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Signature Sponsor
May 13, 2022 - Corsa Coal Corp. (TSXV: CSO) (OTCQX: CRSXF) ("Corsa" or the "Company"), a premium quality metallurgical coal producer, today reported financial results for the three months ended March 31, 2022. Corsa has filed its unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022 and 2021 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 ("FOB"), mine site basis, unless otherwise noted. First Quarter Highlights
Kevin M. Harrigan, Interim President and Chief Executive Officer of Corsa, commented, "The first quarter of 2022 saw continued challenges that carried over from 2021 mainly related to mining geology and labor-availability productivity issues. Geologically, our Casselman mine is nearing the end of its reserve life and we are operating in areas that typically may not be mined due to the lower thickness of the coal seam. However, existing orders and market conditions allow these reserves to be mined and extend the economical coal reserve life albeit with significantly increased mining costs per ton sold when compared to our historical results. Production and costs from our surface operations were also negatively impacted as we continued to establish the second working pit at our Schrock Run Extension mine and experienced challenging weather conditions during the winter operating season. Like many of our competitors and customers, Corsa also experienced transportation constraints and delays for shipments of our coal to our customers." "An ongoing shortage of experienced and skilled labor limits our production capabilities while hiring and training of inexperienced miners decreases our labor efficiency and increases our labor costs per ton. Although the Company implemented and continues to explore ways to attract and retain employees, our productivity, costs and financial results directly reflect the detrimental effects of these significant labor challenges." "Productivity issues at our mines resulted in the Company not being able to take advantage of higher priced opportunities in the spot market during the quarter as we fulfilled our existing domestic and export fixed price orders. We expect this trend to continue into the second quarter or until we can obtain the personnel necessary to fully staff our mines and improve coal production. While Corsa was able to benefit from improved realized pricing on our fixed price contracts, we continue to focus on increasing our operations and improving productivity so that we can further benefit from the current metallurgical coal price environment."
Coal Pricing Trends and Outlook
Price levels opened the first quarter of 2022 at $357.75/metric ton ("mt") delivered-to-the-port ("FOBT") for spot deliveries of Australian premium low volatile metallurgical coal and closed the quarter at $515.00/mt FOBT. The quarterly average price for the first quarter of 2022 was $486.57/mt FOBT for Australian premium low volatile metallurgical coal, compared to $368.92/mt FOBT in the fourth quarter of 2021, and traded in a range from a high of $670.50/mt FOBT to a low of $357.75/mt FOBT. The forward curve for the balance of the second quarter of 2022 according to the SGX TSI index is trading at $504.84/mt FOBT with May at $522.00/mt FOBT and June at $487.67/mt FOBT. Forward curve pricing for the balance of 2022 is trading at an average of $440.33/mt FOBT with the second quarter at a high of $504.84/mt FOBT and the fourth quarter at a low of $393.33/mt FOBT. The forward curve for 2023 is indicating pricing at an average of $337.17/mt FOBT. Increased global steel demand and high levels of global steel production are supporting the demand and supporting higher prices for metallurgical coal. Trade tensions between China and Australia remain and continue to influence the international metallurgical coal market supply routes and metallurgical coal export pricing dynamics, although the long-term effects of the conflict in Ukraine and resurgences in COVID-19 cases and related mitigation measures remain unknown. See "Risk Factors" in the Company's annual information form dated March 1, 2022 for the year ended December 31, 2021 for an additional discussion regarding certain factors that could impact coal pricing trends and outlook, as well as the Company's ongoing operations. Financial Statements and Management's Discussion and Analysis Refer to Corsa's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022 and 2021 and related management's discussion and analysis, filed under Corsa's profile on www.sedar.com, for details of the financial performance of Corsa and the matters referred to in this news release. Non-GAAP Financial Measures Corsa uses certain non-GAAP financial measures to measure its performance internally and to assist in business decision-making as well as providing key performance information to senior management. These measures are not recognized under International Financial Reporting Standards ("GAAP"). Corsa believes that, in addition to the conventional measures prepared in accordance with GAAP, certain investors and other stakeholders also use these non-GAAP financial measures to evaluate Corsa's operating and financial performance; however, these non-GAAP financial measures do not have any standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Accordingly, these non-GAAP financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Management uses the following non-GAAP financial measures:
For a reconciliation of non-GAAP financial measures to GAAP measures, see the tabular presentation at the end of this news release. Qualified Person All scientific and technical information contained in this news release has been reviewed and approved by David E. Yingling, Professional Engineer and the Company's mining engineer, who is a qualified person within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Caution Potential developments and market conditions discussed in this news release are considered to be forward looking information. Readers are cautioned that actual results may vary from this forward-looking information. See "Forward-Looking Statements" below. 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 and coke producers in the Atlantic and Pacific basin markets. To read the full results with financial figures included, click here. |
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