Forbes Coal Cancels Acquisition Agreement With Riversdale Mining
TORONTO, ONTARIO -- (Marketwire) -- 02/15/13 -- Forbes & Manhattan
Coal Corp. ("Forbes Coal") (TSX:FMC)(JSE:FMC) advises that it has
notified Riversdale Mining Limited ("RML") of the cancellation of the
agreement between Forbes Coal and RML ("the agreement") for the
acquisition by Forbes Coal of 100% of the shares and shareholder
claims of Riversdale Holdings (Proprietary) Limited, which is the 74%
shareholder of Zululand Anthracite Colliery ("ZAC").
Subsequent to the parties entering into the agreement in September
2012, and pending fulfillment of the conditions precedent contained
in the agreement, the performance of ZAC deteriorated to a material
extent. This, in the opinion of Forbes Coal, constituted a material
breach of certain of the provisions of the agreement by RML,
entitling Forbes Coal to cancel the agreement, which cancellation
took place by written notice from Forbes Coal to RML on February 1,
On February 10, 2013, RML advised Forbes Coal that -
-- RML denied being in breach of the agreement, which would entitle Forbes
Coal to cancel the agreement;
-- RML did not accept cancellation of the agreement by Forbes Coal;
-- Forbes Coal's actions, in RML's opinion, constituted a repudiation of
the agreement by Forbes Coal;
-- RML accepts the repudiation of the agreement by Forbes Coal; and
-- the agreement is being cancelled at RML's instance.
On February 15, 2013, Forbes Coal advised RML that -
-- Forbes Coal denied having repudiated the agreement; and
-- Forbes Coal denied that it would be liable to RML for any damages
suffered as a result of the cancellation of the agreement.
The parties have attempted to reach agreement on a mutually
beneficial way forward in respect of the acquisition, but such
discussions have to date been unsuccessful.
Stephan Theron, President and CEO of Forbes Coal commented on the
cancellation: "We are disappointed that the situation has
necessitated this decision, but believe that cancelling the agreement
is in the best interests of all our shareholders and other
stakeholders in Forbes Coal."
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It holds
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 substantial
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. Forbes
Coal has a strong balance sheet and an experienced coal-focused
Please refer to the company's NI 43-101 compliant technical report on
the Forbes Coal Dundee Properties dated March 1, 2011 entitled
"Technical Report on Slater Coal and Subsidiaries, KwaZulu-Natal
Province, South Africa", available on the SEDAR profile of the
Company at www.sedar.com. Additional information is available at
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.
The ability of Forbes Coal 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 the cancellation of the agreement with
RML, the anticipated production results with respect to the Forbes
Coal Dundee Properties, future financial or operating performance of
Forbes Coal 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
Forbes Coal, 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 Forbes Coal 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 Forbes Coal 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
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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