CANONSBURG, PA, Nov. 16,
2017 /CNW/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa"), a premium
quality metallurgical, thermal and industrial coal producer, today
reported financial results for the three and nine months ended
September 30, 2017. Corsa has filed its unaudited
Condensed Interim Consolidated Financial Statements for the three
and nine months ended September 30, 2017 and 2016 and related
Management's Discussion and Analysis under its profile on
www.sedar.com. An updated investor presentation has been
added to www.corsacoal.com.
Unless otherwise noted, all dollar amounts in this news release
are expressed in United States
dollars and all ton amounts are short tons (2,000 pounds per
ton). Pricing and cost per ton information is expressed on a
free-on-board, or FOB, mine site basis, unless otherwise noted.
Third Quarter 2017 Highlights
- Corsa reported net and comprehensive income of $6.8 million, or $0.06 per share, for the third quarter of 2017,
compared to net and comprehensive loss of $7.1 million, or $0.09 per share, for the third quarter of
2016.
- Operating cash flows for the third quarter of 2017 were
$7.4 million compared to cash used in
operations of $2.2 million for the
same period in the prior year.
- Total revenue was $80.4 million
for the third quarter of 2017, an improvement of 235% as compared
to the third quarter 2016. Metallurgical coal sales volumes
increased 44% in the third quarter of 2017 as compared to the
second quarter of 2017 and 225% compared to the third quarter of
2016. This marks the sixth consecutive quarter of above 20% or
greater growth in metallurgical coal sales volumes.
- Corsa's adjusted EBITDA(1) was $13.2 million and $12.6
million at its NAPP Division and on a consolidated basis,
respectively, for the three months ended September 30, 2017.
- Corsa achieved an average realized price per ton of
metallurgical coal sold(1) at its NAPP Division of
$112.15 in the third quarter 2017, an
increase of 61% as compared to the third quarter of 2016. This
average realized price is the approximate equivalent of
$152 to $154 on a free-on-board
terminal basis(2) and is comprised of a mix of 20% sales
to domestic customers and 80% sales to international
customers.
- The Acosta Mine successfully commenced production in early
June 2017, consistent with previous
guidance. Conditions at the mine are positive from a geologic,
equipment and hiring standpoint. Production from the Acosta Mine
will increase in the fourth quarter of 2017, as a second mining
unit and additional shifts are added.
|
(1)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Similar to most U.S.
metallurgical coal producers, Corsa reports sales and costs per ton
on an FOB mine basis and denominated in short tons. Many
international metallurgical coal producers report prices and costs
on a delivered-to-the-port basis, thereby including freight costs
between the mine and the port. Additionally, Corsa reports
sales and costs per short ton, which is approximately 10% lower
than a metric ton. For the purposes of this figure, we have
used an illustrative freight rate of $26-$28 per short ton.
Historically, freight rates rise and fall as market prices rise and
fall. As a note, most published indices for metallurgical
coal report prices on a delivered-to-the-port basis and denominated
in metric tons.
|
George Dethlefsen, Chief
Executive Officer of Corsa, commented, "Driven by volume gains and
operational efficiency, Corsa achieved increased profitability in
the third quarter of 2017 as compared to the second quarter of
2017. Our sales and operations teams continue to perform
well, with volume growth across all three classifications of
metallurgical coal sales - from company produced tons, value added
services tons, and sales and trading tons. We remain on track
to double production volumes of low volatile metallurgical coal
over the next two years. Corsa achieved a sixth consecutive
quarter of at least 20% sequential volume growth for sales of
metallurgical coal, growing 44% in the third quarter versus the
second quarter.
Within our NAPP Division, over the past number of months we have
developed, staffed, and equipped the Acosta Deep Mine, started
placing equipment orders for the Horning Mine and have positioned
the Quecreek Mine for retreat mining. This development work
is expected to translate into increased production levels in the
months ahead from the Acosta Deep and Quecreek Mines. We
project the Acosta Deep Mine to hits its run-rate production level
of 30,000 to 35,000 saleable tons per month within the next three
months. Additionally, we recently submitted our permit
application for the Keyser Mine, which we expect to be fully
permitted in the first half of 2018. In the third quarter of
2017, we started production of metallurgical coal from two surface
mines in Pennsylvania. Collectively, we expect these moves to
increase company produced metallurgical tons at the NAPP Division
by more than 50% in 2018 as compared to projected 2017
levels. Continued metallurgical production growth into 2019
can grow production to levels double that of 2017.
Strong steel pricing and production levels have helped to
sustain a high level of demand for raw materials such as
metallurgical coal. The global supply chain for metallurgical
coal remains challenged and prone to disruption. We expect
Chinese policy to continue to reduce metallurgical coal production
capacity and drive consolidation in the industry, which should
support metallurgical coal prices. We expect to see continued
volatility in metallurgical coal prices over the coming
quarters. Corsa has made excellent progress in constructing
its sales order book for 2018 and has a diversified portfolio of
price exposure to fixed prices, FOB Australia prices and FOB U.S.
East Coast prices.
We continue to remain focused on growth opportunities from our
sales and trading platform, acquisitions, and organic
projects."
Third Quarter 2017 Sales Metrics
Metallurgical Coal Sales Volume
Corsa's metallurgical coal sales in third quarter 2017 were
575,080 tons, an increase of 45% from second quarter 2017
levels. This marks the sixth consecutive quarter of at least
20% sequential quarterly sales volume growth for Corsa.
Year-to-date metallurgical coal sales volumes through September are
up 199% from first nine months of 2016 levels. A twelve month
history of Corsa's metallurgical coal sales volumes is presented
below.
Corsa's metallurgical coal sales figures are comprised of three
types of sales: (i) selling coal that Corsa produces ("Company
Produced"); (ii) selling coal that Corsa purchases and provides
value added services (storing, washing, blending, loading) to make
the coal saleable ("Valued Added Services"); and (iii) selling coal
that Corsa purchases on a clean or finished basis from suppliers
outside the Northern Appalachia region ("Sales and Trading").
In the first nine months of 2017, Corsa's sales were broken down
into the following categories.
|
Metallurgical Coal
Sales by Category (Tons)
|
|
|
Q1
2017
|
|
Q2
2017
|
|
Q3
2017
|
|
2017
YTD
|
|
|
Company
Produced
|
|
196,777
|
|
194,075
|
|
248,798
|
|
639,650
|
|
|
Purchased - Value
Added Services
|
|
63,940
|
|
79,523
|
|
81,115
|
|
224,578
|
|
|
Purchased - Sales and
Trading
|
|
34,545
|
|
124,267
|
|
245,167
|
|
403,979
|
|
|
Total
|
|
295,262
|
|
397,865
|
|
575,080
|
|
1,268,207
|
|
Financial and Operations Summary
|
|
For the three
months ended
September
30,
|
|
For the nine
months ended
September
30,
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
Increase
|
|
(in
thousands)
|
|
2017
|
|
|
2016
|
|
|
(Decrease)
|
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
Revenues
|
|
$
|
80,366
|
|
$
|
23,983
|
|
|
$
|
56,383
|
|
|
$
|
205,649
|
|
|
$
|
59,258
|
|
|
$
|
146,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales(2)
|
|
$
|
66,386
|
|
$
|
25,643
|
|
|
$
|
40,743
|
|
|
$
|
166,446
|
|
|
$
|
67,879
|
|
|
$
|
98,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
expense
|
|
$
|
4,875
|
|
$
|
3,281
|
|
|
$
|
1,594
|
|
|
$
|
13,112
|
|
|
$
|
9,026
|
|
|
$
|
4,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive
income (loss) for
the period
|
|
$
|
6,815
|
|
$
|
(7,106)
|
|
|
$
|
13,921
|
|
|
$
|
21,450
|
|
|
$
|
(23,455)
|
|
|
$
|
44,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
(used in) operating
activities
|
|
$
|
7,376
|
|
$
|
(2,185)
|
|
|
$
|
9,561
|
|
|
$
|
24,754
|
|
|
$
|
(6,710)
|
|
|
$
|
31,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
12,624
|
|
534
|
|
|
12,090
|
|
|
39,309
|
|
|
(1,881)
|
|
|
41,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal sold -
tons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal
|
|
488
|
|
177
|
|
|
311
|
|
|
1,153
|
|
|
427
|
|
|
726
|
|
|
NAPP – thermal
coal
|
|
40
|
|
61
|
|
|
(21)
|
|
|
166
|
|
|
169
|
|
|
(3)
|
|
|
CAPP – thermal
coal
|
|
123
|
|
152
|
|
|
(29)
|
|
|
393
|
|
|
348
|
|
|
45
|
|
|
CAPP – metallurgical
coal
|
|
87
|
|
—
|
|
|
87
|
|
|
115
|
|
|
—
|
|
|
115
|
|
|
Total
|
|
738
|
|
390
|
|
|
348
|
|
|
1,827
|
|
|
944
|
|
|
883
|
|
|
(1)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Cost of sales
consists of the following:
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
|
September
30,
|
|
September
30,
|
|
(in
thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Mining and processing
costs
|
|
$
|
25,859
|
|
|
$
|
17,136
|
|
|
$
|
64,585
|
|
|
$
|
44,468
|
|
|
Purchased coal
costs
|
|
26,744
|
|
|
2,295
|
|
|
63,102
|
|
|
3,083
|
|
|
Royalty
expense
|
|
2,016
|
|
|
1,454
|
|
|
6,259
|
|
|
3,840
|
|
|
Amortization
expense
|
|
4,111
|
|
|
3,875
|
|
|
12,418
|
|
|
11,884
|
|
|
Transportation costs
from preparation plant to customer
|
|
7,908
|
|
|
737
|
|
|
18,288
|
|
|
2,919
|
|
|
Idle mine
expense
|
|
367
|
|
|
163
|
|
|
960
|
|
|
1,079
|
|
|
Tolling
costs
|
|
452
|
|
|
(26)
|
|
|
808
|
|
|
38
|
|
|
Change in estimate of
reclamation provision
|
|
—
|
|
|
—
|
|
|
(148)
|
|
|
—
|
|
|
Write-off of advance
royalties and other assets
|
|
133
|
|
|
35
|
|
|
303
|
|
|
231
|
|
|
Other
costs
|
|
(1,204)
|
|
|
(26)
|
|
|
(129)
|
|
|
337
|
|
|
|
$
|
66,386
|
|
|
$
|
25,643
|
|
|
$
|
166,446
|
|
|
$
|
67,879
|
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
|
2016
|
|
|
|
Variance
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
Variance
|
|
|
Realized price per
ton sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal(1)
|
|
$
|
112.15
|
|
|
$
|
69.48
|
|
|
$
|
42.67
|
|
|
$
|
126.48
|
|
|
$
|
67.00
|
|
|
$
|
59.48
|
|
|
NAPP – thermal
coal(1)
|
|
$
|
46.68
|
|
|
$
|
39.64
|
|
|
$
|
7.04
|
|
|
$
|
44.63
|
|
|
$
|
39.15
|
|
|
$
|
5.48
|
|
|
CAPP – thermal and
metallurgical coal(1)
|
|
$
|
69.38
|
|
|
$
|
56.07
|
|
|
$
|
13.31
|
|
|
$
|
63.30
|
|
|
$
|
60.43
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash production cost
per ton sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal(1)(2)
|
|
$
|
70.30
|
|
|
$
|
60.07
|
|
|
$
|
(10.23)
|
|
|
$
|
70.14
|
|
|
$
|
59.74
|
|
|
$
|
(10.40)
|
|
|
NAPP – thermal
coal(1)(2)
|
|
$
|
45.95
|
|
|
$
|
43.07
|
|
|
$
|
(2.88)
|
|
|
$
|
42.10
|
|
|
$
|
44.82
|
|
|
$
|
2.72
|
|
|
CAPP – thermal and
metallurgical coal(1)
|
|
$
|
64.76
|
|
|
$
|
50.16
|
|
|
$
|
(14.60)
|
|
|
$
|
61.41
|
|
|
$
|
52.60
|
|
|
$
|
(8.81)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per ton
sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal(1)(3)
|
|
$
|
80.29
|
|
|
$
|
60.07
|
|
|
$
|
(20.22)
|
|
|
$
|
83.05
|
|
|
$
|
59.74
|
|
|
$
|
(23.31)
|
|
|
NAPP – thermal
coal(1)(3)
|
|
$
|
45.95
|
|
|
$
|
43.07
|
|
|
$
|
(2.88)
|
|
|
$
|
42.10
|
|
|
$
|
44.82
|
|
|
$
|
2.72
|
|
|
CAPP – thermal and
metallurgical coal(1)
|
|
$
|
64.76
|
|
|
$
|
50.16
|
|
|
$
|
(14.60)
|
|
|
$
|
61.41
|
|
|
$
|
52.60
|
|
|
$
|
(8.81)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash margin per ton
sold(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP – metallurgical
coal(1)
|
|
$
|
31.86
|
|
|
$
|
9.41
|
|
|
$
|
22.45
|
|
|
$
|
43.43
|
|
|
$
|
7.26
|
|
|
$
|
36.17
|
|
|
NAPP – thermal
coal(1)
|
|
$
|
0.73
|
|
|
$
|
(3.43)
|
|
|
$
|
4.16
|
|
|
$
|
2.53
|
|
|
$
|
(5.67)
|
|
|
$
|
8.20
|
|
|
CAPP – thermal and
metallurgical coal(1)
|
|
$
|
4.62
|
|
|
$
|
5.91
|
|
|
$
|
(1.29)
|
|
|
$
|
1.89
|
|
|
$
|
7.83
|
|
|
$
|
(5.94)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1) (000's)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPP
|
|
$
|
13,228
|
|
|
$
|
463
|
|
|
$
|
12,765
|
|
|
$
|
42,491
|
|
|
$
|
(1,304)
|
|
|
$
|
43,795
|
|
|
CAPP
|
|
380
|
|
|
795
|
|
|
(415)
|
|
|
(353)
|
|
|
1,843
|
|
|
(2,196)
|
|
|
Corporate
|
|
(984)
|
|
|
(724)
|
|
|
(260)
|
|
|
(2,829)
|
|
|
(2,420)
|
|
|
(409)
|
|
|
Total
|
|
$
|
12,624
|
|
|
$
|
534
|
|
|
$
|
12,090
|
|
|
$
|
39,309
|
|
|
$
|
(1,881)
|
|
|
$
|
41,190
|
|
|
(1)
|
This is a
non-GAAP financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(2)
|
Cash production
cost per ton sold excludes purchased coal. This Non-GAAP
financial measure is defined in more detail in "Non-GAAP Financial
Measures" below.
|
|
(3)
|
Cash cost per
ton sold includes purchased coal. This Non-GAAP financial
measure is defined in more detail in "Non-GAAP Financial Measures"
below.
|
Guidance(1)
Corsa's updated guidance for the year ending December 31, 2017 is as follows:
(all tonnage in short tons)
|
|
|
|
|
|
YTD
September
2017
|
Quarter Ended
December 31,
2017
|
Year Ended
December 31, 2017
|
Change from
Previous
Guidance(2)
|
|
Actual
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
|
Metallurgical Coal
Sales Tons
|
|
|
|
|
|
|
|
|
NAPP
Division
|
|
|
|
|
|
|
|
|
Company
Produced
|
640,000
|
|
180,000
|
|
200,000
|
|
820,000
|
|
840,000
|
|
(80,000)
|
|
(160,000)
|
|
|
Purchased - Value
Added Services
|
224,000
|
|
76,000
|
|
86,000
|
|
300,000
|
|
310,000
|
|
50,000
|
|
10,000
|
|
|
Purchased - Sales
& Trading
|
289,000
|
|
61,000
|
|
186,000
|
|
350,000
|
|
475,000
|
|
(22,061)
|
|
52,939
|
|
|
Total NAPP Met. Sales
Tons
|
1,153,000
|
|
317,000
|
|
472,000
|
|
1,470,000
|
|
1,625,000
|
|
(52,061)
|
|
(97,061)
|
|
|
|
|
|
|
|
|
|
|
CAPP
Division
|
115,000
|
|
20,000
|
|
35,000
|
|
135,000
|
|
150,000
|
|
69,943
|
|
49,943
|
|
|
|
|
|
|
|
|
|
|
Total Metallurgical
Coal Sales Tons
|
1,268,000
|
|
337,000
|
|
507,000
|
|
1,605,000
|
|
1,775,000
|
|
17,882
|
|
(47,118)
|
|
|
|
|
|
|
|
|
|
|
Thermal Coal Sales
Tons
|
|
|
|
|
|
|
|
|
NAPP
Division
|
166,000
|
|
44,000
|
|
54,000
|
|
210,000
|
|
220,000
|
|
(5,000)
|
|
(15,000)
|
|
|
CAPP
Division
|
393,000
|
|
135,000
|
|
155,000
|
|
528,000
|
|
548,000
|
|
(117,000)
|
|
(142,000)
|
|
|
559,000
|
|
179,000
|
|
209,000
|
|
738,000
|
|
768,000
|
|
(122,000)
|
|
(157,000)
|
|
|
|
|
|
|
|
|
|
|
Cash Production
Cost/Ton Sold(3)
|
|
|
|
|
|
|
|
|
NAPP Division
Metallurgical Coal(3)(4)
|
$
|
70.14
|
|
$
|
69.50
|
|
$
|
82.00
|
|
$
|
70.00
|
|
$
|
73.00
|
|
$
|
5.00
|
|
$
|
3.00
|
|
|
CAPP Division - Met.
and Thermal Coal(3)
|
$
|
61.41
|
|
$
|
51.00
|
|
$
|
60.00
|
|
$
|
59.00
|
|
$
|
61.00
|
|
$
|
4.00
|
|
$
|
1.00
|
|
Corsa's Company Produced metallurgical sales volumes were
updated to reflect future production assumptions based on current
productivity and coal seam thickness. Value Added Services
and Sales and Trading purchased coal reflect updated availability
of coal that the Company will be able to procure. The CAPP
Division metallurgical coal has been updated to reflect additional
blend vessels that are scheduled to ship during the fourth quarter
2017. Thermal coal sales volumes have been updated to reflect
future production assumptions primarily related to the projected
coal quality at the CAPP Division due to the timing of the Double
Mountain Mine exhausting economical coal reserves as well as
current qualities at the surface mines meeting the metallurgical
coal specifications. The cash production cost has been
updated to reflect the mix of production from the Company's mines
taking into account the current operating conditions, advance rates
and coal recovery.
|
(1)
|
Guidance projections
("Guidance") are considered "forward-looking statements" and
"forward looking information" and represent management's good faith
estimates or expectations of future production and sales results as
of the date hereof. Guidance is based upon certain
assumptions, including, but not limited to, future cash production
costs, future sales and production and the availability of coal
from other suppliers that the Company may purchase. Such
assumptions may prove to be incorrect and actual results may differ
materially from those anticipated. Consequently, Guidance
cannot be guaranteed. As such, investors are cautioned not to
place undue reliance upon Guidance, forward-looking statements and
forward looking information as there can be no assurance that the
plans, assumptions or expectations upon which they are placed will
occur.
|
|
(2)
|
Previous Guidance was
presented in the Company's news release announcing financial
results for the second quarter 2017 dated August 16,
2017.
|
|
(3)
|
This is a non-GAAP
financial measure. See "Non-GAAP Financial Measures"
below.
|
|
(4)
|
Cash Production Cost
/ Ton Sold excludes purchased coal. See "Non-GAAP Financial
Measures" below.
|
Coal Pricing Trends and Outlook
NAPP Division
Spot prices for low volatile metallurgical coal experienced
significant volatility in the third quarter of 2017, rising
approximately 40% to a high in early September 2017 and then ending the quarter at
levels 30% higher than at the end of the second quarter of
2017. High rates of global steel production growth fueled
increased demand for raw materials which created tightness in the
seaborne metallurgical coal market. Chinese domestic
metallurgical coal prices have risen as a result of strong steel
production and government policy initiatives to decrease coal
production capacity and consolidate coal production.
Currently, Chinese domestic metallurgical coal prices remain
elevated, which encourages imports and creates supply tightness in
the seaborne market. The forward curve for low volatile
metallurgical coal prices for calendar 2018 is above $165/mt, suggesting that a supply deficit will
continue in the quarters ahead. We are seeing a localized
scarcity of low vol metallurgical coal in the United States, as a result of significant
supply disruptions in 2017 and increased demand. We continue
to see high levels of interest for low, medium, and high vol coals
from our international customers.
Corsa's geographic proximity to over 50% of domestic coke
production capacity and short rail distance and multiple options to
access the Maryland and
Virginia export terminals solidify
Corsa's ability to serve both domestic and international
customers. Our sales and trading platform operations also
give us the ability to market a greater variety of products, access
more users and increases our ability to respond to market-shaping
events.
CAPP Division
The CAPP Division mineral reserve base exclusively consists of
high BTU and high carbon content coal. These unique qualities,
combined with advantaged logistics, set the CAPP Division apart
from other producers and create a niche in the utility and
industrial marketplace. Coal prices for utility and
industrial coal shipments from the CAPP Division in the third
quarter were in line with the previous quarter and are reflective
of our annual contracts. Fourth quarter utility and
industrial coal prices for the CAPP Division will be at the annual
contract rates as well. CAPP Division high vol metallurgical
coal prices are subject to the same market influences noted above
in the NAPP Division Coal Pricing Trends and Outlook.
Financial Statements and Management's Discussion and
Analysis
Refer to Corsa's unaudited condensed interim consolidated
financial statements for the three and nine months ended
September 30, 2017 and 2016 and related Management's
Discussion and Analysis, filed under Corsa's profile on
www.sedar.com, for details of the financial performance of Corsa
and the matters referred to in this news release.
Stock Options Granted
Corsa also announces that its Board of Directors has granted
stock options to purchase a total of 2,252,500 common shares of
Corsa (the "Common Shares") to certain directors, officers and
employees of Corsa, which grant represents approximately 2.4% of
the total outstanding Common Shares. These options were granted in
accordance with Corsa's Second Amended and Restated Option Plan
(the "2017 Plan"), are exercisable for five years at a price of the
higher of (a) C$1.53, being the
closing price of the Common Shares on the TSXV on November 15, 2017 and (b) the closing price of
the Common Shares on the TSX-V on November
20, 2017, being the date following Corsa's "blackout" period
in connection with its third quarter 2017 financial statements, and
are subject to the terms and conditions of the Option Plan and
TSX-V approval. Such options will vest one-third on the first
anniversary of the date of grant, one-third on the second
anniversary of the date of grant and one-third on the third
anniversary of the date of grant.
Officers of Corsa were granted an aggregate of 865,000 options,
Corsa's non-executive directors, other than Robert C. Sturdivant and Kai Xia, were each granted 75,000 options and
other employees of Corsa received an aggregate of 1,012,500
options. Mr. Sturdivant and Mr. Xia are representatives of Corsa's
significant shareholder Quintana Energy Partners L.P. and its
affiliated investment funds, elected not to receive any
options.
Non-GAAP Financial Measures
Management uses realized price per ton sold, cash production
cost per ton sold, cash cost per ton sold, cash margin per ton sold
and adjusted EBITDA as internal measurements of financial
performance for Corsa's mining and processing operations.
These measures are not recognized under International Financial
Reporting Standards ("GAAP"). The Company believes that, in
addition to the conventional measures prepared in accordance with
GAAP, certain investors and other stakeholders also use these
non-GAAP financial measures to evaluate the Company's operating and
financial performance; however, these non-GAAP financial measures
do not have any standardized meaning and therefore may not be
comparable to similar measures presented by other issuers.
Accordingly, these non-GAAP financial measures are intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP. Reference is made to the
Management's Discussion and Analysis for the three and nine months
ended September 30, 2017 for a
reconciliation and definitions of non-GAAP financial measures to
GAAP measures.
Corsa defines adjusted EBITDA as EBITDA (earnings before
deductions for interest, taxes, depreciation and amortization)
adjusted for change in estimate of reclamation provision for
non-operating properties, impairment and write-off of mineral
properties and advance royalties, gain (loss) on sale of assets and
other costs, stock-based compensation, non-cash finance expenses
and other non-cash adjustments. Adjusted EBITDA is used as a
supplemental financial measure by management and by external users
of our financial statements to assess our performance as compared
to the performance of other companies in the coal industry, without
regard to financing methods, historical cost basis or capital
structure; the ability of our assets to generate sufficient cash
flow; and our ability to incur and service debt and fund capital
expenditures. Management also uses adjusted EBITDA for the
purposes of making decisions to allocate resources among segments
or assessing segment performance.
Corsa Retains LodeRock Advisors Inc.
Corsa is also pleased to announce that it has retained the
services of LodeRock Advisors Inc. ("LodeRock") to handle its
investor relations activities. George
Dethlefsen, Chief Executive Officer of Corsa, commented, "We
are pleased to announce that we have selected LodeRock to reinforce
Corsa's profile in the financial community and enhance the
visibility of our company. We chose LodeRock because their
standards and methodologies fit best with the message we wish to
communicate to the investing public."
In consideration of the services to be provided, the monthly
fees incurred by Corsa will be cash consideration of up to
C$10,000 until such point that the
agreement is terminated with a 45 day notice period. LodeRock
does not have any interest, directly or indirectly, in Corsa or its
securities, or any right or intent to acquire such an interest.
Qualified Person
All scientific and technical information contained in this news
release has been reviewed and approved by Peter V. Merritts, Professional Engineer and the
Company's President - NAPP Division,
who is a qualified person within the meaning of National Instrument
43-101 - Standards of Disclosure for Mineral Projects.
Caution
The estimated coal sales, projected market conditions and
potential development disclosed in this news release are considered
to be forward looking information. Readers are cautioned that
actual results may vary from this forward looking
information. Actual sales are subject to variation based on a
number of risks and other factors referred to under the heading
"Forward-Looking Statements" below as well as demand and sales
orders received.
Information about Corsa
Corsa is a coal mining company focused on the production and
sales of metallurgical coal, an essential ingredient in the
production of steel. Our core business is producing and selling
metallurgical coal to domestic and international steel and coke
producers in the Atlantic and Pacific basin markets. Corsa also
offers high heat content, low delivered cost coal to major
utilities and industrial users in the Southeast region of the
U.S.
Earnings Call
Members of management will host a conference call on
Friday, November 17, 2017 at
10:00 a.m. (Eastern time) to discuss
the Company's results. To access the call from Canada and the U.S., dial 1.888.231.8191
(Toll Free). To access the
call from other locations, dial 1.647.427.7450 (International)
Forward-Looking Statements
Certain information set
forth in this press release contains "forward-looking statements"
and "forward-looking information" under applicable securities laws.
Except for statements of historical fact, certain information
contained herein relating to projected sales, coal prices, coal
production, mine development, the capacity and recovery of Corsa's
preparation plants, expected cash production costs, geological
conditions, future capital expenditures and expectations of market
demand for coal, constitutes forward-looking statements which
include management's assessment of future plans and operations and
are based on current internal expectations, estimates, projections,
assumptions and beliefs, which may prove to be incorrect. Some of
the forward-looking statements may be identified by words such as
"estimates", "expects" "anticipates", "believes", "projects",
"plans", "capacity", "hope", "forecast", "anticipate", "could" and
similar expressions. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Corsa's actual performance
and financial results in future periods to differ materially from
any projections of future performance or results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to: risks that the
actual production or sales for the 2017 fiscal year will be less
than projected production or sales for this period; risks that the
prices for coal sales will be less than projected; liabilities
inherent in coal mine development and production; geological,
mining and processing technical problems; inability to obtain
required mine licenses, mine permits and regulatory approvals or
renewals required in connection with the mining and processing of
coal; risks that Corsa's preparation plants will not operate at
production capacity during the relevant period, unexpected changes
in coal quality and specification; variations in the coal mine or
preparation plant recovery rates; dependence on third party coal
transportation systems; competition for, among other things,
capital, acquisitions of reserves, undeveloped lands and skilled
personnel; incorrect assessments of the value of acquisitions;
changes in commodity prices and exchange rates; changes in the
regulations in respect to the use, mining and processing of coal;
changes in regulations on refuse disposal; the effects of
competition and pricing pressures in the coal market; the
oversupply of, or lack of demand for, coal; inability of management
to secure coal sales or third party purchase contracts; currency
and interest rate fluctuations; various events which could disrupt
operations and/or the transportation of coal products, including
labor stoppages and severe weather conditions; the demand for and
availability of rail, port and other transportation services; the
ability to purchase third party coal for processing and delivery
under purchase agreements; and management's ability to anticipate
and manage the foregoing factors and risks. The forward-looking
statements and information contained in this press release are
based on certain assumptions regarding, among other things, coal
sales being consistent with expectations; future prices for coal;
future currency and exchange rates; Corsa's ability to generate
sufficient cash flow from operations and access capital markets to
meet its future obligations; the regulatory framework representing
royalties, taxes and environmental matters in the countries in
which Corsa conducts business; coal production levels; Corsa's
ability to retain qualified staff and equipment in a cost-efficient
manner to meet its demand; and Corsa being able to execute its
program of operational improvement and initiatives. 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. The reader is
cautioned not to place undue reliance on forward-looking
statements. Corsa does not undertake to update any of the
forward-looking statements contained in this press release unless
required by law. The statements as to Corsa's capacity to produce
coal are no assurance that it will achieve these levels of
production or that it will be able to achieve these sales
levels.
The TSX Venture Exchange has in no way passed on the
merits of this news release. Neither the 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 release.
SOURCE Corsa Coal Corp.
