| ||December 20, 2010|
CanAm Coal Reports Third Quarter Coal Sales
| ||Calgary, AB - December 20, 2010 - CanAm Coal Corp. (TSXV: COE) ("CanAm" or the "Company") is pleased to report coal sales of RAC Mining LLC ("RAC") for the third quarter ending October 31, 2010. Coal sales at RAC continued to be strong in the third quarter and were 23,281 tons in the quarter as compared to 25,131 tons in Q2 and 20,305 tons in Q1. The average for the quarter was 7,760 tons per month as compared to 8,377 tons per month in Q2 and 6,769 tons per month in Q1. Sales in the third quarter consisted of 66% metallurgical coal and 34% thermal or steam coal.|
Sales for the quarter were characterized by:
- Record production of 11,051 tons in the month of August or nearly our targeted run-rate production of an average 12,000 tons per month.
- Higher thermal coal recovery rates from the Mary Lee coal seam resulting in a 66/34% metallurgical/thermal coal mix.
- Production slowdown in the second half of the quarter as the Company, and more importantly our contract miner and partner, turned his focus on transitioning and handing over the operations to RAC Mining LLC in anticipation of the Company becoming the 98% owner of the mine. Contractor equipment failure also impacted production near the end of the quarter.
Total sales for the nine month period ended October 31, 2010 were 68,718 tons and were comprised of 77% metallurgical coal and 23% thermal or steam coal. The Company will release its full third quarter financial results at the end of December.
"Although our production slowed down towards the end of the third quarter as a result of contractor equipment failure and the transition of mine operations to RAC, our August production has demonstrated to us that the mine can operate at our target production levels. Once transition of mine operations has been completed, we anticipate that production growth will resume in 2011," said Tim Bergen, CEO of CanAm.
Through the third quarter, CanAm's ownership of RAC Mining LLC was 49% but effective on November 8, 2010 the Company doubled its ownership to 98% following the buy-out of its partner and contract miner Job Land & Mineral Inc. Since November 8th, the Company has become the operator and has been working to transition mine operations to RAC Mining LLC. As part of this transition, the Company has been focused on complementing its equipment fleet with drilling and dozer capacity as the contract miner removed some of that equipment from the Powhatan mine. Other key transition activities include the hiring of employees, maintenance and upgrading of existing equipment, re-evaluating mining plans, review of mining practices and procedures, negotiation of 2011 sales contracts, permit revisions and extensions and, last but not least, safety, health and environmental practices. The Company will also develop a longer-term strategy for optimization of the Powhatan property. The Company anticipates that these transition activities will have a temporary impact on production levels for the fourth quarter as experienced in the latter part of the third quarter.
About CanAm Coal Corp.
CanAm is a coal producer and development company focused on growth through the acquisition, exploration and development of coal resources and resource-related technologies. CanAm's main activities and assets include its Alabama coal mine operations, the exclusive rights to a proprietary Coal to Liquids technology which converts coal into liquid fuels (such as oil, jet fuel) at an economical cost with zero airborne emissions and the Buick Coal Project which holds significant coal resources, 188 million indicated and 103 million inferred resources, in Colorado, USA (see the technical report entitled "Limon Lignite Project, Elbert County, Colorado, USA," dated October 26, 2007 and filed on SEDAR on November 2, 2007). Other coal and related opportunities continue to be evaluated on an ongoing basis.
For Further Information:
CanAm Corporate Office:
Linden Swensen, President
Toll Free: 1.877.262.5888
Brisco Capital Partners:
Scott Koyich, Partner
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.
Forward Looking Information and Statements
This press release contains certain forward looking statements and forward looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking statements are often, but not always, identified by the use of words such as "could", "should", "can", "anticipate", "estimate", "expect", "believe", "will", "may", "project", "budget", "plan", "sustain", "continues", "strategy", "forecast", "potential", "projects", "grow", "take advantage", "well positioned" or similar words suggesting future outcomes. In particular, this press release contains forward looking statements relating to: the future production of the Powhatan mine; the permitting of the Davis mine; and the potential production at the Davis mine. This forward looking information is based on management's estimates considering typical strip mining operations, equipment requirements and availability and typical permitting timelines.
In addition, forward looking statements regarding the Company are based on certain key expectations and assumptions of the Company concerning anticipated financial performance, business prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of services, the ability to obtain financing on acceptable terms, the actual results of exploration projects being equivalent to or better than estimated results in technical reports or prior exploration results, and future costs and expenses being based on historical costs and expenses, adjusted for inflation, all of which are subject to change based on market conditions and potential timing delays. Although management of the Company consider these assumptions to be reasonable based on information currently available to them, these assumptions may prove to be incorrect.
By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the Company's beliefs, plans, objectives and expectations, including, among other things: general economic and market factors, including business competition, changes in government regulations or in tax laws; the early stage development of the Company and its projects; general political and social uncertainties; commodity prices; the actual results of current exploration and development or operational activities; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Company; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. These factors should not be considered exhaustive. Many of these risk factors are beyond the Company's control and each contributes to the possibility that the forward-looking statements will not occur or that actual results, performance or achievements may differ materially from those expressed or implied by such statements. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these risks, uncertainties and factors are interdependent and management's future course of action depends upon the Company's assessment of all information available at that time.
Forward -looking statements in respect of the future production of the Powhatan mine may be considered a financial outlook. These forward-looking statements were approved by management of the Company on December 17, 2010. The purpose of this information is to provide an operational update on the company's activities and strategies and this information may not be appropriate for other purposes.
The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this press release are made as of the date of this press release and the Company does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
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