Your SlideShare is downloading. ×
Investor Presentation September 2011
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Investor Presentation September 2011

1,362
views

Published on


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,362
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. TSX/JSE : FMC September 2011 EMERGING SOUTHERN AFRICAN COAL COMPANY Investor Presentation A Forbes & Manhattan Group Company
  • 2. 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 ever beconverted 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
  • 3. Company Overview TSX/JSE : FMC Forbes & Manhattan Coal Corp.’s (“Forbes Coal” or the “Company”) 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 coal resource 51.7 million tonnes Bituminous (NI 43-101): 50.8 million tonnes Anthracite1 Number of 2 (Magdalena Historical annual saleable 648,000 saleable tonnes in mines: and Aviemore) production: fiscal 2011 Mine location: Kwa-zulu, Natal, 2 year target production2: 1,000,000 saleable tonnes South Africa Bituminous - Magdalena 420,000 saleable tonnes Anthracite - Aviemore Production capacity: 1.5 million saleable tonnes1.  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. 32.  As per management’s guidance
  • 4. Investment Highlights TSX/JSE : FMC  Strategic assets in one of the best developed coal markets in the world  Substantial resource base of high quality bituminous and anthracite coal  Ability to TRIPLE production within three years from 2010 historic levels using existing infrastructure and capacity  In-place infrastructure to reach export corridors and growing domestic market  Substantial upside through organic production growth and strategic acquisitions  Experienced coal-focused management teamAs per management’s guidance 4
  • 5. Experienced Management Team TSX/JSE : FMC  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 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  Johan Louw, Pr. Eng. Vice President, Business Development Capital project specialist with over 15 years experience in the Southern African mining and energy sectors Former project manager for Weir PLC and KBR Inc. Former senior plant metallurgist for Anglo Coal covering numerous export focused coal mines  Kuda Muchenje, VP Exploration & Development Seasoned exploration geologist with over 15 years experience in the generation of exploration targets and management of exploration and evaluation programs Former Country Manager(Mozambique)for Rio Tinto  Deb Battiston, CGA Chief Financial Officer Financial specialist with over 20 years experience in the mining sector  Kevern Mattison, NHD (Mining), B. Tech. General Manager More than 20 years operational coal mining experience Spent over 20 years with Anglo Coal, most recently Manager Mining 5
  • 6. Directors TSX/JSE : FMC  Stan Bharti, P.Eng. Executive Chairman Business consultant and a professional mining engineer with more than 25 years experience Founder and Chairman of Forbes & Manhattan, Inc., a private merchant focused on the resource sector, since July 2001  Stephan Theron, B.Comm, CGA , President and CEO  David Stein, MSc., CFA Director Over nine years of asset evaluation, research and corporate finance experience President and Director of Aberdeen International (seed investor in Forbes Coal)  Grant Davey, P. Eng. Director Mining Engineer with close to 20 years experience in coal, platinum and gold mining industry Previously held senior operational management roles for Anglo American in South Africa & Australia  David Gower, P. Geo. Director Professional Geologist and the former Global Head of Nickel Exploration for Falconbridge  Ryan Bennett, M.Mining Eng. Director Masters degree in Mining Engineering from the Colorado School of Mines Extensive technical mining project analyses experience Senior Partner of Resource Capital Fund;(significant shareholder in Forbes Coal) 6
  • 7. Progress to Date TSX/JSE : FMC Corporate Milestones…dual listed with a growing management team Co-Listied on the Johannesburg Completed RTO within 60 days, began trading Stock Exchange debut under theon the Toronto Stock Exchange under the symbol Closed CDN$42 million capital raise at $4.55/share; symbol “FMC”;; Experienced “FMC” Forbes Coal increased ownership in Slater Coal to COO joined FMC September 2010 76.75%; Completed second NI 43-101 Technical July 2011 Report March 2011 Operational Highlights…production up 34% since acquiring the Slater Coal properties Reported a 45% Signed three year offtake agreement increase in with leading energy trading company production and 65% for 1.75 million tonnes of thermal coal; Released fiscal 2011 full year results: FMC increase in average Increased export capacity at Navitrade Terminal January and February 2011 production produced 648,000 saleable tonnes monthly revenue for at Richards Bay; Magdalena upgraded mining increases 28% (combined) and $16.5 million EBITDA (for 12 Q1 2012 operations; increased saleable production April 2011 months ended February 28,2011 at Slater capacity by 330,000 tonnes per annum Coal properties) August 2011 December 2010 May 2011 7
  • 8. Coal Markets Overview TSX/JSE : FMC Thermal Metallurgical •  Aviemore one of four listed metallurgical (anthracite) coal •  Thermal (bituminous) coal sold producers in South Africa directly to independent industrial companies in South Africa •  Cost-effective replacement for coking coal/coke Domestic •  Thermal coal sold at circa US$80 per tonne vs low quality coal sold •  Applications include iron ore to Eskom priced at US$20 - 30 per pelletizing, PCI for blast furnaces, tonne calcining for electrode manufacturing, ferroalloys and power generation •  Demand increasing from emerging •  Demand driven by the metal refining Asian markets, especially India and industry China •  Asia dominates demand for anthracite •  Indian government expecting coal domestic coal shortfall of approx. 112 o  83% of global imports; 95% of million tonnes for year ended March expected export demand Export 2012; 35% increase from previous forecasts growth •  Pricing highly correlated with PCl coal •  South African coal exports to India prices increased 161% 2008 – 2009 •  Australian coal producers starting to •  China imported165 million tonnes of settle PCl contracts at a record US$275 coal in 2010, up 31% from prior year per tonne FOB for April –June quarter 1Source: Company reports1.  McCloskey Coal Report, March 22, 2 011 8
  • 9. Established Mining Region TSX/JSE : FMCSource: Company reports 9
  • 10. TSX/JSE : FMCCompany Outlook 10
  • 11. 2010 – 2013 Mine Plan TSX/JSE : FMC•  Increasing production: saleable production is expected to grow at a CAGR of 41% from 2010 to 2013 –  Driven by expansion of production from the Magdalena and Aviemore underground mines Saleable Production1(000 t) 1,423 1,061 648 505 2010FY 2011FY 2012FY 2013FY Bituminous Anthracite 1.  Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com. 11
  • 12. Organic Growth Opportunities TSX/JSE : FMCRamp up at Magdalena•  Double production from fiscal 2010 to fiscal 2013•  FY2011 CAPEX: $9.7 million•  Estimated FY2012 CAPEX: $12.4 millionIncrease wash plant recovery rates•  Improve from current level of 60% to 70%•  Investigate product upgrade potential•  FY2011 CAPEX: $1.5 million•  Estimated FY2012 CAPEX: $1.2 millionAviemore anthracite operations•  Ramp-up saleable production to 500,000 by tonnes/ year by fiscal 2014•  FY2011 CAPEX: $0.16 million•  Estimated FY2012 CAPEX: $3.7 millionSource: Company reports, all figures in CDN $ unless otherwise indicated 12
  • 13. Positioned for Multi-Year Export Growth TSX/JSE : FMCSECURED ADDITIONAL EXPORT CAPACITY AT RICHARD’S BAYMilestone agreement inked on December 7, 2010 increasesexport capacity incrementally by 960,000 tonnes per annumfor a total export capacity of 1,157,000 tonnes in 2013. SIGNIFICANT OFFTAKE AGREEMENT PROVIDES STEADYCASH FLOWThree year offtake agreement reached with global energy tradingcompany for 1.75 million tonnes (total) of thermal coalCash flow from offtake agreement will fund continued ramp up ofproduction at the two operating mines  13
  • 14. External Growth Opportunities TSX/JSE : FMC Target consolidation in area •  6 mining operators estimated in the region •  1 acquisition opportunity currently identified in Kwa-Zulu, Natal, South Africa •  Substantial enhanced upside by improving acquired business operating practices •  Increased export allocation and marketing advantage •  Synergy in product base and cost savings with central management teamSource: Company reports 14
  • 15. Mining Resource TSX/JSE : FMC NI 43 – 101 Global Resource1 Measured Indicated Inferred MI & I Yearly LOM ROM2Magdalena 51.7 m - - 51.7 m 1.0 m + 20 yearsBituminousAviemore 1.6 m 34.1 m 15.1 m 50.8 m 0.25 m + 20 yearsAnthracite1.  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 15
  • 16. U/G LOM Production Profile 1 TSX/JSE : FMC 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 Tonnes 1,000,000 800,000 600,000 400,000 200,000 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Magdalena O/C Magdalena U/G Aviemore U/GMagdalena2 Aviemore2•  Section 1: ABM30 High Seam, 40,000 tonnes/month •  Section 1: Conventional, 22,000 tonnes/month•  Section 2: Conventional Low Seam, 10,000 tonnes/month •  Section 2: Conventional, 22,000 tonnes/month•  Section 3: Dyke, 12,000 tonnes/month •  Investigate low seam CM’s for future•  Section 4: ABM30 High Seam, 40,000 tonnes/month•  Section 5: CM Low Seam, 25,000 tonnes/month•  Section 6: CM Low Seam, 25,000 tonnes/month•  Section 7: CM Low Seam, 25,000 tonnes/month1.  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. 16
  • 17. Magdalena Bituminous Coal Operations TSX/JSE : FMC 17
  • 18. Magdalena Bituminous Coal Operations TSX/JSE : FMC Magdalena Operations and Site Layout Asset Summary1Location: •  Dundee, Kwa-Zulu, NatalCoal Type: •  BituminousResource: •  51.7 million tonnesAcres: •  4,557Average BTU: •  12,250 BTU/lb •  6,800 kcal/kgAsh: •  15.0%Volatility: •  16.7%Saleable •  2011FY2: 555,000 tonnesProduction: •  2012FY2: 900,000 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 18
  • 19. Magdalena Bituminous Coal Production Profile TSX/JSE : FMC•  Ramp-up on schedule•  New ABM30 continuous miner arrived in December 2010 (further increased saleable production capacity by close to 30,000 tonnes per month)1•  Second ABM30 continuous miner scheduled for delivery end September 2011 Magdalena Saleable Bituminous Coal Production2 (000 t)/February 28 year-end 1,003 900 556 485 449 347 326 299 2006 2007 2008 2009 2010 2011 2012E 2013E Magdalena - open pit Magdalena - underground1.  As per management’s guidance2.  Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com. 19
  • 20. Magdalena Project Area & Mining Rights1 TSX/JSE : FMC1.  Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com. 20
  • 21. Aviemore Anthracite Coal Operations TSX/JSE : FMC 21
  • 22. Aviemore Anthracite Coal Operations TSX/JSE : FMC Aviemore Operations Asset Summary1Location: •  Dundee, Kwa-Zulu, NatalCoal Type: •  AnthraciteResource: •  50.8 million tonnesAcres: •  13,818Average BTU: •  12,800 BTU/lb •  7,100 kcal/kgAsh: •  13.7%Volatility: •  7.9%Saleable •  2011FY2: 92,000 tonnesProduction: •  2012FY2: 161,000 tonnesMine Life: •  Approximately +20 yearsInfrastructure: •  Wash plant, processing plant and siding 1.  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 22
  • 23. Aviemore Anthracite Coal Production Profile TSX/JSE : FMC•  Annual production capacity expected to hit 500,000 tonnes of saleable coal per annum in fiscal 20141 Aviemore Anthracite Coal Saleable Production2 (000 t)/February 28 year-end 420 161 102 92 59 62 61 20 2006 2007 2008 2009 2010 2011 2012E 2013E1.  As per management’s guidance2.  Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com. 23
  • 24. Aviemore Project Area & Mining Rights1 TSX/JSE : FMC1.  Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com. 24
  • 25. Corporate Structure TSX/JSE : FMC Forbes Coal Ownership Structure Forbes and Manhattan Coal Corp. (Ontario, TSX/JSE Listed) 100% Forbes and Manhattan Coal Inc. (Ontario) 76.75% 100%Corondale Prospecting andMining (Proprietary) Limited Slater Coal (Proprietary) Limited Slater Vendors Dormant Company 100% (South Africa) 23.25% 0% 70% Zinoju Coal (Proprietary) Limited BEE (South Africa) 30% (Nulane) 100% 100% Magdalena Aviemore Bituminous Coal Anthracite Coal Source: FM Coal Corp 25
  • 26. Responsible Development TSX/JSE : FMC•  Has a good working relationship with its two unions: National Union of Mineworkers (NUM) and Amalgamated Mining & Construction Union (AMCO) •  Labour contracts are on an annual basis•  Currently in the process of 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  26
  • 27. Capitalization and Share Performance TSX/JSE : FMC Share Structure Basic Shares Outstanding 34.8 million FD Shares Outstanding1 39.5 million Canadian Share Performance South African Share Performance Company Ticker TSX: FMC Company Ticker JSE: FMC Closing Price (Sept 10, 2011) C$2.45 Closing Price (Sept 10, 2011) ZAR 2,100 Trading Range C$2.22 – $5.01 Trading Range ZAR2,100 –2,750 (since September 27, 2010) (since July 28, 2011) Market Capitalization (Basic) C$85 million Market Capitalization (Basic) ZAR 731million Market Capitalization (FD) C$98 million Market Capitalization (FD) ZAR 829 million1 Includes2,700,000 performance warrants that convert into common shares upon the company reaching certain operating targets. Also includes3,445,300 options with a weighted average exercise price of C$5.35 per share, 763,887 broker warrants convertible into common shares at an exerciseprice of C$2.80 per share and expiring on January 23, 2012 and 480,000 broker warrants convertible into common shares at an exercise price of C$4.55 per 27share and expiring on February 22, 2013.
  • 28. Peer Group Trading Analysis TSX/JSE : FMC•  The listed South African peer universe for Forbes Coal includes: Price:earnings comparables South African listed peers   Exxaro, Optimum Coal, Coal of Africa, Keaton Energy, FY+1 average (1)= 8.3x FY+2 average(1) = 5.9x Wescoal, Resources Generation, Hwange and Firestone 11.3 Energy (the latter 4 of which are not set out in the analysis 12.0 alongside due to lack of broker forecast earnings) 10.0•  The relative sizes of these peers are set out below, in terms of 8.5 8.5 8.2 market capitalization: 8.0 7.1 6.4 6.3 6.0 Peer Market Share price Share price Capitalization performance 6 performance (R’m) months to date 12 months to 4.0 2.9 3.0 date 2.1 2.0 Exxaro 62 821 17.4% 62.0% 0.0 Optimum Coal 7 931 -5.9% 25.1% Keaton Energy Coal of Africa Optimum Coal Exxaro Forbes Coal Corp. Coal of Africa 4 037 -21.6% -9.6% FY 12 P/E FY 13 P/E Resources 1 163 -18.6% 7.3% Sales growth (FY12 to FY13) versus FY12 P/E: South African listed peers Generation 70.0% Forbes Coal 681 -38.4% -19.1% Bubble sizes represented by market cap 60.0% Hwange 633 -22.1% 80.4% Keaton Energy 50.0% Keaton Energy 487 -26.9% -32.4% 40.0% Forbes Coal Coal of Africa Firestone 421 -21.1% -54.4% Sales Growth (FY12 to FY13) 30.0% Energy 20.0% Wescoal 115.1 -33.0% 43.4% Exxaro Optimum Coal 10.0% 0.0% 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 -10.0% FY12 P/E Source: Bloomberg, 30 August 2011 (1) Excluding Forbes Coal FY12 and FY13 P/E is projected 28
  • 29. Summary TSX/JSE : FMC  Currently producing high quality bituminous and anthracite coal  Plans to organically TRIPLE production from 2010 historic levels to 1.5 million saleable tonnes per annum in three years  Export capacity at Richards Bay Coal Terminal and Grindrod Terminals Richards Bay to increase incrementally to 1,157,000 tonnes per annum by 2013  Offtake agreement with global energy trading company provides cash to fund ramp up at two operating mines  Growing demand for coal from emerging markets  Looking at strategic acquisition opportunities in the region  Strong balance sheet and coal-focused management team 29
  • 30. TSX/JSE : FMCAppendix 30
  • 31. South Africa – Overview TSX/JSE : FMC•  South Africa is the most attractive country in which to do business according to Ernst & Richard’s Bay Port Young 2011 Africa Attractiveness Survey World’s Largest Coal Terminal•  Modern infrastructure system supporting distribution of commodities for both domestic and export markets –  Extensive rail network (10th longest in the world) –  Majority of electricity generated via coal fired power stations –  Richard’s Bay port in South Africa is the world’s largest bulk coal terminal •  91 million tonne capacity •  Coal railed from approximately 49 mines•  Long history in resource development –  World’s largest PGM & ferrochrome producer –  Significant coal, iron ore and manganese resources 31
  • 32. Historical Coal Prices TSX/JSE : FMC •  South African thermal coal (Richard’s Bay terminal) and coking coal prices have increased significantly over the last several months •  The recovery to 2008 levels have been driven by increased demand, particularly from China and India, and higher cost supply from key producing nations such as Russia and the U.S. Historical South African Thermal Coal and PCI Coal Prices $300 $250 $200(US$ /tonne) $150 $100 $50 $0 Jul-07 Sep-07 Jul-08 Sep-08 Jul-09 Sep-09 Jul-10 Sep-10 Jan-07 Mar-07 May-07 Jan-08 Mar-08 May-08 Jan-09 Mar-09 May-09 Jan-10 Mar-10 May-10 Jan-11 Nov-07 Nov-08 Nov-09 Nov-10 Richards Bay Thermal Coal Spot Price McCloskey/Xinhua Infolinks Coking Coal Price Source: Bloomberg 32
  • 33. Thermal Coal Global Overview TSX/JSE : FMC•  Significant upside potential to export prices Global Thermal Demand and Supply Forecast•  A tightening of the global seaborne market in late 2010 provided the initial base for thermal coal to rise•  Robust import demand from India•  Growing imports into China due to increasing demand and production curtailments•  Slowing export supply growth from Indonesia as more coal is diverted for domestic use•  Short-term supply constraints caused by flooding in Australia•  Australia is the second-largest exporter of bituminous coal•  Wood Mackenzie stated that prices could exceed 2008 highs Source GTIS, Macquarie Research, February 2011 33
  • 34. Thermal Coal Global Overview TSX/JSE : FMC •  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 34
  • 35. Thermal Coal Global Overview TSX/JSE : FMC •  India will be relying heavily on coal fired power plants in the near future 35
  • 36. Thermal Coal Global Overview TSX/JSE : FMC •  As a result of reliance on thermal power generation, Indian thermal imports are expected to rise significantlySource GTIS, Macquarie Research, February 2011 36
  • 37. Thermal Coal Global Overview TSX/JSE : FMC •  Chinese thermal coal imports have been huge; this trend is expected to continue into near future 37
  • 38. Metallurgical Coal Global Overview TSX/JSE : FMC•  The coking coal market was fundamentally tight prior to the Global Thermal Demand and Supply Forecast Queensland floods, which have further constrained the market•  Current situation highlights the lack of geographical diversity to supply side portfolio, leaving it prone to shocks•  Market deficit likely to prevail, keeping price at decent premium to cost support•  Requirement for projects in high geopolitical and infrastructure risk regions will keep long-term prices elevated Source GTIS, Macquarie Research, February 2011 38
  • 39. Metallurgical Coal Global Overview TSX/JSE : FMC •  Many metallurgical coal basins exist, however there is a challenge in bringing new projects onlineSource GTIS, Macquarie Research, February 2011 39
  • 40. Metallurgical Coal Global Overview TSX/JSE : FMC •  Supply growth in 2011 is set to be much lower than in 2010, while key regions increase demand 40
  • 41. Metallurgical Coal Global Overview TSX/JSE : FMC •  Global anthracite coal demand driven by the metal refining industry –  Cost-effective replacement for coking coal/coke •  Emerging markets consuming the most steel •  China is the world largest steel producer –  Accounts for 44% of global steel production –  Expected to sustain steel consumption growth of 6%-8% annually •  China accounts for 52% of the world’s coking coal consumption –  Imports more than half of coking coal consumed from export markets Increasing steel production and consumption drives demand for anthracite coalGlobal steel consumption: Macquarie Commodities Research February 2011 41
  • 42. TSX/JSE : FMC September 2011 CONTACT INFORMATIONStephan Theron Sabina SrubiskiPresident & CEO Investor Relations ManagerForbes & Manhattan Coal Corp. Forbes & Manhattan Coal Corp.   Tel: + 1 416 861 5912 Tel: + 1 416 309 2957   info@forbescoal.com ssrubiski@forbescoal.comwww.forbescoal.com www.forbescoal.com 65 Queen Street West, Suite 815 P.O. Box 71, Toronto, Ontario, Canada, M5H 2M5 42