August 21, 2019 - Corsa Coal Corp. (TSXV: CSO; OTCQX: CRSXF), a premium quality metallurgical coal producer, has reported financial results for the three and six months ended June 30, 2019.  Corsa has filed its unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2019 and 2018 and related management's discussion and analysis under its profile on www.sedar.com.

Unless otherwise noted, all dollar amounts in this news release are expressed in United States dollars and all ton amounts are short tons (2,000 pounds per ton).  Pricing and cost per ton information is expressed on a free-on-board, or FOB, mine site basis, unless otherwise noted.

Second Quarter and First Half Highlights

Corsa reported net and comprehensive income from continuing operations of $3.6 million , or $0.03 per share attributable to shareholders, for the second quarter 2019, compared to a loss of $4.9 million , or $(0.05) per share attributable to shareholders, for the second quarter 2018. Net and comprehensive income from continuing operations for the six months ended June 30, 2019 was $6.6 million , or $0.05 per share attributable to shareholders compared to a loss of $2.9 million , or $(0.04) per share attributable to shareholders for the six months ended June 30, 2018 .

Corsa's adjusted EBITDA(1) was $10.1 million and $19.3 million for the three and six months ended June 30, 2019 compared to $4.3 million and $15.2 million for the three and six months ended June 30, 2018 . Corsa's EBITDA(1) was $10.2 million and $19.8 million for the three and six months ended June 30, 2019 compared to $2.3 million and $11.4 million for the three and six months ended June 30, 2018 .

Cash production cost per ton sold(1) was $84.55 for the second quarter 2019, a decrease of $7.65 per ton, or 8%, as compared to the second quarter 2018. Cash production cost per ton sold(1) was $83.92 for the six months ended June 30, 2019 , a decrease of $7.87 per ton, or 9%, as compared to the six months ended June 30, 2018 .

Operating cash flows provided by continuing operations for the three and six months ended June 30, 2019 were $8.8 million and $14.5 million , respectively, compared to a use of $4.6 million and cash provided by continuing operations of $3.2 million for the three and six months ended June 30, 2018 , respectively.

Total revenue from continuing operations was $63.0 million for the second quarter 2019 compared to $57.3 million for the second quarter 2018, an increase of 10%. Total revenue from continuing operations was $120.3 million for the six months ended June 30, 2019 compared to $137.8 million for the six months ended June 30, 2018 .Low volatile metallurgical coal sales tons, comprised of "Company Produced" tons and "Value Added Services" purchased coal tons, were 414,105 in the second quarter 2019 compared to 282,444 in the second quarter 2018. In the second quarter 2019, Corsa sold a total of 36,306 "Sales and Trading" tons, which are treated as pass-through from a profitability perspective, compared to 109,890 tons in the second quarter 2018. See "2019 Year-to-Date Sales Metrics" for a description of Corsa's three types of metallurgical coal sales.

Corsa achieved an average realized price per ton of metallurgical coal sold(1) of $117.48 for all metallurgical qualities in the second quarter 2019 compared to $115.52 in the second quarter 2018. This average realized price is the approximate equivalent of $168 to $174 on an FOB vessel basis.(2) For the second quarter 2019, Corsa's sales mix included 31% of sales to domestic customers and 69% of sales to international customers.

Subsequent to June 30, 2019 , certain wholly-owned subsidiaries of Corsa, as borrowers, entered into a senior secured revolving credit facility with KeyBank National Association for up to $25 million and a lease financing agreement with Key Equipment Finance, as lessor and assignor, and 36th Street Capital Partners, LLC, as assignee, for the sale and leaseback of various coal mining equipment for a funding amount of $12 million . These new facilities replace the $25 million senior secured term credit facility with Sprott Resource Lending Corp.

Similar to most U.S. metallurgical coal producers, Corsa reports sales and costs per ton on an FOB mine site basis and denominated in short tons.  Many international metallurgical coal producers report prices and costs on a delivered-to-the-port basis (or "FOB vessel basis"), thereby including freight costs between the mine and the port.  Additionally, Corsa reports sales and costs per short ton, which is approximately 10% lower than a metric ton.  For the purposes of this figure, we have used an illustrative freight rate of $35-$40 per short ton.  Historically, freight rates rise and fall as market prices rise and fall.  As a note, most published indices for metallurgical coal report prices on a delivered-to-the-port basis and denominated in metric tons.

Peter Merritts , Chief Executive Officer of Corsa, commented, "During the second quarter of 2019, Corsa reached a milestone as all of our active mining locations are now operating at their full run-rate capacity.  We began realizing the benefits of this ramp-up in the second quarter, as production from our mines hit a new five-year high for the Company, surpassing the previous quarterly production record, set in the first quarter of this year, by 13%.  Operations continued to perform well in the second quarter as cash production cost per ton sold improved by 8% from a year ago.  We expect to continue to experience these benefits as the year progresses.  The Company made significant advances on free cash flow generation during the quarter increasing the Company's cash position by $4.5 million .

The outlook for metallurgical coal pricing is challenged in the upcoming months, and we are taking steps to minimize the market decline impact on our business.  Although the market has weakened in the near term, we continue to believe the fundamentals for metallurgical coal pricing will remain supportive in the coming quarters, driven by continued global economic growth and limited investment in new coal production.  As a result of this market pull back, we have adjusted our guidance downward to reflect the impact of the current price forecasts.  We expect to continue to be profitable in the existing price environment and will continue to focus on cost control and discipline in managing our operations."

Coal Pricing Trends and Outlook

Price levels stayed above $200 /metric ton ("mt") delivered-to-the-port basis ("FOBT") for spot deliveries of Australian premium low volatile metallurgical coal through early June, hitting a high in mid-May of $210 /mt, primarily due to strong imports into China and India . Late in the second quarter the market reacted to concerns of a slowing global economy and finished at $193 FOBT for Australian premium low volatile metallurgical coal.  Since the end of the second quarter 2019, spot prices have further weakened to $154 /mt, a decrease of $62 /mt since the beginning of 2019, a 29% decline. The quarterly price average for the second quarter of 2019 was $203 /mt FOBT for Australian premium low volatile metallurgical coal, compared to $207 /mt in the first quarter of 2019.  The forward curve for the balance of the year has weakened with current prices at $161 /mt down $22 /mt since the beginning of the year. The forward curve for 2020 declined from $175 /mt to $160 /mt.

In late May 2019 , Turkey reduced its import tariff on imported coking coal from the U.S. from 13.7% to 5%. The lower import tariff will allow U.S. coking coal exports to be sold into Turkey more competitively. Recent news has been focused on bankruptcies of U.S. coking coal producers. Currently, there are three U.S. producers in bankruptcy and two of the producers have shut down production, which has limited near term supply availability. Finally, U.S. domestic buyers have started their annual buying process by issuing the first round of tenders for 2020 business.

The World Steel Association reports that global steel production through May is up 5% year-to-date while the U.S. is up 6.2%, China is up 10.2% and Asia is up 7.4%. China represents 54.7% of global steel production. Chinese hot-rolled coil steel prices are up 6% since the start of the year while Northern European prices are down 10% and U.S. prices are down 24% to $560 /net ton. Trade data through May shows Chinese coking coal imports are up 30% year-to-date while India's coking coal imports are up 23% year-to-date. China recently announced new coking coal import restrictions until further notice. Preliminary U.S. coking coal export data shows an 8.5% decline for a total of 24 million tons year-to-date through May which would imply annual coking coal exports declining 3-4 million tons in 2019.

For the full quarterly results with financial figures included, click here.