TORONTO, July 15, 2014 /CNW/ - Pacific Coal Resources Ltd. (TSXV: PAK) provides an operational update on its second quarter of 2014 production at the La Caypa and Cerro Largo mines, in addition to the production outlook for the mines for the remainder of 2014 and details of a debt offering.
Hernan Martinez, Executive Chairman, commented: "The Company produced 284,262 tonnes of thermal coal in the second quarter of 2014, a 3% increase from the 274,744 tonnes produced in the first quarter. For the remainder of 2014, we are aiming to maximize south pit production and working towards full-scale underground production at the La Caypa mine, beginning by completing the 40,000 tonne pilot project by the end of the year. At the Cerro Largo mine, the Company will continue its focus on maximizing operations and lowering costs as the mine's new third party operator ramps-up to full production."
Production at La Caypa
|Open-pit operations|| Production of Coal
|Waste (bcm)(1)||Stripping Ratio|
|South pit development||-||609,841||N/A|
|South pit development||-||2,097,785||N/A|
| (1) Bank cubic meters
(2) La Caypa's operations for the second quarter included 17,372 tonnes from the north pit and 174,603 tonnes from the south pit, and 233,697 tonnes from the north pit and 197,106 tonnes from the south pit for the first half of 2014.
(3) Year to date
|Underground operations||Production of Coal (metric tonnes)|
Production from the La Caypa mine was 196,644 tonnes in the second quarter of 2014 (open-pit operations of 191,975 tonnes and underground operations of 4,669 tonnes), achieving 73% of its planned production and 18% less than the 241,151 tonnes produced in the first quarter of 2014.
The decrease from the first quarter of 2014 can be attributed to adverse geological conditions in the section produced from in the second quarter. The issue is outside of the Company's control and primarily a result of naturally occurring burning of the coal mantles in addition to the mantles being affected by the presence of a geological fault.
The Company continues to forecast thermal coal from La Caypa in 2014 of approximately 960,000 tonnes (open pit production of 920,000 tonnes and underground production of 40,000 tonnes), representing a 5% production decrease from 2013.
Production at Cerro Largo
| Production of Coal
|Waste (bcm)||Stripping Ratio|
In the second quarter of 2014, the Company produced 87,618 tonnes from the Cerro Largo mine, over two times the amount produced in the first quarter of 2014 (35,593 tonnes) and 12% greater than the second quarter of 2013 (78,429 tonnes). Production at Cerro Largo in January and February 2014 was lower as the Company finalized a contract with a new third party operator, who commenced operations late in the first quarter of 2014.
Production was 36% below planned production for the second quarter of 2014 as the new operator's ramp-up to full production was slower than originally anticipated. Production targets for 2014 at Cerro Largo are 0.4 million tonnes, an approximately 32% increase over the tonnes produced in 2013.
July Debt Offering
In July 2014, the Company completed a debt offering for aggregate gross proceeds of approximately USD$6.5 million at an interest rate of 12%, payable monthly. The notes expire in July 2015 and are guaranteed by a USD$6.5 million payment as part of the 2013 Barranquilla port concession sale agreements, which is also due in July 2015. Net proceeds were approximately USD$6.3 million, after excluding fees associated with the offering. Related parties to the Company subscribed up to $0.5 million of the debt offering.
About Pacific Coal Resources Ltd.
Pacific Coal Resources Ltd. is a Canadian-based mining company engaged in the acquisition, exploration and production of coal and coal-related assets from properties located in Colombia. The Company's common shares are listed on the TSX Venture Exchange and trade under the symbol "PAK".
Forward Looking Information:
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pacific Coal to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Pacific Coal disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. 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. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE: Pacific Coal Resources Ltd.
For further information:
Deputy General Counsel & Secretary