Last updated on April 19, 2014 at 5:20 EDT

Xinergy Ltd. Reports Second Quarter 2012 Operating Results

August 13, 2012

Toronto Stock Exchange: XRG

      o Received all requisite permits at Blue Knob, enabling production at
        our second surface mine at South Fork
      o Secured a $20.0 million financing commitment for a first lien,
        senior secured note with a three year maturity at an interest rate
        of 9.875%
      o Entered into definitive documentation to acquire for a purchase
        price of $4 million a mid-volatility metallurgical coal property
        adjacent to our South Fork property, which, upon closing, would
        significantly increase our premium mid-vol met reserves and, upon
        project completion, our production.
      o Idled Raven Crest and began idling True Energy mining operations
        due to market conditions
      o Maintaining a Strong Balance Sheet with Liquidity of $53.5 million
        as of June 30, 2012
      o Updating 2012 and 2013 Financial Guidance

KNOXVILLE, TN, Aug. 13, 2012 /PRNewswire/ – Xinergy Ltd., (TSX: XRG) (“Xinergy”
or the “Company”), a Central Appalachian coal producer, today announced
operating results for the three months ended June 30, 2012, together
with its Management’s Discussion and Analysis (“MD&A”) for the
corresponding period.  These documents are posted on SEDAR at www.sedar.com and on the Company’s website at www.xinergycorp.com.

The Company reported a second quarter net loss of $14.5 million or $0.27
per diluted share in the quarter ended June 30, 2012 as compared to a
net loss of $2.8 million or $0.05 per diluted share last year.  EBITDA
and Adjusted EBITDA for the second quarter 2012 was $(5.4) million
compared to $18.1 million and $7.1 million, respectively, for the
comparable period last year.  The increased net loss and decrease in
EBITDA were a result of significantly lower production and sales during
the second quarter of 2012.

In the second quarter of 2012, the Company reported coal revenues of
$23.1 million on 363,495 tons sold ($63.37 per ton) compared to $40.6
million on 510,381 tons sold ($79.62 per ton) for the same quarter a
year ago.  Total cash costs were $21.6 million or $79.22 per ton
produced compared to $30.0 million or $58.39 per ton a year ago.

Matt Goldfarb, Xinergy’s Interim CEO, commented: “We continue to manage
through near-term cyclical and secular challenges in the domestic coal
industry, with the thermal coal market beginning to show signs of a
recovery while the fundamentals of the metallurgical coal market have
begun to reflect increasing concern surrounding growth rates in Asia
and economic uncertainty in Europe.  The Company remains constructive
on the long-term market position of our high quality metallurgical and
low-cost CAPP thermal assets, and has accordingly prioritized a
measured approach to our operating portfolio and balance sheet
stability as we await signs of a more pronounced recovery.  Xinergy has
taken decisive steps to align our operations for today’s market
environment, having idled our Raven Crest and True Energy operations as
we continue our efforts to efficiently manage inventory.  While we have
attempted to relocate certain employees from idled operations to our
South Fork mid-vol met operations, we regretfully had no other option
than to further reduce workforce as we continued to curtail production
to match a lower demand environment.”

“On a positive note, we are pleased to announce that we have entered
into definitive documentation to acquire for $4 million cash a mid-vol
met property adjacent to our South Fork operation which we anticipate
would, if consummated, significantly increase our mid-vol metallurgical
production capacity in West Virginia upon project completion. In early
August, we received requisite permits to begin mining operations at
Blue Knob, which is our second surface mine at our South Fork complex,
and further anticipate receipt of all requisite permits to commence
construction of our preparation plant and rail load-out facility at
South Fork during the third quarter.”

Financial Overview

The following tables present selected balance sheet, statement of
operations and sales and operating statistics for Xinergy.

                       As of         As of         As of          As of
                      June 30       March 31    December 31      June 30
    ($'000)             2012          2012         2011            2011

    Balance Sheet                                                         

      Cash and cash                             $             $
      equivalents   $   53,454   $     69,465        72,983        145,592

      Total current
      assets            78,828        103,688       117,269        171,196

      Total assets     257,693        282,854       289,701        295,525

      Total current
      liabilities       22,368         30,835        40,309         36,751

      liabilities      222,106        225,308       224,803        218,611

      equity            13,220         26,711        24,589         40,163

                                              2012                  2011

                       months    Three months   Six months    Three months
    ($'000, except     ended        ended          ended         ended
    per share)        June 30      March 31       June 30       June 30

    Statement of

      Coal revenues $   23,143   $     29,946   $    53,090   $     40,637

      Cost of coal
      sales             26,372         30,507        56,879         29,954

      Gross margin     (3,229)          (561)       (3,789)         10,683

      (Loss) income
      before taxes    (18,070)          2,372      (15,698)        (5,289)

      Net (loss)
      income          (14,474)          1,690      (12,784)        (2,817)

      Basic and
      diluted net
      income (loss)
      per share         (0.27)           0.03        (0.23)         (0.05)

                                              2012                   2011

                   Three months    Three months   Six months   Three months
                      ended           ended         ended         ended
                     June 30        March 31       June 30       June 30

    Sales &

      Tons sold         363,495         425,697      789,192        510,381

      Tons              272,999         380,173      653,172        513,866

      Sales        $      63.67   $       70.35   $    67.27   $      79.62

      COGS/ton     $      72.55   $       71.66   $    72.07   $      58.69

      Gross        $     (8.88)   $      (1.31)   $   (4.80)   $      20.93

      Cash         $      79.22   $       66.99   $    72.11   $      58.39


Thermal & Metallurgical Coal Production and Sales

The below revised coal sales guidance is as follows:

                                2012 Thermal Coal Full Year Sales Guidance 

                            Revised Guidance              Previous Guidance

    Straight Creek       0.7--0.8 million       0.6--0.8  million
                                          tons                         tons

    Raven Crest          0.2--0.3 million        0.2--0.3 million
                                          tons                         tons

                         0.9--1.1 million        0.8--1.1 million
                                          tons                         tons

                                 2013 Thermal Coal Full Year Sales Guidance

                            Revised Guidance                               

    Straight Creek        0.7-0.9 million tons                             

    Raven Crest           0.3-0.4 million tons                             

                          1.0-1.3 million tons                             

                           2012 Metallurgical Coal Full Year Sales Guidance

                            Revised Guidance            Previous Guidance

    South Fork             80,000-100,000 tons        360,000--480,000 tons

    True Energy           40,000-- 50,000 tons        200,000--250,000 tons

                          120,000-150,000 tons         560,000-730,000 tons

                           2013 Metallurgical Coal Full Year Sales Guidance

                              Revised Guidance          Previous Guidance

    South Fork            300,000-400,000 tons     800,000 - 1,000,000 tons

    True Energy                                   250,000  -   300,000 tons

                          300,000-400,000 tons        1,050,000 - 1,300,000

Estimated Capital Expenditures

We have spent approximately $24.0 million on capital expenditures for
the six months ended June 30, 2012.   The Company estimates an
additional $12.0 million to $14.0 million in capital expenditures will
be incurred during the remainder of 2012, for a total of $36.0 to $38.0
million for the full year 2012.

Of the remaining capital expenditures, $11.0 million to $12.0 million
will be for the continued development and expansion of our South Fork
property including the construction of a coal preparation plant and
rail loading facility, the acquisition of additional reserves and the
payment due the previous owners upon receipt of the Blue Knob permit. 
The remaining capital expenditures of $1.0 million to $2.0 million will
be for maintenance capital that will be incurred at our other


As of June 30, 2012, the Company had available liquidity of $53.5
million calculated as follows (in millions):

    Unrestricted Cash                               $ 53.5

    Available Liquidity                             $ 53.5

    Restricted Cash                                 $ 10.4

During July, the Company secured a $20 million financing commitment from
Marret Asset Management, Inc. (“Marret”) that contemplates issuance of
$20 million in principal amount of first lien senior secured notes,
which would bear interest at a rate of 9.875% per annum, have a three
year term and be issued at an original issue discount of 98% of face

Conference Call

The Company will hold a conference call to discuss second quarter 2012
results on Tuesday, August 14, 2012 at 10:00 a.m. ET.  Interested
parties are invited to participate in the conference call, during which
prepared remarks from the Company’s management team will be followed by
a question and answer session.  The conference call will be webcast
live on the Internet with a replay available on the Company’s website
shortly after the event.

    Event:    Conference call to discuss second quarter 2012 financial

    Timing:   Tuesday, August 14, 2012 at 10:00 a.m. Eastern Time

    Phone:    Dial In 877-317-6789 (International 412-317-6789) Canada
              866-605-3852 five to ten minutes prior to scheduled start and
              reference Xinergy conference call

    Internet: Log on to the Company's website,
              five to ten minutes prior to scheduled start, follow links to
              Investors page.

    Replay:   A telephonic replay will be available approximately 1 hour
              after conclusion of the call through August 29, 2012 at 9:00
              AM ET by calling 877-344-7529 (International 412-317-0088)
              and entering conference number 10017141.  Replay of the
              webcast will also be available on the Company's website.

About Xinergy Ltd.

Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly
owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal
mining in eastern Kentucky, West Virginia and Virginia. Xinergy sells
high quality thermal and metallurgical coal to electric utilities,
steelmakers and industrial companies. For more information, please
visit www.xinergycorp.com.



SOURCE Xinergy Ltd.

Source: PR Newswire