TORONTO,
July 29, 2013 /PRNewswire/ - Corsa
Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") announces that it
has filed its Condensed Interim Consolidated Financial Statements
and Management's Discussion and Analysis for the three months and
six months ended May 31, 2013 on
SEDAR and has posted these documents to its website
www.corsacoal.com.
Second Quarter highlights included:
- Metallurgical coal sales of 83,000 tons.
- Maintains sales guidance at 300,000 to 320,000 tons of
metallurgical coal for fiscal 2013.
- Cash cost of metallurgical coal sales of $71 per ton (1).
- Successful commencement of the Company's first highwall mining
operation at the Hemminger surface mine and commencement of
operations at Ankeny surface mine.
- Conditional TSXV acceptance of the Quintana transaction and
closing scheduled for on or about July 31,
2013.
Refer to the Condensed Interim Consolidated
Financial Statements and Management's Discussion and Analysis for
the three and six months ended May 31,
2013 for the details of the financial performance of the
Company and the matters referred to in this release including the
technical reports and independent qualified person.
Don Charter,
President and Chief Executive Officer, stated "The second quarter
was a great quarter for the Company operations. With the
Casselman mine operating for
virtually the entire quarter at full production with the current
two unit configuration, we were able to achieve further cost
reductions with a cash cost of $38
per ROM ton (2) of coal produced at the Casselman mine during the quarter. In
addition, the commencement of the Hemminger high wall operation and
opening of the Ankeny surface mine together with entering the final
stage of permitting of the Acosta underground project the Company
is well positioned for continued expansion. Corsa continues to
successfully position itself as a new and expanding US supplier of
low volatile metallurgical coal"
(1) (2) These are non-GAAP measures.
See "Non-GAAP Measures" below.
Production and Sales
References in this news release to "Q2 2013"
means the three months ended May 31,
2013 and to "6M 2013" means the six months ended
May 31, 2013, unless otherwise
noted.
Production of raw metallurgical coal from the
Company's mines was 123,000 tons in Q2 2013, of which 116,000 tons
were from the Casselman mine and
7,000 tons were from surface mines. Production of raw metallurgical
coal from the Company's operations was 183,000 tons in 6M 2013; of
which 165,000 tons were from the Casselman Mine and 18,000 tons
were from surface mines.
The Company has the ability to purchase raw
metallurgical coal from third parties in order to increase the
amount available for blending and processing at the Preparation
Plant. In Q2 2013, the Company purchased 2,000 tons of raw
metallurgical coal. In 6M 2013, the Company purchased 8,000 tons of
raw metallurgical coal.
The Preparation Plant processed 119,000 tons of
raw metallurgical coal in Q2 2013 and produced 77,000 tons of clean
metallurgical coal. The Preparation Plant processed 175,000 tons of
raw metallurgical coal in 6M 2013 and produced 115,000 tons of
clean metallurgical coal in 6M 2013. The increase in production
resulted from the increase in sales orders. The average
recovery rate in the plant was 64.7% in Q2 2013 and 65.7% in 6M
2013. The Company expects the average recovery rate for the
balance of fiscal 2013 to be between 60% and 70%.
Production of thermal coal from surface mines
was 11,000 tons in Q2 2013 and 14,000 tons in 6M 2013. The thermal
coal production is ancillary to metallurgical coal production.
In Q2 2013, the Company sold 83,000 tons of
clean metallurgical coal at an average realized price of
$105 per ton and 16,000 tons of
thermal coal at an average realized price of $28 per ton. In 6M 2013, the Company sold 119,000
tons of clean metallurgical coal at an average realized price of
$104 per ton and 10,000 tons of raw
metallurgical coal at an average realized price of $63 per ton and 49,000 tons of thermal coal at an
average realized price of $35 per
ton.
Outlook
While the metallurgical coal market continued to
be volatile, the Company has continued to be successful in
achieving sales as a result of the quality of its low volatile
metallurgical coal product. The Company's current guidance for
fiscal 2013 is clean metallurgical coal sales of between
approximately 300,000 and 320,000 clean tons, of which 119,000 tons
have been sold in the first six months of the year leaving
approximately 181,000 to 201,000 tons for the balance of the year.
In addition, the Company currently expects clean metallurgical coal
sales of between 45,000 and 60,000 tons in the first fiscal quarter
of 2014. This guidance is based on currently contracted sales which
are direct to both domestic and international steel producers. The
Company continues to actively market its high quality low volatile
metallurgical coal and match production to actual sales.
Update on the Quintana Transaction
July 24, 2013, the Company
announced the TSX Venture Exchange has conditionally accepted
Corsa's previously announced proposed transaction with Quintana
Kopper Glo Investment, LLC, a portfolio company of Quintana Energy
Partners L.P. and its affiliated investment funds
(collectively, "Quintana"), which, when the transaction
contemplated is fully completed, will result in Corsa having raised
a total of US$40 million at
Cdn$0.17 a share and acquiring Kopper
Glo, a Tennessee based coal
producer, from Quintana and Quintana having acquired a control
position in Corsa. The Quintana Transaction is expected to close on
or about July 31, 2013. See the
press release of the Company dated July 24,
2013 and the Filing Statement dated July 24, 2013 filed on SEDAR for full details of
the Quintana Transaction, including the closing conditions.
Caution
The estimated coal production, purchases, sales
and mining cash costs per ton of coal and processing costs per ton
of coal sold disclosed in this press release are considered to be
forward looking information. Readers are cautioned that actual
results may vary from this forward looking information. Actual
production, purchases, total cash costs, sales and processing costs
are subject to variation based on a number of risks and other
factors referred to under the heading "Forward-Looking Statements"
below as well as demand and sales orders received. Costs will be
impacted by production levels actually achieved.
Non GAAP Measures
Management uses non-GAAP measures as internal
measurements of production costs and performance for the Company's
mining and processing operations. Management believes these
non GAAP measures provide useful information for investors as they
provide information in addition to the GAAP measures to assist in
their evaluation of those operating costs which impact on Corsa's
cash resources.
(1) Cash cost of
metallurgical coal sales per ton is a non-GAAP measure and is the
total of cost of coal sold expense and royalties expense for clean
metallurgical coal divided by the tons sold. Cost of coal sold
expense includes all cash operating cost at the mines, the cost of
purchased coal and the cash operating cost of processing related to
clean metallurgical coal and royalties expenses includes all
production and sales royalties related to clean metallurgical
coal.
(2) Cash cost of
ROM coal per ton is a non-GAAP measure and is and is the total of
cash operating cost and royalties cost divided by the tons
produced. Cash operating cost, which is a non-GAAP measure, is
defined as the cost of coal sold expense plus (i) the increase in
inventory from the previous period and its impact in the statement
of operations for the reporting period, or less (ii) the decrease
in inventory from the previous period and its impact in the
statement of operations for the reporting period. Inventory is
calculated at lower of cost or net realizable value. Royalties cash
cost, which is a non-GAAP measure, is defined as royalties expense
plus (i) the increase in inventory from the previous period and its
impact in the statement of operations for the reporting period, or
less (ii) the decrease in inventory from the previous period and
its impact in the statement of operations for the reporting period.
Inventory is calculated at lower of cost or net realizable
value.
Reference is made to the Management's Discussion
and Analysis and the Condensed Consolidated Financial Statements
for the three and six months ended May 31,
2013 for a reconciliation of non GAAP measures to GAAP
measures.
Information about Corsa
Corsa's primary business is the mining, processing
and selling of low volatile metallurgical coal, as well as actively
exploring, acquiring and developing resource properties
consistent with its coal business.
Forward-Looking Statements
Certain information set forth in this press
release contains "forward-looking statements" and "forward-looking
information" under applicable securities laws. Except for
statements of historical fact, certain information contained herein
relating to projected sales and the expected date of
completion of the Quintana Transaction constitutes forward-looking
statements which include management's assessment of future plans
and operations and are based on current internal expectations,
estimates, projections, assumptions and beliefs, which may prove to
be incorrect. Some of the forward-looking statements may be
identified by words such as "estimates", "expects" "anticipates",
"believes", "projects", "plans", "outlook", "capacity" and similar
expressions. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause the Company's actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to: risks that
the actual production or sales for the 2013 fiscal year and the
first fiscal quarter of 2014 will be less than projected production
or sales for these periods; risks that the Quintana Transaction
will not be completed or will be delayed; risks that the prices for
coal sales will be less than projected or expected; liabilities
inherent in coal mine development and production including
restarting idled mines; geological, mining and processing technical
problems; inability to obtain required mine licenses, mine permits
and regulatory approvals or renewals required in connection with
the mining and processing of coal; risks that the Company's coal
preparation plant will not operate at production capacity during
the relevant period, unexpected changes in coal quality and
specification; variations in the coal mine or coal preparation
plant recovery rates; dependence on third party coal transportation
systems; competition for, among other things, capital, acquisitions
of reserves, undeveloped lands and skilled personnel; incorrect
assessments of the value of acquisitions; changes in commodity
prices and exchange rates; changes in the regulations with respect
to the use, mining and processing of coal; changes in regulations
on refuse disposal; the effects of competition and pricing
pressures in the coal market; the oversupply of, or lack of demand
for, coal; inability of management to secure coal sales or third
party purchase contracts; currency and interest rate fluctuations;
various events which could disrupt operations and/or the
transportation of coal products, including labour stoppages and
severe weather conditions; the demand for and availability of rail,
port and other transportation services; the ability to purchase
third party coal for processing and delivery under purchase
agreements; and management's ability to anticipate and manage the
foregoing factors and risks. The forward-looking statements and
information contained in this press release are based on certain
assumptions regarding, among other things, coal sales being
consistent with expectations; future prices for coal; future
currency and exchange rates; the Company's ability to generate
sufficient cash flow from operations and access capital markets to
meet its future obligations; the regulatory framework representing
royalties, taxes and environmental matters where the Company
conducts business; coal production levels; and the Company's
ability to retain qualified staff and equipment in a cost-efficient
manner to meet its demand. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. The reader is cautioned not to
place undue reliance on forward-looking statements. The Company
does not undertake to update any of the forward-looking statements
contained in this press release unless required by law. The
statements as to the Company's capacity to produce coal are no
assurance that it will achieve these levels of production or that
it will be able to achieve these sales levels.
Investors are cautioned that, except as
disclosed in the filing statement prepared in connection with the
Quintana Transaction, any information released or received with
respect to the Transaction may not be accurate or complete and
should not be relied upon. Trading in the securities of Corsa
should be considered speculative.
The TSX Venture Exchange has in no way
passed on the merits of the Quintana Transaction and neither
approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Corsa Coal Corp.
