MFC Industrial Ltd. Reports Results For The Year 2012 And Details Of Q2 Cash Dividend Payment

 MFC Industrial Ltd. Reports Results For The Year 2012 And Details Of Q2 Cash
                               Dividend Payment

- Non-cash impairment charge of $48.2 million -

- Increased annual cash dividend by 9% and book value up to $12.11 from $8.74

PR Newswire

NEW YORK, April 1, 2013

NEW YORK, April 1, 2013 /PRNewswire/ --MFC Industrial Ltd. ("MFC" or the
"Company") (NYSE: MIL) announces its results for the year ended December 31,
2012 and provides an update on its recent corporate developments. The
Company's financial statements are prepared in accordance with International
Financial Reporting Standards.
Unless otherwise noted, all dollar amounts are in United States dollars.

2012 was a time of challenges and opportunities. We saw commodities prices
experience a weaker than expected year and we saw a major negative shift in
the mining landscape in India. However, on the positive side, we saw doors
open to two significant opportunities for us. These opportunities have allowed
us to enlarge our commodities footprint, enter new markets and expand our
supply chain platform,  thus offering growth and the potential for significant
contributions to the economics of our company in a recovering economy.

- Exited the Indian iron-ore market and recognized a one-time non-cash
impairment charge and inventory write-down (net of an income tax recovery) of
$48.2 million.
- Increased our book value per share to $12.11, from $8.74 at the end of
2011.Total assets are now $1.38 billion.
- Increased our annual cash dividend by 9% for 2013, representing a 2.81%
yield, based on the closing price of our shares in 2012.
- Expanded our commodities platform into natural gas and midstream facilities
with the completion of the acquisition of Compton Petroleum Corporation
- Grew our commodity supply chain business with the acquisition of Possehl
Mexico S.A. de C.V. ("Possehl") and ACC Resources Co., L.P. ("ACCR"), which
also gave us new products and new markets.
- Acquired Kasese Cobalt Company Limited, which owns a cobalt refinery and a
hydroelectric power station.
- Our net income for the year ended December 31, 2012, increased to $30.6
million, or $0.49 per share on a diluted basis, excluding a non-cash
accounting gain of $247.0 million, a one-time non-cash impairment charge and
inventory write-down (net of an income tax recovery) of $48.2 million and
certain one-time transaction expenses of $2.6 million. See page 2 for a
reconciliation to net income.


Total revenues for the year ended December 31, 2012 decreased to $485.7
million compared to $520.7 million in 2011. Our income for 2012, including a
non-cash bargain purchase accounting gain of $247.0 million, primarily from
the CPC acquisition, and a one-time non-cash impairment and write-down charge
(net of income tax recovery) of $48.2 million for our former subsidiary,
increased to $226.8 million, or $3.62 per share on a diluted basis, from $12.2
million, or $0.19 per share on a diluted basis from the same period last year.

Excluding a non-cash bargain purchase accounting gain of $247.0 million (which
was primarily a net gain on the purchase of CPC excluding our cost), one-time
non-cash impairment charge and inventory write-down (net of an income tax
recovery) of $48.2 million (on our former subsidiary) and certain one-time
transaction expenses of $2.6 million, our income for the year ended December
31, 2012 increased to $30.6 million, or $0.49 per share on a diluted basis,
from $12.2 million, or $0.19 per share on a diluted basis from the same period
last year.

Revenues were down for 2012 because of several factors, including that the
Euro depreciated against the United States dollar by 7.6%. We also had lower
volumes and price reductions on some commodities during the first half of the
year. However, we did offset some of the revenue reduction through the
introduction of new products. Our revenue numbers were disappointing, but we
believe the new acquisitions will be intergraded and will be major
contributors in 2013.

Revenues for our commodities and resources business were $455.9 million for
the year ended December 31, 2012, compared to $481.7 million for the same
period in 2011. Included are the gross revenues generated by our royalty
interest, which for the year ended December 31, 2012 were approximately $29.1
million, compared to $30.8 million in 2011. A total of 3,189,443 tons of iron
ore pellets and concentrate were shipped during the year ended December 31,
2012, compared to 3,472,643 tons shipped in the same period in 2011.

Revenues for our merchant banking business were $11.8 million for the year
ended December 31, 2012, compared to $22.5 million for the same period in

Other revenues, which encompass our corporate and other investments, were
$18.0 million for the year ended December 31, 2012, compared to $16.5 million
for the same period in 2011.

Costs of sales decreased to $407.6 million during the year ended December 31,
2012 from $435.4 million for the same period in 2011. Selling, general and
administrative expenses increased to $47.7million for the year ended December
31, 2012 from $40.4million for the same period in 2011.


The table shows our revenues by operating segments for each of the years ended
December 31, 2012 and 2011:


 All amounts in thousands
                              December 31, 2012    December 31, 2011
Commodities and resources    $   455,898        $   481,677
Merchant banking              11,751               22,487
Other                         18,010               16,545
 Total revenues            $   485,659        $   520,709

Our income from operations for each of the years ended December 31, 2012 and
2011 are shown in the table below:


 All amounts in thousands, except per share amounts
                                         December 31, 2012  December 31, 2011
Commodities and resources                 $ (25,661)    $  23,157
Merchant banking                         259,957 ^(2)       8,858
Other                                    (9,301)            (14,834)
Income before income taxes               224,995            17,181
Income tax recovery(expenses)
                                         8,528              (1,336)
Resource property revenuetax expenses
                                         (5,902)            (4,647)
Net (income) loss attributable to                          
non-controlling interests
                                         (867)              995
Net income attributable to                           

 shareholders                          $ 226,756 ^(3)    $  12,193
Earning per share                        $ 3.62 ^(3) $ 0.35 ^(4)
(1) Included a one-time non-cash impairment and write-down of $62.1 million,
before income tax recovery of
$13.8 million
(2) Includes a non-cash bargain purchase accounting gain of $247.0 million.
(3) Including a non-cash bargain purchase gain of $247.0 million and a
non-cash impairment and write-down of
$48.2 million (net of income tax recovery).
(4) The first half of 2011 included a one-time expense of $0.14 per share.


Liquidity is of great importance to companies in our business. As at December
31, 2012, we had cash, short-term deposits and securities of $280.6 million.
Our objectives when managing capital are: to safeguard our ability to do
business so that we can continue to provide returns to shareholders; and to
provide an adequate return by pricing products and services commensurately
with the level of risk. We also maintain a flexible capital structure which
optimizes the cost of capital at acceptable risk and we set the amount of
capital allocated proportionate to risk. We manage our capital structure and
make adjustments to it in light of changes in economic conditions and the risk
characteristics of the underlying assets.


All amounts in thousands
                                    December 31, 2012 December 31, 2011
Total debt                         $      162,993 $        47,127
Less: cash and cash equivalents    (273,790)            (387,052)
Net debt (net cash & cash          (110,797)            (339,925)
Shareholders' equity               757,197              546,623


The following table highlights certain selected key numbers and ratio as of
December 31, 2012.


All amounts in thousands, except ratio
                                    December 31, 2012     December 31, 2011
Long-term debt, less current        $      118,824   $     20,150
Shareholders' equity                757,197                546,623
Long-term debt-to-equity ratio ^(1) 0.16                   0.04
Note (1) The long-term debt-to-equity ratio is calculated as long-term
debt divided by shareholders' equity.

As at December 31, 2012, the majority of our long-term debt, less current
portion in the amount of $105.5 million, consists of borrowing from banks.
All-in costs for this unsecured loan, which is due November 2020, are 2.54%


We maintain various types of credit lines and facilities with various banks,
and most of these are short-term. These facilities are used for day-to-day
business, structured solutions and various other activities in both the
commodities and finance areas.

As at December 31, 2012, we had credit facilities aggregating $439.7 million
as follows: (i) revolving credit facilities aggregating $195.2 million from
banks; (ii) revolving credit facilities aggregating $63.8 million from banks
for structured solutions. The margin is negotiable when the facility is used;
(iii) a structured factoring arrangement with a bank for up to $122.6 million
for our commodities activities. Generally, we can factor our commodity
receivables upon invoicing at the inter-bank rate plus a margin; and (iv) a
foreign exchange credit facility of $58.1 million with a bank. All of these
bank lines and facilities are renewable on a yearly basis.


In September 2012, the Indian government halted all mining activity in the
State of Goa following the tabling in Parliament of the Shah Commission report
on illegal mining. Subsequently, in October 2012, the Supreme Court, acting on
a filed petition, stayed all mining operations, including transport of mined
minerals (iron ore and manganese), in the State until further orders.

We believe the orders will take many years to resolve for the existing mines
and that there is a very strong possibility that no new mining will ever
occur. As a result, it was our decision to move on and recognize a loss on our
investment. We have sold our position for nominal consideration, consisting
of an interest in any future cash flow if mining actually resumes.

With this former subsidiary being sold in 2013, MFC recognized an impairment
charge of $42.6 million on these interests and a $19.4 million write-down on
inventories. The total impairment and write-down was $48.2 million, net of an
income tax recovery of $13.8 million. MFC has no further cash flow obligations
associated with these operations.


The acquisition of CPC in 2012 expanded our commodities platform into natural
gas and midstream facilities. We determined to pursue and complete the
acquisition of CPC for, among other things, the following key reasons:

  oto significantly expand our global commodities platform into the energy
  othe price paid under our takeover of CPC was attractive and considerably
    below CPC's net asset value, which resulted in our recognition of a
    bargain purchase gain of $244.6 million for the year ended December 31,
    2012 in connection with the acquisition of CPC;
  oCPC's operations include significant midstream facilities, which present
    an opportunity for growth through value-added projects and the
    consolidation of regional gas production;
  oin addition to its producing properties, CPC has a significant undeveloped
    land package, which, as at December 31, 2012, included 309,782 net
    undeveloped acres which can be further developed; and
  oat the time we completed the takeover, our acquisition cost per mcf
    equivalent for CPC's proved and probable natural gas, NGL and oil reserves
    was approximately CDN$0.10 based on CPC's most recent reserves estimates
    prior to completion of the acquisition, which were as of June 30, 2012.
    Please note that these reserves estimates are historic in nature, do not
    represent our reserves as at December 31, 2012 and were prepared by CPC
    based upon Canadian securities requirements and are not comparable to the
    updated reserves figures that we have prepared in accordance with SEC
    requirements, which are in our Annual Report on Form 20-F for the year
    ended December 31, 2012 (the "Form 20-F").

The following are selected highlights of this acquisition.


Acquired CPC, a producer and processor of natural gas and other hydrocarbons

Western Canada, for approximately CDN$33.1 million on September 6, 2012.
Expanded our global commodities platform to include energy.
Majority of operations located in Deep Basin fairway of Western Canada.
Significant undeveloped land bank.
Future tax benefits.
Recognized a $244.6 million bargain purchase gain in connection with the

In reviewing these assets, we will use our financial strength to arrange
credit facilities. We have reduced CPC's selling, general and administrative
expenses and we also refinanced their bank debt. As a consequence, we can now
look to rationalize these assets and better manage their supply, distribution
risk and capital requirements. The following is an overview of our current
plans and intentions for CPC's assets in 2013.

Developing midstream operations

Our plan for our Mazeppa Gas Processing Facility  (sweet and sour gas
facility),  is to develop midstream facilities which will help to reduce our
exposure to the volatility of natural gas prices and have the potential to
create long-term stable processing income as well as a value-added component
to our natural gas. Sour gas  is  gas containing significant amounts
ofhydrogen sulfide,whereas sweet gas is natural gas low in concentration of
sulphur compounds. The Mazeppa facility was originally built by Canadian
OccidentalPetroleum and we are advised that the replacement cost of this
facility today would be in excess of $100 million.

Using the Mazeppa facility as the foundation, our strategy involves pursuing
bolt-on or value-added projects, which may involve aggregate investments of
over $300 million, including the following potential projects:

Co-generation plant (10 to 25 MW) providing electricity for our own use and
with the surplus for sale to the Alberta electrical grid.
Consolidate regional sour gas production by investing in sour gas gathering
infrastructure to complement our facility and connecting stranded sour gas
Design and build a deep-cut straddle plant at our facility for the recovery of
ethane, propane and butane.
A 10,000 barrel per day natural gas liquid fractionation facility and rail

We have been approached by several interested parties who wish to be our
partner in our midstream operations. These projects are in the initial
planning, design and contracting phases and the current timing for execution
is expected to be approximately 24 to 36 months.

Wells and other processing facilities


All amounts in Canadian dollars, except production numbers
For the period between September 7 and December 31, 2012
Operating cost (lifting cost) per mcf of natural gas  CDN$ (1.32)
Royalties expenses per mcf of natural gas             (0.47)
Transportation costs per mcf of natural gas           (0.13)
Average selling price per mcf of natural gas          3.12
Natural gas production per day, mcf                   55,849
Natural gas, liquids and oil production per day, BOE 10,812

It is our intention to sell certain assets as well as some of our smaller low
volume wells in due course.

Significant undeveloped land bank

We have approximately 309,782 net undeveloped acres on which, due to the
current pricing environment in natural gas, we do not intend to do any
drilling at this time.


MFC acquired, Park Ridge, NJ-based, ACCR and its affiliated company, Mexico
City-based, Possehl in November of 2012.


MFC acquired 60% of the shares of Possehl and 70% of the shares of ACCR for
$20.9 million in cash, with the balance of the shares owned by the existing
The MFC group gained experienced operating management.
The acquisition resulted in our expansion into new markets and new products.


ACCR, established in 1957, has a head office in New Jersey and a network of
offices in Latin America, including Argentina and Brazil, as well as a
sourcing office in China. Possehl, which was established in 1986, has a
network of offices, warehousing and agencies in Mexico. They source
internationally and sell primarily in Mexico and Central and South America.

Purchase price

The acquisition price for 60% of Possehl and 70% of ACCR was equal to the Net
Tangible Asset Value ("NTAV"), which equals approximately $20.9 million,
subject to adjustments. An additional $2.3 million is payable by us in
November 2013 at which time we will acquire an additional 10% interest in
ACCR. In addition we have created a series of options for additional ACCR
shares to retain key individuals with the same NTAV price formula. MFC's
notable financial strength and its already substantial global reach will be
resources that will enable growth and agility for the combined companies.

It is ACCR's, Possehl's and MFC's belief that China will be an excellent
sourcing market for us. As the Chinese slowdown continues, their commodities
prices should start to come down and they will appreciate relationships with
reliable counterparties from international supply chain organizations with
ready financing.


OnMarch 11, 2013,Cliffs Natural Resources Inc.("Cliffs") announced that due
to high production costs and lower pellet premium pricing, which is expected
to persist in certain markets during the year, it would be taking measures to
adjust iron ore pellet production at itsWabushoperation, while continuing to
meet its customer commitments. Cliffs's current product mix in its Eastern
Canadian iron ore business segment iscomprised of iron ore pellets and

Cliffs expects to idle production at its Pointe Noire iron ore pellet plant
within the city ofSept-Iles,Quebec and transition to producing an iron ore
concentrate from its Wabush Scully Mine in the Province
ofNewfoundlandandLabradorby the end of the second quarter in 2013.

We do not expect that this will affect the royalty payment that we receive
from Cliffs. Our royalties are paid on all iron ore products (i.e. pellets,
concentrate and chips) shipped from the Wabush Mine.

Cliffs also disclosed that, for 2013, it is maintaining its full-year sales
and production volume expectations of 9 to 10 million tons out of itsEastern
Canadabusiness segment. This is comprised of approximately 3 million tons of
both iron ore pellets and/or concentrate products from itsWabushoperation.
We believe it is a positive development that Cliffs maintained its 2013
guidance for the same 3 million ton production levels as in 2012. On another
Cliffs issue, we are in arbitration again over the underpayment of royalties
and the method to calculate the royalty prices going forward. We expect the
related hearings to be held in the fall of 2013.


MFC currently holds an indirect 50% interest in the Pea Ridge Iron Ore project
("Project"), a past-producing iron ore mine located in Sullivan, Missouri. The
Project is a 50/50 joint venture between MFC and Alberici Group Inc., who
joined forces with the goal to re-open and further develop the former Pea
Ridge Iron Ore Mine.

To date our activities at the Project have included, among other things:

  oa total investment of approximately $16.7 million in the Project; and
  ocompleting a Canadian National Instrument 43-101 compliant technical
    report dated August 13, 2012 by Behre Dolbear and Company (USA), Inc. and
    titled "Technical Report on the PRR Mining Pea Ridge Property" (the
    "Technical Report"), to update previously disclosed historic resources
    estimate to current resource estimates. The Technical Report estimated
    the following resources at a cut-off grade of 40% magnetic iron:

       omeasured and indicated resources of 248.7 million short tons at
         57.82% total iron and 52.87% magnetic iron; and
       oinferred resources of 15.8 million short tons at 57.64% total iron
         and 53.67% magnetic iron.

Please refer to the Technical Report, a copy of which is available under our
profile on, for further information regarding the Project and
the above estimates.

In addition to completion of the Technical Report, as part of the work
necessary to evaluate the Pea Ridge Mine for re-opening, we engaged the
consulting firm Geotechnology, Inc. to investigate the depth and shape of the
top and bottom of the subsidence cave zone which is present above the Pea
Ridge Mine deposit. This work included direct measurements of the size and
extent of the cave zone within existing vertical drill holes above a portion
of the Pea Ridge Mine deposit. Having received the results of such
investigation, we are, together with our consultants, considering additional
steps in the evaluation of the cave zone, including re-drilling several
existing holes above the mineralized zone, and conducting a three-dimensional
detailed seismic survey over the Pea Ridge Mine site. We believe that the
results of this work will be useful in determining the best way to develop and
mine the iron deposit. Additionally, in 2012 we commenced confirmatory
exploration and development work in connection with the large tonnage of
tailings materials of the Pea Ridge Mine site.

Together with our consultants, we are conducting additional analysis and
investigation regarding the re-opening of the mine, including commencing
confirmatory work in connection with the large tonnage of tailings materials
present at the Project site. If we determine to move forward with the Project,
significant additional investment would be required. We currently expect that
development activities would take place in two main phases:

  oThe first phase focusing on the tailings materials. This would likely
    require construction of a beneficiation plant to process the tailing at
    the project.
  oThe second phase would center on re-opening of the underground mine. This
    will involve dewatering the mine, substantial new development work,
    installing new equipment and, in part, will require construction of
    additional beneficiating facilities.

The Project is currently at a preliminary stage and any decision on proceeding
with the Project, including development activities, is dependent on the
completion of further analysis, including feasibility studies. Activities at
the Project are proceeding in an orderly fashion. It is currently anticipated
that substantial additional expenditures will be incurred in order to
determine the feasibility of the Project.



All amounts in thousands
                                     December 31, 2012    December 31, 2011
Deferred income tax assets          $       18,510    $         7,524
Deferred income tax liabilities     (3,391)                 (61,045)
Net                                 $       15,119    $       (53,521)

It is important to understand what has happened with these different tax
assets and liabilities. In 2011 we had a liability of approximately $61.0
million primarily related to the increase in value of the royalty at Wabush
that was recognized upon adoption of IFRS. Following the CPC transaction and
reorganization of its tax pools, we had enough new benefit in essence to
off-set the $50 million and have a net asset of $18.6 million for future use.


We are a company that strives to be fiscally responsible. The corporate income
tax paid in cash was approximately $4.9 million for the year ended December
31, 2012.


On January 14, 2013, our Board of Directors declared an annual cash dividend
for 2013 of US$0.24 per common share. The dividend is 9% higher than the
dividend paid in 2012 and, based on the closing price of $8.55 for the
Company's common shares on December 31, 2012, represents a yield of
approximately 2.81% compared to an annual dividend yield of approximately 2.5%
for the NYSE Composite Index in 2012.

Q2 Dividend Payment

We are pleased to announce the following details with respect to our second
quarter 2013 cash dividend payment:

  oThe dividend payment of $0.06 per common share will be paid on April 22,
    2013 to shareholders of record on April 12, 2013.
  oFor the above payment, the Company's common shares will trade ex-dividend
    on April 10, 2013.
  oThe dividend is subject to customary Canadian withholding tax for
    non-resident shareholders. Pursuant to applicable tax treaties the
    withholding rate for eligible U.S. resident shareholders is 15%. The
    dividend is an eligible dividend under the Income Tax Act (Canada).

The Company currently anticipates that the next scheduled quarterly dividend
payment of $0.06 per share will be made in June 2013. The declaration, timing
and payment of future dividends will depend on, among other things, the
Company's financial results.


Chairman Michael Smith commented: "We must now integrate all of our newly
acquired businesses, which we view as both a challenge and a good opportunity.
MFC will continue to focus on increasing its efforts in acquiring undervalued
captive commodities assets and operating businesses, as well as streamlining
its existing operations. To date, our financial foundation has allowed us to
expand and diversify our commodities business in an expedient manner."

Mr. Smith concluded: "We still have a long way to go to reach our goals.
However, we are fortunate to have a good business platform and a sound
financial foundation."

Shareholders are encouraged to read the entire Form 20-F, which includes our
unaudited financial statements and management's discussion and analysis for
the year ended December 31, 2012 and was filed with the Securities and
Exchange Commission ("SEC") and Canadian securities regulators today, for a
greater understanding of the Company.

Today at 10:00 a.m. EDT (7:00 a.m. PDT), a conference call will be held to
review MFC's announcement and results. This call will be broadcast live over
the Internet at An online archive will be available
immediately following the call and will continue for seven days. You may also
to listen to the audio replay by phone by dialing: 1 (888) 286 8010, using
conference number 64701581. International callers dial: 1 (617) 801 6888.

On March 15, 2013, we were granted an exemption order by applicable Canadian
securities regulators, permitting us to prepare our natural gas and oil
disclosure in accordance with the rules of the SEC in place of much of the
disclosure required by National Instrument 51-101 ("NI 51-101"). Accordingly,
proved and probable natural gas and oil reserves data and certain other
disclosures with respect to our natural gas and related activities in our Form
20-F and other disclosure are prepared in accordance with SEC requirements,
which differ from corresponding information otherwise required by NI 51-101.
Accordingly, such disclosures may not be comparable to those prepared by other
Canadian reporting issuers. Please see our Form 20-F for further information.

About MFC Industrial Ltd.

MFC is a global commodity supply chain company and is active in a broad
spectrum of activities related to the integrated combination of commodities
and resources interests. We also provide logistics, financial and risk
management services to producers and consumers of commodities. To obtain
further information on the Company, please visit our website at:

Cautionary Note on Resource Estimates

As a reporting issuer in Canada, the Company is required by Canadian law to
provide disclosure in accordance with National Instrument 43-101. Accordingly,
you are cautioned that the information contained in this press release may not
be comparable to similar information made public by U.S. companies under the
United States federal securities laws and the rules and regulations
thereunder. In particular, the terms "measured resource", "indicated resource"
and "inferred resource" as used in this press release are not defined in SEC
Industry Guide 7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned not to
assume that any part or all of mineral deposits in these categories will ever
be converted into mineral reserves with demonstrated economic viability. In
addition, the estimation of inferred resources involves far greater
uncertainty as to their existence and economic viability than the estimation
of other categories of resources. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. U.S. investors are cautioned not to assume that
part or all of an inferred resource exists, or is economically or legally

Disclaimer for Forward-Looking Information

This document contains statements which are, or may be deemed to be,
"forward-looking statements" which are prospective in nature, including,
without limitation, statements regarding our future plans, including in
respect of CPC, implementation of current strategies and our plans for our
projects and the outcome of proceedings. Forward-looking statements are not
based on historical facts, but rather on current expectations and projections
about future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of forward-looking
words such as "plans", "expects" or "does not expect", "is expected",
"scheduled", "estimates", "forecasts", "projects", "intends", "anticipates"
or "does not anticipate", or "believes", or variations of such words and
phrases or statements that certain actions, events or results "may", "could",
"should", "would", "might" or "will" be taken, occur or be achieved. Such
statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause our actual results, revenues, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Important factors that
could cause our actual results, revenues, performance or achievements to
differ materially from our expectations include, among other things: (i)
periodic fluctuations in financial results as a result of the nature of our
business; (ii) commodities price volatility; (iii) economic and market
conditions; (iv) competition in our business segments; (v) decisions and
activities of operators of our resource interests; (vi) the availability of
commodities for our commodities and resources operations; (vii) the
availability of suitable acquisition or merger or other proprietary investment
candidates and the availability of financing necessary to complete such
acquisitions or development plans; (viii) our ability to realize the
anticipated benefits of our acquisitions; (ix) additional risks and
uncertainties resulting from strategic investments, acquisitions or joint
ventures; (x) counterparty risks related to our trading activities; (xi)
unanticipated grade, geological, metallurgical, processing or other problems
experienced by the operators of our resource interests (xii) delays in
obtaining requisite environmental and other permits or project approvals;
(xiii) potential title and litigation risks inherent with the acquisition of
distressed assets; (xiv) risks related to exploration, development and
construction of a previously shut-down mine project, including the suitability
and integrity of historic mine structures; (xv) the availability of services
and supplies; (xvi) operating hazards; and (xvii) other factors beyond our
control. Such forward-looking statements should therefore be construed in
light of such factors. Other than in accordance with its legal or regulatory
obligations, the Company is not under any obligation and the Company expressly
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Additional information about these and other assumptions, risks
and uncertainties are set out in our Annual Report on Form 20-F and our
Management's Discussion and Analysis for the year ended December 31, 2012,
filed with the Canadian securities regulators.

December 31, 2012 and 2011
(United States Dollars in Thousands)

                                              December 31,
                                              2012          December 31,
Current Assets
Cash and cash equivalents                     $  273,790  $  387,052
Short-term cash deposits                      182           163
Securities                                    6,658         13,062
Restricted cash                               889           623
Loan receivable                               –             19,869
Bills of exchange                             –             10,545
Trade receivables                             72,820        21,154
Other receivables                             18,314        9,144
Inventories                                   142,925       81,223
Real estate held for sale                     12,210        12,012
Deposits, prepaid and other                   27,833        9,344
Assets held for sale                          128,657       –
 Total current assets          684,278       564,191
Non-current Assets

Securities                                    9,637         11,606
Equity method investments                     22,382        18,726
Investment property                           34,152        33,585
Property, plant and equipment                 80,139        3,743
Interests in resource properties              383,745       219,582
Hydrocarbon probable reserves                 99,142        –
Hydrocarbon undeveloped lands                 48,728        –
Deferred income tax assets                    18,510        7,524
Other                                         776           –
 Total non-current assets      697,211       294,766
 Total assets  $ 1,381,489   $  858,957

December 31, 2012 and 2011
(United States Dollars in Thousands)


LIABILITIES AND EQUITY                               


                                     December 31,          December 31,

                                       2012   2011
Current Liabilities

Short-term bank borrowings            $   150,396         $ 114,239
Debt, current portion                 44,169                26,977
Account payables and accrued          77,586                42,226
Facility term financing               7,390                 –
Provisions                            80                    115
Income tax liabilities                2,866                 4,453
Deferred sale liabilities             26,637                14,958
Liabilities relating to assets held   29,806                –
for sale
 Total current         338,930               202,968
Long-term Liabilities

Debt, less current portion            118,824               20,150
Facility term financing               11,328                –
Deferred income tax liabilities       3,391                 61,045
Decommissioning obligations           136,642               –
Accrued pension obligation, net       1,228                 –
Puttable instrument financial         7,761                 –
Deferred sale liabilities            –                     25,647
 Total long-term       279,174               106,842
  Total        618,104               309,810

Capital stock                         382,746               382,289
Treasury stock                        (68,610)              (68,117)
Contributed surplus                   13,037                13,028
Retained earnings                     426,184               213,200
Accumulated other comprehensive       3,840                 6,223
Shareholders' equity                  757,197               546,623
Non-controlling interests             6,188                 2,524
Total equity                          763,385               549,147
                                      $ 1,381,489           $ 858,957

For the Years Ended December 31, 2012 and 2011
(United States Dollars in Thousands, Except Per Share Amounts)

                                                    2012          2011
Net Sales                                           $ 479,507    $ 514,797
Equity income                                       6,152         5,912
 Gross revenues                                485,659       520,709
Costs and Expenses:
 Costs of sales                                407,626       435,392
 Impairment of available-for-sales-securities  4,265         12,408
 Impairment of interest in resource            42,631        –
 Selling, general and administrative           47,737        40,378
 Share-based compensation – selling, general
and                                                9             7,219
 Finance costs                                 12,431        7,198
                                                    514,699       502,595
Income (loss) from operations                      (29,040)      18,114
Other items:
 Exchange differences on foreign currency      7,108         (933)
Change in fair value of puttable instrument
financial                                          (77)          –
 Bargain purchase                              247,004       –
Income before income taxes                         224,995       17,181
Income tax (expense) recovery:
 Income taxes                                 8,528         (1,336)
 Resource property revenue taxes              (5,902)       (4,647)
                                                    2,626         (5,983)
Net income for the year                            227,621       11,198
Net (income) loss attributable to non-controlling  (867)         995
Net income attributable to owners of the parent   $ 226,754     $  12,193
Basic earnings per share:                          $    3.62  $    0.19
Diluted earnings per share:                        $    3.62  $    0.19
Weighted average number of common shares                       
 - basic
                                                    62,555,438    62,561,421
- diluted
                                                    62,555,438    62,561,421

As of December 31, 2012
(United States Dollars in Thousands, Except Per Share Amount and Ratios)

Cash and cash equivalents              $ 273,790
Short-term securities                  6,658
Trade receivables                      72,820
Current assets                         684,278
Total assets                           1,381,489
Current liabilities                    338,930
Working capital                        345,348
Current ratio                          2.02
Acid test ratio                        1.20
Long term debt, less current portion   118,824
Long-term debt-to-shareholders' equity 0.16
Total Liabilities                      618,104
Shareholders' equity                   757,197
Equity per common share                12.11




SOURCE MFC Industrial Ltd.

Contact: Corporate: Rene Randall, MFC Industrial Ltd., +1-604-683-8286 ex 224,; or Investors: Kevin McGrath, Cameron Associates,
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