TORONTO, Nov. 29, 2012 /CNW/ - Pacific Coal Resources Ltd. (TSXV: PAK)
has filed today its unaudited interim condensed consolidated financial
statements for the three and nine months ended September 30, 2012,
together with its management's discussion and analysis ("MD&A") for the
corresponding period. All financial figures contained herein are
expressed in U.S. dollars unless otherwise noted. These documents will
be posted on the Company's website at www.pacificcoal.ca and under the Company's profile at www.sedar.com.
Hernan Martinez, Executive Chairman, commented: '"The second half of
2012 has thus far seen the Company re-focus on its core competencies by
selling our BACF investment and signing an MOU for the sale of our
Barranquilla port interest. The sale of the BACF investment, which
closed in October, provided us with $5 million in cash, which will be
used in operating and selling activities at our producing coal and coke
sites. Coal operations continued through the third quarter of 2012,
with 341,248 tonnes of thermal coal produced at our La Caypa and Cerro
Largo sites. We expect production improvements and cost reductions at
La Caypa as we replace the current operator in the fourth quarter. The
Company's cost cutting program resulted in a 20% reduction in G&A
expenses in the third quarter compared to the second quarter of 2012,
with an expected quarterly run rate as of the fourth quarter of 2012
that is approximately 30% below the average in 2011. Management
believes the decisions made and actions taken during the quarter and
through the remainder of 2012 are positioning the Company towards
significantly improved operations and liquidity."
Financial and Operating Summary
A summary of the financial and operating results for the three and nine
months ended September 30, 2012 and 2011 is as follows:
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Third Quarter
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Nine Months Ended September 30
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(000's except per share and operating data)
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2012
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2011
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2012
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2011
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Operational
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Tonnes of coal produced
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341,248
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400,909
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993,325
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1,070,209
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Average stripping ratio - operations
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11.38
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7.61
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10.60
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7.38
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Tonnes of coal sold(1) |
366,678
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460,189
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965,948
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1,217,389
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Average realized price per tonne sold
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$ 92.53
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$ 101.01
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$ 97.67
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$ 97.65
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Operating margin per tonne sold(2) |
(5.76)
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4.12
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(13.95)
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10.18
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Financial
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Revenues
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$ 35,033
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$ 46,485
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$ 98,654
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$ 118,877
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Gross margin(3) |
(4,120)
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(937)
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(20,447)
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6,371
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Net (loss) earnings attributed to shareholders(4) |
(15,201)
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(1,126)
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(85,827)
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(46,380)
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Basic and fully diluted (loss) earnings per share
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(0.05)
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0.00
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(0.27)
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(0.16)
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Total cash
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135
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14,267
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135
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14,267
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Total assets
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318,462
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392,112
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318,462
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392,112
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Total debt (5) |
39,701
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32,012
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39,701
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32,012
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(1)
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Includes coal purchased from third parties for sale.
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(2)
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See additional financial measures in MD&A.
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(3)
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"Gross margin" represents total revenues, net of operating costs,
transportation and port services costs, selling costs, depreciation,
depletion and amortization, and impairment charges related to
inventory.
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(4)
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2012 includes a non-cash impairment writedown of $45.5 million;
including $8.0 million in the third quarter triggered by the planned
sale of the Barranquilla port concession and $35.6 million relating to
impairment of the Cerro Largo property in the second quarter.
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(5)
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Includes bank indebtedness, long-term debt (including current portion),
and obligations under finance leases (including current portion).
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Third Quarter Highlights
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The Company produced 341,248 tonnes of coal during the third quarter of
2012, representing a 2% increase over the 335,008 tonnes produced in
the second quarter of 2012. The Company's stripping ratio for the third
quarter was 11.38:1.
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Production at La Caypa was 251,525 tonnes representing a decrease of
approximately 6% from the second quarter of 2012 and 72% of its planned
production. Production was significantly impacted by issues with the
mine operator and destabilization of the mine footwall in August 2012.
Production at the Cerro Largo mine was 89,723 tonnes, representing an
increase of approximately 33% from the second quarter of 2012.
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Total revenues for the third quarter of 2012 were $35.0 million,
consistent with $35.2 million in the second quarter of 2012, on the
strength of coal sales of 366,678 tonnes, at an average realized price
of $92.53 per tonne.
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During the third quarter of 2012, cost saving initiatives contributed to
a 20% decrease 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%
decreases already realized in the first and second quarters of 2012
respectively. G&A in the third quarter included $0.6 million of
one-time severance costs associated with staff reductions and $0.4
million of asphaltite research costs. The Company anticipates a
quarterly G&A run rate of approximately $2.75 million in the fourth
quarter of 2012.
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In October 2012 the Company sold its Blue Advanced Colloidal Fuels
("BACF") investment for cash proceeds of $5.0 million and in November
2012 signed an MOU in respect of its interest in Sociedad Portuaria
Terminal de las Flores S.A. ("SPTF"), which holds the Barranquilla port
concession. The cash generated by these transactions will be used in
the Company's operating and selling activities at its producing coal
and coke sites. Sale of the BACF investment contributed to the $3.0
million cash balance at November 29, 2012.
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The Company continues to work with SRK Consulting (UK) Ltd, to finalize
the Company's 43-101 updated technical reports. The Cerro Largo report
is expected to be released in the fourth quarter of 2012. The La Caypa
report is expected in the second quarter of 2013.
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The net loss of $15.2 million ($0.05 per share) in the third quarter of
2012 includes a $8.0 million ($0.02 per share) non-cash impairment
writedown of SPTF triggered by its planned sale.
Q3 2012 - La Caypa
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Production of Coal
(metric tonnes)
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Waste
(bcm (1))
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Strip Ratio
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Actual Pit
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251,525
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1,966,372
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7.82:1
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South Pit
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392,674
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Total
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251,525
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2,359,046
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9.38:1
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(1) "BCM" is Bank Cubic Metres
During the third quarter of 2012, the Company produced 251,525 tonnes at
La Caypa, down approximately 6% from the second quarter and 72% of
planned production. Production at La Caypa during the quarter was
negatively impacted by the mine operator's general lack of equipment
for loading, hauling, and support at the mine and was compounded by
destabilization of the mine footwall in the month of August. Issues
with the mine operator resulted in a breach of their contractual
obligations, which led the Company to begin the process of replacing
them during the fourth quarter of 2012.
Operational stripping ratio at La Caypa, up slightly to 7.82 in the
third quarter of 2012 reflected the impact of the mine sidewall
development during the quarter. Total stripping ratios at La Caypa
include costs incurred in moving waste volumes from the south pit.
Q3 2012 - Cerro Largo
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Production of Coal
(metric tonnes)
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Waste
(bcm (1))
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Strip Ratio
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Total
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89,723
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1,918,289
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21.38:1
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(1) "BCM" is Bank Cubic Metres
The Company's production at Cerro Largo of 89,723 tonnes in the third
quarter of 2012 was an increase of approximately 33% from second
quarter of 2012. Consistent with the second quarter, the Company
continued addressing mud concentration concerns at the bottom of the
open pit, although efforts to correct the issue were noted during the
quarter with the increase in production and improvement of the
stripping ratio to 21.38:1 from 25.53:1 in the second quarter of 2012.
Q3 2012 - Jam
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Q3 2012
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Q3 2011
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Tonnes produced
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476
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The Company's Jam operation commenced production in the fourth quarter
of 2011. In the third quarter of 2012, given current coke market trends
the Company decided to maintain production at minimum levels. The
Company's Jam activity has focused on repairs to coking infrastructure,
with anticipated significant production in the first quarter of 2013.
Revised production guidance
As a result of reduced production in the third quarter of 2012 and the
expected change in operator, the Company's 2012 production target at La
Caypa has been revised to 970,000 tonnes. At Cerro Largo, in light of
the third quarter results and the ongoing work required to clear the
mud concentration in the pit, the Company has revised its 2012
production target for Cerro Largo to 400,000 tonnes.
Corporate update
The Company plans to provide a corporate update and an update on its
strategic plan in a subsequent press release to be issued next week.
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.