TORONTO, Jan. 7 /CNW/ - Coalcorp Mining Inc. ("Coalcorp" or the "Company") (TSX-CCJ) is providing its eighth Default Status Report in accordance with National Policy 12-203: Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"). On September 16, 2009, the Company announced that it would be delayed in the filing of its annual financial statements and related MD&A for the financial year ended June 30, 2009 (the "Annual Financials") and 2009 Annual Information Form beyond their filing deadlines of September 28, 2009.
On December 16, 2009, Coalcorp announced that it filed its Annual Financials, however remained delayed in the filing of its 2009 Annual Information Form. The Company also announced on that date that it was delayed in the filing of its first quarter interim financial statements, CEO and CFO certifications and related management discussion and analysis (MD&A) for the three month period ended September 30, 2009 (the "First Quarter Interim Financials") beyond the filing deadline of November 16, 2009.
On October 19, 2009, the Ontario Securities Commission (the "OSC") issued a management cease trade order related to the Company's securities against the Chief Executive Officer of the Company with respect to the delayed filing of the Annual Financials and 2009 Annual Information Form. The management cease trade order will remain in effect for so long as the 2009 Annual Information Form and First Quarter Interim Financials are not filed. The issuance of such management cease trade order does not affect the ability of persons to trade in their securities of Coalcorp, other than the Chief Executive Officer. However, the OSC, in its discretion, may determine at a later time that it would be appropriate to issue a general issuer cease trade order affecting all of the Company's securities.
The Company reports the below matters which are material changes to the information contained in the seventh default status report issued by the Company on December 23, 2009.
Sale of Mining Assets
On this date, the Corporation announced that it had entered into agreements to sell the La Francia mine and related infrastructure assets (the "La Francia I Assets") and all of the issued and outstanding shares (the "Adromi Shares") of Adromi Capital Corp. ("Adromi"), the holder of the La Francia II concession, to a subsidiary of the Goldman Sachs Group ("Goldman Sachs"). The cash consideration for the La Francia I Assets is USD$100 million and the cash consideration for the Adromi Shares is USD$51 million.
As part of the La Francia I Assets, Compania Carbones del Cesar ("CDC"), the indirect wholly owned Colombian subsidiary of Coalcorp that owns the La Francia I Assets, will assign to the purchaser a coal supply agreement providing for the sale of 2.4 million metric tonnes of coal (the "Coal Contract"). At this time, the mark-to-market value of the Coal Contract based on prevailing coal prices (which are subject to fluctuation), is estimated to be approximately USD$50 million in favour of the purchaser under the Coal Contract, which amount represents an existing off-balance sheet liability of Coalcorp being assumed by the purchaser.
The disposition of the La Francia I Assets (including the assignment and novation of the Coal Contract) and the Adromi Shares is referred to as the "Proposed Transaction". Including the cash consideration for the purchase price and the current estimated value arising from the assignment of the Coal Contract, the approximate total value of the Proposed Transaction is USD$200 million.
The completion of the Proposed Transaction is subject to certain conditions, including the receipt of required Colombian regulatory and environmental approvals, approval by the shareholders of Coalcorp, Coalcorp making offers to repurchase the Corporation's outstanding USD$115 million 12% senior secured notes in accordance with their terms and the satisfaction of certain other closing conditions.
Non-Payment of Interest on Senior Notes
On December 31, 2009, Coalcorp announced that it did not make a USD$6.9 million interest payment due today on its 12% senior secured notes (the "Senior Notes"). Under the terms of the indenture governing the Senior Notes, the Company has 30 days to make this payment in order to avoid an event of default. The Company did not make this payment to preserve its cash position as it reviewed its strategic alternatives.
The Company confirms that, except as described herein and in its initial default announcement and its subsequent default status reports: (i) there has been no material change to the information set out in its initial default announcement filed pursuant to NP 12-203; (ii) there has been no failure by the Company in fulfilling its stated intention with respect to satisfying the provisions of the alternative information guidelines set out in NP 12-203; (iii) there is no actual or anticipated specified default subsequent to that disclosed in the initial default announcement; and (iv) there is no other additional material information concerning the affairs of the Company that has not been generally disclosed.
The Company will continue to provide bi-weekly updates, as required by NP 12-203, until the required filings have been made and the Company is no longer in default.
Coalcorp is a coal mining, exploration and development company with interests in the La Francia coal mine and related infrastructure projects and a number of coal exploration properties, all located in Colombia. Coalcorp also holds a 60% equity interest in Carbones Colombianos del Cerrejon which owns the La Caypa coal mine in Colombia. Further information can be obtained by visiting our website at www.coalcorp.ca or under the Company's profile at www.sedar.com.
Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Coalcorp does not undertake to update any forward-looking statements; such statements speak only as of the date made.
SOURCE Coalcorp Mining Inc.
For further information: For further information: Joseph Belan, Interim Chief Executive Officer, +57 - 1 - 658 - 5050 Ext: 9990