CanAm Coal Corp. (TSX VENTURE: COE)(OTCQX: COECF) ("CanAm" or the "Company") is pleased to provide an update on production and sales contracts for the fiscal year ended December 31, 2012.
The Company is estimating coal sales of between 450,000 to 550,000 tons for the 2012 fiscal year with a metallurgical/thermal coal mix of 20/80% respectively. This represents a 200,000 to 300,000 ton increase over 2011 estimated sales or the Company is forecasting to nearly double production in 2012. Up to 85% of this estimated 2012 production has been contracted for with a variety of customers including the Alabama Coal Cooperative and various industrial users. Sales contracts are for a minimum term of 3 years and some thermal coal production has been contracted for through 2017.
Pricing obtained by the Company for its high quality metallurgical and thermal coals has been extremely favorable and all prices are at higher levels than in 2011. On average, the estimated realized sales price for 2012 will be $100/ton with average price increases as follows:
-- Metallurgical coal: up 11%
-- Thermal coal - power customer: up 4%
-- Thermal coal - industrial customers: up 17%
"We are extremely pleased with our recently completed sales contracts as they provide us with both downside protection and earnings visibility for 2012 and beyond," said Tim Bergen, CEO of CanAm. "In addition, most of our contracts include cost inflation clauses which provide for additional protection in the event our major production cost components were to escalate in the next couple of years."
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