Forbes Coal Reports Revenue of $20.5 Million and EBITDA of $2 Million for the First Quarter of FY2014

TORONTO, ONTARIO--(Marketwired - Jul 15, 2013) - Forbes & Manhattan Coal Corp. (TSX:FMC)(JSE:FMC) ("Forbes Coal" or "the Company") reports its financial results for the first quarter of FY2014 (the 3 month period ended May 31, 2013). Revenue was $20.51 million, gross profit was $0.34 million and consolidated EBITDA was $2.01 million as summarized in the table below.

First Quarter FY2014 Financial Results

Stephan Theron, President and Chief Executive Officer of Forbes Coal commented, "We have been successful at continuing to reduce our operating expenses this quarter which has been increasingly important as export coal prices have softened further. On the production side, we had a strong quarter and achieved record production in April and May 2013 which had a positive impact on the financial results of the Company this quarter."

Operational Highlights

Operational efficiencies and increased production continue to be the focus of the Company.

• Operating expenses for the three months ended May 31, 2013 were $16.80 million ($64.36 per tonne) compared to $16.18 million ($68.86 per tonne) for the three months ended May 31, 2012.
  
  
• Aviemore ROM production was 138,000 tonnes for Q1 FY2014, a 62% increase over the Q4 FY2013 production of 86,000 tonnes. Record production was achieved by Aviemore in each of April and May 2013

• Magdalena underground ROM production was 227,000 tonnes for Q1 FY2014, a 16% increase over Q4 FY2013 production of 196,000 tonnes. Record production was achieved by Magdalena underground in each of April and May 2013.

• Q1 FY2014 saleable production was 253,000 tonnes, an 18% increase over Q4 FY2013 saleable production of 214,000 tonnes (excluding bought in coal in this quarter). No coal was bought in during the Q1 FY2014.

• Q1 FY2014 total ROM production of 447,000 tonnes is equal to 32% of the total fiscal 2013 annual ROM production of 1,412,000 tonnes.

ROM Production

• Total ROM production from all operations for Q1 FY2014 was 447,000 tonnes, a 23% increase compared to 364,000 tonnes produced in Q4 FY2013. The increase in ROM production in Q1 FY2014 was due to record production for Magdalena underground and Aviemore underground for April and May 2013.
  
  
• Total ROM production for Q1 FY2014 was below targeted ROM production of 487,000 tonnes primarily as a result of difficult geology in sections 4 and 5 of the Magdalena underground mine.
  
  
• ROM production from Magdalena operations, underground and open pit combined, for Q1 FY2014 was 309,000 tonnes, an 11% increase compared to 279,000 tonnes produced in Q4 FY2013. The production for the quarter comprised 228,000 tonnes from the underground operations and 81,000 tonnes from the open pit.
  
  
• ROM production from Aviemore operations for Q1 FY2014 was 138,000 tonnes, a 62% increase compared to 86,000 tonnes produced in Q4 FY2013.

Saleable Production

• Saleable coal production for Q1 FY2014 was 243,000 tonnes (excluding calcine), a 14% increase compared to 214,000 saleable tonnes in Q4 FY2013 (excluding bought in coal), as a result of the increased ROM production.
  
  
• The calcine plant was recommissioned during the quarter under review. Saleable calcine product was 10,000 tonnes for Q1 FY2014, being the first period of production for this product.
  
  
• No saleable coal was purchased in Q1 FY2014, compared to 11,000 tonnes purchased during Q4 FY2013.
  
  
• The total calculated yield from plant feed was 59.7% for Q1 FY2014, compared to 58.6% for Q4 FY2013.
  
  
• Thinner coal seams and additional roof cutting in Magdalena sections 1 and 5 continued to result in increased contamination of coal from these sections during Q1 FY2014, resulting in lower than budgeted yields.

Sales

• Total sales of bituminous coal and anthracite products for Q1 FY2014 were 261,000 tonnes, a 55% increase compared to 169,000 tonnes sold in Q4 FY2013.
  
  
• Export sales for Q1 FY2014 were 142,000 tonnes, a 108% increase compared to 68,000 tonnes sold in Q4 FY2013, despite a significant slowdown in the anthracite export market during this period.
  
  
• Domestic sales in Q1 FY2014 were 119,000 tonnes, a 18% increase compared to 101,000 tonnes sold in Q4 2013.

SUMMARIZED FINANCIAL RESULTS OF FORBES COAL DUNDEE

Numbers in this chart are derived from the Forbes Coal Dundee stand alone financial statements (See non-IFRS performance measures).

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 measures and reconciliation of the non-IFRS measures to reported IFRS measures are as follows:

EBITDA - Forbes Coal consolidated

EBITDA - Forbes Coal Dundee stand alone

ADVANCE NOTICE BY-LAW AMENDMENT

Forbes Coal also announces that it has adopted a new policy that requires advance notice to the Company for nominations of directors other than by management, through a requisition for a meeting or by way of a shareholder proposal.

Among other things, the policy fixes a deadline by which holders of record of common shares of Forbes Coal must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in the notice to Forbes Coal for the notice to be in proper written form.

In the case of an annual meeting of shareholders, notice to Forbes Coal must be made not less than 30 nor more than 65 days prior to the date of the annual meeting, provided that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10^th day following such public announcement.

In the case of a special meeting of shareholders (which is not also an annual meeting), notice to Forbes Coal must be made not later than the close of business on the 15^th day following the day on which the first public announcement of the date of the special meeting was made.

The new policy is intended to: (i) facilitate an orderly and efficient annual general or special meeting process; (ii) ensure that all shareholders receive adequate notice of the director nominations and sufficient information regarding all director nominees; and (iii) allow shareholders to register an informed vote after having been afforded reasonable time for appropriate deliberation.

The policy is effective immediately and will be placed before Forbes Coal's shareholders for approval at the Company's annual general and special meeting of shareholders scheduled to be held on September 11, 2013.

The full text of the policy is available under Forbes Coal's SEDAR profile at www.sedar.com.

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 Forbes Coal (Pty) Ltd., a South African company ("Forbes Coal Dundee") 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 Forbes Coal Dundee 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 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 an experienced coal-focused management team.

Please refer to the company's NI 43-101 compliant technical report on the Forbes Coal Dundee Properties dated March 6, 2013 entitled "Independent Qualified Persons' Report on Forbes Coal Dundee Operations In the 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.

Cautionary Notes:

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 [NTD: make sure he has reviewed]. The ability of Forbes Coal 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 Forbes Coal Dundee Properties, future financial or operating performance of Forbes Coal and its projects, statements regarding the advance notice by-law amendment, anticipated improvements in logistical support and anticipated improvements in sales, statements made with respect to prospects for the business of Forbes Coal, 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 Forbes Coal 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 Forbes Coal 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 forwardlooking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

BE IT ENACTED AND IT IS HEREBY ENACTED as a by-law of FORBES & MANHATTAN COAL CORP. (hereinafter called the "Corporation") as follows:

ADVANCE NOTICE OF NOMINATIONS OF DIRECTORS

1. General By-law No. 3 of the by-laws of the Corporation is hereby amended by adding the following thereto as Section 3A:

Nomination of Directors. - Subject only to the Business Corporations Act (Ontario) (the "Act") and the articles of the Corporation (the "Articles"), only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors, (a) by or at the direction of the Board or an authorized officer of the Corporation, including pursuant to a notice of meeting, (b) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act or a requisition of the shareholders made in accordance with the provisions of the Act or (c) by any person (a "Nominating Shareholder") (i) who, at the close of business on the date of the giving of the notice provided for below in this Section 3A and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting and (ii) who complies with the notice procedures set forth below in this Section 3A:

General By-law No. 1, as amended from time to time, of the by-laws of the Corporation and this by-law shall be read together and shall have effect, so far as practicable, as though all the provisions thereof were contained in one by-law of the Corporation. All terms contained in this by-law which are defined in General By-law No. 1, as amended from time to time, of the by-laws of the Corporation shall, for all purposes hereof, have the meanings given to such terms in the said General By-law No. 1 unless expressly stated otherwise or the context otherwise requires.