Xinergy Ltd. Provides Sales And Operations Updates
Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, Oct. 6, 2011 /PRNewswire/ - Xinergy Ltd., (TSX: XRG and XRG.WT) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, today announced updated sales and shipments guidance for calendar years 2011 - 2013 along with operational updates on thermal and metallurgical properties.
Based on currently available information, the Company estimates that for the three months ended September 30, 2011: (i) tons sold was 531,000; (ii) tons produced was 570,000; (iii) coal revenues was in the range of $48,500,000 to $49,500,000; (iv) revenue per ton sold was in the range of $91.00 to $93.00; and (v) Adjusted EBITDA was in the range of $12,000,000 to $13,000,000.
This preliminary information, which has been prepared by and is the responsibility of management, is subject to additional data becoming available and the finalization of customary closing procedures for the three-month period ended September 30, 2011. Our actual results could be materially different from our estimates. In addition, Coulter and Justus, P.C., the Company's independent auditors, have not completed their procedures with respect to the financial information for the three months ended September 30, 2011, nor have they expressed any opinion or other form of assurance with respect to the estimated ranges presented above or their achievability.
The Company now expects calendar 2011 sales to be in the range of 2.2 million to 2.4 million tons compared to the previous range of 2.8 million to 3.0 million tons. The decrease is due to several market driven factors including delayed shipments to a major customer as well as the deferred opening of two new thermal mines at its Straight Creek, KY, mining complex pending improved market conditions.
Jon E. Nix, Xinergy's Chairman and CEO, said, "Consistent with our long-stated sales philosophy, we continue to refrain from forcing tons into a market during a period of broad economic uncertainty, and are therefore delaying the opening of two Kentucky thermal mines that were slated for production this year. Given our strong balance sheet and free cash profile, we are well positioned to continue our organic growth by developing existing projects, as well as taking advantage of opportunistic acquisition opportunities as they present themselves."
In this regard, Xinergy anticipates producing between 3.0 million and 3.5 million tons from existing thermal and metallurgical operations in each of 2012 and 2013. The Company plans to provide a more detailed update by mining complex when it reports third quarter 2011 financial and operating results but anticipates producing 2.5 million tons of thermal and 500 thousand to 1.0 million tons of metallurgical coal per year.
The outlook contained above represents forecasts of production and sales, which indicate a range of possible outcomes and are provided to assist investors with the development of future earnings estimates. While Xinergy believes that these forecasts represent the best estimate of management as to future events, actual events will differ from these forecasts, and such differences could be material. These forecasts are subject to risks identified under "forward-looking statements" below
South Fork Coal (West Virginia - Greenbrier Mid Vol Metallurgical) - The Company has received the permit transfers from the West Virginia Department of Environmental Protection on the property referred to as Lost Flats. The Company is currently modifying the existing permits and is optimistic that final approvals will be received in a manner that would allow initial production to begin December 2011.
Raven Crest (West Virginia - Brier Creek Thermal Underground) - The Company continues to develop its fully permitted Brier Creek thermal underground reserves, with the construction of a new preparation plant anticipated to be completed by August 15, 2012.
True Energy (Virginia - High Vol Metallurgical) - The True Energy mine has been fully integrated into the Company and is producing at a higher rate and lower costs than anticipated.
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky, West Virginia and Virginia. Currently, Xinergy sells high quality coal to electric utilities and industrial companies throughout the south-eastern United States. For more information, please visit www.xinergycorp.com.
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Xinergy's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
SOURCE Xinergy Ltd.