Corsa Coal Announces Reduction in Workforce and Production Rationalization
January 9, 2015 - Toronto, Ontario - Corsa Coal Corp. (TSXV: CSO) (“Corsa” or the “Company”) announces that the ongoing integration of recently acquired PBS Coals Limited (“PBS”) into the Company’s Northern Appalachian Division (the “NAPP Division”) and the continued weakness in global metallurgical coal markets has resulted in the decision to eliminate approximately 130 full time positions or approximately 25% of the NAPP Division workforce. As a result of this decision, the Kimberly Run and Barbara mines have been idled and placed under management review for closure. Certain personnel and equipment from these mines will be transferred to the Casselman and Quecreek mines which are the Company’s lowest cost metallurgical coal operations. The additional personnel and equipment are expected to allow for an increase in production and operational efficiency at the Casselman and Quecreek mines.
“We regret the need to take today’s actions, however, we anticipate these moves will improve the overall cost structure of the NAPP Division while still maintaining premium quality metallurgical coal specifications,” said George Dethlefsen, Corsa’s Chief Executive Officer. “The acquisition of PBS last August provided the Company with a large portfolio of active and development mines. Today’s moves are part of the ongoing integration of PBS as well as an effort to rationalize production in response to market conditions. The Company will shift its near term metallurgical coal production to its lowest cost operations while preserving other reserves for future development at a time when the market is stronger.”
The Company expects to provide an updated outlook for 2015 as sales commitments and production decisions are finalized.
Information about Corsa
Corsa is one of the leading suppliers of premium quality metallurgical coal, an essential ingredient in the production of steel, which is necessary for the secular trends in global urbanization. Our core business is supplying metallurgical coal with the highest safety, yield, and strength characteristics to domestic steel producers while being a strategic source of supply in the Atlantic and Pacific basin markets. Corsa also offers a high heat content, low delivered cost coal to major utilities and industrial users in the Southeast region of the U.S.
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 production and efficiency of operations at the Casselman and Quecreek mines, future coal market conditions, NAPP Division cost structure and coal quality and future development of the Kimberley Run and Barbara mines constitute 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 “expects”, “anticipates” 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 and efficiency of operations at the Casselman and Quecreek mines will not increase; risks that the prices for coal sales will be less than projected or expected; liabilities inherent in coal mine development and production including restarting idled mines; geological, mining and processing technical problems;; risks that Corsa’s coal preparation plant will not operate at production capacity during the relevant period, unexpected changes in coal quality and specification; variations in the coal mine or coal preparation plant recovery rates; dependence on third party coal transportation systems;; changes in commodity prices and exchange rates; changes in the regulations with 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 labour 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 where 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 initiative to realize cost synergies following the completion of Corsa’s acquisition of PBS. 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 TSX Venture Exchange has in no way passed on the merits of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.