Corsa Files Third Quarter 2012 Financial Results
TORONTO, Oct. 11, 2012 /PRNewswire/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") announces that it has filed its Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis for the three months and nine months ended August 31, 2012 on SEDAR and has posted these documents to its website www.corsacoal.com.
Third Quarter highlights included:
- Positive cash flow from operations of $3.5 million
- Metallurgical coal sales of 138,000 tons at an average realized price of $152 per ton
- Casselman Mine expansion to two mining units completed with production increasing to 44,000 tons for August
Refer to the Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis filed for the details of the financial performance of the Company and the matters referred to in this release.
Don Charter, President and Chief Executive Officer, stated "This was an important quarter for Corsa. With the successful production and development ramp up at the Casselman mine and shipping of 138,000 tons of met coal, in line with guidance, we have made significant improvements in our competitive position in this tight market. Cash mining costs at Casselman have been reduced by 36 percent to $51 a ton and processing costs have been reduced by 43 percent to $13. The increased volume with reduced costs resulted in the Company achieving positive cash flow from operations. We continue to actively market our high quality low-vol met coal while improving operating costs."
The global demand for steel is down and the demand for metallurgical coal has experienced a continuing slowdown that began in the fall of 2011 resulting in declining prices. The US coal industry continues to be challenged and a number of producers have announced reductions in production. Nonetheless, the Company's second quarter 2012 production met guidance and it was able to double second quarter 2012 sales in third quarter 2012 shipping 138,000 tons. With the continued decline in the market, based on purchase orders and expected trains, the Company expects to ship at least 32,000 clean tons of metallurgical coal in fourth quarter 2012. While the Company continues to actively market its high quality low vol metallurgical coal, which it believes is well suited to domestic users as well as the seaborne market, presently the Company is not in a position to provide production, sales and cost guidance beyond the sales it has currently under contract until sales levels can be more accurately forecast.
For the remainder of the fiscal year, the Company will continue to adjust its production to match actual demand and sales orders. The Company has temporarily idled its surface mines and does not have large unsold inventories. Operations have continued at the Casselman Mine to meet fourth quarter 2012 expected sales and to ensure an appropriate operating inventory. However, the Company will be temporarily idling this mine and keeping it in readiness for an immediate restart pending an increase in sales levels.
Information about Corsa
Corsa's main operating subsidiaries are Wilson Creek Energy LLC and Maryland Energy Resources LLC based in Somerset County, 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 the actual production or sales for the fourth quarter of 2012 and 2012 fiscal year 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 including restarting idled mines; 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.
Non IFRS Measures
This press release contains references to "cash flow from Operations" and "cash mining costs" which do not have a standardized meaning under IFRS. See the Condensed Interim Consolidated Financial Statements and the Management Discussion and Analysis for a reconciliation to IFRS measures.
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.