TORONTO, Sept. 17, 2012 /CNW/ - Cline Mining Corporation ("Cline Mining" or the "Company") (TSX:CMK) today provided an update on its current activities at its New Elk mine, including an update on the temporary mine stoppage and mine plan review.
Ken Bates, CEO and Director of Cline Mining, commented: "The global coal market, in which metallurgical coal prices have decreased sharply over the last two quarters, is incredibly challenging for coal companies at the present moment and is a direct reflection on excess inventories and current soft demand. We are focused on, and committed to, navigating this challenging environment. We have taken all the necessary actions so that we preserve our capital position and conserve our working capital. The implementation of the marketing strategy is also key and we are firmly committed to this process and to achieving a financially viable and economic rate of return for our coal product. The New Elk mine is an asset with long-term potential as markets recover."
Temporary Production Suspension at New Elk Mine
As announced in the Company's July 11, 2012 news release, the Company temporarily suspended production at its New Elk mine in order to manage costs and preserve the Company's financial condition. While the duration of the suspension was expected to be approximately sixty (60) days, the Company, due to current market forces, will continue the suspension of operations at New Elk pending improved market conditions.
The Company is implementing a long-term marketing strategy to sell its current stockpile and future production at a rate that is financially viable. Though the Company anticipates that production will resume, variability of market conditions and other economic factors continue to make it impossible to project an exact personnel return date with certainty.
New Elk Mine Plan Review
The technical mine planning review process for operations of the New Elk mine, conducted by the recently-appointed New Elk Coal Company LLC Chief Operating Officer, David Stone, has been completed on schedule. The primary focus has been on the development of the Central Zone of the mining lease which provides optimum utilization of the already present infrastructure coupled with the highest short-term production output. The technical mine plan review now demonstrates the optimal resource and recovery coupled with the overall focus on increasing the Net Present Value ("NPV") of the asset. The Northern and Southern areas of the lease provide an exceptional upside case and will be developed once the action plan for the Central Zone is complete. These areas in supplement to the Central Zone facilitate the ability to perform low capital brownfields expansion.
The Company continues to build appropriate Life Of Mine operating schedules and new financial and cost analysis for the project, and expects to formalize this review and production plan at the time that it resumes production.
David Stone, Chief Operating Officer of New Elk, commented: "The results of the review have clearly demonstrated that the resource can be transformed into a world class mining complex. The entire plan has been built from first principles taking into account geology, equipment and infrastructure. A detailed implementation action plan inclusive of all required factors including safety, human resources, financials, logistics, engineering and maintenance is well underway for the entire operation and we are confident that upon the securing of an off-take agreement the projected plan will be achieved."
Cline has metallurgical coal property interests in Colorado, U.S.A. with NI 43-101 independent Technical Reports. Cline Mining Corporation is focused on the exploration and development of metallurgical steel making coals in the U.S., and on its iron ore property in Madagascar and its Cline Lake gold property in northern Ontario, Canada.
This press release contains forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the operations of the Company, the environment in which it operates and the Company's future financial and operating performance. Generally, forward-looking statements can be identified by the use of words 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". Such statements are based on assumptions, estimates, forecasts and projections made in light of the trends, conditions and expected developments that are considered to be relevant and reasonable in the circumstances at the date that such statements are made. Forward-looking statements are not guarantees of future performance and such information is inherently subject to known and unknown risks, uncertainties and other factors that are difficult to predict and may be beyond the control of the Company. A number of factors and assumptions may cause actual results, level of activity, performance or outcomes of the Company to be materially different from those expressed or implied by such forward-looking statements including, without limitation, the future price of coal, the estimation of mineral reserves and resources, capital, operating and exploration expenditures, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters and other risks set forth in other public filings of the Company. Consequently, undue reliance should not be placed on such forward-looking statements. In addition, all forward-looking statements in this press release are given as of the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.
Brookfield Place, 181 Bay Street, 3rd Floor, Clarkson Gordon Heritage Building, Toronto, ON, M5J 2T3
SOURCE: Cline Mining Corporation
For further information:
Ken Bates, President and CEO
Office: (416) 504-7600
Email: [email protected]
The Capital Lab
Office: (647) 438-2193
Email: [email protected]