CanAm Announces Fourth Quarter and Full 2012 Financial Results and Delivers $3.2 million EBITDA in Q4
CALGARY, ALBERTA--(Marketwired - April 30, 2013) - CanAm Coal Corp. (TSX VENTURE:COE)(OTCQX:COECF) ("CanAm" or the "Company") has filed its audited consolidated financial statements and related management discussion and analysis for the year ended December 31, 2012. These audited 2012 financial statements include a restatement of the 2011 financials and of Q1 and Q2 for 2012 which is discussed at the end of this press release. Definitions of commonly used non-IFRS financial measures (EBITDA and Free Cash Flow) are also included at the end of this press release.
Full Year 2012 and Q4 Highlights
The Company announced today its full year 2012 and fourth quarter financial results for the period ending December 31, 2012. Full year revenue, EBITDA and net loss for the year were $55.4 million, $10.2 and ($6.1) million respectively as compared to $38.9 million, $8.5 million and ($1.7) million in the prior year. Fourth quarter revenue, EBITDA and net loss were $14.6 million, $3.2 million and ($2.3) million respectively as compared to $8.4 million, $1.7 million and ($1.0) million in the prior year. Excluding one- time impairment charges and a correction of an error in the calculation of mineral property amortization, the fourth quarter loss was ($0.7) million as compared to ($1.0) million in Q4 of 2011.
The Company continued its momentum from Q3 and our fourth quarter operating results were in-line with third quarter results. Our quarter over quarter and full 2012 key performance indicators highlight the significant progress the Company has achieved during the year:
Q1 Q2 Q3 Q4 2012
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Production (in
tons) 117,192 130,517 157,900 153,841 559,450
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(in $ per Ton)
Revenue $ 114 $ 106 $ 94 $ 96 $ 99
Production Cost 71 65 47 49 56
RTO 21 21 20 18 19
---------------- ------- ------- ------- ------- -------
EBITDA $ 14 $ 14 $ 21 $ 20 $ 18
---------------- ------- ------- ------- ------- -------
(in $'millions) Q1 Q2 Q3 Q4 2012
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Operating Cash
Flow $ 1.3 $ 1.6 $ 1.0 $ 3.1 $ 7.0
---------------- ------- ------- ------- ------- -------
EBITDA 1.8 1.9 3.3 3.2 10.2
Capex (5.4) (5.2) (5.2) (1.6) (17.4)
---------------- ------- ------- ------- ------- -------
Free Cash Flow $ (3.6) $ (3.3) $ (1.9) $ 1.6 $ (7.2)
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-- Sales for the year were at record levels and were up 95% on an original
reported basis and 39% on a restated basis. Sales for Q4 of 153,841 tons
were in line with Q3 but were impacted by delayed customer shipments over
the Christmas holiday period.
-- Long term off-take contracts enabled the Company to achieve better than
market pricing for our high quality coals. Average sales price per ton
has however gone down quarter over quarter as a result of our changing
coal mix following the additional 30% acquisition of BCC who only
produces and sells thermal coal.
-- Contracted sales for 2013 are in the range of 700,000 to 800,000 tons
which corresponds to between 85% and 100% of expected production of our
new mine complement.
-- Focus on operational excellence through ongoing cost improvement
initiatives, integration and centralization of our mining operations
across all mines and entities and improved mining conditions resulted in
a significant reduction in production cost which started in Q3 and
continued in our fourth quarter. Fourth quarter production cost per ton
was $49 as compared to $71 in Q1 2012.
-- Operating cash flow continued to improve throughout the year and set a
record level in Q4 of $3.1 million.
-- Investment in equipment and mine development was significant during the
year and totaled $17.4 million. This investment was required in order to
position the Company for continued growth and involved the opening and
development of three new mines and the purchase and upgrade/refurbishment
of equipment. The Company's investment program is substantially completed
and 2013 capital expenditures will be significantly lower.
-- Transition to our new mine complement and configuration, which commenced
in October 2012, is nearly complete and the Company expects to reach full
production in early Q2 2013.
-- Free cash flow turned positive in the fourth quarter and amounted to $1.5
million. This represents a major milestone for the Company as we can now
start to build our cash position which will enable us to improve our
overall working capital and position us to start paying down our debt.
-- One-time provisions of $2.2 million were recorded in Q4 to correct an
error in the calculation of mineral property amortization and to write
down certain equipment and project development expenses to their net
realizable value.
Company President and CEO, Jos De Smedt commented: "CanAm completed another record year and continued its progress towards becoming an intermediate coal producer with a goal to achieving annual production of between 2 to 3 million tons within the next 5 years. Although we achieved a number of major milestones in 2012, including the acquisition of an additional 30% ownership in BCC and obtaining three new major mining permits, 2012 was not without its challenges. Delays in obtaining our mine permits, consolidation and integration of our mine operations, significant mine development and infrastructure work at our new mines and transitioning our resources, both people and equipment, to our new mines, all contributed to a challenging operating and work environment. In spite of these challenges, the hard work of our team paid off and the operational improvements achieved at our mines in the second half of the year, coupled with improved mining conditions, resulted in higher production levels and a significantly lower cost structure. This contributed to continued improvement in our cash flow from operations and, for the first time, the Company generated free cash flow.
With our new mines fully permitted, mine development nearing completion and full production levels achieved in Q2 of 2013, further significant growth is expected in 2013. In addition, the Company's $14.5 million investment in equipment in 2012 positions CanAm to efficiently optimize production and sales from these new mines. With these building blocks in place, we look forward to strong growth in 2013."
Detailed Financial Results and Discussion
2012 Coal Sales Revenue EBITDA
Tons $'000's $'000's
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Q1 Restated 117,192 12,789 1,854
Q1 Original 67,153 7,672 973
Q2 Restated 130,517 11% 13,310 4% 1,932 4%
Q2 Original 76,577 8,153 1,080
Q3 157,900 21% 14,741 11% 3,281 70%
Q4 153,841 -3% 14,553 -1% 3,150 -4%
2012 559,450 39% 55,392 42% 10,217 21%
2011 Restated 402,766 38,946 8,479
2011 Original 256,221 24,432 4,606
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Q1, Q2 and comparative 2011 financial information
has been restated to reflect full (100%) consolidation
accounting of BCC commencing with the purchase of
the initial 50% ownership stake in May 2011 (see end
of press release for full discussion and EBITDA definition).
The previously reported results are presented for
reference.
Summary of Recent Operations History and Mine Transition
Since May 2011, the Company has mined an average of between 40,000 and 60,000 tons of coal per month at four mines located in Alabama: Bear Creek, Old Union, Gooden Creek and Powhatan. In Q4, the Company commenced a significant repositioning of its mining operations, as follows:
1. Opened the first of three pits of a new mine, Old Union 2. Old Union 2
replaces the original Old Union mine, which completed mineable operations
in Q1 2013.
2. Temporarily suspended mining operations at Gooden Creek and accelerated
plans to open pits 2 and 3 at Old Union 2. These pits were opened during
Q1 2013.
3. Received final permitting for the Knight mine, which replaces the Bear
Creek mine (mined out in Q2 2013). The Knight mine achieved initial
commercial level production in March 2013.
4. In January, received final permitting for the Posey Mill 2 mine, with
first production scheduled for Q2 2013.
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