Forbes Coal: Labour Disruption Resolved
Forbes Coal Provides Operations Update for Third Quarter and Fiscal
TORONTO, ONTARIO -- (Marketwire) -- 11/16/12 -- Forbes & Manhattan
Coal Corp. (TSX:FMC)(JSE:FMC) has resolved the wage-related labour
disruption at its mines. Operations at the Magdalena and Aviemore
mines as well as the coal processing plants in South Africa, will
resume on Monday, November 19, 2012. Forbes Coal and the employees
involved have agreed to an average wage increase of 14.8%.
Forbes Coal President and Chief Executive Officer Stephan Theron
comments, "management is pleased to have agreed on a settlement with
the employees, in the interests of all stakeholders. Operations are
set to resume early next week. Management is committed to maximizing
production in the current and next quarter in order to meet the
revised 2013 targets".
Forbes Coal suffered production losses during the labour disruption,
which will have an impact on the current quarter and the full year,
summarized as follows:
-- The run of mine (ROM) loss of production will be approximately 256,000
tonnes for the third quarter; 55% lower than the forecast of 463,000
-- The tonnes sold for the third quarter is expected to be approximately
94,000 tonnes, 63% lower than the forecast of 257,000 tonnes.
As a result of the labour disruption, the ROM production target of
1.7 million tonnes for fiscal 2013 (ending February 28, 2013) has
been adjusted to 1.3 million tonnes. The ROM revised production
estimate for the year is broken down as follows: Aviemore underground
387,000 tonnes; Magdalena underground 658,000 tonnes; and Magdalena
opencast 287,000 tonnes.
The company also estimates that fourth quarter sales will be lower as
a result of weaker coal pricing globally.
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
Forbes Coal (Pty) Ltd., a South African company ("Forbes Coal
Dundee") 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 Forbes Coal Dundee Properties"). The mines have a substanti
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 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. In
September 2012, Forbes's Coal agreed to acquire 100% ownership of
Riversdale Mining from Rio Tinto. As a result of the acquisition,
Forbes Coal will acquire a current producing anthracite mine in the
Zululand Anthracite Colliery ("ZAC"). ZAC is thought to be one of the
last, large-scale producers of high-quality anthracite product in
South Africa, with historic run of mine production of 700,000 tonnes
of coal per annum over the last five years. The Acquisition scales
Forbes Coal's annual production capacity to an estimated 2.5 million
Forbes Coal has a strong balance sheet and an experienced
coal-focused management team and board of directors.
The ability of the Company to increase production amounts has not
been the subject of a feasibility study and there is no certainty
that the proposed expansion will be economically feasible.
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 anticipated production results with
respect to the Forbes Coal Dundee Properties, future financial or
operating performance of the Company and its projects, statements
regarding the anticipated improvements in logistical support and
anticipated improvements in sales, statements made with respect to
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.
Forbes & Manhattan Coal Corp.
President and Chief Executive Officer
+1 (416) 861-5912
Forbes & Manhattan Coal Corp.
Investor relations Manager
+1 (416) 309-2957
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