Corsa Coal Wash Plant commences operating

Tuesday, 21 Jun 2011

Corsa Coal Corp announced that it has commenced operations at its new, state of the art, coal preparation plant, and is now producing low vol coking coal with its first train shipments of product to begin in July.

Mr Don Charter President and Chief Executive Officer of Corsa stated that “With our wash plant now operating, the recent expansion of our resource base and with six surface mines and a major underground mine operating this year, Corsa has taken another major step in its business plan to become a significant met coal producer. With our scheduled production, we are well positioned to take immediate advantage of the very robust market for US low vol coking coal.”

1. The Plant

The Company coal preparation plant is located near Somerset, Pennsylvania, on the CSX rail line and only 170 miles from the Port of Baltimore. With a name plate capacity of 400 raw tons of coal an hour, at full capacity the plant has the ability to produce up to 1.8 to 2 million clean tons of met coal annually. The Company's permanent rail load out facility can handle 120 car unit trains ensuring Corsa a competitive freight rate.

2. Production

Currently the Company has a met coal inventory of approximately 100,000 raw tons stock piled from its operations and purchase program to date that is being processed at the plant. In addition to existing inventory, immediate plant feed will be provided from the Company's four producing surface mines as well as coal purchased from other local mining operations.

In addition, two other surface mines and one underground mine will commence production in 2011, all of which coal will be processed at the Company plant. The Plant surface mine is scheduled to commence production by July and the Hastings surface mine is scheduled to commence production by September. The Casselman mine, the Company major new underground mine will commence production in July.

3. 2011/2012 Sales Update

The arrangements in place for the sale of 500,000 tons of metallurgical coal from April 2011 to March 2012 at current world prices are expected to result in net prices to Corsa of approximately USD 170 per clean ton FOB rail car subject to normal industry discounts based on coal specifications. Shipments under this agreement will commence in July 2011. This contract represents approximately 70% to 75% of the Company's expected sales tonnage during this period of time and provides the Company with the flexibility to enter into other sales arrangements and to take further advantage of the current robust market.

First shipments of met coal commenced in May, and in the period to mid-June sales of met coal totalled approximately 30,000 raw tons at prices effectively above US$170 per clean ton taking advantage of the current tightness in the market for low volatile metallurgical coal.

The Company continues to target fiscal 2011 met coal sales at approximately 500,000 tons. This is intended to be comprised of approximately 250,000 tons from production from the Company's mines and the balance from coal purchase agreements with other producers. With the purchase of the Casselman mine, the Company now expects fiscal 2012 coking coal sales to increase to approximately 1 million tons, which is expected to be made up of approximately 700,000 tons from the Company's mines and 300,000 tons from coal purchase agreements with other producers. (sourced Corsa Coal Corp)