TORONTO, Dec. 5, 2012 /PRNewswire/ - Pacific Coal Resources Ltd. (TSXV: PAK)
announces a strategic update, including significant advances in the La
Caypa underground initiative, a re-focusing of operations at the Cerro
Largo property, signing of an agreement relating to La Tigra
exploration, signing of the Barranquilla port sale MOU and an update
regarding the cost reduction program. Management believes Pacific
Coal's strategic re-focus is positioning the Company towards
significantly improved operations and liquidity. All financial figures
contained herein are expressed in U.S. dollars unless otherwise noted.
La Caypa underground mine
The Company is advancing towards operation of an underground mine at La
Caypa, with anticipated production of underground thermal coal
beginning by the end of 2013. Pacific Coal's new management team has
begun negotiations in respect of carrying out this underground mine
operation with OXBOW, a leader in underground coal production in the
United States which also operates globally. Underground production at
La Caypa is expected to reach 0.7 million tonnes of coal in 2014 and
over 1.0 million tonnes annually from 2015 onwards. This production
will be in addition to La Caypa's continued open-pit mine production of
approximately 1.0 million tonnes per year.
Cerro Largo operations
Based on the high BTU and low sulfur levels of Cerro Largo's thermal
coal, management has determined that such coal is ideal for power
generation, specifically a mine mouth electric plant (coal burning
electric-generating plant). Pacific Coal is in discussion with Pacific
Power Generation Corp. and Proelectrica & CIA S.C.A. ESP to create a
new joint venture company which would focus on (i) building an electric
plant, which is anticipated to have a maximum production capacity of
150 Megawatts, and (ii) marketing the energy produced.
La Tigra exploration
Asphaltite exploration continues at La Tigra. Pacific Coal has signed
an agreement with a third-party to perform analysis of exploration
results, 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 Pacific Coal will determine an adequate course of action
for the deposit.
Pacific Coal signed an MOU in respect of the sale of its interest in
Sociedad Portuaria Terminal de las Flores S.A., the subsidiary that
owns the Barranquilla port concession, with an anticipated completion
of the sale by January 2013.
The board of directors of the Company has determined that it is in the
best interest of the Company to consolidate its issued and outstanding
common shares on a 7:1 basis. The Company expects to call a special
meeting of shareholders in the first quarter of 2013 so that
shareholders may vote on the proposed share consolidation.
Cost reduction program
Pacific Coal has undertaken a comprehensive cost cutting program
including payroll and G&A reductions. During the third quarter of
2012, actions taken contributed to a decrease of 20% in G&A expenses to
$3.6 million as compared to $4.4 million in the second quarter of 2012,
in addition to the 12% and 9% decrease already realized in the first
and second quarter of 2012 respectively. The third quarter expenses
include approximately $1.0 million of one-time expenses associated with
staff reductions and asphaltite research costs, which if excluded would
see a G&A expense improvement of approximately 43% from the second
quarter of 2012. Based on the continued success of the cost cutting
program, management expects a continued decrease in the quarterly G&A
run rate to approximately $2.75 million by the fourth quarter of 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
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.