CANONSBURG, PA, Nov. 7,
2018 /CNW/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa" or
the "Company"), a premium quality metallurgical coal producer,
today reported financial results for the three and nine months
ended September 30, 2018. Corsa has filed its unaudited
condensed interim consolidated financial statements for the three
and nine months ended September 30, 2018 and 2017 and related
management's discussion and analysis under its profile on
www.sedar.com.
Unless otherwise noted, all dollar amounts in this news release
are expressed in United States
dollars and all ton amounts are short tons (2,000 pounds per
ton). Pricing and cost per ton information is expressed on a
free-on-board, or FOB, mine site basis, unless otherwise
noted.
Third Quarter Highlights
- Corsa reported net and comprehensive loss from continuing
operations of $1.5 million, or
$0.02 per share, for the third
quarter 2018, compared to net and comprehensive income from
continuing operations of $7.5
million, or $0.07 per share,
for the third quarter 2017. Net and comprehensive loss from
continuing operations for the third quarter 2018 includes
$6.7 million of amortization expense
of which $2.7 million, or
$0.03 per share, resulted from the
asset impairment reversal that took place in December 2017.
- Corsa's adjusted EBITDA(1) was $9.9 million and $8.5
million at its Northern Appalachia division ("NAPP" or "NAPP
Division") and on a consolidated basis, respectively, for the third
quarter 2018. Corsa's EBITDA(1) was $9.5 million and $6.9
million at its NAPP Division and on a consolidated basis,
respectively, for the third quarter 2018.
- Operating cash flows provided by continuing operations for the
third quarter 2018 were $6.5 million,
which was consistent with operating cash flows for the third
quarter 2017.
- Total revenue from continuing operations was $61.6 million for the third quarter 2018, a
decrease of 2% as compared to the third quarter 2017. The decrease
in revenue was attributable to the expiration of a thermal coal
contract in December 2017.
- Corsa sold a total of 455,525 tons of metallurgical coal in the
third quarter 2018. On a year-to-date basis, low volatile
metallurgical coal sales volumes are up 17% versus 2017 comparable
period levels, and total metallurgical sales volumes are up 22% as
compared to year-to-date September
2017. This growth has been accomplished despite supply chain
disruptions to export terminals and rail service.
- Corsa achieved an average realized price per ton of
metallurgical coal sold(1) at its NAPP Division of
$106.99 for all metallurgical
qualities in the third quarter 2018. This average realized price is
the approximate equivalent of $151 to
$157 on an FOB vessel
basis(2). For low volatile metallurgical coal sold,
Corsa achieved the approximate equivalent of $157 to $162 on an
FOB vessel basis(2). Corsa's sales mix for the third
quarter 2018 included 40% of sales to domestic customers and 60% of
sales to international customers.
- Cash production cost per ton sold(1) was
$77.94 for the third quarter 2018, a
decrease of $15.52 per ton as
compared to the second quarter 2018. Cash production cost per ton
sold(1) increased $7.65
per ton, or 11% as compared to the third quarter 2017.
- Corsa is at an advanced stage on discussions and expects to
refinance or extend the maturity of our term loan beyond the
August 2019 maturity date.
|
(1)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Similar to most U.S.
metallurgical coal producers, Corsa reports sales and costs per ton
on an FOB mine site basis and denominated in short tons. Many
international metallurgical coal producers report prices and costs
on a delivered-to-the-port basis, thereby including freight costs
between the mine and the port. Additionally, Corsa reports
sales and costs per short ton, which is approximately 10% lower
than a metric ton. For the purposes of this figure, we have
used an illustrative freight rate of $30-$35 per short ton.
Historically, freight rates rise and fall as market prices rise and
fall. The low volatile metallurgical coal sales price is
approximated at 3-4% above the equivalent metallurgical coal price
on an FOB Vessel basis. As a note, most published indices for
metallurgical coal report prices on a delivered-to-the-port basis
and denominated in metric tons.
|
George Dethlefsen, Chief
Executive Officer of Corsa, commented, "In the third quarter of
2018 we began to realize returns on the investments made during the
first half of the year, and we believe these investments will yield
further improvement in the quarters ahead. Overall, our cash
mining costs per ton sold(1) were down 16% in the third
quarter 2018 compared to first half 2018 levels. This
improvement in cash mining costs per ton sold(1) in the
third quarter of 2018 was the result of experiencing more favorable
geology and putting in service newly rebuilt mining equipment at
the Casselman mine. At the
Acosta mine, we achieved full
production levels and achieved our highest quarterly production
rate since beginning the mine.
Low volatile metallurgical coal remains in very high demand both
domestically as well as internationally as steel and coke prices
remain profitable for producers. Supply disruptions in
the United States and Australia have created a fragile supply
situation for metallurgical coal and specifically for the low
volatile metallurgical coal that we produce. Pricing on the
US East Coast is at one-year highs and Australian spot prices are
up approximately $35.00 per ton, or
20%, since the beginning of the third quarter. The forward
pricing curve now averages around $200 per metric ton FOB Vessel for all of
2019. This uptick in pricing is expected to positively impact
Corsa's fourth quarter 2018 earnings as well as 2019
earnings. Port congestion on the US East Coast has improved
significantly, which will serve to substantially reduce demurrage
expenses in the coming quarters.
With the challenging geology at Casselman behind us, the ramp up at
Acosta complete, the newly rebuilt
underground mining equipment in service, the future reduction in
demurrage expense and the increase in pricing we expect further
increases in Adjusted EBITDA in the fourth quarter. We are
providing guidance for the fourth quarter 2018 of $11 - $13 million
of Adjusted EBITDA. We expect higher average realized prices
and margin expansion to continue through the fourth quarter of 2018
and into 2019, leading to strong free cash flow generation in the
quarters ahead.
We continue to aggressively pursue volume growth, given the
attractive returns profile of our organic projects. In the
quarter, we upgraded our equipment at the Horning mine, which is
now producing a low ash, low sulfur metallurgical coal that is very
strategic in our Sales & Trading platform. Additionally,
in the quarter, we upgraded mining equipment at our Casselman and Acosta mines. We continue to await the
issuance of the mining permit for our Keyser project and expect
this to be received later this year. Finally, we have had
success drilling around our flagship Casselman mine and expect to significantly
increase the reserve life of that mine.
The Company is well positioned for the quarters ahead. Our
face mining equipment rebuild initiative is complete and fully
funded, we foresee favorable geologic conditions at our mines and
the supply-demand balance for metallurgical coal remains favorable
for metallurgical coal producers. We are well advanced in
constructing our sales order book for 2019, having achieved price
increases for our domestic orders and building a diversified
international customer base with price exposure to both Australian
and US-linked indices. Corsa's customer relationships,
preparation plant infrastructure, rail access and coal storage
capacity allow for full participation in the seaborne market and
significant operating leverage to the rising price
environment."
2018 Year-to-Date Sales Metrics
Metallurgical Coal Sales Volume
Corsa's total metallurgical coal sales and low volatile
metallurgical coal sales have increased significantly for the nine
months ending September 30, 2018
compared to the same period in 2017, as presented below.
Corsa's metallurgical coal sales figures are comprised of three
types of sales: (i) selling coal that Corsa produces ("Company
Produced"); (ii) selling coal that Corsa purchases and provides
value added services (storing, washing, blending, loading) to make
the coal saleable ("Valued Added Services"); and (iii) selling coal
that Corsa purchases on a clean or finished basis from suppliers
outside the Northern Appalachia region ("Sales and Trading").
For the nine months ended September 30,
2018, Corsa's sales were broken down into the following
categories.
|
Metallurgical Coal
Sales by Category (Tons)
|
|
|
Q1
2018
|
|
|
Q2
2018
|
|
|
Q3
2018
|
|
|
YTD
2018
|
|
Company
Produced
|
|
242,511
|
|
|
194,051
|
|
|
263,266
|
|
|
699,828
|
|
Purchased - Value
Added Services
|
|
145,856
|
|
|
88,393
|
|
|
78,839
|
|
|
313,088
|
|
Purchased - Sales and
Trading
|
|
169,354
|
|
|
109,890
|
|
|
113,420
|
|
|
392,664
|
|
Total
|
|
557,721
|
|
|
392,334
|
|
|
455,525
|
|
|
1,405,580
|
Financial and Operations Summary
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
|
(in
thousands)
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
Revenues
|
|
$
|
61,561
|
|
|
$
|
62,944
|
|
|
$
|
(1,383)
|
|
|
$
|
199,340
|
|
|
$
|
169,661
|
|
|
$
|
29,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales(2)
|
|
$
|
56,923
|
|
|
$
|
48,681
|
|
|
$
|
8,242
|
|
|
$
|
182,749
|
|
|
$
|
128,100
|
|
|
$
|
54,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
|
$
|
4,960
|
|
|
$
|
4,473
|
|
|
$
|
487
|
|
|
$
|
16,517
|
|
|
$
|
11,787
|
|
|
$
|
4,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive
(loss) income for
|
|
$
|
(1,470)
|
|
|
$
|
7,536
|
|
|
$
|
(9,006)
|
|
|
$
|
(4,402)
|
|
|
$
|
25,070
|
|
|
$
|
(29,472)
|
|
the period from
continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities from
|
|
$
|
6,465
|
|
|
$
|
6,297
|
|
|
$
|
168
|
|
|
$
|
9,680
|
|
|
$
|
24,192
|
|
|
$
|
(14,512)
|
|
continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
|
$
|
6,890
|
|
|
$
|
12,152
|
|
|
$
|
(5,262)
|
|
|
$
|
18,283
|
|
|
$
|
37,853
|
|
|
$
|
(19,570)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
8,505
|
|
|
$
|
12,244
|
|
|
$
|
(3,739)
|
|
|
$
|
23,671
|
|
|
$
|
39,662
|
|
|
$
|
(15,991)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal sold -
tons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
456
|
|
|
488
|
|
|
(32)
|
|
|
1,406
|
|
|
1,153
|
|
|
253
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Cost of sales
consists of the following:
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
|
September
30,
|
|
September
30,
|
|
(in
thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Mining and processing
costs
|
|
$
|
18,768
|
|
|
$
|
16,138
|
|
|
$
|
56,215
|
|
|
$
|
40,399
|
|
Purchased coal
costs
|
|
17,089
|
|
|
23,516
|
|
|
65,650
|
|
|
57,675
|
|
Royalty
expense
|
|
1,746
|
|
|
1,365
|
|
|
4,870
|
|
|
4,675
|
|
Amortization
expense
|
|
6,671
|
|
|
2,999
|
|
|
19,093
|
|
|
9,142
|
|
Transportation costs
from preparation plant to customer
|
|
10,934
|
|
|
5,056
|
|
|
33,719
|
|
|
14,454
|
|
Idle mine
expense
|
|
368
|
|
|
225
|
|
|
608
|
|
|
773
|
|
Tolling
costs
|
|
558
|
|
|
453
|
|
|
1,689
|
|
|
808
|
|
Write-off of advance
royalties and other assets
|
|
33
|
|
|
133
|
|
|
38
|
|
|
303
|
|
Other
costs
|
|
756
|
|
|
(1,204)
|
|
|
867
|
|
|
(129)
|
|
|
$
|
56,923
|
|
|
$
|
48,681
|
|
|
$
|
182,749
|
|
|
$
|
128,100
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
|
Realized price per
ton sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
$
|
106.99
|
|
|
$
|
112.15
|
|
|
$
|
(5.16)
|
|
|
$
|
113.92
|
|
|
$
|
126.48
|
|
|
$
|
(12.56)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash production cost
per ton sold(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
$
|
77.94
|
|
|
$
|
70.29
|
|
|
$
|
(7.65)
|
|
|
$
|
87.02
|
|
|
$
|
70.14
|
|
|
$
|
(16.88)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per ton
sold(1)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
$
|
82.42
|
|
|
$
|
80.29
|
|
|
$
|
(2.13)
|
|
|
$
|
90.00
|
|
|
$
|
83.05
|
|
|
$
|
(6.95)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash margin per ton
sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
$
|
24.57
|
|
|
$
|
31.86
|
|
|
$
|
(7.29)
|
|
|
$
|
23.92
|
|
|
$
|
43.43
|
|
|
$
|
(19.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
(000's)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP
|
|
$
|
9,497
|
|
|
$
|
13,554
|
|
|
$
|
(4,057)
|
|
|
$
|
25,087
|
|
|
$
|
40,521
|
|
|
$
|
(15,434)
|
|
Corporate
|
|
(2,607)
|
|
|
(1,402)
|
|
|
(1,205)
|
|
|
(6,804)
|
|
|
(2,668)
|
|
|
(4,136)
|
|
Total
|
|
$
|
6,890
|
|
|
$
|
12,152
|
|
|
$
|
(5,262)
|
|
|
$
|
18,283
|
|
|
$
|
37,853
|
|
|
$
|
(19,570)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1) (000's)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP
|
|
$
|
9,865
|
|
|
$
|
13,228
|
|
|
$
|
(3,363)
|
|
|
$
|
27,744
|
|
|
$
|
42,491
|
|
|
$
|
(14,747)
|
|
Corporate
|
|
(1,360)
|
|
|
(984)
|
|
|
(376)
|
|
|
(4,073)
|
|
|
(2,829)
|
|
|
(1,244)
|
|
Total
|
|
$
|
8,505
|
|
|
$
|
12,244
|
|
|
$
|
(3,739)
|
|
|
$
|
23,671
|
|
|
$
|
39,662
|
|
|
$
|
(15,991)
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Cash production cost
per ton sold excludes purchased coal. This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(3)
|
Cash cost per ton
sold includes purchased coal. This is a non-GAAP financial
measure. See "Non-GAAP Financial Measures" below.
|
Guidance(1)
Corsa's updated guidance for the year ending December 31, 2018 is as follows:
|
(all dollar
amounts in U.S. dollars and
tonnage in short tons)
|
|
Updated
Guidance
Full Year 2018
|
|
Previous
Guidance(2)
Full Year 2018
|
|
Change to
Previous
Guidance
|
|
|
|
|
|
|
|
|
Metallurgical Coal
Sales Tons(3)
|
|
|
|
|
|
|
|
Company
Produced
|
|
1.0
million
|
|
1.0
million
|
|
—
|
|
Purchased - Value
Added Services
|
|
0.4
million
|
|
0.4 - 0.5
million
|
|
0 .0 - (0.1)
million
|
|
Purchased - Sales and
Trading
|
|
0.5
million
|
|
0.7 - 0.8
million
|
|
(0.2) - (0.3)
million
|
|
Total Metallurgical
Coal Sales Tons
|
|
1.9
million
|
|
2.1 - 2.3
million
|
|
(0.2) - (0.4)
million
|
|
|
|
|
|
|
|
|
Share of
Metallurgical Coal Sales Tons
|
|
|
|
|
|
|
|
% Domestic Sales at
the mid-point
|
|
26%
|
|
27%
|
|
(1)%
|
|
% Export Sales at the
mid-point
|
|
74%
|
|
73%
|
|
1%
|
|
|
|
|
|
|
|
|
Metallurgical Coal
Sales Tons Commitments(7)
|
|
|
|
|
|
|
|
Committed at the
mid-point
|
|
100%
|
|
94%
|
|
6%
|
|
Committed and Priced
at the mid-point
|
|
84%
|
|
79%
|
|
5%
|
|
|
|
|
|
|
|
|
Cash Production
Cost per ton sold (FOB Mine)(4)
|
|
|
|
|
|
|
NAPP Division
Metallurgical Coal(5)
|
|
$82 - $84
|
|
$82 - $84
|
|
—
|
|
|
|
|
|
|
|
|
General and
Administrative Expenses(6)
|
|
|
|
|
|
|
|
NAPP
Division
|
|
$8.5 - $9.0
million
|
|
$9.0 - $10.0
million
|
|
($0.5) - ($1.0)
million
|
|
Corporate
Division
|
|
$6.5 - $7.0
million
|
|
$6.5 - $7.0
million
|
|
—
|
|
Total Corsa
|
|
$15.0 - $16.0
million
|
|
$15.5 - $17.0
million
|
|
($0.5) - ($1.0)
million
|
|
|
|
|
|
|
|
|
Note: Selling
expenses are forecasted to be covered by margins from Sales and
Trading tons sold.
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(4)
|
|
$34.7 - $36.7
million
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures per ton sold(7)
|
|
|
|
|
|
|
2018 Full
Year
|
|
$10
|
|
$9
|
|
$1
|
|
2018-2020 Forecasted
Average
|
|
$4
|
|
$4
|
|
—
|
|
|
|
(1)
|
Guidance projections
("Guidance") are considered "forward-looking statements" and
"forward looking information" and represent management's good faith
estimates or expectations of future production and sales results as
of the date hereof. Guidance is based upon certain
assumptions, including, but not limited to, future cash production
costs, future sales and production and the availability of coal
from other suppliers that the Company may purchase. Such
assumptions may prove to be incorrect and actual results may differ
materially from those anticipated. Consequently, Guidance
cannot be guaranteed. As such, investors are cautioned not to
place undue reliance upon Guidance, forward-looking statements and
forward looking information as there can be no assurance that the
plans, assumptions or expectations upon which they are placed will
occur.
|
|
(2)
|
Previous Guidance was
presented in the Company's MD&A for the three and six months
ended June 30, 2018 dated August 28, 2018.
|
|
(3)
|
Corsa's metallurgical
coal sales figures are comprised of three types of sales: (i)
selling coal that Corsa produces ("Company Produced"); (ii) selling
coal that Corsa purchases and provides value added services
(storing, washing, blending, loading) to make the coal saleable
("Value Added Services"); and (iii) selling coal that Corsa
purchases on a clean or finished basis from suppliers outside the
Northern Appalachia region ("Sales and Trading").
|
|
(4)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures" below
for more information.
|
|
(5)
|
Cash Production Cost
per ton sold excludes purchased coal.
|
|
(6)
|
Exclusive of
stock-based compensation and selling related commissions, bank fees
and finance charges.
|
|
(7)
|
Tons sold excludes
purchased coal used in the Sales and Trading platform.
|
Coal Pricing Trends and Outlook
Over the past quarter market conditions have grown more
constructive as there were several notable supply side-issues that
constrained an already tight global supply chain. In addition
to near term supply-side challenges, our global customer base
expects continued growth in demand going into 2019. In
response to supply disruptions and a positive demand outlook,
prices have responded with United States East Coast export low
volatile metallurgical coal pricing increasing 7% during the
quarter and Australian premium low volatile metallurgical coal
prices having increased by more than 6% for full-year calendar 2019
contracts. Corsa has been able to benefit from the strong global
market by booking sales on indexed pricing mechanisms for the
fourth quarter 2018 and into 2019.
Global steel production is up 4.8% year-to-date ("YTD") and,
excluding China, the rest of the
world grew at 3.7%, according to the World Steel Association data.
Chinese steel production grew 5.8% YTD while India is up 6.7% YTD. Global steel
capacity utilization is approximately 79% and has been above 70%
since early 2017. The strong global steel markets continue to drive
a healthy US export market. US steel production is up approximately
4.0% YTD. Most of our domestic customers started the annual
procurement process early this year as the global markets continued
to tighten. We were able to capture increased sales prices from our
domestic customer base while also growing our sales volumes.
We continue to watch rising global freights rates, trade tariffs
and the effects of a strong US economy which has made it difficult
to find qualified workers throughout the supply chain. US port
congestion and rail road performance have been considerable
challenges to export shipments this year, but we have witnessed a
recent improvement in both areas. Given these points, the forward
curve continues to focus on the global supply side risks and we
continue to expect a constructive forward price environment.
Financial Statements and Management's Discussion and
Analysis
Refer to Corsa's unaudited condensed interim consolidated
financial statements for the three and nine months ended
September 30, 2018 and 2017 and related management's
discussion and analysis, filed under Corsa's profile on
www.sedar.com, for details of the financial performance of Corsa
and the matters referred to in this news release.
Stock Options Granted
Corsa also announces that its Board of Directors has granted
stock options to purchase a total of 2,692,500 common shares of
Corsa to certain directors, officers and employees of Corsa, which
grant represents approximately 2.8% of the total outstanding common
shares. These options were granted in accordance with Corsa's
Second Amended and Restated Option Plan (the "2017 Plan"), are
exercisable for five years at a price of the higher of (a)
C$0.90, being the closing price of
the common shares on the TSX Venture Exchange (the "TSXV") on
November 6, 2018 or (b) the closing price of the common shares
on the TSXV on November 9, 2018,
being the date following Corsa's "blackout" period in connection
with its third quarter 2018 financial statements, and are subject
to the terms and conditions of the 2017 Plan and TSXV
approval. Such options will vest one-third on the first
anniversary of the date of grant, one-third on the second
anniversary of the date of grant and one-third on the third
anniversary of the date of grant.
Officers of Corsa were granted an aggregate of 1,195,000
options, Corsa's non-executive directors, other than Robert C. Sturdivant and Kai Xia, were each granted 75,000 options and
other employees of Corsa received an aggregate of 1,122,500
options. Messrs. Sturdivant and Xia are representatives of
Corsa's significant shareholder Quintana Energy Partners L.P. and
its affiliated investment funds, elected not to receive any
options.
Non-GAAP Financial Measures
Management uses realized price per ton sold, cash production
cost per ton sold, cash cost per ton sold, cash margin per ton
sold, EBITDA and adjusted EBITDA as internal measurements of
financial performance for Corsa's mining and processing
operations. These measures are not recognized under
International Financial Reporting Standards ("GAAP"). Corsa
believes that, in addition to the conventional measures prepared in
accordance with GAAP, certain investors and other stakeholders also
use these non-GAAP financial measures to evaluate Corsa's operating
and financial performance; however, these non-GAAP financial
measures do not have any standardized meaning and therefore may not
be comparable to similar measures presented by other issuers.
Accordingly, these non-GAAP financial measures are intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP. Reference is made to the
management's discussion and analysis for the three and nine months
ended September 30, 2018 for a reconciliation and definitions
of non-GAAP financial measures to GAAP measures.
Corsa defines adjusted EBITDA as EBITDA (earnings before
deductions for interest, taxes, depreciation and amortization)
adjusted for change in estimate of reclamation provision for
non-operating properties, impairment and write-off of mineral
properties and advance royalties, gain (loss) on sale of assets and
other costs, stock-based compensation, non-cash finance expenses
and other non-cash adjustments. Adjusted EBITDA is used as a
supplemental financial measure by management and by external users
of our financial statements to assess our performance as compared
to the performance of other companies in the coal industry, without
regard to financing methods, historical cost basis or capital
structure; the ability of our assets to generate sufficient cash
flow; and our ability to incur and service debt and fund capital
expenditures. Management also uses adjusted EBITDA for the
purposes of making decisions to allocate resources among segments
or assessing segment performance.
Qualified Person
All scientific and technical information contained in this news
release has been reviewed and approved by Peter V. Merritts, Professional Engineer and the
Company's President - NAPP Division,
who is a qualified person within the meaning of National Instrument
43-101 - Standards of Disclosure for Mineral Projects.
Caution
The estimated coal sales, projected market conditions and
potential development disclosed in this news release are considered
to be forward looking information. Readers are cautioned that
actual results may vary from this forward looking
information. Actual sales 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.
Information about Corsa
Corsa is a coal mining company focused on the production and
sales of metallurgical coal, an essential ingredient in the
production of steel. Our core business is producing and selling
metallurgical coal to domestic and international steel and coke
producers in the Atlantic and Pacific basin markets.
Earnings Call
Members of management will host a conference call on
Thursday, November 8, 2018 at
10:00 a.m. (Eastern time) to discuss
the Company's results. To access the call from Canada and the U.S., dial 1.888.231.8191
(Toll Free). To access the
call from other locations, dial 1.647.427.7450 (International)
The live webcast will be available at:
https://event.on24.com/wcc/r/1868345/B6DAAC08AAF03BB21CAE212C6144B92B
Forward-Looking Statements
Certain information set forth in this press release contains
"forward-looking statements" and "forward-looking information"
(collectively, "forward-looking statements") under applicable
securities laws. Except for statements of historical fact, certain
information contained herein relating to projected sales, coal
prices, coal production, mine development, the capacity and
recovery of Corsa's preparation plants, expected cash production
costs, geological conditions, future capital expenditures and
expectations of market demand for coal, 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",
"capacity", "hope", "forecast", "anticipate", "could" 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 Corsa'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 2018 fiscal year will be less
than projected production or sales for this period; risks that the
prices for coal sales will be less than projected; liabilities
inherent in coal mine development and production; 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 Corsa's preparation plants will not operate at
production capacity during the relevant period, unexpected changes
in coal quality and specification; variations in the coal mine or
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 in 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
labor 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; Corsa'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 in the countries in
which Corsa conducts business; coal production levels; Corsa's
ability to retain qualified staff and equipment in a cost-efficient
manner to meet its demand; and Corsa being able to execute its
program of operational improvement and initiatives. 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. Corsa does not undertake to update any of the
forward-looking statements contained in this press release unless
required by law. The statements as to Corsa'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.
The TSX Venture Exchange has in no way passed on the
merits of this news release. Neither the TSX Venture Exchange
nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
SOURCE Corsa Coal Corp.
