Coalcorp Announces 2008 First Quarter Results and Feasibility Study for Development of La Francia Pit C/D



    TORONTO, Nov. 13 /CNW/ - Coalcorp Mining Inc. (TSX-CCJ) announced today
its results for the first quarter ended September 30, 2007. Coalcorp reported
a net loss of $7.8 million or $0.09 per share as compared to a loss of
$10.7 million or $0.19 per share in the four month period ended September 30,
2006 (all figures in U.S. dollars). Last year, the Company changed its year
end from May 31 to June 30 and therefore the comparative prior fiscal period
was four months.
    For the three months ended September 30, 2007, the Company realized
revenues of $19.7 million based on sales of 492,000 tonnes at an average
realized price of $40 per tonne as compared to revenue of $36.3 million in the
prior period derived from sales of 834,000 tonnes sold at an average price of
$44 per tonne. The prior year period includes a greater proportion of higher
priced FOB deliveries as well as an extra month of operations due to the
change in the Company's year end.
    Total coal production in the first quarter amounted to 563,000 tonnes as
compared to 869,000 tonnes in the four months ended September 30, 2006. Mine
operating costs in the quarter averaged $39 per tonne, with transport and
handling costs adding an additional $5 per tonne. Mine operating costs remain
above normal due to above-average stripping ratios. Stripping ratios at La
Francia and Caypa of 9.2:1 and 10.3:1, respectively, represented improvements
from the stripping ratios experienced in the fourth quarter ended June 30,
2007. However, total material mined and coal production were lower than
expected in the current quarter primarily due to heavier seasonal rainfall and
haul truck availability being lower than planned. Steps are currently being
taken at both mines to increase haul truck availability and to add additional
equipment to increase mining volumes to planned levels for the balance of the
year.
    In fiscal 2008, Coalcorp is expected to produce 3.3 million tonnes, with
stripping ratios at La Francia and Caypa expected to improve to approximately
8:1 and 9:1, respectively, with a corresponding improvement in direct
operating costs. Sales already booked for the balance of fiscal 2008 include
0.6 million tonnes FOT at an average price of $39 per tonne and 1.7 million
tonnes FOB at an average price of $55 per tonne. After cash used in operations
of $16 million and capital investments of $15 million, the Company had
unrestricted cash and short-term investments amounting to $42.9 million at
September 30, 2007. In addition, the Company had $7.1 million of restricted
cash that will become available in the next 12 months to fund capital
projects.

    Development of La Francia Pit C/D

    The Company has received a final feasibility study with respect to
development of Pit C/D at La Francia and the adjoining La Francia II property,
a copy of which was filed on SEDAR earlier today under the title "Technical
Report on the La Francia Pit C/D, Colombia, South America". The feasibility
study is dated November 2007 and was prepared in accordance with National
Instrument 43-101 (NI 43-101) by Terry L. Kremmel P.E. of Marston & Marston
Inc., who is a "qualified person" under NI 43-101 and is independent of
Coalcorp. The disclosure in this news release related to the feasibility study
has been reviewed and approved by Mr. Kremmel. The following is a summary of
the feasibility study.
    Based on 104 drill holes totalling 23,964 metres, in situ measured and
indicated coal resources amounted to 103.5 million tonnes with a stripping
ratio of 9.6:1 and coal quality of 11,391 btu, 0.7% sulphur and 5.6% ash
within 250 metres of surface. After contact loss, dilution and mining recovery
of 97.2%, mineable coal resources totalled 53.1 million tonnes. With 336.2
bank cubic metres of waste, the projected stripping ratio was 6.9:1 with coal
quality of 11,123 btu, 0.6% sulphur and 6.8% ash.
    With annual coal production estimated at 3.5 tonnes, this resulted in a
17-year mine life. Average direct mining costs over the life of the mine are
estimated at $14.66 per tonne, with an additional $12.43 per tonne for
transportation, port handling, administration and royalties, resulting in a
total cash cost per tonne of $27.09 per tonne.
    Capital expenditures include $178 million for equipment and $30 million
for site infrastructure, for a total $208 million, of which $140 million is
initial capital and the balance is ongoing or sustaining in nature. In
addition, initial waste stripping of $37 million, net of revenues is included
in mining costs. Excluding capital equipment, first year funding requirements
total $55 million.
    The study assumed an average selling price of $47 per tonne. Including
the $124.8 million acquisition cost for the property, the project has an
internal rate of return of 15.4%, assuming no additional resources are found
elsewhere on the property. Additionally, for each dollar of revenue above $47,
the internal rate of return increases by almost 1%.
    The Company is currently reviewing the results of this study and in
conjunction with the identification of export infrastructure, expects to make
a production decision in the coming months.

    Infrastructure

    Access to the Fenoco rail system is now expected to commence in mid-2008.
Approval of the Company's application for an environmental license has been
delayed until December at which point construction of the rail branch will
immediately begin. The Company is currently evaluating three identified sites
for its ocean port, likely to be located at Barranquilla, and a decision is
imminent.

    Complete Financial Statements, Management's Discussion and Analysis and
the November 2007 feasibility study on La Francia Pit C/D are available from
our website under "Investor Info" or on SEDAR at www.sedar.com.

    Coalcorp is a coal mining, exploration and development company with
interests in the La Francia and La Caypa coal mines and related infrastructure
projects and a number of coal exploration properties, all located in Colombia.
Further information can be obtained by visiting our website www.coalcorp.ca.

    This press release contains forward-looking statements based on
assumptions, uncertainties and management's best estimates of future events.
Actual results may differ materially from those currently anticipated.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties. Important factors that could cause actual results to differ
materially from those expressed or implied by such forward looking statements
are detailed from time to time in the company's periodic reports filed with
the British Columbia Securities Commission and other regulatory authorities.
The Company has no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

    %SEDAR: 00004043E




For further information:

For further information: Michael Davies, Chief Financial Officer, (416)
360-4653

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