (t) | 207,189 | 134,976 |
Plant feed (t) | 303,069 | 207,359 |
Yield (%) on ROM | 66.6% | 68.3% |
Yield (%) on Plant feed | 68.4% | 65.1% |
Inventory tonnes balance open | 189,778 | 86,742 |
Inventory tonnes balance close | 204,396 | 107,145 |
Sales (t) | 190,827 | 114,573 |
Revenue 000,000's ($) | 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$) | 102.71 | 84.90 |
Selling price (average) / sold production t (US$) | 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 this chart are derived from the Slater Coal stand alone financial statements or consolidation adjustments |
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 | 1,840 | ||
EBITDA 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 | 1,840 | ||
General and administration (Non Slater) | 432 | ||
EBITDA Slater Coal | 6,249 |
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" (http://www.sedar.com/GetFile.do?lang=EN&docClass=24&issuerNo=00024687&fileName=/csfsprod/data118/filings/01753050/00000001/s%3A%5Cfmctech530f.pdf), available on the SEDAR profile of the Company at www.sedar.com. Additional information is available at www.forbescoal.com.
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 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, 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.
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