LOUISVILLE, KY, March 26 /CNW/ - Phoenix Coal Inc. (TSX: PHC) ("Phoenix" or the "Company") reported its financial results for the fourth quarter and year ended December 31, 2009. The consolidated financial statements for the years ended December 31, 2009 and December 31, 2008 and notes thereto, along with Management's Discussion and Analysis are available at www.sedar.com and www.phxcoal.com. Unless otherwise noted, all reserves and resources are expressed in imperial tons, and all financial information is expressed in U.S. dollars.
During the year ended December 31, 2009:
- Due to the sale of its surface mining operations on September 30,
2009, the Company derived no revenue from coal sales, nor did it
produce or purchase any coal for the fourth quarter ended December
- For the twelve months ended December 31, 2009, the Company produced
approximately 1.4 million tons of saleable coal and purchased
approximately 355,000 tons of saleable coal.
- Coal sales totaled approximately 1.7 million tons for the twelve
months ended December 31, 2009.
- Revenue for the twelve months ended December 31, 2009 was
approximately $58.8 million, for average revenue per ton sold of
- Cost of sales for the twelve months ended December 31, 2009 was
approximately $55.4 million for an average cost per ton sold of
- For the three and twelve months ended December 31, 2009, the
Company's net loss was approximately $24.5 million and $78.6 million,
respectively. The loss on the sale of the surface mining operations
and an impairment charge related to the Company's underground
development projects contributed approximately $36.4 million and
$21.9 million to the total year-to-date loss, respectively.
- At December 31, 2009, the Company had approximately $13.8 million in
cash and cash equivalents. The Company also had restricted cash, cash
equivalents and certificates of deposit as collateral for letters of
credit for reclamation bonding and escrowed funds from the sale of
its surface mining operations of approximately $12.1 million.
Subsequent to December 31, 2009, the Company sold its Panama South Reserves and entered into a definitive agreement to sell its Gryphon Reserves. These assets, together referred to as the Gryphon Mining Complex, were the last remaining material coal assets of the Company. Upon closing of the sale of the Gryphon Reserves, the Company will no longer be a developer or operator of coal assets in the Illinois Basin. The Company is expected to have nearly $56.2 million in cash (restricted and unrestricted), reclamation liabilities and other general and administrative costs primarily related to salaries, professional services and the wind down of the coal business. The Company plans to redeploy its capital into opportunities in the natural resources and mining sectors and has begun the process of evaluating potential acquisitions.
The Company retained several previously mined surface properties that require reclamation, and as at December 31, 2009, the asset retirement obligations and other long-term liabilities on the balance sheet related to these reclamation obligations totaled approximately $2.6 million. During 2010, the Company expects to spend approximately $1.5 million on the necessary reclamation work, which is projected to free up approximately $1.9 million from restricted cash that was posted as collateral against the Company's obligations.
Of the $56.2 million in cash expected at closing of the sale of the Gryphon Reserves, approximately $5.7 million will be restricted. In addition to the $1.9 million that is expected to be released from restriction over the course of 2010 for reclamation activities, the Company expects to have another approximately $2.7 million freed up as a result of contractual obligations from the sale of its surface mining operations and the Gryphon Reserves. The amount and timing of these releases of cash from restriction is subject to the provisions of certain contractual arrangements and state regulatory authorities, and thus could change.
About Phoenix Coal Inc.
Phoenix Coal is headquartered in Louisville, Kentucky. It is an acquirer, developer, and operator of assets in the natural resources and mining sector. For additional information, visit www.phxcoal.com.
Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Phoenix's future plans and operations and are based on Phoenix's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Phoenix's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements, without limitations, which forward-looking statements included the production run rate Phoenix expects to achieve at full production. These risks and uncertainties include, but are not limited to: liabilities inherent in coal mine development and production; geological, mining and processing technical problems; Phoenix's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and coal processing operations; dependence on third party coal transportation systems; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; changes in the regulations in respect to the use of coal; the effects of competition and pricing pressures in the coal market; the oversupply of, or lack of demand for, coal; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; changes in mineral reserve and mineral resource estimates; and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Phoenix undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
The TSX has neither approved nor disapproved of the contents of this press release.
SOURCE Elgin Mining Inc.
For further information: For further information: Stephen McLean, Director of Corporate Communications, Phoenix Coal Inc., (502) 587-5900, firstname.lastname@example.org; David Feick, The Equicom Group, Investor Relations, (403) 218-2839, email@example.com