Corsa Announces Improvements at Casselman Mine and Q3 Sales In Line with Guidance
TORONTO, Sept. 19, 2012 /PRNewswire/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") is pleased to announce that during the third quarter of 2012 the Company sold 138,000 clean tons of metallurgical coal at an average realized price of US$152 per clean ton in line with its published guidance of 140,000 tons. As well, the Company sold 37,000 tons of thermal coal during the quarter at an average price of $32 a ton. For the nine months ended August 31, 2012, the Company has sold 275,000 clean tons of metallurgical coal at an average realized price of $153 per ton and 96,000 tons of thermal coal at an average realized price of $34 a ton. The realized prices reflect the sale of some carry over tons from a 2011 sales contract.
For the nine months ended August 31, the Company produced a total of 289,000 tons of raw met coal from its own mines and purchased a total of 212,000 tons of raw met coal from third parties.
Q3 was a breakthrough quarter for the Company's Casselman underground mine. The disturbed low seam area at the mine entrance has been mined through and the coal seam is currently 44 to 46 inches at the face with very good mining conditions. In addition, the Company has utilized a contract miner who has provided the additional required staffing to expand the mine to two units. The mine is now currently operating with two continuous mining units working two shifts with a third maintenance shift. The mine production has ramped up successfully from approximately 11,000 raw tons in June to 42,000 raw tons in August with in plant recoveries exceeding 63% on unscreened ROM coal. This represents an underground productivity rate in excess of 4.5 tons per man hour. The result has been a significant improvement in mining costs per ton. When combined with improved recoveries in the plant and the improved raw coal and refuse handling, the Company continues to improve its competitiveness in the current tight market. The mine produces a high quality low vol product, which management believes is very well suited for domestic steel producers and coking operations as well as the seaborne market.
While the met coal market had shown some signs of strengthening in calendar Q2, it has shown a sharp decline in both demand and prices in calendar Q3 and the outlook for calendar Q4 is for a weaker market. In the face of declining demand and uncertain sales levels and pricing for fiscal Q4, the Company has continued to match production to sales and accordingly does not have unnecessary inventories of unsold coal. Based on purchase orders and scheduled trains the Company expects to ship approximately 32,000 clean tons of metallurgical coal in September. The Company will continue to market its high quality low vol met coal to domestic buyers and in the spot market, and while it believes it can be successful in achieving additional sales it is not in a position to provide further fiscal Q4 sales guidance at this time. The Company is also focused on sales contracts for the 2013 fiscal year and is in discussions with both domestic buyers and buyers for the seaborne market. For the remainder of the year the Company will continue to adjust its production and third party purchases to match actual demand and sales orders.
The estimated coal production, purchases, sales and processing of coal disclosed in this press release are considered to be forward looking information. Readers are cautioned that actual results may vary from this forward looking information. There can be no assurance as to when or if the required permits will be issued. Actual production, sales, shipments, purchases, total cash costs and sales and processing costs are subject to variation based on a number of risks and other factors referred to under the heading "Forward-Looking Statements" as well as actual demand and sales orders received. Costs will be impacted by production levels actually achieved.
Information about Corsa
Corsa's main operating subsidiaries are Wilson Creek Energy LLC and Maryland Energy Resources LLC based in Somerset, Pennsylvania. Its primary business is the mining, processing and selling of metallurgical coal, as well as actively exploring, acquiring and developing resource properties consistent with its coal business.
Certain information set forth in this press release contains "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein 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", "outlook", "capacity" 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 the Company'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 transactions referred to will not be completed; risks that the actual production or sales will be less than projected production or sales for these periods; 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 the Company's coal preparation plant will not operate at production capacity during the relevant period, unexpected changes in coal quality and specification; variations in the coal mine or coal 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 labour 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, future prices for coal; future currency and exchange rates; the Company'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 the Company conducts business; coal production levels; and the Company's ability to retain qualified staff and equipment in a cost-efficient manner to meet its demand. 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. The Company does not undertake to update any of the forward-looking statements contained in this press release unless required by law. The statements as to the Company'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 neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Corsa Coal Corp.