Pacific Coal Resources Ltd. announces fourth quarter 2012 strategic
update
TORONTO,
Dec. 5, 2012 /CNW/ - Pacific Coal
Resources Ltd. (TSXV: PAK) announces a strategic update, including
significant advances in the La Caypa underground initiative, a
re-focusing of operations at the Cerro Largo property, signing of
an agreement relating to La Tigra exploration, signing of the
Barranquilla port sale MOU and an update regarding the cost
reduction program. Management believes Pacific Coal's strategic
re-focus is positioning the Company towards significantly improved
operations and liquidity. All financial figures contained
herein are expressed in U.S. dollars unless otherwise noted.
La Caypa underground mine
The Company is advancing towards operation of an
underground mine at La Caypa, with anticipated production of
underground thermal coal beginning by the end of 2013. Pacific
Coal's new management team has begun negotiations in respect of
carrying out this underground mine operation with OXBOW, a leader
in underground coal production in the
United States which also operates globally. Underground
production at La Caypa is expected to reach 0.7 million tonnes of
coal in 2014 and over 1.0 million tonnes annually from 2015
onwards. This production will be in addition to La Caypa's
continued open-pit mine production of approximately 1.0 million
tonnes per year.
Cerro Largo operations
Based on the high BTU and low sulfur levels of
Cerro Largo's thermal coal, management has determined that such
coal is ideal for power generation, specifically a mine mouth
electric plant (coal burning electric-generating plant). Pacific
Coal is in discussion with Pacific Power Generation Corp. and
Proelectrica & CIA S.C.A. ESP to create a new joint venture
company which would focus on (i) building an electric plant, which
is anticipated to have a maximum production capacity of 150
Megawatts, and (ii) marketing the energy produced.
La Tigra exploration
Asphaltite exploration continues at La
Tigra. Pacific Coal has signed an agreement with a
third-party to perform analysis of exploration results, at the
third-party's cost, to determine the site's prospects. The analysis
is expected to be completed in the second quarter of 2013, at which
time Pacific Coal will determine an adequate course of action for
the deposit.
Barranquilla port
Pacific Coal signed an MOU in respect of the
sale of its interest in Sociedad Portuaria Terminal de las Flores
S.A., the subsidiary that owns the Barranquilla port concession,
with an anticipated completion of the sale by January 2013.
Share Consolidation
The board of directors of the Company has
determined that it is in the best interest of the Company to
consolidate its issued and outstanding common shares on a 7:1
basis. The Company expects to call a special meeting of
shareholders in the first quarter of 2013 so that shareholders may
vote on the proposed share consolidation.
Cost reduction program
Pacific Coal has undertaken a comprehensive cost
cutting program including payroll and G&A reductions.
During the third quarter of 2012, actions taken contributed to a
decrease of 20% in G&A expenses to $3.6
million as compared to $4.4
million in the second quarter of 2012, in addition to the
12% and 9% decrease already realized in the first and second
quarter of 2012 respectively. The third quarter expenses include
approximately $1.0 million of
one-time expenses associated with staff reductions and asphaltite
research costs, which if excluded would see a G&A expense
improvement of approximately 43% from the second quarter of
2012. Based on the continued success of the cost cutting
program, management expects a continued decrease in the quarterly
G&A run rate to approximately $2.75
million by the fourth quarter of 2012.
About Pacific Coal Resources Ltd.
Pacific Coal Resources Ltd. is a
Canadian-based mining company engaged in the acquisition,
exploration and production of coal and coal-related assets from
properties located in Colombia.
The Company's common shares and warrants are listed on the TSX
Venture Exchange and trade under the symbol "PAK" and "PAK.WT"
respectively.
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.