Pacific Coal Resources Ltd. announces fourth quarter and full year 2011 financial results and provides Q1 2012 operational and corporate update
TORONTO, April 25, 2012 /PRNewswire/ – Pacific Coal Resources Ltd. (TSXV: PAK)
has filed today its audited consolidated financial statements for the
year ended December 31, 2011, 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. The Company also provided an operational and corporate update on its
first quarter 2012 production at its La Caypa, Cerro Largo, and C.I.
Luis Carvajales, Chief Executive Officer, commented: “2011 was an important year in the development of Pacific Coal. In
addition to acquiring the Cerro Largo mine and Barranquilla Port, we
achieved over 96% of our projected production totals from the Company’s
La Caypa and Cerro Largo mines. We remain focused in 2012 on expanding
our margins and continuing to reduce our strip ratio at Cerro Largo,
and we believe that we have laid a solid foundation to significantly
ramp up thermal coal production at La Caypa and Cerro Largo, and
increase coke production at C.I. Jam.”
Financial and Operating Summary
A summary of the financial and operating results for the three and
twelve months ended December 31, 2011 is as follows:
_____________________________________________________________________ | | | | Period from | | | | Year ended |incorporation| | | Fourth Quarter | December | on May 4, | | | | 31, 2011 | 2010 to | | | | |December 31, | | | | | 2010 | |_______________|_________________________|_____________|_____________| |(000's except | | | | | |per share and | | | | | |operating data)| 2011 | 2010 | | | |_______________|____________|____________|_____________|_____________| | | | | | | |_______________|____________|____________|_____________|_____________| |Operational | | | | | |_______________|____________|____________|_____________|_____________| |Tonnes of coal | | | | | |produced | 356,541| 272,704| 1,426,750| 767,381| |_______________|____________|____________|_____________|_____________| |Average | | | | | |stripping ratio| | | | | |- operations | 7.79:1| 7.90:1| 7.48:1| 8.73:1| |_______________|____________|____________|_____________|_____________| |Tonnes of coal | | | | | |sold (1) | 477,127| 270,304| 1,694,516| 848,746| |_______________|____________|____________|_____________|_____________| |Average | | | | | |realized price | | | $ | | |per tonne sold |$ 101.12| 98.52| 98.62| 91.01| |_______________|____________|____________|_____________|_____________| |Operating | | | | | |margin per | | | | | |tonne sold (2) | 4.03| 15.39| 7.38| 8.69| |_______________|____________|____________|_____________|_____________| | | | | | | |_______________|____________|____________|_____________|_____________| |Financial | | | | | |_______________|____________|____________|_____________|_____________| |Revenues (3) |$ 48,813|$ 26,629|$ 167,690| $ 77,246| |_______________|____________|____________|_____________|_____________| |Gross margin | (618)| 3,574| 5,753| 6,024| |_______________|____________|____________|_____________|_____________| |Net (loss) | | | | | |earnings | | | | | |attributed to | | | | | |shareholders | (7,236)| (34)| (53,616)| 2,279| |_______________|____________|____________|_____________|_____________| |Basic and fully| | | | | |diluted (loss) | | | | | |earnings per | | | | | |share | (0.02)| (0.01)| (0.18)| 0.03| |_______________|____________|____________|_____________|_____________| |Total cash | 11,062| 5,000| 11,062| 5,000| |_______________|____________|____________|_____________|_____________| |Total assets | 369,562| 259,289| 369,562| 259,289| |_______________|____________|____________|_____________|_____________| |Total long-term| | | | | |debt, including| | | | | |current portion| 35,942| 13,820| 35,942| 13,820| |_______________|____________|____________|_____________|_____________|
1. Includes tonnes of coal purchased from third parties for sale 2. See "Additional Financial Measures" 3. Includes 2,320 tonnes of coke sold in the fourth quarter of 2011
Fourth Quarter Highlights
-- Total revenues for the fourth quarter of 2011 increased by 5% over the third quarter of 2011 to $48.8 million credited to the sale of 0.5 million tonnes of coal sold at an average realized price of $101.12. -- Pacific Coal produced 356,541 tonnes of coal in the fourth quarter of 2012. Production in the fourth quarter of 2012 was approximately 12% less than in the third quarter of 2011 as the Company focused its effort and resources on development work at the south pit at La Caypa. Production was also negatively affected by delays caused by extreme weather conditions in September 2011 which resulted in the collapse of a bridge located near La Caypa which subsequently out of use for 45 days. The Company repaired the bridge and reconstruction was completed in November 2011 at a cost of $0.3 million, which saved the Company approximately $1.5 million in the fourth quarter by avoiding potential loss of production with estimated savings of $3.3 million in each of the first two quarters of 2012 had it used alternate trucking routes while waiting for the government to repair the bridge.
Full Year 2011 Highlights
-- Pacific Coal produced approximately 1.5 million (1)tonnes of thermal coal during 2011, reaching over 96% of its production guidance for the year despite severe weather related delays during the fourth quarter. The Company expects 2012 coal production to increase more than 40% to approximately 2.2 million tonnes. -- Revenues for 2011 were $167.7 million, more than double the previous year, as a result of increased production and sustained strong coal prices during 2011. -- The Company completed the refurbishment of the coker infrastructure and 160 ovens at C.I. Jam during the third quarter of 2011, allowing the Company to produce 7,226 tonnes of coke in the fourth quarter of 2011. Coke production in 2012 is expected to reach approximately 72,000 tonnes. -- During the third quarter, the Company entered into a sales purchase agreement with LCC Group, an established energy services company based in Ireland, for the supply of 700,000 tonnes per annum, commencing upon completion of deliveries under their existing contract in 2014 and extending the relationship between the two companies to 2019. Management has estimated the value of this agreement at approximately $350 million based on projected forward prices for coal. -- During 2011, the Company completed the acquisition of the Cerro Largo mine, adding 11.6 million tonnes of coal resources with potential for additional resources through greenfield exploration. -- The Company has undertaken exploration at both the La Caypa and Cerro Largo mines and updated NI 43-101 technical reports for the open pit and underground resources at both mines are expected to be completed in the second quarter of 2012. The Company has also commenced geophysical studies at La Tigra, where exploration is progressing and is expected to continue through the third quarter of 2012. -- In March 2011, the Company completed the acquisition of a 96.4% interest in a port concession in Barranquilla, Colombia. Engineering, design and development work is ongoing with operations expected to commence in 2012. -- In the second quarter of 2011, the Company took possession of a leased truck fleet of 100 trucks serving both La Caypa and Cerro Largo which contributed to an 11% decrease in transportation costs per tonne sold from Q3 to Q4.
1. Includes 0.1 million tonnes produced in the first quarter of 2011 at Cerro Largo prior to the March 2011 acquisition.
Q1 2012 Operational and Corporate Update
Luis Carvajales, Chief Executive Officer of Pacific Coal, commented: “We
made good progress with regard to the Company’s production during the
first quarter of 2012, producing 317,070 tonnes of thermal coal at our
La Caypa and Cerro Largo mines. We have also made important progress
with the development work both at La Caypa’s south pit and on Cerro
Largo’s integrated mine plan. The Company remains committed to
expanding its margins and reducing its costs on a per tonne basis.”
Q1 2012 Production at La Caypa
___________________________________________________ | |Production of Coal| Waste |Strip Ratio| | | (metric tonnes) | (bcm) | | |__________|__________________|_________|___________| |Actual Pit| 185,175|1,297,248| 7.01:1| |__________|__________________|_________|___________| |South Pit | -| 321,424| NA| |__________|__________________|_________|___________| |Total | 185,175|1,618,672| 8.75:1| |__________|__________________|_________|___________|
During the first quarter of 2012, the Company produced 185,175 tonnes at
La Caypa, completing 87% of its planned production, despite a two week
blockade as a consequence of an illegal strike by employees of a mine
subcontractor (see Pacific Coal press releases dated January 30, 2012
and February 6, 2012). Stripping ratios at La Caypa now reflect waste
volumes moved from the south pit.
Q1 2012 Production at Cerro Largo – La Divisa
______________________________________________ | |Production of Coal| Waste |Strip Ratio| | | (metric tonnes) | (bcm) | | |_____|__________________|_________|___________| |Total| 131,895|2,135,468| 16.19:1| |_____|__________________|_________|___________|
In the first quarter of 2012, the Company made substantial progress at
Cerro Largo in both production and reduction of strip ratio. Production
was up over 50% from the previous quarter, improving to 131,895 tonnes
from 87,297 tonnes in the fourth quarter of 2011, while the strip ratio
was reduced to 16.19:1 from 17.72:1 in the fourth quarter of 2011.
While coal production at Cerro Largo was 77% of planned production,
consistent improvement and performance, coupled with the commissioning
of additional equipment by the operator, have placed the Company on
track to achieving its 800,000 tonne production target by the end of
The Company experienced some logistical disruption at Cerro Largo
associated with the collapse of a bridge on the route on December 26,
2011, which forced an additional 200 kilometers detour until February
21, 2012. However, the cost impact was mitigated and transport ensured
by the utilization of the Company’s own truck fleet (a cost assessment
will be provided with the Q1 financials). Additionally, Pacific Coal
joined efforts with other coal producers, with the coordination of
Transportes Sanchez Polo and the Ministry of Transport, in providing a
temporary solution to the matter. The Company has also made a minor
financial contribution to help fund a study that will report on the
structural condition of the bridges on coal routes between La Caypa and
Santa Marta and between Cerro Largo and Santa Marta.
Coal sales during the first quarter of 2012 from La Caypa, Cerro Largo
and third party production totaled 252,526 tonnes.
CI Jam Operations in Q1 2012
____________________________________________________________ |Metallurgical Coal |Q1 2012 Tonnes|Q4 2011 Tonnes| |______________________________|______________|______________| | Third Party Purchases | 14,645| 23,400| |______________________________|______________|______________| | Company Production | 1,123| 1,618| |______________________________|______________|______________| | | |____________________________________________________________| |Coke Operation |Q1 2012 Tonnes|Q4 2011 Tonnes| |______________________________|______________|______________| | Metallurgical Coke Produced| 10,547| 7,266| |______________________________|______________|______________| | Metallurgical Coke Sales | 4,796| 2,361| |______________________________|______________|______________|
Discussions have been undertaken with the operator, Geoformaciones,
regarding actual processing cost reduction and a tariff revision for
April 2012 onwards.
Exploration continues at all of the Company’s properties with the
objective of updating its resources and reserves through the completion
of National Instrument 43-101 compliant technical reports. Drilling
programs at La Caypa, La Divisa and C.I. Jam were at 90% completion as
of March 31, 2012. However, such drilling plans have been extended and
increased in coordination with SRK, aiming to produce additional
information necessary for the Caypa underground project and the North
of Caño Canime area at Cerro Largo. The technical reports are now
expected to be completed by end of the second quarter of 2012 and
43-101 reports are expected to be issued by Q3 2012.
The Company continues to advance its Colloidal Asphaltite in Water
(“CAW”) and Colloidal Coal in Water (“CCW”) projects. As mentioned in
the Pacific Coal news release dated January 24, 2012, CAW combustion
trials were conducted during the second week of December 2011,
producing positive results. A visitor day was held at the Babcock &
Wilcox facilities to receive a full briefing on trial results on March
28, 2012. Two potential CAW/CCW Caribbean-based customers participated
in the visit and conducted preliminary discussions on further greater
scale trials at their facilities. Combustion trials on CCW are
scheduled for June 2012. A fact sheet on the properties, uses and
commercialization opportunities for asphaltite is available on the
Company’s website at www.pacificcoal.ca.
Conceptual design, tender issuance and bid evaluation for the
underground mine project at La Caypa with the support of SRK continue
to progress according to plan. This process is expected to be concluded
by the end of Q2 2012 and operations to commence in 2013.
La Tigra Exploration
Geophysical, metalotelluric, and gravimetric studies are in progress and
results are now expected for end April 2012. Such results will provide
further precise information which will enable the assembly of a full
exploration program involving the Company’s rigs (five in total) which
is expected to be undertaken from April through August 2012.
Land movement and preparation for early coal/coke yards at the port has
commenced. Engineering and design work is ongoing with Nathan and
Associates. Development work continues with the goal of having early
coke export operations by the third quarter of 2012. Q2 2012 activities
will be focused on concluding land preparation work, securing a deck
barge to be used as a provisional berth and setting up the proper
operational conditions for the early operation.
As at April 13, 2012, approximately 11.1 million shares had been
purchased for cancellation under the normal course issuer bid,
previously announced on July 4, 2011. The Company currently has 322.1
million shares outstanding.
Management will hold a conference call on Wednesday, April 25, 2011 at
10:00 a.m. (Eastern Time) (9:00 am Bogota time) to discuss the fourth
quarter and 2011 results.
Call-in details are as follows:
Toronto & International: (647) 427-7450 North America: (888) 231-8191 Conference ID: 74388584
An encore of this conference call will be available by dialing
416-849-0833 or 1-855-859-2056 with the above conference ID number
until May 9, 2012.
About Pacific Coal Resources Ltd.
Pacific Coal Resources Ltd. is a Canadian-based mining company focused
on coal, coking coal, asphalt and asphaltite exploration, development
and production from producing, development-stage and exploration-stage
properties in Colombia. The Company has acquired or entered into
agreements to acquire various interests in several operating coal mines
and projects, representing a substantive coal and asphaltite
exploration and production area throughout Colombia. Pacific Coal is
committed to implementing its exploration and development strategy with
a comprehensive environment, safety and community program, meeting
international standards of best practice.
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.