Pacific Coal Resources Ltd. announces third quarter results

TORONTO, Nov. 29, 2011 /PRNewswire/ - Pacific Coal Resources Ltd. (TSXV: PAK) has filed today its interim condensed consolidated financial statements for the three and nine months ended September 30, 2011, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period. These documents will be posted on the Company's website at www.pacificcoal.ca and at www.sedar.com.

Luis Carvajales, Chief Executive Officer, commented: "I am pleased with the progress the Company is making to implement mine plans at both La Caypa and Cerro Largo, which aim to progressively reduce costs, and ensure firm, guaranteed sales volumes going forward at contract prices at a premium to market. With a full trucking fleet now in place, we are in a good position to ramp up production at both Cerro Largo and CI Jam. Year to date, we produced 1.2 million tonnes of coal, which demonstrates a track record of execution over the last three quarters, and we remain on track to produce at our budgeted production target of 1.6 million to 1.8 million tonnes for the year. "

Financial and Operating Summary

A summary of the financial and operating results for the three and nine months ended September 30, 2011 is as follows:

(1)     Includes coal purchased from third parties for sale.
(2)     See "Additional Financial Measures" in MD&A.

Third Quarter Highlights

• Through the first nine months of 2011, production amounted to 1.2⁽¹⁾ million tonnes of coal. Pacific Coal is on track to produce 1.6⁽¹⁾ million to 1.8⁽¹⁾ million tonnes of coal in 2011.
• Total revenues for the third quarter of 2011 increased to $46.5 million on the strength of 460,189 tonnes of coal sold at an average realized price of $101.01 per tonne. Total revenues for the first nine months of 2011 amounted to $118.9 million.
• Operating costs in the third quarter of 2011 increased by approximately $9 per tonne, compared with the first half of 2011, mainly associated with an increase in the royalties at La Caypa, which are prepaid and expected to decrease going forward. Higher transportation and port services costs also impacted operating expenses and, with a full committed trucking fleet in place, these costs are expected to decline as well in coming quarters.
• Pacific Coal has entered into a sales purchase agreement with LCC Group, an established energy services company based in Northern Ireland, for the supply of 700,000 tonnes per annum, commencing upon completion of deliveries under their existing contract and extending the relationship between the two companies to 2019. Management has estimated the value of this agreement at approximately $350 million based on conservative forward prices for coal.
• Exploration at both the La Caypa and Cerro Largo mines has been undertaken in coordination with SRK pursuant to updating the National Instrument 43-101 ("NI 43-101") technical reports in connection with open pit and underground resources at both mines.
• Progress is being made in the expansion of installed capacity for coke production at CI Jam and activities associated with development of the Barranquilla port.
• Exploration at La Tigra is progressing and geophysical studies have been undertaken (due to be finalized by mid-December); a NI 43-101 technical report is expected by the second quarter of 2012.
• The Company commenced a Normal Course Issuer Bid in July 2011 and to-date has repurchased approximately 2% of its issued and outstanding common shares for cancellation.

(1)     Includes 0.1 million tonnes produced in the first quarter of 2011 at Cerro Largo prior to the March 2011 acquisition.

Management will hold a conference call on Wednesday, November 30, 2011 at 10:30 a.m. (Eastern Time) to discuss the third quarter 2011 results.

Call-in details are as follows:

A playback of this conference call will be available by dialling (416) 849-0833 or 1 (855) 859-2056 with the above conference ID number until December 14, 2011.

About Pacific Coal Resources Ltd.

Pacific Coal Resources Ltd. is a Canadian-based mining company focused on coal, coking coal, asphalt and asphaltite exploration, development and production from prospective, producing, development-stage and exploration-stage properties in Colombia. The Company has acquired or entered into agreements to acquire various interests in several operating coal mines and projects, representing a substantive coal and asphaltite exploration and production area throughout Colombia. Pacific Coal is committed to implementing its exploration and development strategy with a comprehensive environment, safety and community program, meeting international standards of best practice.

Forward Looking Information:

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pacific Coal to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Pacific Coal disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. 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. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Pacific Coal Resources Ltd.