Pacific Coal Resources Ltd. announces third quarter 2012 financial
results
TORONTO,
Nov. 29, 2012 /CNW/ - Pacific Coal
Resources Ltd. (TSXV: PAK) has filed today its unaudited interim
condensed consolidated financial statements for the three and nine
months ended September 30, 2012,
together with its management's discussion and analysis ("MD&A")
for the corresponding period. All financial figures contained
herein are expressed in U.S. dollars unless otherwise noted. These
documents will be posted on the Company's website at
www.pacificcoal.ca and under the Company's profile at
www.sedar.com.
Hernan Martinez,
Executive Chairman, commented: '"The second half of 2012 has thus
far seen the Company re-focus on its core competencies by selling
our BACF investment and signing an MOU for the sale of our
Barranquilla port interest. The sale of the BACF investment, which
closed in October, provided us with $5
million in cash, which will be used in operating and selling
activities at our producing coal and coke sites. Coal
operations continued through the third quarter of 2012, with
341,248 tonnes of thermal coal produced at our La Caypa and Cerro
Largo sites. We expect production improvements and cost
reductions at La Caypa as we replace the current operator in the
fourth quarter. The Company's cost cutting program resulted
in a 20% reduction in G&A expenses in the third quarter
compared to the second quarter of 2012, with an expected quarterly
run rate as of the fourth quarter of 2012 that is approximately 30%
below the average in 2011. Management believes the decisions made
and actions taken during the quarter and through the remainder of
2012 are positioning the Company towards significantly improved
operations and liquidity."
Financial and Operating Summary
A summary of the financial and operating results
for the three and nine months ended September 30, 2012 and 2011 is as follows:
|
|
|
|
|
|
Third Quarter |
Nine Months Ended September 30 |
(000's except per share and operating data) |
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
Operational |
|
|
|
|
Tonnes of coal produced |
341,248 |
400,909 |
993,325 |
1,070,209 |
Average stripping ratio - operations |
11.38 |
7.61 |
10.60 |
7.38 |
Tonnes of coal sold(1) |
366,678 |
460,189 |
965,948 |
1,217,389 |
Average realized price per tonne sold |
$
92.53 |
$
101.01 |
$
97.67 |
$
97.65 |
Operating margin per tonne sold(2) |
(5.76) |
4.12 |
(13.95) |
10.18 |
|
|
|
|
|
Financial |
|
|
|
|
Revenues |
$
35,033 |
$
46,485 |
$
98,654 |
$
118,877 |
Gross margin(3) |
(4,120) |
(937) |
(20,447) |
6,371 |
Net (loss) earnings attributed to
shareholders(4) |
(15,201) |
(1,126) |
(85,827) |
(46,380) |
Basic and fully diluted (loss) earnings per
share |
(0.05) |
0.00 |
(0.27) |
(0.16) |
Total cash |
135 |
14,267 |
135 |
14,267 |
Total assets |
318,462 |
392,112 |
318,462 |
392,112 |
Total debt (5) |
39,701 |
32,012 |
39,701 |
32,012 |
(1) |
Includes coal purchased from third parties for sale. |
(2) |
See additional financial measures in MD&A. |
(3) |
"Gross margin" represents total revenues, net of operating
costs, transportation and port services costs, selling costs,
depreciation, depletion and amortization, and impairment charges
related to inventory. |
(4) |
2012 includes a non-cash impairment writedown of $45.5 million;
including $8.0 million in the third quarter triggered by the
planned sale of the Barranquilla port concession and $35.6 million
relating to impairment of the Cerro Largo property in the second
quarter. |
(5) |
Includes bank indebtedness, long-term debt (including current
portion), and obligations under finance leases (including current
portion).
|
Third Quarter Highlights
- The Company produced 341,248 tonnes of coal during the third
quarter of 2012, representing a 2% increase over the 335,008 tonnes
produced in the second quarter of 2012. The Company's stripping
ratio for the third quarter was 11.38:1.
- Production at La Caypa was 251,525 tonnes representing a
decrease of approximately 6% from the second quarter of 2012 and
72% of its planned production. Production was significantly
impacted by issues with the mine operator and destabilization of
the mine footwall in August 2012.
Production at the Cerro Largo mine was 89,723 tonnes, representing
an increase of approximately 33% from the second quarter of
2012.
- Total revenues for the third quarter of 2012 were $35.0 million, consistent with $35.2 million in the second quarter of 2012, on
the strength of coal sales of 366,678 tonnes, at an average
realized price of $92.53 per
tonne.
- During the third quarter of 2012, cost saving initiatives
contributed to a 20% decrease in G&A expenses to $3.6 million as compared to $4.4 million in the second quarter of 2012, in
addition to the 12% and 9% decreases already realized in the first
and second quarters of 2012 respectively. G&A in the
third quarter included $0.6 million
of one-time severance costs associated with staff reductions and
$0.4 million of asphaltite research
costs. The Company anticipates a quarterly G&A run rate of
approximately $2.75 million in the
fourth quarter of 2012.
- In October 2012 the Company sold
its Blue Advanced Colloidal Fuels ("BACF") investment for cash
proceeds of $5.0 million and in
November 2012 signed an MOU in
respect of its interest in Sociedad Portuaria Terminal de las
Flores S.A. ("SPTF"), which holds the Barranquilla port
concession. The cash generated by these transactions will be
used in the Company's operating and selling activities at its
producing coal and coke sites. Sale of the BACF investment
contributed to the $3.0 million cash
balance at November 29, 2012.
- The Company continues to work with SRK Consulting (UK) Ltd, to
finalize the Company's 43-101 updated technical reports. The Cerro
Largo report is expected to be released in the fourth quarter of
2012. The La Caypa report is expected in the second quarter of
2013.
- The net loss of $15.2 million
($0.05 per share) in the third
quarter of 2012 includes a $8.0
million ($0.02 per share)
non-cash impairment writedown of SPTF triggered by its planned
sale.
Q3 2012 - La Caypa
|
Production of Coal
(metric tonnes) |
Waste
(bcm (1)) |
Strip Ratio |
Actual Pit |
251,525 |
1,966,372 |
7.82:1 |
South Pit |
- |
392,674 |
- |
Total |
251,525 |
2,359,046 |
9.38:1 |
(1) "BCM" is Bank
Cubic Metres
During the third quarter of 2012, the Company
produced 251,525 tonnes at La Caypa, down approximately 6% from the
second quarter and 72% of planned production. Production at
La Caypa during the quarter was negatively impacted by the mine
operator's general lack of equipment for loading, hauling, and
support at the mine and was compounded by destabilization of the
mine footwall in the month of August. Issues with the mine operator
resulted in a breach of their contractual obligations, which led
the Company to begin the process of replacing them during the
fourth quarter of 2012.
Operational stripping ratio at La Caypa, up
slightly to 7.82 in the third quarter of 2012 reflected the impact
of the mine sidewall development during the quarter. Total
stripping ratios at La Caypa include costs incurred in moving waste
volumes from the south pit.
Q3 2012 - Cerro Largo
|
Production of Coal
(metric tonnes) |
Waste
(bcm (1)) |
Strip Ratio |
Total |
89,723 |
1,918,289 |
21.38:1 |
(1) "BCM" is Bank Cubic Metres
The Company's production at Cerro Largo of
89,723 tonnes in the third quarter of 2012 was an increase of
approximately 33% from second quarter of 2012. Consistent
with the second quarter, the Company continued addressing mud
concentration concerns at the bottom of the open pit, although
efforts to correct the issue were noted during the quarter with the
increase in production and improvement of the stripping ratio to
21.38:1 from 25.53:1 in the second quarter of 2012.
Q3 2012 - Jam
|
Q3 2012 |
Q3 2011 |
Tonnes produced |
476 |
- |
The Company's Jam operation commenced production
in the fourth quarter of 2011. In the third quarter of 2012, given
current coke market trends the Company decided to maintain
production at minimum levels. The Company's Jam activity has
focused on repairs to coking infrastructure, with anticipated
significant production in the first quarter of 2013.
Revised production guidance
As a result of reduced production in the third
quarter of 2012 and the expected change in operator, the Company's
2012 production target at La Caypa has been revised to 970,000
tonnes. At Cerro Largo, in light of the third quarter results
and the ongoing work required to clear the mud concentration in the
pit, the Company has revised its 2012 production target for Cerro
Largo to 400,000 tonnes.
Corporate update
The Company plans to provide a corporate update
and an update on its strategic plan in a subsequent press release
to be issued next week.
About Pacific Coal Resources Ltd.
Pacific Coal Resources Ltd. is a
Canadian-based mining company engaged in the acquisition,
exploration and production of coal and coal-related assets from
properties located in Colombia.
The Company's common shares and warrants are listed on the TSX
Venture Exchange and trade under the symbol "PAK" and "PAK.WT"
respectively.
Forward Looking Information:
This news release contains "forward-looking
information", which may include, but is not limited to, statements
with respect to the future financial or operating performance of
the Company and its projects. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or believes" or
variations (including negative 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 statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Pacific Coal to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Forward-looking statements contained herein are made as of the date
of this press release and Pacific Coal disclaim, other than as
required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. 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. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
Neither 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 news release.
SOURCE Pacific Coal Resources Ltd.