1. TSX/JSE : FMC January 2013
RAPIDLY GROWING COAL PRODUCER IN SOUTHERN AFRICA
Corporate Presentation
A Forbes & Manhattan Group Company
2. Disclaimer TSX/JSE : FMC
This presentation contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements
with respect to the development potential and timetable of the Magdelena and Aviemore projects; the Company’s ability to raise additional funds as necessary;
the future price of coal; the estimation of mineral resources; conclusions of economic evaluations (including scoping studies); the realization of mineral resource
estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures;
success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks.
Generally, forward-looking statements 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
statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are
based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of
mining at the Company’s projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous mining
activities at the projects, and detailed research and analysis completed by independent consultants and management of the Company; research and estimates
regarding the timing of delivery for long-lead items; and knowledge regarding certain factors described in the technical report filed under the profile of the
Company on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independent
consultants. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel and
independent consultants. Forward-looking statements are 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 statements,
including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction,
expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of exploration and mining
activities; changes in project parameters as plans continue to be refined; future prices of coal; failure of plant, equipment or processes to operate as anticipated;
accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such statements 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 statements. The Company does not undertake to
update any forward-looking statements except in accordance with applicable securities laws.
Investors are advised that National Instrument NI 43-101 of the Canadian Securities Administrators (“NI 43-101”) requires that each category of mineral reserves and
mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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 presentation.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources
The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are
recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral
resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of
feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever
be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is
economically or legally mineable.
2
3. Company Overview TSX/JSE : FMC
Forbes & Manhattan Coal Corp.’s (FMC) vision is to build a high quality bituminous
and anthracite coal company with production capacity in excess of
10 million tonnes per year
Company Summary
Headquarters: Toronto, Ontario Total mineable coal 51.7 million tonnes Bituminous
resource (all measured)
(NI 43-101): 50.8 million tonnes Anthracite*
(15.1 million inferred)
Number of 2 (Magdalena Historical annual saleable 923,700 saleable tonnes in
mines: and Aviemore) production: fiscal 2012
Mine location: Kwa-zulu, Natal, 1 year target production: 583,000 saleable tonnes
South Africa (fiscal 2013) Bituminous - Magdalena
242,000 saleable tonnes
Anthracite – Aviemore
110,000 saleable tonnes
Bituminous-bought in
Production capacity: 2 million tonnes
* As set out in the Technical Report of the Company entitled “An Independent National Instrument 43-101 Technical Report on Slater Coal and Subsidiaries,
KwaZulu-Natal Province, South Africa”, dated March 1, 2011, prepared for the Company by Minxcon (the “Technical Report”). A copy of the Technical
Report is available under the profile of the Company on SEDAR at www.sedar.com. 3
5. Mining Resource (Dundee) TSX/JSE : FMC
NI 43 – 101 Global Resource1
Measured Indicated MI Inferred Yearly LOM
ROM2 (t)
Magdalena 51.7 m - 51.7 m - 0.9 mt + 20 years
Bituminous
Aviemore 1.6 m 34.1 m 35.7 m 15.1 m 0.4 mt + 20 years
Anthracite
1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
2. As per management’s guidance for fiscal 2013
5
7. Magdalena Bituminous Coal Operations TSX/JSE : FMC
Asset Summary
Location: • Dundee, Kwa-Zulu, Natal
Coal Type: • Bituminous
Resource: • 51.7 million tonnes1
Acres: • 4,557
Average BTU: • 12,250 BTU/lb
• 6,800 kcal/kg
Ash: • 15.0%
Volatility: • 16.7%
Saleable • 2011FY2: 556,000 tonnes
Production: • 2012FY2: 748,000 tonnes
Mine Life: • Approximately +20 years
Infrastructure: • Wash plant, processing plant and
siding
1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
2. Fiscal year-end February 28
7
8. Magdalena Project Area & Mining Rights TSX/JSE : FMC
* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
8
9. Magdalena Bituminous Coal Production Profile TSX/JSE : FMC
Drilling at Magdalena for potential opencast mine expansion has been
completed, Hilltop exploration drilling license has recently been granted.
Magdalena Saleable Bituminous Coal Production
(000 t)/February 28 year-end
748
556 583
485
449
347 326
299
FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13E
Magdalena o/c Magdalena u/g
* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
9
11. Aviemore Anthracite Coal Operations TSX/JSE : FMC
Asset Summary
Location: • Dundee, Kwa-Zulu, Natal
Coal Type: • Anthracite
• 50.8 million tonnes1
Resource:
(15.1 million tonnes inferred)
Acres: • 13,818
• 12,800 BTU/lb
Average BTU:
• 7,100 kcal/kg
Ash: • 13.7%
Volatility: • 7.9%
Saleable • 2011FY2: 92,000 tonnes
Production: • 2012FY2: 176,000 tonnes
Mine Life: • Approximately +20 years
• Wash plant, processing plant and
Infrastructure: siding
1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
2. Fiscal year-end February 28
11
12. Aviemore Project Area & Mining Rights TSX/JSE : FMC
* Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
12
13. Aviemore Anthracite Coal Production Profile TSX/JSE : FMC
At Aviemore, a feasibility study for an expansion is underway. There is potential
for 1 million tonnes of ROM per annum.
Aviemore Anthracite Coal Saleable Production1
(000 t)/February 28 year-end
242
176
102 92
59 62 61
20
FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13E
1. Source: National Instrument 43 – 101 Report available under the profile of the Company on SEDAR at www.sedar.com.
13
15. ZAC Anthracite Coal Operations TSX/JSE : FMC
Asset Summary
• 230 kms from Forbes Dundee
Location:
operations
Coal Type: • High quality anthracite
• Productions levels over the past 5
Resource:
yrs average 700,000 tpa
Combined • Approximately 75% on ROM
Yield: production
Allocation: • 150,000 tpa at Richard’s Bay
• Rail siding 10 kms from plant
Infrastructure: owned and operated by ZAC
15
16. Forbes Coal Pro Forma (ZAC) TSX/JSE : FMC
FMC STAND-ALONE
PROFORMA FMC/RHL CONSOLIDATED
(Sustainable)
ROM 0.8mt Bituminous / 0.5mt Anthracite 1.3mt Bituminous/ 1.2mt Anthracite
Production TOTAL 1.3 MT TOTAL UP TO 2.5 MT
1.1mt port allocation/ 1.1mt port allocation – FCD + 0.2mt
Port & Rail 1.5mt siding facility port allocation ZAC/ 1.5mt siding
facility
EBITDA $22 mln for 2012 fiscal year $32 to $47 mln potential
Marketing 70% Bituminous/ 30% Metallurgic 50% Bituminous/ 50% Metallurgic
16
17. Results TSX/JSE : FMC
Q1 2013 Q2 2013 Q3 2013
(March – May 2012 ) (June – Aug’ 2012 ) (Sept’ – Nov’ 2012 )
Revenue $ 20.8 million $ 23.39 million $10.83 million
Gross Profit $ 1.81 million $ 2.35 million -$2.29 million
Consolidated EBITDA $ 2.45 million $ 2.72 million -$3.39 million
Q1 2013 Q2 2013 Q3 2013
(March – May 2012 ) (June -Aug’ 2012) (Sept’ – Nov’2012)
Run of Mine
387,075 414,551 246,002
Production (t)
Saleable
244,605 256,583 152,013
Production (t)
Total Sales (t) 234,997 284,196 147,254
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18. Responsible Development TSX/JSE : FMC
• Good working relationship with its two
unions: National Union of Mineworkers
(NUM) and Amalgamated Mining &
Construction Union (AMCU)
• Labour contracts are negotiated on an
annual basis
• Recent labour disruption was settled
November 16, 2012 resulting in an
average wage increase of 14.8%
• Implementing internationally recognized
safety, health, environmental and quality
management systems
• Adheres to the tenets of the Mining
Charter and promotes local
procurement and procurement from BEE
companies
• Committed to developing local
communities
18
19. Experienced Management Team TSX/JSE : FMC
Stephan Theron, B.Comm, CGA │President and Chief Executive Officer
Extensive management, project finance and equity analysis experience in the mining, energy and infrastructure
sectors. Previous capital and project experience includes Weir PLC and AMEC PLC as well as former sector head
materials and energy with a specific focus on South African coal market.
Malcolm Campbell, Pr. Cert. Eng. (Mining) │Chief Operating Officer
Fourth generation coal miner with 25 years industry experience. Skilled in operational management, turnaround
strategies and business development. Spent 20 years with Anglo Coal; held a variety of positions including regional
manager for new business development and strategy.
Deb Battiston, CGA │Chief Financial Officer
Financial specialist with over 20 years experience in the mining sector.
Sarah Williams, CA │Vice President Finance
Chartered Accountant (SA) with nine years experience in the corporate finance industry and expertise in the resource
sector where she played key roles in company listings and IPOs, mergers and acquisitions, restructurings and debt and
equity capital raisings.
Kevern Mattison, NHD (Mining), B. Tech.│General Manager
More than 20 years operational coal mining experience and spent over 20 years with Anglo Coal, most recently as a
manager of mining.
Fanie Müller, B.Sc. Eng., M. Eng. │ Group Manager - Technical Support Service
A Professional Mining Engineer registered with the Engineering Council of South Africa. Project experience in
commodities ranging from coal, gold and diamonds to platinum and uranium. The foundation of his career in mining
was initiated at Anglo Coal. He joined Forbes Coal as the Group Technical Services Manager in 2010.
19
20. Directors TSX/JSE : FMC
Stephan Theron, B.Comm, CGA , │ President and CEO
Craig Wiggill, B.Sc. Eng. │ Chairman of the Board
Has held management, executive and directorship positions on several international mining companies in the coal sector
and, as CEO of Coal Americas at Anglo American plc. was responsible for all of that company’s coal activities in North and
South America. He was previously Managing Director of Anglo Coal Marketing Ltd from 2000 to 2004.
Stan Bharti, P.Eng. │ Director
Business consultant and a professional mining engineer with more than 25 years experience
President of Forbes & Manhattan, Inc., a private merchant focused on the resource sector, since July 2001.
John Dreyer, │ Director
Mr. Dreyer is a qualified South African lawyer, CEO of Tavistock Coal and executive director of Anglo American Platinum. He
served as chairman of ASX listed Firestone Energy until 2011. Mr. Dreyer currently serves on the board of ASX listed Cobar
Consolidated Resources where he also serves on the audit committee.
Bernard Wilson, │ Director
An advisor in corporate finance and investment banking. Notable leadership roles include serving as the Chairman of the
Canadian Chamber of Commerce (with 175,000 members), Chairman of the Canadian Council for International Business,
Chairman of the International Chamber of Commerce, as a member of the Canada/US Trade Committee and Chairman
Founders Board of the Institute of Corporate Directors.
Ryan Bennett, M.Mining Eng. │ Director
Masters degree in Mining Engineering from the Colorado School of Mines with extensive technical mining project analyses
experience. Senior Partner of Resource Capital Fund;(significant shareholder in Forbes Coal).
Michael Price, B.Sc., Phd. │ Director
Thirty-five years experience in mining and mining finance. After working for BP Coal, BP Minerals and BP Exploration in various
mine management and business development roles Mr. Price moved into mining finance with NM Rothschild & Sons, Societe
Generale and Barclays Capital. Mr. Price is now a Non-Executive Director of several mining companies and he is an
independent adviser on mining finance as well as the London Representative of Resource Capital Fund.
20
21. Investment Highlights TSX/JSE : FMC
• Resource base of high quality bituminous and anthracite coal in one of the best developed
coal markets in the world
• Goal to triple organic production within three years from 2010 historic levels using existing
infrastructure and capacity
• Established infrastructure to reach export corridors and growing domestic market
• Delivering on goals to increase sales while lowering production costs, resulting in strong
EBITDA
• ZAC acquisition moves FMC towards enviable mid-tier production status
• ZAC increases portfolio of high quality coal products, has solid marketing agreements in place
and great logistics, fully funded by Investec, maximizing potential returns to shareholders
• Experienced coal-focused management team
21
22. Share Price Performance TSX/JSE : FMC
Ticker Company Exchange YTD performance Capitalization
FMC Forbes Coal TSX -83% Shares Outstanding 34.8 million
UNV Universal Coal ASX -66% FD Shares Outstanding 39.5 million
IKW Ikwezi Mining ASX -73%
Closing Price (Jan 17, 2013) C$0.60
CCC Continental Coal ASX -83%
Trading Range C$0.48 – $2.03
CZA Coal of Africa ASX -73% (52 week)
Market Capitalization (Basic) C$20.88 million
Market Capitalization (FD) C$23.7 million
Source: Google Finance; 23 January 2013
22
23. Strategy and Business Plan TSX/JSE : FMC
Magdalena
• Continuing exploration program on the recently granted Hilltop exploration license;
• Increasing production capacity with additional mechanisation, and operational efficiency initiatives;
• Ramp-up saleable production up to 1,000,000 tonnes for the year;
• Investigate regional possibilities for the relocation of the opencast at the end of the current extension;
• Increase wash plant recovery rates from the current level of 62% to 68%;
• Investigate product upgrade potential.
Aviemore
• Achievable saleable production up to 300,000 tonnes for the year;
• Progress exploration and feasibility study for the expansion of1 million ROM tonnes per year producer.
Improve operational efficiencies by:
• Further develop management team with international experience;
• Explore opportunities to increase sales and exports;
23
24. New Opportunities TSX/JSE : FMC
Where?
• Forbes Coal to stay focused on Southern Africa. Most of the coals in Southern Africa can be washed to
produce an acceptable export thermal product.
• Lack of both infrastructure and investment are the main reasons why production and exports remain
constrained.
• The countries that are viewed to have the best potential for coal projects are South Africa, Botswana,
Mozambique, Zimbabwe, Tanzania and Swaziland.
• Opportunities have already been reviewed in most of the Southern African countries
How?
• Acquisitions
• Farm in options
• Licence applications
• Outright acquisitions preferable for operational assets and advanced projects
• Farm in options help mitigate against the risk of huge capital outlay. This is the preferred entry opportunity
for exploration projects
• Licence applications will only work in countries with robust and transparent licence frameworks (e.g
Botswana, Mozambique)
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26. Current Company Structure TSX/JSE : FMC
Forbes Coal Ownership Structure
Forbes and Manhattan Coal Corp.
(Ontario, TSX/JSE Listed)
100%
Forbes and Manhattan Coal Inc.
(Ontario)
100%
100%
Corondale Prospecting and
Forbes Coal (Proprietary) Limited Bowwood and Main 33 (Pty) Ltd
Mining (Proprietary) Limited
Dormant Company 100% (South Africa) (South Africa)
70%
Zinoju Coal (Proprietary) Limited BEE
(South Africa) 30% (Nulane)
100% 100%
Magdalena Aviemore
Bituminous Coal Anthracite Coal
26
27. Production – ROM - Quarter TSX/JSE : FMC
ROM tonnes
450,000
400,000
350,000
Quarterly ROM tonnes
300,000
250,000
200,000
150,000
100,000
50,000
0
ROM Magdalena ROM Aviemore
27
30. Combined ROM and Saleable Tonnes TSX/JSE : FMC
ROM tonnes 20121 Saleable tonnes 20121
Dundee - Dundee -
bituminous 36%
bituminous
34%
Dundee - Dundee -
52% anthracite 52% anthracite
ZAC anthracite ZAC -
14% 12% anthracite
20121 ROM tonnes Saleable tonnes
Dundee - bituminous 1 009 555 748 0222
Dundee - anthracite 281 244 175 675
ZAC - anthracite 668 995 518 528
Total 1 959 794 1 442 225
1. Dundee tons for the financial year ended 28 Feb 2012 and ZAC tons for the financial year ended 30 June 2012
2. Includes 66 906 bought in tonnes 30
31. Bituminous vs Anthracite TSX/JSE : FMC
Dundee stand-alone1 Dundee combined with ZAC1
19%
Bituminous 48% Bituminous
Anthracite 52% Anthracite
81%
20121 Saleable tonnes
Dundee - bituminous 748 0222
Dundee - anthracite 175 675
ZAC - anthracite 518 528
Total - anthracite 694 203
1. Dundee tonnes for the financial year ended 28 Feb 2012 and ZAC tonnes for the financial year ended 30 June 2012
2. Includes 66 906 bought in tonnes 31
32. Export vs Domestic TSX/JSE : FMC
Dundee stand-alone1 Dundee combined with ZAC1
47% Domestic 46% Domestic
53% Export 54% Export
20121 Sales tons
Dundee - domestic 505 652
Dundee - export 576 162
ZAC - domestic 353 316
ZAC - export 169 529
1. Dundee tons for the financial year ended 28 Feb 2012 and ZAC tons for the financial year ended 30 June 2012
32
33. Revenue and Sales Tonnes (CAD$) TSX/JSE : FMC
Revenue and sales tonnes
40 400
API4$ pricing decreased
from $118 to $82.
35 350
30 300
Sales tonnes ‘000
25 250
Revenue $’m
20 200
15 150
10 100
5 50
0 -
FY11Q1 FY11Q2 FY11Q3 FY11Q4 FY12Q1 FY12Q2 FY12Q3 FY12Q4 FY13Q1 FY13Q2 FY13Q3 FY13Q4
FC
Revenue $'m Sales tons'000
Notes:
1) The API4$ price has decreased significantly from FY12Q3. Export contracts on API4$ account for 50%-60% of
total sales. This has impacted on revenue and margins.
2) Average API4$ pricing for FY13Q3 was $82 per tonne
33
34. Access to Export Markets TSX/JSE : FMC
• For Fiscal 2012 Forbes Coal reported record export sales of 578,000 tonnes an increase of
179% from Fiscal 2011, reflecting strong demand from export markets
• Global thermal trade flows show India and China as major global importers of thermal coal
• South Africa exported an estimated 23 million tonnes of thermal coal to India in 2010
• Asia dominates demand for anthracite coal
• 83% of global imports; 95% of expected export demand growth
Global Thermal Coal
Trade Flows
1. Source : Company Reports
34
35. TSX/JSE : FMC January 2013
CONTACT INFORMATION
Stephan Theron Samantha Thomson
President & CEO Investor Relations Manager
Forbes & Manhattan Coal Corp. Forbes & Manhattan Coal Corp.
Tel: + 1 416 861 5912 Tel: +1 416 309 2957
Email: info@forbescoal.com Website: www.forbescoal.com
65 Queen Street West, Suite 815 P.O. Box 71, Toronto, Ontario, Canada, M5H 2M5 35
