TORONTO,
April 30, 2013 /CNW/ - Pacific Coal
Resources Ltd. (TSXV: PAK) has filed today its audited annual
consolidated financial statements for year ended December 31, 2012, together with its management's
discussion and analysis ("MD&A") and annual information form
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: '"In 2012, the Company faced
operational issues and a contraction of international coal prices.
The Company endured this, undertaking a substantive revitalization
and altering its strategic focus, including a re-focus on core
competencies and significant operational changes at our producing
thermal coal mine sites." Looking to 2013, Mr. Martinez said "This
year, we look forward to realizing the benefits of the strategic
re-focus and to creating further efficiency and bolstering Company
performance."
Financial and Operating Summary
A summary of the financial and operating results
for the fourth quarter and full year of 2012 is as follows:
|
|
|
|
|
Fourth Quarter |
|
Twelve Months Ended December 31 |
(000's except per share and operating data) |
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
Operational |
|
|
|
|
|
|
|
Tonnes of coal produced |
|
|
274,756 |
|
|
|
356,541 |
|
|
1,268,082 |
|
|
1,426,750 |
Average stripping ratio - operations |
|
|
11.11:1 |
|
|
|
7.79:1 |
|
|
10.71:1 |
|
|
7.48:1 |
Tonnes of coal sold(1) |
|
|
304,165 |
|
|
|
477,127 |
|
|
1,270,114 |
|
|
1,694,516 |
Average realized price per tonne sold |
|
$ |
99.96 |
|
|
$ |
101.12 |
|
$ |
98.22 |
|
$ |
98.62 |
Operating margin per tonne sold |
|
|
(12.90) |
|
|
|
4.03 |
|
|
(13.57) |
|
|
7.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
30,401 |
|
|
$ |
48,813 |
|
$ |
129,055 |
|
$ |
167,690 |
Gross margin |
|
|
(5,908) |
|
|
|
(618) |
|
|
(26,355) |
|
|
5,753 |
Net (loss) earnings attributed to
shareholders(2) |
|
|
(49,868) |
|
|
|
(7,236) |
|
|
(123,752) |
|
|
(53,616) |
Basic and fully diluted (loss) earnings per
share(3) |
|
|
(1.08) |
|
|
|
(0.15) |
|
|
(2.69) |
|
|
(1.23) |
Total cash |
|
|
4,102 |
|
|
|
11,062 |
|
|
4,102 |
|
|
11,062 |
Total assets |
|
|
242,047 |
|
|
|
369,562 |
|
|
242,047 |
|
|
369,562 |
Total debt (4) |
|
|
58,584 |
|
|
|
40,434 |
|
|
58,584 |
|
|
40,434 |
(1) |
|
|
Includes coal purchased from third parties for sale. |
(2) |
|
|
The net loss for the fourth quarter of 2012 included a $39.2
million and $8.5 million impairment of Cerro Largo and Jam
operations respectively. The net loss for the year ended December
31, 2012 includes an $8.1 million impairment triggered by the
re-classification of the Company's subsidiary, Sociedad Portuaria
Terminal de las Flores S.A., to be held for sale and a $35.6
million impairment of the Cerro Largo operation. See the section
"Impairment of non-current assets" in the MD&A. |
(3) |
|
|
At a special meeting of shareholders held on March 11, 2013,
the Company's shareholders approved a share consolidation pursuant
to 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. |
(4) |
|
|
The total debt amount includes $27.6 million owed to Masering
S.A.S. at December 31, 2012 (December 31, 2011 - $4.5
million). |
2012 Highlights
- The Company produced 1,268,082 tonnes of coal in 2012.
Production at Cerro Largo in the fourth quarter of 86,414 tonnes
was consistent with the fourth quarter of 2011, although production
at La Caypa of 188,342 tonnes was lower, based primarily on the
change in operator change.
- Total revenues in 2012 of $129.1
million reflect sales of approximately 1.3 million tonnes of
coal at an average realized price of $98.22 per tonne. Total revenues for the
fourth quarter of 2012 were $30.4
million on coal sales of 304,165 tonnes, at an average
realized price of $99.96 per
tonne. Coal sales in the fourth quarter of 2012 were
approximately 70% on an FOB basis.
- The total operating margin loss on a per tonne sold basis in
the fourth quarter of 2012 was 5% lower than the 2012 operating
margin loss, but higher than the third quarter of 2012, primarily
due to a short-term production stoppage at the La Caypa mine as the
Company replaced the mine operator.
- In the second half of 2012, the Company worked to identify its
operational issues and consider changes to its future strategic
plans. This led to a new mine operator being implemented at
La Caypa and the Company signing a memorandum of understanding in
January 2013 to explore entering into
a joint venture to utilize Cerro Largo's thermal coal for a power
plant operation.
- As a result of re-focusing the Company's long-term plans, the
Company sold its investment in Blue Advanced Colloidal Fuels
("BACF") for cash proceeds of $5.0
million in the fourth quarter of 2012, but retained the
right to purchase up to 10% of BACF for $10
million in the future. The cash proceeds were used in
the Company's operating and selling activities at its producing
coal and coke sites.
- The Company initiated cost saving initiatives in the second
quarter of 2012. During the fourth quarter of 2012, these
initiatives contributed to the 26% decrease in G&A expenses to
$2.3 million compared to $3.1 million in the third quarter of 2012, in
addition to the 29% and 6% decreases already realized in the second
and third quarters of 2012 respectively. The Company anticipates a
quarterly G&A run rate of approximately $1.9 million in 2013.
- The Company has suspended updating the Company's mine 43-101
technical reports for the La Caypa and Cerro Largo mines due to the
Company's operational changes in the fourth quarter of 2012, with
the plan to re-start studies in the second quarter of 2013 and an
anticipated release of the reports at the end of the third quarter
of 2013.
- The net loss of $49.9 million
($1.08 per share) in the fourth
quarter of 2012 includes $39.2
million ($0.85 per share) and
$8.5 million ($0.18 per share) non-cash impairment writedowns
of Cerro Largo and Jam, respectively. These impairments were
triggered by changes to the mine plan and increases to the entities
working capital deficit in the case of Cerro Largo, and reductions
in international metallurgical coal and coke prices for Jam.
Outlook
The Company concluded 2012 with a brighter
outlook on the future after enduring a year with various
operational issues, as well as an international contraction in coal
prices. The Company persevered, minimizing costs where
required and implemented operational plans devised by the strong,
new senior management team. Minimizing costs included replacing the
operator at the La Caypa mine and commencing plans to self-operate
Cerro Largo, both significant decisions that the Company believes
will assist in bringing costs to reasonable levels.
At La Caypa, the Company replaced the mine
operator with Masering, the former operator at Cerro Largo.
Masering commenced operations at the site in February 2013. Significant progress has
been made with the development work at the south pit and production
is expected to commence in the first quarter of 2014. The
Company is in the process of hiring a leading international
underground operator at La Caypa with the expectation for
underground mining to also begin in the first quarter of 2014. With
Masering in place as operator, the Company anticipates producing
1.0 million tonnes of coal from La Caypa mine in 2013, a 12%
increase over the production results of 2012.
At Cerro Largo, in an effort to continue to
reduce operating costs, the Company assumed operations from
Masering in April 2013. The
Company overcame the issue with mud concentrations at the bottom of
the mine's open-pit in October 2012,
which assisted in reducing the mine's stripping ratio by 16%
between the third quarter and the fourth quarter of 2012. The
Company believes that production from the Cerro Largo mine will be
600,000 tonnes in 2013, a 60% increase from the tonnage produced in
2012.
The Company's metcoal production at the Jam mine
was suspended and coke production was limited through the second
half of 2012 as a consequence of high costs and weak international
prices. In the fourth quarter of 2012, the Company decided
that the optimal decision for Jam was to enter into a commercial
relationship with another mining company that has experience
producing metcoal and coke, and then using the coke in its future
operations or selling it to third parties. With this approach
in mind, the Company believes it can finalize a deal that would
result in coke plant production ramp-up starting in May 2013. The Company is continuing to also
look into various alternatives for refurbishment of the Jam mine to
maximize operational efficiency, with hopes to re-start metcoal
production in the second quarter of 2014.
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 analysis is expected to be
completed in the second quarter of 2013, at which time the Company
will determine an adequate course of action for the property.
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.