TORONTO, Dec. 13, 2011 /PRNewswire/ - Corsa Coal Corp. ("Corsa") (TSXV: CSO) is pleased to announce 2011 sales and the acquisition of the Keyser Property.
Corsa sold approximately 252,000 clean tons of metallurgical coal at an average realized price of US$167.00 per clean ton and approximately 142,000 clean tons of thermal coal during the fiscal year ended November 30, 2011.
The Company indicated in November that due to what appeared to be a general slowdown in metallurgical coal shipments, the Company received fewer trains than expected from its customers in October and did not expect to receive the anticipated number of trains for November. The shortfall in sales of 73,000 clean tons of metallurgical coal from the Company's stated guidance of 325,000 clean tons resulted entirely from this October/November slowdown. While the Company had the production capacity from its surface and underground mines, the availability of purchased coal and the plant capacity to meet its expected delivery schedule, the Company temporarily reduced production to match the expected shipment schedule for October and November. The Company has already experienced an increase in activity for December with full operations at the wash plant and all of its mines operating at capacity.
The Company's outlook for sales of 800,000 to 900,000 clean tons of metallurgical coal in fiscal 2012 has not changed.
Don Charter, President and CEO, stated "We have had a great first year having acquired a strong group of coal properties and projects, commenced underground operations at the Casselman mine, successfully commissioned the Wilson Creek Wash Plant and commenced shipments of met coal at or above contracted specs. While we were disappointed with the October/November slow down, we are pleased to be back mining at capacity in December. The acquisition of the Keyser Property is another step in the continuing growth of the Company's resource base. We are excited about our ability to expand with this Property."
The Keyser Property
The Company is also pleased to announce it has exercised its option to purchase the rights to mine the Lower Kittanning coal seam under approximately 2,300 acres in the Jenner and Conemaugh Townships in Somerset County, Pennsylvania referred to as the Keyser Property, located 25 miles by road from the Company's coal preparation plant.
This Property has been drilled with a total of 24 cores extracted within and immediately adjacent to the footprint of this indicated resource. All of these coreholes were drilled in 2011 under the supervision of an independent qualified person. Preliminary calculations for the Keyser Property, utilizing Carlson Mining Software, indicate the presence of a total of 11.0 million tons of in-place, low volatile, coking coal within the Lower Kittanning seam. The Lower Kittanning coal seam is located 100 to 600 feet below the surface and exhibits an average inclination of 3 degrees with an average seam thickness of 3.45 feet.
The purchase price is a total of US$2.8 million, of which US$1 million is payable on exercise and balance payable in December 2012 with interest of 4% on the unpaid balance. The purchase is expected to close within the next few days.
This deposit meets the definition of an indicated coal resource as per National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). A technical report (within the meaning of NI 43-101) has not been filed in respect of the Keyser Property. The effective date of the estimate of the mineral resources contained in the press release is October 14, 2011. The estimate of mineral resources reflects known environmental, permitting, title and other relevant matters. The footprint will require further definition in the following areas in order to achieve the classification of a coal reserve: surface and mineral control, mineability related to geologic conditions, and economic viability. The mineral resources referred to in this press release have not been classified as mineral reserves and a feasibility study has not been completed. Accordingly the economic viability of the Keyser Property has not yet been demonstrated.
The mineral resource estimates have been prepared under the supervision of, and the technical information in this press release was verified and approved by, Dennis Noll of Earthtech Inc., a qualified person, as such term is defined in NI 43-101 - Standards of Disclosure for Mineral Projects. Dennis Noll is independent of Corsa and Wilson Creek Energy.
Information about Corsa
Corsa's 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", "targets" 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 Corsa'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 2011 and for 2012 will be less than projected production or sales for these periods; risks that the prices for coal sales will be less than projected; the risk that the acquisition of the Keyser property will not be completed within the time period contemplated; 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 required in connection with the mining and processing of coal; unexpected changes in coal quality and specification; variations in the coal preparation 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; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labor 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. 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 these forward looking statements unless required to do so by law.
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.