CANONSBURG, PA, Nov. 30, 2016
CANONSBURG, PA, Nov. 30, 2016 /CNW/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") today provided an update to its fourth quarter guidance and announced the decision by its board of directors (the "Board") to proceed with the implementation of a consolidation of the issued and outstanding common shares in the capital of the Company (the "Shares") on the basis of one (1) post-consolidation Share for each 20 pre-consolidation Shares (the "Consolidation"). Subject to the approval of the TSX Venture Exchange, the Consolidation is expected to be implemented pursuant to articles of amendment filed in accordance with Corsa's governing corporate law statute, the Canada Business Corporations Act. The Shares are expected to begin trading on a post-Consolidation basis on the TSX Venture Exchange on or about Wednesday, December 7, 2016.
In response to the current strength in metallurgical coal prices, Corsa has taken steps to increase sales volumes of metallurgical coal. Corsa expects metallurgical sales volumes from its Northern Appalachia (NAPP) Division to be approximately 250,000 tons during the fourth quarter of 2016 ("Q4 2016"). All of the Q4 2016 sales volumes are contracted at fixed prices and Corsa expects to realize approximately US$100 per ton (FOB Mine), which would represent a 44% improvement over Corsa's average realized metallurgical coal price per ton sold in the third quarter of 2016.
Corsa expects prices in the first quarter of 2017 ("Q1 2017") to improve further relative to Q4 2016 as lower-priced, legacy domestic 2016 contracts expire (these legacy contracts represent approximately 45% of Q4 sales volumes). For 2017, Corsa expects the vast majority of its sales to be with international customers, given the higher expected price realizations as compared to domestic sales. Corsa has committed approximately 70% of its volumes in Q1 2017 at prices that reflect current market conditions. Pricing guidance for Q1 2017 will be updated after the contract benchmark for metallurgical coal is settled, likely to be in the second half of December.
Corsa expects to further increase sales volumes in 2017 by purchasing and reselling metallurgical coal produced by third parties in the Northern and Central Appalachian regions and through sales of metallurgical coal produced from the Company's Acosta Deep Mine in Somerset County, Pennsylvania. As previously announced, the Acosta Deep Mine is expected to commence production in the second quarter of 2017. Additionally, Corsa is taking steps to restart the Shade Creek preparation plant and loadout facility, which is on the Norfolk Southern rail line, and is anticipated to be operational in Q1 2017.
Share Consolidation and Preferred Share Authorization
As previously announced, at the annual and special meeting (the "Meeting") of the shareholders of the Company (the "Shareholders") that was held on August 10, 2016, the Shareholders, among other things, passed: (i) a special resolution approving a future consolidation of the Company's issued and outstanding Shares on the basis of one (1) post-consolidation Share for up to 100 pre-consolidation Shares if, and at such time following the date of the Meeting, as the Board so determines; and (ii) a special resolution authorizing the Company to issue an unlimited number of Preferred Shares. For further details regarding the Consolidation and the Preferred Share Authorization, please consult the management information circular provided to Shareholders in connection with the Meeting, which can be found under Corsa's profile on www.sedar.com.
The Board has determined that a Consolidation at this time is in the best interests of the Company and believes that the Consolidation will provide the Company with a share capital structure that will better attract investors and enhance future growth opportunities.
After giving effect to the Consolidation, the 1,887,775,762 pre-Consolidation Shares will be consolidated into approximately 94,388,784 post-Consolidation Shares and the exercise prices and the number of Shares issuable upon the exercise or deemed exercise of any stock options or other convertible or exchangeable securities of the Company will be automatically adjusted based on the consolidation ratio selected by the Board. No fractional Shares will be issued, and no cash consideration will be paid, if, as a result of the Consolidation, a registered Shareholder would otherwise become entitled to a fractional Share. After the Consolidation, then current Shareholders will have no further interest in the Company with respect to their fractional Shares.
A letter of transmittal will be mailed to the registered Shareholders providing instructions to surrender the certificates evidencing their Shares for replacement certificates representing the number of Shares to which they are entitled as a result of the Consolidation. Until surrendered, each certificate representing pre-consolidation Shares prior to the Consolidation will be deemed for all purposes to represent the number of Shares to which the holder of that certificate is entitled as a result of the Consolidation.
In conjunction with the Consolidation, Corsa will proceed with an amendment to the Company's articles authorizing the issuance of an unlimited number of preferred shares (the "Preferred Shares"), issuable in series, with such rights, privileges, restrictions and conditions as the Board may determine from time to time (the "Preferred Share Authorization"). The Board does not have any current intentions to issue Preferred Shares.
Information about Corsa
Corsa is a coal mining company focused on the production and sales of metallurgical coal, an essential ingredient in the production of steel. Our core business is producing and selling metallurgical coal to domestic and international steel producers in the Atlantic and Pacific basin markets. Corsa also offers high heat content, low delivered cost coal to major utilities and industrial users in the Southeast region of the U.S.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws (collectively, "forward looking statements") and which are based on the expectations, estimates and projections of management of Corsa as of the date of this press release unless otherwise stated. Forward-looking statements are statements and information regarding possible events, conditions or results of operations that are based upon assumptions about future economic conditions and courses of action. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "plans", "projections", "outlook", "intends", "may", "could", "would", "might", "will" and similar expressions. More particular and without imitation, this press release contains forward looking statements and information concerning Corsa's anticipated metallurgical coal sales volumes and prices, the timing of commencement of production at the Acosta Deep Mine, the restart of the Shade Creek preparation plant, the approval by the TSX Venture Exchange, and the implementation date (including the date on which the Shares will being trading on a post-Consolidation basis) of, the Consolidation and Preferred Share Authorization and the potential benefits of Consolidation.
By their very nature, forward looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward looking statements will not prove to be accurate. Do not unduly rely on forward looking statements, as a number of important factors, many of which are beyond Corsa's control, could cause actual results to differ materially from the estimates and intentions expressed in such forward looking statements.
Forward looking statements speak only as of the date those statements are made. Except as required by applicable law, Corsa does not assume any obligation to update, or to publicly announce the results of any change to, any forward looking statement contained herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward looking statements.
The TSX Venture Exchange has in no way passed on the merits of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Corsa Coal Corp.