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Corporate update
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 PROVIDES CORPORATE UPDATE
TORONTO, ONTARIO – May 29, 2014: Forbes & Manhattan Coal Corp. (“Forbes Coal” or
the “Company”) (TSX: FMC) (JSE: FMC) announces that, as previously disclosed, Mr. Malcolm
Campbell has been appointed as Chief Executive Officer of the Company with effect from May
1, 2014.
Mr. Campbell is a Professional Certified Mining Engineer with 25 years industry experience and
prior to joining the Company as Chief Operating Officer in 2011, was Chief Operating Officer for
an exploration and development joint venture operating in Botswana. Prior to this, he spent
more than 20 years with Anglo Coal, a wholly-owned subsidiary of Anglo American plc. Mr.
Campbell received his B.Sc. in Mining Engineering from the University of Witwatersrand in 1985
and is currently a member of the South African Institute of Mining and Metallurgy and the South
African Colliery Managers Association - having served on the Council for two terms. Mr.
Campbell has also completed a number of career enhancing courses at globally recognised
institutions in both the engineering and business fields.
Update on funding arrangements
Convertible loan facility from Resource Capital Fund V L.P (“RCF”)
RCF and Forbes Coal have agreed to extend the maturity date for the previously announced
secured convertible loan facility from RCF in the aggregate principal amount of up to US$25
million (approximately C$27.7 million) (the “Facility”), from June 30, 2017 to June 30, 2019.
The closing of the outstanding portion of the Facility, comprising a convertible loan in the
principal amount of US$15 million (approximately C$16.6 million), is subject to disinterested
shareholder approval, for which Forbes Coal intends to seek approval of its disinterested
shareholders at a special meeting, details of which are set out below.
It is anticipated that the Company will close on the Facility on or around June 30, 2014.
Restructuring of debt facilities with Investec Bank Limited (“Investec”)
As previously announced, the Company is also in the process of finalizing a restructuring of its
debt facilities with Investec.
The terms of the restructuring are as follows: restructured debt facilities of R170 million
(approximately C$17.8 million) (the “Restructured Investec Facilities”), comprising a five-year
senior secured amortising term loan facility of up to R90 million (approximately C$9.4 million), a
five-year senior secured loan facility of R50 million (approximately C$5.2 million), repayable by
way of a bullet repayment at the end of the facility life, and a five year senior secured working
capital credit facility of R30 million (approximately C$3.1 million).
As partial consideration for Investec entering into the Restructured Investec Facilities and
subject to disinterested shareholder approval, Forbes Coal will issue warrants to Investec to
purchase that number of common shares in the Company (“Common Shares”) with an
aggregate exercise price of R50 million (approximately C$5.2 million) (the “Investec
Warrants”). The Investec Warrants will be exercisable at a price of C$0.1446 per Common
Share (being the price at which the establishment fees and principal amounts under the Facility
with RCF are convertible into Common Shares) until five years from the closing date of the
Restructured Investec Facilities. Any proceeds received upon the exercise of the Investec
Warrants are to be applied to the Restructured Investec Facilities as a mandatory prepayment.
The Investec Warrants will be subject to a purchase option in favour of RCF, whereby RCF will
have the right to, at its option, purchase the Investec Warrants.
Annual and special meeting of shareholders of the Company
Further details on the Facility and the Restructured Investec Facilities will be made available in
the amended management circular anticipated to be mailed to shareholders and filed under the
Forbes Coal profile at www.sedar.com by no later than June 2, 2014.
The annual and special meeting of shareholders of the Company to approve, inter alia, the
Facility and the Investec warrants is anticipated to be held on June 27, 2014, at 10:00 at
Brookfield Place, Bay/Wellington Tower, 181 Bay Street, Suite 2100, Toronto, Ontario M5J 2T3.
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 and the Restructured Investec Facilities, the meeting to
be held in connection with approval of the issuance of certain securities issuable under the
Facility and the Restructured Investec Facilities 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:
Malcolm Campbell
Chief Executive Officer
+27 11 656 3206
Email: mcampbell@forbescoal.com
Sarah Williams
Chief Financial Officer
+27 11 656 3206
Email : swilliams@forbescoal.com
30 May 2014
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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