FORBES & MANHATTAN COAL CORP - Forbes closes first tranche of loan facility

Forbes closes first tranche of loan facility

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”)




FORBES COAL CLOSES FIRST TRANCHE OF US$25 MILLION LOAN FACILITY


TORONTO, ONTARIO – February 5, 2014: Forbes & Manhattan Coal
Corp. (“Forbes Coal” or the “Company”) (TSX: FMC) (JSE: FMC) has
closed on the first tranche of the previously announced secured
convertible loan facility from Resource Capital Fund V L.P
(“RCF”) in the aggregate principal amount of up to US$25 million
(the “Facility”). The first tranche consists of a bridge loan
(the “Bridge Loan”) in the amount of US$4 million. The remainder
of the Facility consists of a convertible loan in the principal
amount of up to US$15 million (the “Convertible Loan”), and a
refinancing of the existing US$6 million convertible loan
facility completed between the Company and RCF on September 6,
2013 (the “Refinancing”). The Bridge Loan is to be used for
general working capital in relation to Forbes Coal’s operations
in Dundee, South Africa as well as to facilitate the closing of
the Company’s Toronto office.

In connection with the Bridge Loan, RCF will receive an
establishment fee equal to 5% of the value of the Bridge Loan,
payable in common shares in the capital of Forbes Coal (“Common
Shares”), issued at a price of C$0.1446 per Common Share.
The Bridge Loan will bear interest at a rate of 15% per annum,
payable each month. Interest payment obligations under the
Bridge Loan may be satisfied in cash, or, at the option of RCF,
through the issuance of Common Shares valued at the 20-day
volume-weighted average price (“VWAP”) of the Common Shares on
the Toronto Stock Exchange prior to the relevant interest
payment date.

The Bridge Loan will mature on June 30, 2014, provided that if
Forbes Coal receives all necessary shareholder approvals as may
be required in connection with the Facility, the Bridge Loan
will convert into a convertible loan with the same terms and
conditions as the Convertible Loan, with the principal amount of
the Bridge Loan convertible into Common Shares at a price of
C$0.1446 per Common Share.

The issuance of Common Shares to RCF upon conversion of the
Bridge Loan, the Convertible Loan and the Refinancing, in
satisfaction of interest obligations under the Convertible Loan
and the Refinancing, and in satisfaction of the establishment
fee payable in connection with the Convertible Loan are subject
to shareholder approval. Forbes Coal intends to seek approval of
its shareholders for these issuances at a special meeting to be
held no later than April 30, 2014. Pursuant to the policies of
the TSX and Multilateral Instrument 61-101 – Protection of
Minority Shareholder in Special Transactions (“MI 61-101”), RCF
will not vote on the resolution approving the issuances of the
Common Shares to RCF under the Facility.

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
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. Forbes Coal
has an experienced coal-focused management team.

Cautionary Notes:

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 Facility, the meeting to be held
in connection with approval of the issuance of certain Common
Shares issuable under the Facility and future financial or
operating performance of Forbes Coal and its projects.
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 forward-looking information.
The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities
laws.

FOR FURTHER INFORMATION PLEASE CONTACT:

Craig    Wiggill
Executive Chairman and Interim CEO
Email:    crwiggill@gmail.com
+27 11 656 3206


Sarah Williams
Chief Financial Officer
+27 11 656 3206
Email : swilliams@forbescoal.com


6 February 2014
Johannesburg


Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited

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