TORONTO,
Nov. 28, 2013 /PRNewswire/ - Pacific
Coal Resources Ltd. (TSXV: PAK) has filed its unaudited interim
condensed consolidated financial statements for three months ended
September 30, 2013, 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 Company continues to improve
its results; the adjusted EBITDA in the third quarter of 2013 was
an increase of over 70% from the second quarter of 2013. The
adjusted EBITDAs of the last two quarters have been the highest
since the first quarter of 2011. The Company also continues
to cut costs, recording a quarterly G&A expense less than the
forecast for the third quarter in a row and reducing the 2013
G&A expectation by $1.0 million.
We are extremely pleased with the Company's progress and look
forward to even better results in the future."
Financial and Operating Summary
A summary of the financial and operating results
for the third quarter of 2013 is as follows:
|
|
|
|
|
|
|
Third Quarter |
(000's except per share and operating data) |
2013 |
|
2012 |
|
|
|
|
|
|
Operational |
|
|
|
|
|
Tonnes of coal produced |
|
395,499 |
|
|
341,248 |
Average stripping ratio - operations |
|
8.48:1 |
|
|
11.38:1 |
Tonnes of coal sold |
|
356,299 |
|
|
366,678 |
Average realized price per tonne sold |
$ |
102.71 |
|
$ |
92.53 |
Operating margin per tonne sold(1) |
$ |
18.77 |
|
$ |
(5.76) |
|
|
|
|
|
|
Financial |
|
|
|
|
|
Revenues |
$ |
37,189 |
|
$ |
35,033 |
Gross margin(1) |
|
5,001 |
|
|
(4,120) |
Adjusted EBITDA(1) |
|
5,252 |
|
|
(5,035) |
Earnings (loss) from operations |
|
11,376 |
|
|
(15,676) |
Net earnings (loss) attributed to
shareholders |
|
9,021 |
|
|
(15,201) |
Basic and fully diluted (loss) earnings per
share(2) |
|
0.18 |
|
|
(0.33) |
Total cash |
|
448 |
|
|
135 |
Total assets |
|
266,513 |
|
|
318,462 |
Total debt(3) |
$ |
63,098 |
|
$ |
59,483 |
|
|
(1) |
Adjusted EBITDA and operating margin per tonne sold are
non-GAAP finance performance measures and gross margin is an
additional GAAP financial performance measure, none of which have
standardized definitions under IFRS. See pages 18-19 of the
Company's Third Quarter of 2013 MD&A for further details. |
(2) |
At a special meeting held on March
11, 2013, the Company's shareholders approved a share
consolidation, in which seven old common shares of the Company were
exchanged for one new common share. This also resulted in a
consolidation of the Company's outstanding share purchase warrants
and stock options. |
(3) |
Total debt includes bank indebtedness, long-term debt, finance
leases and interest accruing Norcarbon S.A.S. amounts owed to
Masering S.A.S. (September 30, 2013 - $23.7 million, September 30,
2012 - $19.8 million). |
|
|
Third Quarter Highlights
- The Company produced 395,499 tonnes of coal in the third
quarter of 2013. This represents a 16% increase over the
third quarter of 2012 (341,248) and is consistent with production
in the second quarter of 2013 (398,865). Quarterly production
of 315,933 tonnes at La Caypa was consistent with the second
quarter of 2013 (320,436), which was the highest for the mine since
the first quarter of 2011. The La Caypa operational stripping ratio
of 7.74:1 in the third quarter of 2013 was the lowest for the mine
since the second quarter of 2012. This represents a 3%
decrease from the second quarter of 2013 (8.02:1).
- Total coal revenues in the third quarter of 2013 of
$36.6 million reflect sales of
356,299 tonnes of coal at an average realized price of $102.71 per tonne. This represents an 8%
increase over the third quarter of 2012 ($33.9 million).
- Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") for the third quarter of 2013 was
$5.3 million, the highest since the
first quarter of 2011. This represented a significant improvement
over the third quarter of 2012 and the second quarter of 2013 (loss
of $5.0 million and earnings of
$3.1 million, respectively). The
total operating margin of $18.77 on a
per tonne sold basis in the third quarter of 2013 was also the
highest since the first quarter of 2011.
- Earnings from operations and net earnings in the third quarter
of 2013 were the highest the Company has ever recorded
($11.4 million and $7.4 million respectively), as a result of
favourable domestic sales contracts and continued cost reduction at
the Company's La Caypa mine site, in addition to the port
impairment reversal recognized in the quarter.
- In October and November 2013, the
Company signed sale agreements for $29.0
million for 85% of the Barranquilla port, with the Company
retaining the remaining 15%. In September 2013, the Company signed a contract for
a 40,000 tonne pilot project for La Caypa's underground mine.
The Company also signed a rental agreement for use of its coke
plant in August 2013 until the end of
2014.
- In the third quarter of 2013, the Company continued to record a
quarterly G&A lower than forecasted. The $1.4 million (excluding $0.1 million of depreciation, depletion and
amortization ("DDA")) recorded is 11% and 13% lower than the amount
recorded in the first and the second quarter of 2013 respectively,
and 23% less than the $1.9 million
originally forecasted.
Q3 2013 - La Caypa
|
Production of Coal
(metric tonnes) |
Waste
(BCM (1)) |
Strip Ratio |
North Pit |
315,933 |
2,444,648 |
7.74:1 |
South Pit |
- |
916,406 |
- |
Total |
315,933 |
3,361,054 |
10.64:1 |
(1) "BCM" is Bank
Cubic Metres
During the third quarter of 2013, the Company
produced 315,933 tonnes at La Caypa, achieving 105% of its planned
production, and a 26% increase from the 251,525 tonnes produced in
the third quarter of 2012. The increase can be attributed to the
positive results of the collaboration between the Company's La
Caypa team and the mine's new operator, which began production in
February 2013, in addition to the
destabilization of the mine footwall in August 2012 which limited production in the third
quarter of 2012. Given that La Caypa produced 755,349 tonnes of
coal in the first nine months of 2013, including the limited
production in the first quarter as the new operator ramped-up, the
Company is in-line to meet the anticipated production target of 1.0
million tonnes at La Caypa in 2013. This would represent a
12% production increase from 2012.
The operational stripping ratio was 7.74:1 in the
third quarter of 2013, which was consistent with the ratio of
7.82:1 in the third quarter of 2012. The total stripping
ratio for the third quarter of 2013 (10.64:1) includes development
work which took place at the south pit to prepare the site for
production, which is expected to begin by the end of 2013.
Q3 2013 - Cerro Largo
|
Production of Coal
(metric tonnes) |
Waste
(BCM) |
Strip Ratio |
Total |
79,566 |
910,694 |
11.45:1 |
In the third quarter of 2013, the Company produced
79,566 tonnes from the Cerro Largo mine, compared to 89,723 tonnes
in the third quarter of 2012, a decrease of 11%. The third
quarter of 2013 production represented 40% of what was planned for
the three month period. The decrease can be attributed to
lower than forecasted availability of equipment for mine operations
and transportation, as the Company transitioned from use of a third
party operator to operating the mine in-house in 2013. The
Company plans to rectify the equipment issues in the fourth quarter
of 2013. As the Company continues to ramp-up in-house operations of
Cerro Largo, production targets for 2013 for Cerro Largo were
adjusted to 0.4 million tonnes, consistent with the production
levels in 2012. The Cerro Largo mine stripping ratio of 11.45:1 in
the third quarter of 2013 represented a 46% decrease when compared
to the third quarter of 2012 (21.38:1) and was the result of
production in a section of the pit with a high concentration of
coal, as compared to other sections of Cerro Largo.
Q3 2013 - Jam
The Company's metcoal production at Jam has been
suspended since late in the second quarter of 2012 as a consequence
of high costs and weak international prices and, until the end of
July 2013, the Company's coke plant
had focused on processing third party purchased materials. In
August 2013, an agreement was signed
with a third party for the rental of the Company's coke processing
plant and related equipment for approximately $0.3 million annually. This agreement ends
December 31, 2014, coinciding with
the long-term plan of the Company to re-start metcoal and coke
production in 2015, at which point the Company hopes international
prices will have rebounded.
Corporate update
In the third quarter of 2013, the Company
progressed with the strategic and operational plans that were
implemented in the first half of 2013 as part of the Company's core
competency re-focus. Operationally, the re-focus was evident as the
Company's Adjusted EBITDA was the highest since the first quarter
of 2011. Improving the profitability of its operating mines,
specifically Cerro Largo, will continue to be a focus of the
Company going forward.
Strategically, significant progress was made in
completing two goals the current senior management set upon joining
the Company, determining the future of the Barranquilla port and
eliminating the debt owed to the former operator of Cerro
Largo. First, in October and November
2013 the Company signed sale agreements relating to 85% of
the Barranquilla port (note: the transactions remain subject to
TSXV approval). The Company currently retains the remaining
15% of the concession, although the Company believes it is highly
probable this interest will be sold in the near future.
Second, in November 2013 the
Company's subsidiary Norcarbon signed a settlement agreement with
the former operator at Cerro Largo that sets out that the total
balance owed shall be paid by February
2014.
Underground mine
In September 2013
signed a contract with an experienced miner for an underground mine
at La Caypa. The miner will first complete a pilot project of
approximately 40,000 tonnes of coal, with the goal of contracting
all of the underground mining if the pilot project is
successful. The Company anticipates that preliminary work
will begin in the fourth quarter of 2013 and, assuming successful
completion of the pilot project, full operation to begin in
2014.
La Tigra exploration
The Company has signed an agreement with a third
party to perform analysis of the results of asphaltite exploration
at the La Tigra property, at the third party's cost, to determine
the site's prospects. The Company is awaiting the analysis, at
which time the Company will determine an adequate course of action
for the property.
Cost reduction program
The Company continued to exceed cost cutting
expectations in the third quarter of 2013, after forecasting the
2013 quarter run rate at $1.9 million
late last year. G&A for the third quarter surpassed
expectations by $0.3 million
($1.6 million) and $0.6 million for the nine months ended
September 30, 2013 ($5.0 million). The Company has reduced the
forecasted G&A for 2013 from $7.5
million to $6.5 million, a 52%
decrease from 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 are listed on the TSX Venture Exchange and trade under the
symbol "PAK".
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.