Corsa Coal Announces Financial Results for Third Quarter 2021

Canada NewsWire

FRIEDENS, Pa., Nov. 3, 2021

FRIEDENS, Pa., Nov. 3, 2021 /CNW/ - Corsa Coal Corp. (TSXV: CSO) (OTCQX: CRSXF) ("Corsa" or the "Company"), a premium quality metallurgical coal producer, today reported financial results for the three and nine months ended September 30, 2021. Corsa has filed its unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 and related management's discussion and analysis under its profile on www.sedar.com.

Unless otherwise noted, all dollar amounts in this news release are expressed in United States dollars and all ton amounts are short tons (2,000 pounds per ton). Pricing and cost per ton information is expressed on a free-on-board, or FOB, mine site basis, unless otherwise noted.

Third Quarter 2021 Highlights

   -- Key financial results and operational statistics are shown below: 
                       Three months ended   Nine months ended 
                       September 30,        September 30, 
(in millions except    2021        2020     2021         2020 
per share, per ton 
and sales tons) 
Net and comprehensive 
 income (loss)          $     0.9  $ (3.6)   $    (1.3)   $   (50.7) 
Non-cash asset 
 impairment 
 adjustment (included 
 above)                 $       -  $     -   $        -   $   (41.7) 
Diluted earnings 
 (loss) per share       $    0.01  $(0.04)   $   (0.01)   $   (0.47) 
Adjusted EBITDA(1)      $     4.1  $ (4.8)   $      7.0   $      5.8 
EBITDA(1)               $     6.2  $   1.8   $     13.3   $   (32.6) 
Cash (used in) 
 provided by 
 operating activities   $     4.2  $(10.3)   $      3.0   $     10.9 
Total revenue           $    36.4  $  23.6   $     91.4   $    111.7 
Average realized 
 price per ton of 
 metallurgical coal 
 sold(1)                $  112.75  $ 66.54   $    97.46   $    81.73 
Cash production cost 
 per ton sold(1)        $   92.24  $ 77.15   $    83.00   $    70.13 
Company produced 
 sales tons               286,678  286,944      828,260    1,008,622 
Value added services 
 sales tons                11,760      617       31,833       32,619 
Sales and Trading 
 sales tons                     -        -            -      136,663 
Total sales tons          298,438  287,561      860,093    1,177,904 
   -- Corsa's average realized price for the third quarter 2021 is the 
      approximate equivalent of between $174 to $179 per metric ton on an FOB 
      vessel basis(2).  For the third quarter 2021, Corsa's sales mix included 
      41% of sales to domestic customers and 59% of sales to international 
      customers. 
   -- In the third quarter 2021, the Company's U.S. subsidiaries, Wilson Creek 
      Holdings, Inc. and Wilson Creek Energy, LLC, received full forgiveness of 
      the Paycheck Protection Program loans received in April 2020.  The 
      Company previously recognized $7.2 million of grant income in the three 
      months ended September 30, 2020 and the remaining $1.1 million was 
      recognized as grant income in the three months ended September 30, 2021. 
(1)  This is a non-GAAP financial measure. See "Non-GAAP 
      Financial Measures" below. 
(2)  Similar to most U.S. metallurgical coal producers, 
      Corsa reports sales and costs per ton on an FOB mine 
      site basis and denominated in short tons. Many international 
      metallurgical coal producers report prices and costs 
      on a delivered-to-the-port basis (or "FOB vessel basis"), 
      thereby including freight costs between the mine and 
      the port. Additionally, Corsa reports sales and costs 
      per short ton, which is approximately 10% lower than 
      a metric ton. For the purposes of this figure, we 
      have used an illustrative freight rate of $45-$50 
      per short ton. Historically, freight rates rise and 
      fall as market prices rise and fall. As a note, most 
      published indices for metallurgical coal report prices 
      on a delivered-to-the-port basis and denominated in 
      metric tons. 

Bob Schneid, President and Chief Executive Officer of Corsa, commented, "The third quarter of 2021 appears to have marked a turning point for Corsa as the metallurgical coal market rebounded, spot pricing continued to rise and our mines started to return to pre-pandemic operating levels. We started to see the impact of the strong spot market for our low volatile metallurgical coal during the third quarter of 2021 and our average selling price increased accordingly. The majority of our shipments during the quarter, however, were delivered to customers with below market contracts. Our average selling price is expected to rise as all of these below market contracts expire by the end of this year."

"Our cash costs per ton sold increased significantly during the quarter due to: (1) planned outages which lowered production and increased repair and maintenance expenditures, (2) challenging conditions at two of our underground mines that slowed advance rates and increased costs, (3) a reduction in lower cost surface mine production as we transitioned our Schrock Run surface mine to a new mining area, and (4) the inefficiencies associated with hiring and training new, less experienced, employees. Corsa is committed to making the investments in our people and our assets that will position us to take full advantage of the improved metallurgical coal market and to generate the returns for our shareholders."

Financial and Operations Summary

For the three months ended September 30, For the three months ended September 30, Increase Increase (in thousands) 2021 2020 (Decrease) 2021 2020 (Decrease) Revenues $ 36,380 $ 23,586 $ 12,794 $ 91,425 $ 111,651 $ (20,226) Cost of sales $ 35,448 $ 32,004 $ 3,444 $ 92,238 $ 117,502 $ (25,264) Cost of sales - asset impairment - - - - 41,684 (41,684) Total cost of sales(2) $ 35,448

$ 32,004

$ 3,444

$ 92,238

$ 159,186

$ (66,948)

Selling, general and administrative expense $ 2,293

$ 2,507

$ (214)

$ 6,523

$ 7,060

$ (537)

Net and comprehensive loss for the period $ 933

$ (3,579)

$ 4,512

$ (1,347)

$ (50,681)

$ 49,334

Cash provided by operating activities $ 4,231

$ (10,327)

$ 14,558

$ 2,976

$ 10,882

$ (7,906)

EBITDA(1) $ 6,214

$ 1,820

$ 4,394

$ 13,310

$ (32,563)

$ 45,873

Adjusted EBITDA(1) $ 4,125

$ (4,839)

$ 8,964

$ 6,967

$ 5,821

$ 1,146

Coal sold - tons

NAPP -- metallurgical coal 298

288

10

860

1,178

(318)

(1) This is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below.

(2) Cost of sales consists of the following:

For the three months ended For the nine months ended September 30, September 30, (in thousands) 2021 2020 2021 2020 Mining and processing costs $ 24,628 $ 21,012 $ 64,685 $ 66,147 Purchased coal costs 1,529 39 4,002 13,613 Royalty expense 1,775 1,509 4,222 5,204 Amortization expense 4,670 4,966 12,726 16,490 Transportation costs from preparation plant to customer 1,570 3,426 4,294 12,835 Idle mine expense 190 129 493 294 Tolling costs 281 221 518 793 Change in estimate of reclamation provision - - - 278 Limestone costs 282 (24) 708 316 Write-off of advance royalties and other assets - 65 - 484 Other costs 523 661 590 1,048 Cost of sales $ 35,448 $ 32,004 $ 92,238 $ 117,502 Cost of sales - asset impairment $ - $ - $ - $ 41,684 Total cost of sales $ 35,448 $ 32,004 $ 92,238 $ 159,186

For the three months endedSeptember 30, For the nine months endedSeptember 30, 2021 2020 Variance 2021 2020 Variance Realized price per ton sold(1)

NAPP -- metallurgical coal $ 112.75

$ 66.54

$ 46.21

$ 97.46

$ 81.73

$ 15.73

Cash production cost per ton sold(1)(2)

NAPP -- metallurgical coal $ 92.24

$ 77.15

$ (15.09)

$ 83.00

$ 70.13

$ (12.87)

Cash cost per ton sold(1)(3)

NAPP -- metallurgical coal $ 92.55

$ 77.01

$ (15.54)

$ 83.03

$ 71.63

$ (11.40)

Cash margin per ton sold(1)

NAPP -- metallurgical coal $ 20.20

$ (10.47)

$ 30.67

$ 14.43

$ 10.10

$ 4.33

EBITDA(1) (000's)

NAPP $ 7,140

$ 2,569

$ 4,571

$ 16,241

$ (30,140)

$ 46,381 Corporate (926)

(749)

(177)

(2,931)

(2,423)

(508) Total $ 6,214

$ 1,820

$ 4,394

$ 13,310

$ (32,563)

$ 45,873

Adjusted EBITDA(1) (000's)

NAPP $ 4,828

$ (4,346)

$ 9,174

$ 9,147

$ 7,729

$ 1,418 Corporate (703)

(493)

(210)

(2,180)

(1,908)

(272) Total $ 4,125

$ (4,839)

$ 8,964

$ 6,967

$ 5,821

$ 1,146

(1)  This is a non-GAAP financial measure. See "Non-GAAP 
      Financial Measures" below. 
(2)  Cash production cost per ton sold excludes purchased 
      coal. This is a non-GAAP financial measure. See "Non-GAAP 
      Financial Measures" below. 
(3)  Cash cost per ton sold includes purchased coal. This 
      is a non-GAAP financial measure. See "Non-GAAP Financial 
      Measures" below. 

Coal Pricing Trends and Outlook

Price levels opened the third quarter 2021 at $198.00/metric ton ("mt") delivered-to-the-port ("FOBT") for spot deliveries of Australian premium low volatile metallurgical coal and closed the quarter at $388.50/mt FOBT. The quarterly average price for the third quarter of 2021 was $263.66/mt FOBT, compared to $137.46/mt FOBT in the second quarter of 2021, and traded in a range from a high of $408.50/mt FOBT to a low of $198.00/mt FOBT. October 2021 spot market pricing opened the month at $390.00/mt FOBT and closed the month at $402.50/mt FOBT with trades in a range from a high of $402.50/mt FOBT to a low of $390.00 /mt FOBT for an average price of $398.01/mt FOBT.