A Forbes & Manhattan Group CompanyCorporate PresentationJune 2013TSX/JSE : FMCGROWING COAL PRODUCER IN SOUTHERN AFRICA
2TSX/JSE : FMCDisclaimerThis 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.
3TSX/JSE : FMCCompany OverviewForbes & Manhattan Coal Corp.’s (FMC) vision is to build a high quality bituminousand anthracite coal company with production capacity in excess of10 million tonnes per yearCompany SummaryHeadquarters: Toronto, Ontario Total mineable coalresource(NI 43-101):72.9 million tonnes Bituminous(13.4 million tonnes inferred)59.4 million tonnes Anthracite*(17.8 million inferred)Number ofmines:2 (Magdalenaand Aviemore)Historical annual saleableproduction:958,000 saleable tonnes infiscal 2013Mine location: Kwa-zulu, Natal,South Africa1 year target production:(fiscal 2014)845,000 saleable tonnesBituminous - Magdalena300,000 saleable tonnesAnthracite – AviemoreProduction 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 DundeeOperations, KwaZulu-Natal Province, South Africa”, dated October 1, 2012, prepared for the Company by Minxcon (the “Technical Report”). A copy of theTechnical Report is available under the profile of the Company on SEDAR at www.sedar.com.
5TSX/JSE : FMCMining Resource (Dundee)NI 43 – 101 Global Resource1Measured Indicated MI Inferred YearlyROM2 (t)LOMMagdalenaBituminous59.1 m - 59.1 m 13.4 m 1.3 mt + 20 yearsAviemoreAnthracite1.5 m 40.1 m 41.6 m 17.8 m 0.5 mt + 20 years1. 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
7TSX/JSE : FMCMagdalena Bituminous Coal OperationsLocation: • Dundee, Kwa-Zulu, NatalCoal Type: • BituminousResource: • 72.5 million tonnes1(13.4 million tonnes inferred)Acres: • 4,557Average BTU: • 12,250 BTU/lb• 6,800 kcal/kgAsh: • 15.0%Volatility: • 16.7%SaleableProduction:• 2011FY2: 556,000 tonnes• 2012FY2: 748,000 tonnes• 2013FY2: 703,000 tonnes3Mine Life: • Approximately +20 yearsInfrastructure: • Wash plant, processing plant andsidingAsset Summary1. 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 283. Including bought in coal
8TSX/JSE : FMCMagdalena Project Area & Mining Rights* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
9TSX/JSE : FMCMagdalena Bituminous Coal Production ProfileDrilling at Magdalena for potential opencast mine expansion has beencompleted, 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.299347 326449 485 556748 702845FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A FY14EMagdalena o/c Magdalena u/g
11TSX/JSE : FMCAviemore Anthracite Coal OperationsLocation: • Dundee, Kwa-Zulu, NatalCoal Type: • AnthraciteResource:• 50.8 million tonnes1(15.1 million tonnes inferred)Acres: • 13,818Average BTU:• 12,800 BTU/lb• 7,100 kcal/kgAsh: • 13.7%Volatility: • 7.9%SaleableProduction:• 2011FY2: 92,000 tonnes• 2012FY2: 176,000 tonnes• 2013FY2: 255,000 tonnesMine Life: • Approximately +20 yearsInfrastructure:• Wash plant, processing plant andsidingAsset Summary1. 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
12TSX/JSE : FMCAviemore Project Area & Mining Rights* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
13TSX/JSE : FMCAviemore Anthracite Coal Production ProfileAt Aviemore, a feasibility study for an expansion is underway. There is potentialfor 1 million tonnes of ROM per annum.Aviemore Anthracite Coal Saleable Production1(000 t)/February 28 year-end1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.59 62 611022092176255300FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A FY14E
14TSX/JSE : FMCResultsQ1 2013(March – May 2012 )Q2 2013(June – Aug’ 2012 )Q3 2013(Sept’ – Nov’ 2012 )Q4 2013(Dec’ – Feb’ 2013 )Revenue $ 20.8 million $ 23.39 million $10.83 million $13.47 millionGross Profit $ 1.81 million $ 2.35 million -$2.29 million -$0.93 millionConsolidatedEBITDA$ 2.45 million $ 2.72 million -$3.39 million -$2.58 millionQ1 2013(March – May 2012 )Q2 2013(June -Aug’ 2012)Q3 2013(Sept’ – Nov’2012)Q4 2013(Dec’ – Feb’2013)Run of MineProduction (t)387,075 414,551 246,002 364,145SaleableProduction1 (t)244,605 256,583 152,013 214,044Total Sales (t) 234,997 284,196 147,254 168,9131. Excluding bought in coal of 89,739 for fiscal 2013
15TSX/JSE : FMC• Good working relationship with its twounions: National Union of Mineworkers(NUM) and Amalgamated Mining &Construction Union (AMCU)• Labour contracts are negotiated on anannual basis• Recent labour disruption was settledNovember 16, 2012 resulting in anaverage wage increase of 14.8% andextended working hours• Implementing internationally recognizedsafety, health, environmental and qualitymanagement systems• Adheres to the tenets of the MiningCharter and promotes localprocurement and procurement from BEEcompanies• Committed to developing localcommunitiesResponsible Development
16TSX/JSE : FMCExperienced Management TeamStephan 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.
17TSX/JSE : FMCDirectorsStephan 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.Quinn Roussel, MBA, B.Sc . Mining Eng│ DirectorThomas 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 onthe board of an Australian resource company, Finders Resources. He holds MBA degress from the University of South Carolinaand Wirtschafts Universitat-Wien and a B.S. in Mining Engineering from Colorado School of Mines.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.
18TSX/JSE : FMCInvestment Highlights• Resource base of high quality bituminous and anthracite coal in one of the best developedcoal markets in the world• Goal to triple organic production within three years from 2010 historic levels using existinginfrastructure and capacity• Established infrastructure to reach export corridors and growing domestic market• Delivering on goals to increase sales while lowering production costs, resulting in strongEBITDA• Experienced coal-focused management team
19TSX/JSE : FMCShare Price PerformanceSource: Google Finance; June 2013Ticker Company Exchange YTD performanceFMC Forbes Coal TSX -26%UNV Universal Coal ASX -38%IKW Ikwezi Mining ASX -4%CCC Continental Coal ASX -20%CZA Coal of Africa ASX -20%TSX JSEShares Outstanding 34.8 mFD Shares Outstanding 39.5 mClosing Price (May 31, 2013) C$0.56 R3.50Trading Range (52 week) C$0.31 – $2.03 R3.10-R16Market Capitalization (Basic) C$19.48 m R121.8mMarket Capitalization (FD) C$22.12 m R138.2mCapitalizationFMC – listed on TSX and JSE
20TSX/JSE : FMCStrategy and Business PlanMagdalena• Increasing productivity and production capacity through operational efficiency initiatives;• Achieve saleable production of 845,000 for the year;• Investigate regional possibilities for the relocation of the opencast at the end of the current extension;• Generate pitroom for future mining expansion;• Increase wash plant recovery rates from the current level of 62% by improved efficiencies of wash plant byusing density control;• Investigate product upgrade potential.Aviemore• Achieve saleable production of 300,000 tonnes for the year;• Progress exploration and feasibility study for the expansion of1 million ROM tonnes per year producer.Improve operational efficiencies by:• Further develop management team with international experience;• Explore opportunities to increase sales and exports;
21TSX/JSE : FMCNew OpportunitiesWhere?• Forbes Coal to stay focused on Southern Africa. Most of the coals in Southern Africa can be washed toproduce an acceptable export thermal product.• Lack of both infrastructure and investment are the main reasons why production and exports remainconstrained.• The countries that are viewed to have the best potential for coal projects are South Africa, Botswana,Mozambique, Zimbabwe, Tanzania and Swaziland.• Opportunities have already been reviewed in most of the Southern African countriesHow?• Acquisitions – currently reviewing• Farm in options – currently reviewing one opportunity• Licence applications• Outright acquisitions preferable for operational assets and advanced projects• Farm in options help mitigate against the risk of huge capital outlay. This is the preferred entry opportunityfor exploration projects• Licence applications will only work in countries with robust and transparent licence frameworks (e.gBotswana, Mozambique)
27TSX/JSE : FMCRevenue and Sales Tons (CAD$)-501001502002503003504000510152025303540FY11Q1 FY11Q2 FY11Q3 FY11Q4 FY12Q1 FY12Q2 FY12Q3 FY12Q4 FY13Q1 FY13Q2 FY13Q3 FY13Q4Salestonnes‘000Revenue$’mRevenue and sales tonnesRevenue $m Sales tons000Notes:1) The API4$ price has decreased significantly from FY12. Export contracts on API4$ account for 50%-60% oftotal sales. This has impacted on revenue and margins.2) API4$ pricing for FY14Q4 was between $85 - $89 per tonneAPI4$ pricing decreasedfrom $105 to $85.
28TSX/JSE : FMC• For Fiscal 2013 Forbes Coal reported export sales of 437,000 tonnes, reflecting strongdemand 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 growthAccess to Export MarketsGlobal Thermal CoalTrade Flows1. Source : Company Reports