TORONTO,
Nov. 29, 2013 /PRNewswire/ - Corsa
Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") announces that it
has filed its Condensed Interim Consolidated Financial Statements
and related Management's Discussion and Analysis for the three
months and nine months ended September 30,
2013 on www.sedar.com and has posted these documents to its
website www.corsacoal.com.
Highlights
- Sales of 372,000 tons of coal at an average realized price of
$81 per ton in the three months ended
September 30, 2013 and 939,000 tons
at an average realized price of $77
per ton in the nine months ended September
30, 2013. See "Sales".
- Adjusted EBITDA(1) of $8,245,000 in the three months ended September 30, 2013 and $16,929,000 in the nine months ended September 30, 2013.
- Cash provided by operating activities of $7,898,000 in the three months ended September 30, 2013 and $11,885,000 in the nine months ended September 30, 2013.
- Sales guidance of 1,255,000 tons of coal for 2013 comprised of
1,100,000 tons of thermal coal and 155,000 tons of metallurgical
coal. See "Outlook".
- Completion of the previously announced transaction with
Quintana Energy Partners.
- Metallurgical coal production expansion at the Casselman Mine
with the purchase of a continuous haulage system for installation
in January 2014.
- Underground mining permit for the metallurgical coal deposit at
the Acosta Deep Project received from Pennsylvania Department of
Environmental Protection allowing the Company to commence mine
development in 2014.
(1) This is non-GAAP measure. See "Non-GAAP Measures" below.
Refer to the Company's unaudited condensed
interim consolidated financial statements and related management's
discussion and analysis for the three months and nine months ended
September 30, 2013 for the details of
the financial performance of the Company and the matters referred
to in this release.
Keith Dyke,
President, stated "During the third quarter, both the Kopper Glo
thermal coal operations in Tennessee and the Wilson Creek metallurgical coal operations in
Pennsylvania posted strong
operating results with Kopper Glo increasing its tons sold from
2012 levels. The operations continue to improve in every area,
including safety and cost reductions. Demand for our coal has
remained firm in both markets and the Company expects the market
pricing to improve in 2014. We have high quality coals in each of
our market segments and we continue to expand and diversify our
customer base. With high quality products and low operating costs,
we will continue to execute the business plan and grow our
company. The Company's balance sheet is strong with cash of
$16,931,000, total assets of
$203,512,000 and total debt of
$18,316,000 at September 30, 2013. The strong financial position
of Corsa should allow us to take advantage of opportunities in
acquisitions and internal expansion projects. The revenues and
Adjusted EBITDA increases from year over year are encouraging,
considering the market environment and in comparison to the
performance of other public coal companies in North America. The dedication and skills of
all our employees and the management teams are second to none in
the industry."
Sales
Three months ended September 30, 2013
The Company sold 372,000 tons of coal at an
average realized price of $81 per
ton. Thermal coal sales were 299,000 tons at an average realized
price of $75 per ton FOB preparation
plant. Metallurgical coal sales were 73,000 tons at an average
realized price of $104 per ton FOB
preparation plant.
Nine months ended September 30, 2013
The Company sold 939,000 tons of coal at an
average realized price of $77 per
ton. Thermal coal sales were 866,000 tons at an average realized
price of $75 per ton FOB preparation
plant. Metallurgical coal sales were 73,000 tons at an average
realized price of $104 per ton FOB
preparation plant.
Outlook
The Company's coal sales guidance for 2013 is
approximately 1,255,000 tons. Thermal coal sales guidance for 2013
is approximately 1,100,000 tons and metallurgical coal sales
guidance is approximately 155,000 tons. The 2013 coal sales
guidance for metallurgical coal only covers the period from August
to December 2013.
Thermal Coal
As a result of global economic conditions and
low natural gas prices, the thermal coal industry has experienced a
slowdown in demand that began in the fall of 2011 and has continued
with the result that prices have declined. While this weakness in
the market has continued into 2013 and is expected to continue into
2014, the Company believes there may be a modest recovery in the
demand and price for thermal coal beginning in the second quarter
of 2014.
While the thermal coal market, as expected,
continues to be weak in 2013, the Company has continued to be
successful in maintaining a high level of contracted sales. The
Company has sales contracts for 846,000 tons of thermal coal for
2013. The current guidance for 2013 is thermal coal sales of
approximately 1,100,000 tons, of which 866,000 tons were sold in
the nine months ended September 30,
2013 leaving approximately 234,000 tons for the balance of
the year. In addition, the Company currently expects thermal coal
sales of between 200,000 and 250,000 tons in the first quarter of
2014. The Company continues to actively market its thermal coal and
is in discussions with domestic utilities and industrial
buyers.
Metallurgical Coal
The metallurgical coal markets have been
volatile in 2013. The Company has continued to be successful in
achieving metallurgical coal sales as a result of the quality of
its coal. The current guidance for 2013 is metallurgical coal sales
of approximately 155,000 tons, of which 73,000 tons were sold in
the nine months ended September 30,
2013 leaving approximately 82,000 tons for the balance of
the year. As the Wilson Creek
division, which produces metallurgical coal, was acquired on
July 31, 2013, the 2013 coal sales
guidance only covers the period from August to December 2013. In addition, the Company currently
expects metallurgical coal sales of 120,000 to 140,000 tons in the
first quarter of 2014 based on current negotiations with existing
and potential customers. The Company continues to actively market
its metallurgical coal to domestic and international steel
producers.
Liquidity
At September 30,
2013, the Company had cash of $16,931,000. During the nine months ended
September 30, 2013, the Company
received cash of $69,267,000 from
sales collections (amounts receivable at December 31, 2012 plus sales for the nine months
ended September 30, 2013 less amounts
receivable at September 30, 2013) and
received cash of $9,827,000 as a
result of the transaction with Quintana Energy Partners.
In the nine months ended September 30, 2013, the operating activities of
the Company provided cash of $11,885,000, the investing activities provided
cash of $7,815,000 and the financing
activities used cash of $7,979,000.
The increase in cash for the nine months ended September 30, 2013 was $11,721,000.
The Company had working capital of $13,140,000 at September
30, 2013.
At September 30,
2013, the total debt of the Company was $18,316,000. The current portion of the Company's
debt comprised notes payable of $2,493,000 and finance lease obligations of
$3,957,000. At September 30, 2013, the long-term portion of the
Company's debt comprised notes payable of $4,562,000, finance lease obligations of
$4,562,000 and processing fee payable
of $2,742,000. Details of the
Company's debt appear in the notes to the unaudited condensed
interim consolidated financial statements for the three and nine
months ended September 30, 2013.
At September 31,
2013, the shareholders' equity of the Company was
$132,812,000 and comprised share
capital of $72,671,000, contributed
surplus of $410,000 and retained
earnings of $59,731,000.
Non-GAAP Financial Measures
Management uses EBITDA (Earnings before
deductions for interest, taxes, depreciation and amortization) and
Adjusted EBITDA (EBITDA adjusted for finance expenses and items
related to the transaction with Quintana Energy Partners) as
internal measurements of operating performance for the Company's
mining and processing operations. Management believes these
non-GAAP measures provide useful information for investors as they
provide information in addition to the GAAP measures to assist in
their evaluation of the operating performance of the Company.
Reference is made to the management's discussion
and analysis for the three months and nine months ended
September 30, 2013 for a
reconciliation of non-GAAP measures to GAAP measures.
Caution
The estimated coal sales, projected market
conditions and potential development disclosed in this news release
are considered to be forward looking information. Readers are
cautioned that actual results may vary from this forward looking
information. Actual sales are subject to variation based on a
number of risks and other factors referred to under the heading
"Forward-Looking Statements" below as well as demand and sales
orders received.
Information about Corsa
Corsa's primary business is the mining,
processing and selling of thermal and metallurgical coal, as well
as actively exploring, acquiring
and developing resource
properties consistent with its coal business.
Forward-Looking Statements
Certain information set forth in this press
release contains "forward-looking statements" and "forward-looking
information" under applicable securities laws. Except for
statements of historical fact, certain information contained herein
relating to projected sales the nine months ended September 30, 2013 constitutes forward-looking
statements which include management's assessment of future plans
and operations and are based on current internal expectations,
estimates, projections, assumptions and beliefs, which may prove to
be incorrect. Some of the forward-looking statements may be
identified by words such as "estimates", "expects" "anticipates",
"believes", "projects", "plans", "outlook", "capacity" and similar
expressions. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause the Company's actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to: risks that
the actual production or sales for the 2013 fiscal year will be
less than projected production or sales for these periods; risks
that the prices for coal sales will be less than projected or
expected; liabilities inherent in coal mine development and
production including restarting idled mines; geological, mining and
processing technical problems; inability to obtain required mine
licenses, mine permits and regulatory approvals or renewals
required in connection with the mining and processing of coal;
risks that the Company's coal preparation plant will not operate at
production capacity during the relevant period, unexpected changes
in coal quality and specification; variations in the coal mine or
coal preparation plant recovery rates; dependence on third party
coal transportation systems; competition for, among other things,
capital, acquisitions of reserves, undeveloped lands and skilled
personnel; incorrect assessments of the value of acquisitions;
changes in commodity prices and exchange rates; changes in the
regulations with respect to the use, mining and processing of coal;
changes in regulations on refuse disposal; the effects of
competition and pricing pressures in the coal market; the
oversupply of, or lack of demand for, coal; inability of management
to secure coal sales or third party purchase contracts; currency
and interest rate fluctuations; various events which could disrupt
operations and/or the transportation of coal products, including
labour stoppages and severe weather conditions; the demand for and
availability of rail, port and other transportation services; the
ability to purchase third party coal for processing and delivery
under purchase agreements; and management's ability to anticipate
and manage the foregoing factors and risks. The forward-looking
statements and information contained in this press release are
based on certain assumptions regarding, among other things, coal
sales being consistent with expectations; future prices for coal;
future currency and exchange rates; the Company's ability to
generate sufficient cash flow from operations and access capital
markets to meet its future obligations; the regulatory framework
representing royalties, taxes and environmental matters where the
Company conducts business; coal production levels; and the
Company's ability to retain qualified staff and equipment in a
cost-efficient manner to meet its demand. 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. The reader is cautioned not to
place undue reliance on forward-looking statements. The Company
does not undertake to update any of the forward-looking statements
contained in this press release unless required by law. The
statements as to the Company's capacity to produce coal are no
assurance that it will achieve these levels of production or that
it will be able to achieve these sales levels.
The TSX Venture Exchange has in no way
passed on the merits of this news release. Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Corsa Coal Corp.