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    September 2013 September 2013 Presentation Transcript

    • A Forbes & Manhattan Group Company Corporate Presentation September 2013TSX/JSE : FMC GROWING COAL PRODUCER IN SOUTHERN AFRICA
    • 2 TSX/JSE : FMC Disclaimer This presentation contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with 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 resource estimates; 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 or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Company’s projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous mining activities at the projects, and detailed research and analysis completed by independent consultants and management of the Company; research and estimates regarding the timing of delivery for long-lead items; and knowledge regarding certain factors described in the technical report filed under the profile of the Company on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independent consultants. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel and independent 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 mining activities; 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 could cause 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 from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update 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 and mineral 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 has reviewed and approved the scientific and technical information contained in this presentation. Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” 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 an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be 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 is economically or legally mineable.
    • 3 TSX/JSE : FMC Company Overview Forbes & 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 resource (NI 43-101): 72.5 million tonnes Bituminous (13.4 million tonnes inferred) 59.4 million tonnes Anthracite* (17.8 million inferred) Number of mines: 2 (Magdalena and Aviemore) Historical annual saleable production: 958,000 saleable tonnes in fiscal 2013 Mine location: Kwa-zulu, Natal, South Africa 1 year target production: (fiscal 2014) 845,000 saleable tonnes Bituminous - Magdalena 300,000 saleable tonnes Anthracite – Aviemore 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 Forbes Coal Dundee Operations, KwaZulu-Natal Province, South Africa”, dated October 1, 2012, 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.
    • 4 TSX/JSE : FMC Location of Operations
    • 5 TSX/JSE : FMC Mining Resource (Dundee) NI 43 – 101 Global Resource1 Measured Indicated MI Inferred Yearly ROM2 (t) LOM Magdalena Bituminous 59.1 m - 59.1 m 13.4 m 1.3 mt + 20 years Aviemore Anthracite 1.5 m 40.1 m 41.6 m 17.8 m 0.5 mt + 20 years 1. Source: National Instrument 43 – 101 Report (Minxcon October 1, 2012) available under the profile of the Company on SEDAR at www.sedar.com. 2. As per management’s guidance for fiscal 2014
    • 6 TSX/JSE : FMC Magdalena Bituminous Coal Operations
    • 7 TSX/JSE : FMC Magdalena Bituminous Coal Operations Location: • Dundee, Kwa-Zulu, Natal Coal Type: • Bituminous Resource: • 72.5 million tonnes1 (13.4 million tonnes inferred) Acres: • 4,557 Average BTU: • 12,250 BTU/lb • 6,800 kcal/kg Ash: • 15.0% Volatility: • 16.7% Saleable Production: • 2011FY2: 556,000 tonnes • 2012FY2: 748,000 tonnes • 2013FY2: 703,000 tonnes3 Mine Life: • Approximately +20 years Infrastructure: • Wash plant, processing plant and siding Asset Summary 1. Source: National Instrument 43 – 101 Report (Minxcon October 1, 2012) available under the profile of the Company on SEDAR at www.sedar.com. 2. Fiscal year-end February 28 3. Including bought in coal
    • 8 TSX/JSE : FMC Magdalena Project Area & Mining Rights * Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
    • 9 TSX/JSE : FMC Magdalena Bituminous Coal Production Profile 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 * Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 299 347 326 449 485 556 748 702 845 FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A FY14E Magdalena o/c Magdalena u/g
    • 10 TSX/JSE : FMC Aviemore Anthracite Coal Operations
    • 11 TSX/JSE : FMC Aviemore Anthracite Coal Operations Location: • Dundee, Kwa-Zulu, Natal Coal Type: • Anthracite Resource: • 50.8 million tonnes1 (15.1 million tonnes inferred) Acres: • 13,818 Average BTU: • 12,800 BTU/lb • 7,100 kcal/kg Ash: • 13.7% Volatility: • 7.9% Saleable Production: • 2011FY2: 92,000 tonnes • 2012FY2: 176,000 tonnes • 2013FY2: 255,000 tonnes Mine Life: • Approximately +20 years Infrastructure: • Wash plant, processing plant and siding Asset Summary 1. Source: National Instrument 43 – 101 Report (Minxcon October 1, 2012) available under the profile of the Company on SEDAR at www.sedar.com. 2. Fiscal year-end February 28
    • 12 TSX/JSE : FMC Aviemore Project Area & Mining Rights * Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
    • 13 TSX/JSE : FMC Aviemore Anthracite Coal Production Profile 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 1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com. 59 62 61 102 20 92 176 255 300 FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A FY14E
    • 14 TSX/JSE : FMC Results Q1 2013 (March – May 2012 ) Q4 2013 (Dec’ – Feb’ 2013 ) Q1 2014 (March-May 2013) Revenue $ 20.8 million $13.47 million $ 20.51million Gross Profit $ 1.81 million $0.93 million $ 0.34 million Consolidated EBITDA $ 2.45 million -$2.58 million $2.01 million Q1 2013 (March – May 2012 ) Q4 2013 (Dec’ – Feb’2013) Q1 2014 (March-May 2013) Run of Mine Production (t) 387,075 364,145 447,466 Saleable Production1 (t) 244,605 214,044 243,219 Total Sales (t) 234,997 168,913 261,035 1. Excluding bought in coal of 89,739 for fiscal 2013
    • 15 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% and extended working hours • 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 Responsible Development
    • 16 TSX/JSE : FMC Experienced Management Team Stephan Theron, B.Comm, CGA │President and Chief Executive Officer Extensive management, project finance and equity analysis experience in the mining, energy and infrastructure sectors. Previous capital and project experience includes Weir PLC and AMEC PLC as well as former sector head materials and energy with a specific focus on South African coal market. Malcolm Campbell, Pr. Cert. Eng. (Mining) │Chief Operating Officer Fourth generation coal miner with 25 years industry experience. Skilled in operational management, turnaround strategies and business development. Spent 20 years with Anglo Coal; held a variety of positions including regional manager for new business development and strategy. Deb Battiston, CGA │Chief Financial Officer Financial specialist with over 20 years experience in the mining sector. Sarah Williams, CA │Vice President Finance Chartered Accountant (SA) with nine years experience in the corporate finance industry and expertise in the resource sector where she played key roles in company listings and IPOs, mergers and acquisitions, restructurings and debt and equity capital raisings. Kevern Mattison, NHD (Mining), B. Tech.│General Manager More than 20 years operational coal mining experience and spent over 20 years with Anglo Coal, most recently as a manager of mining. Fanie Müller, B.Sc. Eng., M. Eng. │ Group Manager - Technical Support Service A Professional Mining Engineer registered with the Engineering Council of South Africa. Project experience in commodities ranging from coal, gold and diamonds to platinum and uranium. The foundation of his career in mining was initiated at Anglo Coal. He joined Forbes Coal as the Group Technical Services Manager in 2010.
    • 17 TSX/JSE : FMC Directors Stephan Theron, B.Comm, CGA , │ President and CEO Craig Wiggill, B.Sc. Eng. │ Chairman of the Board Has held management, executive and directorship positions on several international mining companies in the coal sector and, as CEO of Coal Americas at Anglo American plc. was responsible for all of that company’s coal activities in North and South America. He was previously Managing Director of Anglo Coal Marketing Ltd from 2000 to 2004. Stan Bharti, P.Eng. │ Director Business consultant and a professional mining engineer with more than 25 years experience President of Forbes & Manhattan, Inc., a private merchant focused on the resource sector, since July 2001. John Dreyer, │ Director Mr. Dreyer is a qualified South African lawyer, CEO of Tavistock Coal and executive director of Anglo American Platinum. He served as chairman of ASX listed Firestone Energy until 2011. Mr. Dreyer currently serves on the board of ASX listed Cobar Consolidated Resources where he also serves on the audit committee. Bernard Wilson, │ Director An advisor in corporate finance and investment banking. Notable leadership roles include serving as the Chairman of the Canadian 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 Chairman Founders Board of the Institute of Corporate Directors. Quinn Roussel, MBA, B.Sc . Mining Eng│ Director Thomas Quinn Roussel is a Principal of Resource Capital Funds, a mining-focused private equity firm based out of Denver, Colorado. Mr. Roussel has also worked as an engineer in both the mining and the oil & gas industries and currently serves on the board of an Australian resource company, Finders Resources. He holds MBA degress from the University of South Carolina and Wirtschafts Universitat-Wien and a B.S. in Mining Engineering from Colorado School of Mines. Michael Price, B.Sc., Phd. │ Director Thirty-five years experience in mining and mining finance. After working for BP Coal, BP Minerals and BP Exploration in various mine management and business development roles Mr. Price moved into mining finance with NM Rothschild & Sons, Societe Generale and Barclays Capital. Mr. Price is now a Non-Executive Director of several mining companies and he is an independent adviser on mining finance as well as the London Representative of Resource Capital Fund.
    • 18 TSX/JSE : FMC Investment Highlights • 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 • Experienced coal-focused management team
    • 19 TSX/JSE : FMC Share Price Performance Source: Google Finance; August 2013 Ticker Company Exchange YTD performance FMC Forbes Coal TSX -247% UNV Universal Coal ASX -7% IKW Ikwezi Mining ASX -27% CCC Continental Coal ASX -37% CZA Coal of Africa ASX -21% TSX JSE Shares Outstanding 34.8 m FD Shares Outstanding 39.5 m Closing Price (Aug 30, 2013) C$0.25 R2.41 Trading Range (52 week) C$0.22 – $1.00 R2.12- R9.65 Market Capitalization (Basic) C$8.70 m R84.0m Market Capitalization (FD) C$9.87 m R95.3m Capitalization FMC – listed on TSX and JSE
    • 20 TSX/JSE : FMC Strategy and Business Plan Magdalena • Increasing productivity and production capacity through operational efficiency initiatives; • Achieve saleable production of 845,000 for the year; • Investigate regional possibilities for the relocation of the opencast at the end of the current extension; • Generate pitroom for future mining expansion; • Increase wash plant recovery rates from the current level of 62% by improved efficiencies of wash plant by using density control; • Investigate product upgrade potential. Aviemore • Achieve saleable production of 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;
    • 21 TSX/JSE : FMC New Opportunities Where? • 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 countries How? • Acquisitions – currently reviewing • Farm in options – currently reviewing one opportunity • 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)
    • 22 TSX/JSE : FMC Appendix
    • 23 TSX/JSE : FMC Current Company Structure Forbes Coal Ownership Structure Forbes Coal (Proprietary) Limited (South Africa) Zinoju Coal (Proprietary) Limited (South Africa) Aviemore Anthracite Coal Magdalena Bituminous Coal 70% 100% 100% 30% Corondale Prospecting and Mining (Proprietary) Limited Dormant Company 100% Forbes and Manhattan Coal Corp. (Ontario, TSX/JSE Listed) BEE (Nulane) 100% Bowwood and Main 33 (Pty) Ltd (South Africa) 100%
    • 24 TSX/JSE : FMC Production – ROM - Quarter 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 QuarterlyROMtonnes ROM tonnes ROM Magdalena ROM Aviemore
    • 25 TSX/JSE : FMC Production - Saleable - Quarter 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Quarterlysaleabletonnes Saleable tonnes Saleable Magdalena Saleable Aviemore Bought in Coal
    • 26 TSX/JSE : FMC Sales tonnes – Quarter (Operations) 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 FY11Q1FY11Q2FY11Q3FY11Q4 FY12Q1FY12Q2FY12Q3FY12Q4 FY13Q1FY13Q2FY13Q3FY13Q4 Quarterlysalestonnes Sales tonnes Sales Magdalena Sale Aviemore
    • 27 TSX/JSE : FMC Revenue and Sales Tons (CAD$) - 50 100 150 200 250 300 350 400 0 5 10 15 20 25 30 35 40 FY11Q1 FY11Q2 FY11Q3 FY11Q4 FY12Q1 FY12Q2 FY12Q3 FY12Q4 FY13Q1 FY13Q2 FY13Q3 FY13Q4 Salestonnes‘000 Revenue$’m Revenue and sales tonnes Revenue $'m Sales tons'000 Notes: 1) The API4$ price has decreased significantly from FY12. Export contracts on API4$ account for 50%-60% of total sales. This has impacted on revenue and margins. 2) API4$ pricing for FY14Q4 was between $85 - $89 per tonne API4$ pricing decreased from $105 to $85.
    • 28 TSX/JSE : FMC • For Fiscal 2013 Forbes Coal reported export sales of 437,000 tonnes, 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 Access to Export Markets Global Thermal Coal Trade Flows 1. Source : Company Reports
    • 29 Stephan Theron President & CEO Forbes & Manhattan Coal Corp. Tel: + 1 416 861 5912 September 2013 CONTACT INFORMATION 65 Queen Street West, Suite 815 P.O. Box 71, Toronto, Ontario, Canada, M5H 2M5 Email: info@forbescoal.com Website: www.forbescoal.com TSX/JSE : FMC Samantha Thomson Investor Relations Manager Forbes & Manhattan Coal Corp. Tel: +1 416 309 2957