VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 8, 2013) -
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EastCoal Inc. (TSX VENTURE:ECX)(AIM:ECX) (the "Company") wishes to update shareholders with developments since its late December 2012 admission to AIM. The tip washing plant, which was producing a better quality coal than expected in its initial phases of operation, has experienced disappointing levels of throughput. Tip washing operations have therefore been suspended while engineering improvements are made during this commissioning phase. The Directors anticipate that the plant will be operational by late February and should then, within a few weeks, start achieving the monthly throughput levels set out in the Admission Document for 2013 and beyond.
At the same time, recent production at the Menzhinsky Mine has not been at the level or quality that the Directors had anticipated due to the deterioration at the end of the current long wall. As a consequence some production must be rewashed before delivery to the Company's main customer. This delay, in conjunction with falling coal prices, has produced disappointing results at the mine in recent weeks. However, the Directors still expect monthly output for the remainder of 2013 from Menzhinsky to achieve the levels envisaged in the Admission Document.
The Company has just recruited an experienced US mining operations executive to assist in the day to day management of all mining operations in the Ukraine. Other local appointments have strengthened the management team at Mezhinsky to ensure delivery of the mining plan.
Progress at the Verticalynaya mine has been good and current development remains on schedule.
The Directors regard improved and expanded operations at Menzhinsky as the key priorities for generating cash flow in line with the Company's financial plan. Production delays have the potential to defer or restrict the investment in capital plant necessary for the Company to fulfil its stated mining plans. Notwithstanding ongoing improvement work at the tip washing plant and the Menzhinsky Mine, the Directors are therefore prudently investigating various sources of external capital to reduce the Company's financial dependence on their short-term operating performance.
By Order of the Board,
John Byrne, Chairman
About EastCoal Inc.
EastCoal Inc. is currently producing coking coal from the Menzhinsky mine, which is operated by its 100% owned subsidiary Inter-Invest Coal, and developing the Verticalnaya anthracite mine, which is operated by its 100% owned subsidiary East Coal Company.
This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance. There are numerous risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking information. These and all subsequent written and oral forward-looking information are based on estimates and opinions on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, EastCoal assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.
Neither the 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 release.