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Operations Update for Third Quarter and Fiscal 2013
Forbes & Manhattan Coal Corp.
(Registration number: 002116278)
(External company registration number: 2011/011661/10)
Share code on the Toronto Stock Exchange: FMC
Share code on the JSE Limited: FMC
ISIN: CA3451171050
(“Forbes Coal” or “the Company”)
LABOUR DISRUPTION RESOLVED
Forbes Coal Provides Operations Update for Third Quarter and Fiscal 2013
TORONTO, ONTARIO – November 16, 2012: Forbes & Manhattan Coal Corp. (TSX: FMC)
(JSE: FMC) has resolved the wage-related labour disruption at its mines. Operations at the
Magdalena and Aviemore mines as well as the coal processing plants in South Africa, will
resume on Monday, November 19, 2012. Forbes Coal and the employees involved have
agreed to an average wage increase of 14.8%.
Forbes Coal President and Chief Executive Officer Stephan Theron comments, “management is
pleased to have agreed on a settlement with the employees, in the interests of all stakeholders.
Operations are set to resume early next week. Management is committed to maximizing
production in the current and next quarter in order to meet the revised 2013 targets”.
Forbes Coal suffered production losses during the labour disruption, which will have an impact
on the current quarter and the full year, summarized as follows:
- The run of mine (ROM) loss of production will be approximately 256,000 tonnes for the
third quarter; 55% lower than the forecast of 463,000 tonnes;
- The tonnes sold for the third quarter is expected to be approximately 94,000 tonnes,
63% lower than the forecast of 257,000 tonnes.
As a result of the labour disruption, the ROM production target of 1.7 million tonnes for fiscal
2013 (ending February 28, 2013) has been adjusted to 1.3 million tonnes. The ROM revised
production estimate for the year is broken down as follows: Aviemore underground 387,000
tonnes; Magdalena underground 658,000 tonnes; and Magdalena opencast 287,000 tonnes.
The company also estimates that fourth quarter sales will be lower as a result of weaker coal
pricing globally.
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It holds a majority interest in two
operating mines through its 100% interest in Forbes Coal (Pty) Ltd., a South African company
("Forbes Coal Dundee") which has a 70% interest in Zinoju Coal (Pty) Ltd. ("Zinoju"). Zinoju
holds a 100% interest in the Magdalena bituminous mine and the Aviemore anthracite mine in
South Africa (collectively, “the Forbes Coal Dundee Properties”). The mines have a substantial
resource base and each mine has a projected life span in excess of 20 years. Forbes Coal is in
the process of increasing production at both mines using existing infrastructure and capacity.
The Company has in-place transportation infrastructure allowing its coal to reach both export
corridors and the growing domestic coal market.In September 2012, Forbes’s Coal agreed to
acquire 100% ownership of Riversdale Mining from Rio Tinto. As a result of the acquisition,
Forbes Coal will acquire a current producing anthracite mine in the Zululand Anthracite Colliery
(“ZAC”). ZAC is thought to be one of the last, large-scale producers of high-quality anthracite
product in South Africa, with historic run of mine production of 700,000 tonnes of coal per
annum over the last five years. The Acquisition scales Forbes Coal’s annual production capacity
to an estimated 2.5 million tonnes.
Forbes Coal has a strong balance sheet and an experienced coal-focused management team
and board of directors.
Cautionary Notes
The ability of the Company to increase production amounts has not been the subject of a
feasibility study and there is no certainty that the proposed expansion will be economically
feasible.
This press release contains “forward-looking information” within the meaning of applicable
Canadian securities legislation. Forward-looking information includes, but is not limited to,
statements with respect to anticipated production results with respect to the Forbes Coal
Dundee Properties, future financial or operating performance of the Company and its projects,
statements regarding the anticipated improvements in logistical support and anticipated
improvements in sales, statements made with respect to prospects for the business of the
Company, requirements for additional capital, government regulation of the mineral exploration
industry, environmental risks, acquisition of mining licences, title disputes or claims, limitations
of insurance coverage and the timing and possible outcome of pending litigation and regulatory
matters. Generally, forward-looking information can be identified by the use of forward-looking
terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or 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 information is subject to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or achievements of the Company to
be materially different from those expressed or implied by such forward-looking information,
including but not limited to: general business, economic, competitive, foreign operations,
political and social uncertainties; a history of operating losses; delay or failure to receive board
or regulatory approvals; timing and availability of external financing on acceptable terms; not
realizing on the potential benefits of the proposed transaction; conclusions of economic
evaluations; changes in project parameters as plans continue to be refined; future prices of
mineral products; failure of plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; and, delays in obtaining governmental
approvals or required financing or in the completion of activities. Although the Company has
attempted to identify important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that such information
will prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue reliance on
forwardlooking information. The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Stephan Theron Samantha Thomson
President and Chief Executive Officer Investor relations Manager
+1 (416) 861-5912 +1 (416) 309-2957
Email: stheron@forbescoal.com Email: sthomson@forbescoal.com
16 November 2012
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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