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Cancellation of an acquisition agreement
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”)
FORBES COAL CANCELS ACQUISITION AGREEMENT WITH RIVERSDALE MINING
TORONTO, ONTARIO – February 15, 2013: Forbes & Manhattan Coal Corp. (“Forbes
Coal”) (TSX: FMC) (JSE: FMC) advises that it has notified Riversdale Mining Limited (“RML”)
of the cancellation of the agreement between Forbes Coal and RML (“the agreement”) for the
acquisition by Forbes Coal of 100% of the shares and shareholder claims of Riversdale
Holdings (Proprietary) Limited, which is the 74% shareholder of Zululand Anthracite Colliery
(“ZAC”).
Subsequent to the parties entering into the agreement in September 2012, and pending
fulfillment of the conditions precedent contained in the agreement, the performance of ZAC
deteriorated to a material extent. This, in the opinion of Forbes Coal, constituted a material
breach of certain of the provisions of the agreement by RML, entitling Forbes Coal to cancel the
agreement, which cancellation took place by written notice from Forbes Coal to RML on
February 1, 2013.
On February 10, 2013, RML advised Forbes Coal that –
-RML denied being in breach of the agreement, which would entitle Forbes Coal to
cancel the agreement;
-RML did not accept cancellation of the agreement by Forbes Coal;
Forbes Coal’s actions, in RML's opinion, constituted a repudiation of the agreement by
Forbes Coal;
-RML accepts the repudiation of the agreement by Forbes Coal; and
-the agreement is being cancelled at RML's instance.
On February 15, 2013, Forbes Coal advised RML that –
-Forbes Coal denied having repudiated the agreement; and
-Forbes Coal denied that it would be liable to RML for any damages suffered as a result
of the cancellation of the agreement.
The parties have attempted to reach agreement on a mutually beneficial way forward in respect
of the acquisition, but such discussions have to date been unsuccessful.
Stephan Theron, President and CEO of Forbes Coal commented on the cancellation: “We are
disappointed that the situation has necessitated this decision, but believe that cancelling the
agreement is in the best interests of all our shareholders and other stakeholders in Forbes
Coal.”
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. Forbes Coal has a strong balance sheet and
an experienced coal-focused management team.
Please refer to the company's NI 43-101 compliant technical report on the Forbes Coal Dundee
Properties dated March 1, 2011 entitled "Technical Report on Slater Coal and Subsidiaries,
KwaZulu-Natal Province, South Africa", available on the SEDAR profile of the Company at
www.sedar.com. Additional information is available at www.forbescoal.com.
Cautionary Notes:
Johan Odendaal, B.Sc.(Geol.), B.Sc.(Hons)(Min. Econ.), M.Sc. (Min. Eng.), a director of
Minxcon and an independent Qualified Person, as defined in National Instrument 43-101 has
reviewed and approved the scientific and technical information contained in this release.
The ability of Forbes Coal 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 the cancellation of the agreement with RML, the anticipated
production results with respect to the Forbes Coal Dundee Properties, future financial or
operating performance of Forbes Coal 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 Forbes Coal, 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 Forbes Coal 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 Forbes Coal 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
Johannesburg
15 February 2013
Sponsor
Sasfin Captital, A division of Sasfin Bank Limited
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