Forbes Coal Reports Revenue of $31.2 Million in Fiscal Third Quarter 2012, an Increase of 245% Year-Over-Year

TORONTO, ONTARIO--(Marketwire - Jan. 16, 2012) - Forbes & Manhattan Coal Corp. (TSX:FMC)(JSE:FMC) ("Forbes Coal" or the "Company") is pleased to announce its fiscal third quarter 2012 financial results for the three months ended November 30, 2011 (References to Q3 2012 or the third quarter 2012 mean the three months ended November 30, 2011. References to Q2 2012 or the second quarter 2012 mean the three months ended August 31, 2011.)

Third Quarter Financial Highlights: (All figures are in Canadian dollars, unless otherwise stated)

		Third Quarter 2012 (September - November 2011)		Second Quarter 2012 (July - August 2011)		% Change
Revenue		$31.2 million		$35.2 million		- 11 %
Gross profit		$6.8 million		$5.6 million		+ 21 %
Consolidated EBITDA (see non-IFRS measures)		$8.2 million		$6.9 million		+ 19 %
Slater Stand Alone EBITDA (see non-IFRS measures)		$9.0 million		$9.2 million		- 2 %
Cash and cash equivalents		$16.8 million		$24.2 million		- 30 %

"The largest portion of the capital program at Magdalena is complete and the company is well positioned to maintain strong growth rates," said Stephan Theron, President and Chief Executive Officer. "The return on investment from our capital expenditure program is evident as production at both of our mines continues to increase. In addition, sales remain consistent as a result of the continued global demand for coal."

Fiscal year-to-date figures are: Revenue is $86 million; Gross Profit is $16.6 million; Consolidated EBIDTA is $20.9 million; Slater Stand Alone EBIDTA is $24.4 million.

Operational highlights

Production at Forbes Coal's two mines, Aviemore and Magdalena, continue to grow. An additional section on a single shift was brought into production at Aviemore in the third quarter of 2012, resulting in significant increases in ROM and saleable production.

Operational highlights include:

ROM Production

• ROM production at Aviemore in the third quarter of 2012 was 78,100 tonnes, a 22% sequential increase over 62,400 tonnes produced in the second quarter of 2012. Year-over-year ROM production at Aviemore increased 15% over the 68,000 tonnes produced in third quarter 2011. Fiscal year-to-date ROM production at Aviemore is 193,000 tonnes.
  
  
• ROM production at Magdalena in the third quarter of 2012 was 275,900 tonnes, a 7% sequential increase from the 258,600 tonnes produced in the second quarter of 2012. Year-over-year ROM production at Magdalena increased 24% from the 222,200 tonnes produced in the third quarter of 2011. Fiscal year-to-date ROM production at Magdalena is 794,800 tonnes.
  
  
• Total ROM production in the third quarter of 2012 was 354,000 tonnes, a 10% sequential increase over the 322,800 tonnes of total ROM production in the second quarter of 2012. Year-over-year total ROM production increased 22% over the 290,300 tonnes produced in the third quarter of 2011. Fiscal year-to-date total ROM production is 987,800 tonnes.
  
  

Saleable Production and Sales

• Saleable production at Aviemore in the third quarter of 2012 was 52,100 tonnes, a 33% sequential increase over the 39,100 tonnes produced in the second quarter of 2012. Year-over-year saleable production at Aviemore increased 22% over the 42,800 tonnes produced in the third quarter of 2011. Fiscal year-to-date saleable production at Aviemore is 123,100 tonnes.
  
  
• Saleable production at Magdalena in the third quarter of 2012 was 194,400 tonnes, an 8% sequential increase over the 179,600 tonnes in the second quarter of 2012. Year-over-year saleable production at Magdalena increased 34% over the 145,000 tonnes produced in the third quarter of 2011. Fiscal year-to-date saleable production at Magdalena is 549,400 tonnes.
  
  
• Total saleable production in the third quarter of 2012 was 246,600 tonnes, a 13% sequential increase when compared to the 218,700 tonnes of total saleable production in the second quarter of 2012. Year-over-year total saleable production increased 32% over the 187,000 tonnes produced in the third quarter of 2011. Fiscal year-to-date total saleable production is 672,500 tonnes.
  
  
• Total sales in the third quarter of 2012 were 331,300 tonnes, a slight sequential decrease when compared to the 339,800 tonnes sold in the second quarter of 2012. Year-over-year total sales, however, increased 246% when compared to the 95,600 tonnes sold in third quarter 2011. Fiscal year-to-date total sales are 861,900 tonnes.
  
  
• 60% of total coal sold was into the export market via the Richards Bay coal terminal.
  
  
• Total export sales in the third quarter of 2012 were 199,200 tonnes, a 3.5% sequential increase when compared to second quarter 2012 export sales of 192,400 tonnes. Fiscal year-to-date total export sales are 483,500 tonnes.
  
  
• Total domestic sales in the third quarter of 2012 were 132,100 tonnes, a 10% sequential decrease when compared to the second quarter 2012 domestic sales of 147,400 tonnes. Fiscal year-to-date total domestic sales are 378,500 tonnes.
  
  
• Saleable product transported to the Navitrade port in third quarter 2012 was 119,600 tonnes.
  
  
• Coal shipped through Navitrade to overseas markets in third quarter 2012 was 86,800 tonnes.
  
  
• Stock at the Navitrade terminal at the end of the third quarter stood at 67,700 tonnes.

SUMMARIZED FINANCIAL RESULTS OF SLATER COAL

Summarized Financial Results (Actual)
Slater Coal
		Three months ended *						Nine months ended *
		November 30, 2011			November 30, 2010			November 30, 2011			November 30, 2010
Run of Mine (ROM) (t)		354,003			290,278			987,770			720,240
Run of Mine (ROM) coal purchased (t)		18,207			-			21,660			-
Saleable production (t)		246,570			187,069			672,483			486,972
Saleable coal purchased (t)		27,313			-			27,313			-
Plant feed (t)		364,358			276,388			995,171			718,956
Yield (%) on ROM		66.2	%		64.4	%		66.6	%		67.6	%
Yield (%) on plant feed		67.7	%		67.7	%		67.6	%		67.7	%
Inventory tonnes balance open		82,425			129,269			189,778			86,742
Inventory tonnes balance close		38,258			220,728			38,258			220,728
Sales (t)		331,296			95,610			861,925			352,986
Revenue 000,000's (CAD)		31.2			8.4			86.0			30.3
EBITDA 000,000's (CAD)		9.0			2.7			24.4			10.4
CAD: USD (average)		1.02			1.02			0.99			1.03
ZAR: CAD (average)		7.77			6.86			7.30			7.14
Selling price (average) / sold production tonnes (CAD)		94.03			87.75			99.78			85.81
Selling price (average) / sold production tonnes (USD)		92.56			85.88			101.30			83.12
Cash cost of sales and operating expenses 000,000's (CAD)		20.5			5.3			57.1			19.1
Cash cost of sales and operating expenses / sold production tonnes (CAD)		61.76			55.47			66.19			54.12
Cash cost of sales and operating expenses / sold production tonnes (USD)		60.79			54.28			67.20			52.42
Capital expenditures 000,000's (CAD)		13.49			2.33			17.45			5.04
Capital expenditures per t of saleable production (CAD)		54.69			12.45			25.95			10.35
Numbers in this chart are derived from the Slater Coal stand alone financial statements these are not affected by the adjustments related to the purchase price allocation or consolidation adjustments.
See non IFRS measures.

(*) The Slater Coal results presented in the chart above for the three and nine months ended November 30, 2010 have not been reported in the consolidated financial statements of the Company in full. Only results for a period from the date of acquisition (July 29, 2010) have been consolidated. Also as described above the comparative period for reporting purposes is the three months ended December 31, 2010.

NON-IFRS PERFORMANCE MEASURES

The Company has included in this document certain non-IFRS performance measures that are detailed below. These non-IFRS performance measures do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with IFRS. The definition for these performance measure and reconciliation of the non-IFRS measure to reported IFRS measures are as follows:

EBITDA - Forbes Coal consolidated

			Three months ended		Nine months ended
			November 30, 2011		November 30, 2011
			$000's		$000's
Net income (loss) for the period			3,523		1,097
	add back
Amortization and depletion			3,907		12,355
Income tax (recovery) expense			(396)		2,672
Foreign exchange (gain)			(1,203)		(1,131)
Interest and dividend income			306		827
Change in estimates on contingent acquisition liability			120		120
Accretion			475		1,540
Business combination transaction costs			2		24
Stock based compensation			64		1,996
Loss on share-based payments			1,488		1,488
Unrealized (gain) on marked-to-market securities			(54)		(54)
EBITDA Forbes Coal Consolidated			8,232		20,934

EBITDA - Slater Coal stand alone

			Three months ended		Nine months ended
			November 30, 2011		November 30, 2011
			$000's		$000's
Net income (loss) for the period			3,523		1,097
	add back
Amortization and depletion			3,907		12,355
Income tax (recovery) expense			(396)		2,672
Foreign exchange (gain)			(1,203)		(1,131)
Interest and dividend income			306		827
Change in estimates on contingent acquisition liability			120		120
Accretion			475		1,540
Business combination transaction costs			2		24
Mineral properties investigation costs (Non-Slater)			190		190
Stock based compensation			64		1,996
Loss on share-based payments			1,488		1,488
Unrealized (gain) on marked-to-market securities			(54)		(54)
General and administration (Non Slater)			615		3,320
EBITDA Slater Coal			9,037		24,444

About Forbes Coal

Forbes Coal is a growing coal producer in southern Africa. It holds a majority interest in two operating mines through its 76.75% 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.

Cautionary Note Regarding Forward-Looking Information 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 at the Slater Properties, future financial or operating performance of the Company and its projects, statements regarding the 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.