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    Fmc corporate presentation (jan 28, 2013) Fmc corporate presentation (jan 28, 2013) Presentation Transcript

    • TSX/JSE : FMC January 2013 RAPIDLY GROWING COAL PRODUCER IN SOUTHERN AFRICA Corporate Presentation A Forbes & Manhattan Group Company
    • Disclaimer TSX/JSE : FMCThis presentation contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statementswith respect to the development potential and timetable of the Magdelena and Aviemore projects; the Company’s ability to raise additional funds as necessary;the future price of coal; the estimation of mineral resources; conclusions of economic evaluations (including scoping studies); the realization of mineral resourceestimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures;success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks.Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”,“budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases orstatements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements arebased on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost ofmining at the Company’s projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous miningactivities at the projects, and detailed research and analysis completed by independent consultants and management of the Company; research and estimatesregarding the timing of delivery for long-lead items; and knowledge regarding certain factors described in the technical report filed under the profile of theCompany on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independentconsultants. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel andindependent consultants. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results,level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward looking statements,including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction,expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of exploration and miningactivities; changes in project parameters as plans continue to be refined; future prices of coal; failure of plant, equipment or processes to operate as anticipated;accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that couldcause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated,estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially fromthose anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake toupdate any forward-looking statements except in accordance with applicable securities laws.Investors are advised that National Instrument NI 43-101 of the Canadian Securities Administrators (“NI 43-101”) requires that each category of mineral reserves andmineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Johan Odendaal,B.Sc.(Geol.), B.Sc.(Hons)(Min. Econ.), M.Sc. (Min. Eng.), a director of Minxcon and an independent Qualified Person, as defined in National Instrument 43-101 hasreviewed and approved the scientific and technical information contained in this presentation.Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred ResourcesThe information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms arerecognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineralresources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of aninferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis offeasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will everbe converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or iseconomically or legally mineable. 2
    • Company Overview TSX/JSE : FMCForbes & Manhattan Coal Corp.’s (FMC) vision is to build a high quality bituminous and anthracite coal company with production capacity in excess of 10 million tonnes per year Company Summary Headquarters: Toronto, Ontario Total mineable coal 51.7 million tonnes Bituminous resource (all measured) (NI 43-101): 50.8 million tonnes Anthracite* (15.1 million inferred) Number of 2 (Magdalena Historical annual saleable 923,700 saleable tonnes in mines: and Aviemore) production: fiscal 2012 Mine location: Kwa-zulu, Natal, 1 year target production: 583,000 saleable tonnes South Africa (fiscal 2013) Bituminous - Magdalena 242,000 saleable tonnes Anthracite – Aviemore 110,000 saleable tonnes Bituminous-bought in Production capacity: 2 million tonnes* As set out in the Technical Report of the Company entitled “An Independent National Instrument 43-101 Technical Report on Slater Coal and Subsidiaries, KwaZulu-Natal Province, South Africa”, dated March 1, 2011, prepared for the Company by Minxcon (the “Technical Report”). A copy of the Technical Report is available under the profile of the Company on SEDAR at www.sedar.com. 3
    • Location of Operations TSX/JSE : FMC 4
    • Mining Resource (Dundee) TSX/JSE : FMC NI 43 – 101 Global Resource1 Measured Indicated MI Inferred Yearly LOM ROM2 (t) Magdalena 51.7 m - 51.7 m - 0.9 mt + 20 years Bituminous Aviemore 1.6 m 34.1 m 35.7 m 15.1 m 0.4 mt + 20 years Anthracite1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.2. As per management’s guidance for fiscal 2013 5
    • Magdalena Bituminous Coal Operations TSX/JSE : FMC 6
    • Magdalena Bituminous Coal Operations TSX/JSE : FMC Asset SummaryLocation: • Dundee, Kwa-Zulu, NatalCoal Type: • BituminousResource: • 51.7 million tonnes1Acres: • 4,557Average BTU: • 12,250 BTU/lb • 6,800 kcal/kgAsh: • 15.0%Volatility: • 16.7%Saleable • 2011FY2: 556,000 tonnesProduction: • 2012FY2: 748,000 tonnesMine Life: • Approximately +20 yearsInfrastructure: • Wash plant, processing plant and siding1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.2. Fiscal year-end February 28 7
    • Magdalena Project Area & Mining Rights TSX/JSE : FMC* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 8
    • Magdalena Bituminous Coal Production Profile TSX/JSE : FMC Drilling at Magdalena for potential opencast mine expansion has been completed, Hilltop exploration drilling license has recently been granted. Magdalena Saleable Bituminous Coal Production (000 t)/February 28 year-end 748 556 583 485 449 347 326 299 FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13E Magdalena o/c Magdalena u/g* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 9
    • Aviemore Anthracite Coal Operations TSX/JSE : FMC 10
    • Aviemore Anthracite Coal Operations TSX/JSE : FMC Asset SummaryLocation: • Dundee, Kwa-Zulu, NatalCoal Type: • Anthracite • 50.8 million tonnes1Resource: (15.1 million tonnes inferred)Acres: • 13,818 • 12,800 BTU/lbAverage BTU: • 7,100 kcal/kgAsh: • 13.7%Volatility: • 7.9%Saleable • 2011FY2: 92,000 tonnesProduction: • 2012FY2: 176,000 tonnesMine Life: • Approximately +20 years • Wash plant, processing plant andInfrastructure: siding 1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 2. Fiscal year-end February 28 11
    • Aviemore Project Area & Mining Rights TSX/JSE : FMC* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 12
    • Aviemore Anthracite Coal Production Profile TSX/JSE : FMC At Aviemore, a feasibility study for an expansion is underway. There is potential for 1 million tonnes of ROM per annum. Aviemore Anthracite Coal Saleable Production1 (000 t)/February 28 year-end 242 176 102 92 59 62 61 20 FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13E1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 13
    • ZAC Anthracite Operations TSX/JSE : FMC Deep Western Extension CHPP EOutcrop Ngwabe Siding 14
    • ZAC Anthracite Coal Operations TSX/JSE : FMC Asset Summary • 230 kms from Forbes DundeeLocation: operationsCoal Type: • High quality anthracite • Productions levels over the past 5Resource: yrs average 700,000 tpaCombined • Approximately 75% on ROMYield: productionAllocation: • 150,000 tpa at Richard’s Bay • Rail siding 10 kms from plantInfrastructure: owned and operated by ZAC 15
    • Forbes Coal Pro Forma (ZAC) TSX/JSE : FMC FMC STAND-ALONE PROFORMA FMC/RHL CONSOLIDATED (Sustainable) ROM 0.8mt Bituminous / 0.5mt Anthracite 1.3mt Bituminous/ 1.2mt Anthracite Production TOTAL 1.3 MT TOTAL UP TO 2.5 MT 1.1mt port allocation/ 1.1mt port allocation – FCD + 0.2mt Port & Rail 1.5mt siding facility port allocation ZAC/ 1.5mt siding facility EBITDA $22 mln for 2012 fiscal year $32 to $47 mln potential Marketing 70% Bituminous/ 30% Metallurgic 50% Bituminous/ 50% Metallurgic 16
    • Results TSX/JSE : FMC Q1 2013 Q2 2013 Q3 2013 (March – May 2012 ) (June – Aug’ 2012 ) (Sept’ – Nov’ 2012 ) Revenue $ 20.8 million $ 23.39 million $10.83 million Gross Profit $ 1.81 million $ 2.35 million -$2.29 millionConsolidated EBITDA $ 2.45 million $ 2.72 million -$3.39 million Q1 2013 Q2 2013 Q3 2013 (March – May 2012 ) (June -Aug’ 2012) (Sept’ – Nov’2012) Run of Mine 387,075 414,551 246,002 Production (t) Saleable 244,605 256,583 152,013 Production (t) Total Sales (t) 234,997 284,196 147,254 17
    • Responsible Development TSX/JSE : FMC• Good working relationship with its two unions: National Union of Mineworkers (NUM) and Amalgamated Mining & Construction Union (AMCU) • Labour contracts are negotiated on an annual basis • Recent labour disruption was settled November 16, 2012 resulting in an average wage increase of 14.8%• Implementing internationally recognized safety, health, environmental and quality management systems• Adheres to the tenets of the Mining Charter and promotes local procurement and procurement from BEE companies• Committed to developing local communities 18
    • Experienced Management Team TSX/JSE : FMCStephan Theron, B.Comm, CGA │President and Chief Executive OfficerExtensive management, project finance and equity analysis experience in the mining, energy and infrastructuresectors. Previous capital and project experience includes Weir PLC and AMEC PLC as well as former sector headmaterials and energy with a specific focus on South African coal market.Malcolm Campbell, Pr. Cert. Eng. (Mining) │Chief Operating OfficerFourth generation coal miner with 25 years industry experience. Skilled in operational management, turnaroundstrategies and business development. Spent 20 years with Anglo Coal; held a variety of positions including regionalmanager for new business development and strategy.Deb Battiston, CGA │Chief Financial OfficerFinancial specialist with over 20 years experience in the mining sector.Sarah Williams, CA │Vice President FinanceChartered Accountant (SA) with nine years experience in the corporate finance industry and expertise in the resourcesector where she played key roles in company listings and IPOs, mergers and acquisitions, restructurings and debt andequity capital raisings.Kevern Mattison, NHD (Mining), B. Tech.│General ManagerMore than 20 years operational coal mining experience and spent over 20 years with Anglo Coal, most recently as amanager of mining.Fanie Müller, B.Sc. Eng., M. Eng. │ Group Manager - Technical Support ServiceA Professional Mining Engineer registered with the Engineering Council of South Africa. Project experience incommodities ranging from coal, gold and diamonds to platinum and uranium. The foundation of his career in miningwas initiated at Anglo Coal. He joined Forbes Coal as the Group Technical Services Manager in 2010. 19
    • Directors TSX/JSE : FMCStephan Theron, B.Comm, CGA , │ President and CEOCraig Wiggill, B.Sc. Eng. │ Chairman of the BoardHas held management, executive and directorship positions on several international mining companies in the coal sectorand, as CEO of Coal Americas at Anglo American plc. was responsible for all of that company’s coal activities in North andSouth America. He was previously Managing Director of Anglo Coal Marketing Ltd from 2000 to 2004.Stan Bharti, P.Eng. │ DirectorBusiness consultant and a professional mining engineer with more than 25 years experiencePresident of Forbes & Manhattan, Inc., a private merchant focused on the resource sector, since July 2001.John Dreyer, │ DirectorMr. Dreyer is a qualified South African lawyer, CEO of Tavistock Coal and executive director of Anglo American Platinum. Heserved as chairman of ASX listed Firestone Energy until 2011. Mr. Dreyer currently serves on the board of ASX listed CobarConsolidated Resources where he also serves on the audit committee.Bernard Wilson, │ DirectorAn advisor in corporate finance and investment banking. Notable leadership roles include serving as the Chairman of theCanadian Chamber of Commerce (with 175,000 members), Chairman of the Canadian Council for International Business,Chairman of the International Chamber of Commerce, as a member of the Canada/US Trade Committee and ChairmanFounders Board of the Institute of Corporate Directors.Ryan Bennett, M.Mining Eng. │ DirectorMasters degree in Mining Engineering from the Colorado School of Mines with extensive technical mining project analysesexperience. Senior Partner of Resource Capital Fund;(significant shareholder in Forbes Coal).Michael Price, B.Sc., Phd. │ DirectorThirty-five years experience in mining and mining finance. After working for BP Coal, BP Minerals and BP Exploration in variousmine management and business development roles Mr. Price moved into mining finance with NM Rothschild & Sons, SocieteGenerale and Barclays Capital. Mr. Price is now a Non-Executive Director of several mining companies and he is anindependent adviser on mining finance as well as the London Representative of Resource Capital Fund. 20
    • Investment Highlights TSX/JSE : FMC• Resource base of high quality bituminous and anthracite coal in one of the best developed coal markets in the world• Goal to triple organic production within three years from 2010 historic levels using existing infrastructure and capacity• Established infrastructure to reach export corridors and growing domestic market• Delivering on goals to increase sales while lowering production costs, resulting in strong EBITDA• ZAC acquisition moves FMC towards enviable mid-tier production status• ZAC increases portfolio of high quality coal products, has solid marketing agreements in place and great logistics, fully funded by Investec, maximizing potential returns to shareholders• Experienced coal-focused management team 21
    • Share Price Performance TSX/JSE : FMC Ticker Company Exchange YTD performance Capitalization FMC Forbes Coal TSX -83% Shares Outstanding 34.8 million UNV Universal Coal ASX -66% FD Shares Outstanding 39.5 million IKW Ikwezi Mining ASX -73% Closing Price (Jan 17, 2013) C$0.60 CCC Continental Coal ASX -83% Trading Range C$0.48 – $2.03 CZA Coal of Africa ASX -73% (52 week) Market Capitalization (Basic) C$20.88 million Market Capitalization (FD) C$23.7 millionSource: Google Finance; 23 January 2013 22
    • Strategy and Business Plan TSX/JSE : FMCMagdalena• Continuing exploration program on the recently granted Hilltop exploration license;• Increasing production capacity with additional mechanisation, and operational efficiency initiatives;• Ramp-up saleable production up to 1,000,000 tonnes for the year;• Investigate regional possibilities for the relocation of the opencast at the end of the current extension;• Increase wash plant recovery rates from the current level of 62% to 68%;• Investigate product upgrade potential.Aviemore• Achievable saleable production up to 300,000 tonnes for the year;• Progress exploration and feasibility study for the expansion of1 million ROM tonnes per year producer.Improve operational efficiencies by:• Further develop management team with international experience;• Explore opportunities to increase sales and exports; 23
    • New Opportunities TSX/JSE : FMCWhere?• Forbes Coal to stay focused on Southern Africa. Most of the coals in Southern Africa can be washed to produce an acceptable export thermal product.• Lack of both infrastructure and investment are the main reasons why production and exports remain constrained.• The countries that are viewed to have the best potential for coal projects are South Africa, Botswana, Mozambique, Zimbabwe, Tanzania and Swaziland.• Opportunities have already been reviewed in most of the Southern African countriesHow?• Acquisitions• Farm in options• Licence applications• Outright acquisitions preferable for operational assets and advanced projects• Farm in options help mitigate against the risk of huge capital outlay. This is the preferred entry opportunity for exploration projects• Licence applications will only work in countries with robust and transparent licence frameworks (e.g Botswana, Mozambique) 24
    • TSX/JSE : FMCAppendix 25
    • Current Company Structure TSX/JSE : FMC Forbes Coal Ownership Structure Forbes and Manhattan Coal Corp. (Ontario, TSX/JSE Listed) 100% Forbes and Manhattan Coal Inc. (Ontario) 100% 100%Corondale Prospecting and Forbes Coal (Proprietary) Limited Bowwood and Main 33 (Pty) LtdMining (Proprietary) Limited Dormant Company 100% (South Africa) (South Africa) 70% Zinoju Coal (Proprietary) Limited BEE (South Africa) 30% (Nulane) 100% 100% Magdalena Aviemore Bituminous Coal Anthracite Coal 26
    • Production – ROM - Quarter TSX/JSE : FMC ROM tonnes 450,000 400,000 350,000Quarterly ROM tonnes 300,000 250,000 200,000 150,000 100,000 50,000 0 ROM Magdalena ROM Aviemore 27
    • Production - Saleable - Quarter TSX/JSE : FMC Saleable tonnes 350,000 300,000Quarterly saleable tonnes 250,000 200,000 150,000 100,000 50,000 0 Saleable Magdalena Saleable Aviemore Bought in Coal 28
    • Sales tonnes – Quarter (Operations) TSX/JSE : FMC Sales tonnes 400,000 350,000 300,000Quarterly sales tonnes 250,000 200,000 150,000 100,000 50,000 0 Sales Magdalena Sale Aviemore 29
    • Combined ROM and Saleable Tonnes TSX/JSE : FMC ROM tonnes 20121 Saleable tonnes 20121 Dundee - Dundee - bituminous 36% bituminous 34% Dundee - Dundee - 52% anthracite 52% anthracite ZAC anthracite ZAC - 14% 12% anthracite20121 ROM tonnes Saleable tonnesDundee - bituminous 1 009 555 748 0222Dundee - anthracite 281 244 175 675ZAC - anthracite 668 995 518 528Total 1 959 794 1 442 2251. Dundee tons for the financial year ended 28 Feb 2012 and ZAC tons for the financial year ended 30 June 20122. Includes 66 906 bought in tonnes 30
    • Bituminous vs Anthracite TSX/JSE : FMC Dundee stand-alone1 Dundee combined with ZAC1 19% Bituminous 48% Bituminous Anthracite 52% Anthracite 81%20121 Saleable tonnesDundee - bituminous 748 0222Dundee - anthracite 175 675ZAC - anthracite 518 528Total - anthracite 694 2031. Dundee tonnes for the financial year ended 28 Feb 2012 and ZAC tonnes for the financial year ended 30 June 20122. Includes 66 906 bought in tonnes 31
    • Export vs Domestic TSX/JSE : FMC Dundee stand-alone1 Dundee combined with ZAC1 47% Domestic 46% Domestic 53% Export 54% Export20121 Sales tonsDundee - domestic 505 652Dundee - export 576 162ZAC - domestic 353 316ZAC - export 169 5291. Dundee tons for the financial year ended 28 Feb 2012 and ZAC tons for the financial year ended 30 June 2012 32
    • Revenue and Sales Tonnes (CAD$) TSX/JSE : FMC Revenue and sales tonnes 40 400 API4$ pricing decreased from $118 to $82. 35 350 30 300 Sales tonnes ‘000 25 250Revenue $’m 20 200 15 150 10 100 5 50 0 - FY11Q1 FY11Q2 FY11Q3 FY11Q4 FY12Q1 FY12Q2 FY12Q3 FY12Q4 FY13Q1 FY13Q2 FY13Q3 FY13Q4 FC Revenue $m Sales tons000 Notes: 1) The API4$ price has decreased significantly from FY12Q3. Export contracts on API4$ account for 50%-60% of total sales. This has impacted on revenue and margins. 2) Average API4$ pricing for FY13Q3 was $82 per tonne 33
    • Access to Export Markets TSX/JSE : FMC • For Fiscal 2012 Forbes Coal reported record export sales of 578,000 tonnes an increase of 179% from Fiscal 2011, reflecting strong demand from export markets • Global thermal trade flows show India and China as major global importers of thermal coal • South Africa exported an estimated 23 million tonnes of thermal coal to India in 2010 • Asia dominates demand for anthracite coal • 83% of global imports; 95% of expected export demand growth Global Thermal Coal Trade Flows1. Source : Company Reports 34
    • TSX/JSE : FMC January 2013 CONTACT INFORMATIONStephan Theron Samantha ThomsonPresident & CEO Investor Relations ManagerForbes & Manhattan Coal Corp. Forbes & Manhattan Coal Corp.Tel: + 1 416 861 5912 Tel: +1 416 309 2957 Email: info@forbescoal.com Website: www.forbescoal.com 65 Queen Street West, Suite 815 P.O. Box 71, Toronto, Ontario, Canada, M5H 2M5 35