TORONTO, ONTARIO--(Marketwire - Sept. 27, 2012) - Forbes & Manhattan Coal Corp. (TSX:FMC)(JSE:FMC) ("Forbes Coal" or the "Company") wishes to respond to the inaccurate information that is being suggested by Resource Capital Fund V LP ("RCF") in its press release of September 26, 2012.
On September 24, 2012, Forbes Coal announced that it had entered into a definitive agreement with Rio Tinto PLC pursuant to which it will acquire 100% ownership of the shares and shareholder claims of Riversdale Mining Limited (not Riverside Mining Limited, as noted in the press release disseminated by the dissident shareholders) in Riversdale Holdings (Proprietary) Limited ("Riversdale") (the "Transaction").
On September 26, 2012, RCF issued a press release suggesting that it was inappropriate for the current board of directors to agree to acquire Riversdale at this time. Forbes Coal believes that this is misleading.
- RCF is well aware that the Forbes Coal board of directors, which includes a representative of RCF, unanimously approved the Transaction well in advance of the shareholders meeting held on September 17, 2012.
- Forbes Coal announced the Transaction earlier this week once the definitive agreement with Rio Tinto was finalized and entered into. However, on July 24, 2012, the board of directors of Forbes Coal, including the RCF representative on the board, unanimously authorized the Company to negotiate, finalize and execute a binding offer letter and definitive agreement in respect of the Transaction.
- There was no inappropriate behaviour on the part of Forbes Coal or the board of directors and to suggest otherwise is simply false.
- Forbes Coal believes that the press releases being issued by the dissident shareholders are an attempt to deviate management's attention and its resources from executing on the Company's strategy.
Stephan Theron, the President and Chief Executive Officer of Forbes Coal, states "the Company is focused on executing its strategy and creating value for all shareholders. The smear campaign embarked on by the dissident shareholders could cause severe harm to the Company and artificially depress the share price. We can only speculate that this must be the dissidents' motivation in an effort to position themselves advantageously for any future acquisition of the Company."
In addition, the September 26, 2012 press release is inaccurate as the dissident shareholders did not secure overwhelming shareholder support for their proposed slate of directors. Forbes Coal wishes to reiterate that the decision to disallow invalid proxies was in accordance with the Proxy Protocol, which the dissidents requested be followed. Forbes Coal will not comment further at this time as this matter is before the Court.
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It holds a majority interest in two operating mines through its 100% interest in Slater Coal (Pty) Ltd., a South African company ("Slater Coal") which has a 70% interest in Zinoju Coal (Pty) Ltd. ("Zinoju"). Zinoju holds a 100% interest in the Magdalena bituminous mine and the Aviemore anthracite mine in South Africa (collectively, "the Slater Properties"). The mines have a substantial resource base and each mine has a projected life span in excess of 20 years. Forbes Coal is in the process of increasing production at both mines and looks to triple production from 2010 levels in the next three years using existing infrastructure and capacity. The Company has in-place transportation infrastructure allowing its coal to reach both export corridors and the growing domestic coal market. Forbes Coal has a strong balance sheet and an experienced coal-focused management team.
Please refer to the Company's NI 43-101 compliant technical report on the Slater Properties dated March 1, 2011 entitled "Technical Report on Slater Coal and Subsidiaries, KwaZulu-Natal Province, South Africa", available on the SEDAR profile of the Company at www.sedar.com. Additional information is available at www.forbescoal.com.
Johan Odendaal, B.Sc.(Geol.), B.Sc.(Hons)(Min. Econ.), M.Sc. (Min. Eng.), a director of Minxcon and an independent Qualified Person, as defined in National Instrument 43-101 has reviewed and approved the scientific and technical information contained in this release.
The ability of the Company to increase production amounts has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically feasible.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the anticipated production results with respect to the Slater Properties, future financial or operating performance of the Company and its projects, statements regarding the anticipated improvements in logistical support and anticipated improvements in sales, statements made with respect to prospects for the business of the Company, requirements for additional capital, government regulation of the mineral exploration industry, environmental risks, acquisition of mining licences, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or 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 information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, foreign operations, political and social uncertainties; a history of operating losses; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; not realizing on the potential benefits of the proposed transaction; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of mineral products; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; and, delays in obtaining governmental approvals or required financing or in the completion of activities. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.