A Forbes & Manhattan Group Company
CORPORATE PRESENTATION
February 2012TSX/JSE : FMC
GROWING COAL PRODUCER IN SOUTHERN AFRICA
2
TSX/JSE : FMCDisclaimer
This presentation contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statementswith 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 resourceestimates; 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 orstatements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements arebased 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 miningactivities at the projects, and detailed research and analysis completed by independent consultants and management of the Company; research and estimatesregarding the timing of delivery for long-lead items; and knowledge regarding certain factors described in the technical report filed under the profile of theCompany on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independentconsultants. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel andindependent 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 miningactivities; 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 couldcause 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 fromthose anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake toupdate 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 andmineral 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 hasreviewed and approved the scientific and technical information contained in this presentation.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred ResourcesThe 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 mineralresources” 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 aninferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis offeasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will everbe 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 iseconomically or legally mineable.
3
TSX/JSE : FMCCompany Overview
Forbes & Manhattan Coal Corp.’s (“Forbes Coal” or the “Company”) vision is to build a high quality bituminous and anthracite coal company with production
capacity in excess of 10 million tonnes per year
C omp a n y Su mma r y
Headquarters: Toronto, Ontario Total coal resource
(NI 43-101):
51.7 million tonnes Bituminous
35.7 million tonnes Anthracite1
(15.1 million tonnes anthracite inferred)
Number of
mines:
2 (Magdalena
and Aviemore)
Historical annual saleable
production:
648,000 saleable tonnes in
fiscal 2011
Mine location: Kwa-zulu, Natal,
South Africa
2 year target production2: 1,000,000 saleable tonnes
Bituminous - Magdalena
420,000 saleable tonnes
Anthracite - Aviemore
Production capacity: 1.5 million saleable tonnes
1. 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.
2. As per management’s guidance
4
TSX/JSE : FMC Investment Highlights
Strategic assets in one of the best developed coal markets in the world
Resource base of high quality bituminous and anthracite coal
Ability to TRIPLE production within three years from 2010 historic levels using existing
infrastructure and capacity
In-place infrastructure to reach export corridors and growing domestic market
Substantial upside through organic production growth and strategic acquisitions
Experienced coal-focused management team
As per management’s guidance
5
TSX/JSE : FMC Experienced Management Team
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 PLCFormer 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 experienceSkilled 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
Kuda Muchenje, │VP Exploration & Development Seasoned exploration geologist with over 15 years experience in the generation of exploration targets and
management of exploration and evaluation programs
Former Country Manager(Mozambique)for Rio Tinto
Deb Battiston, CGA │Chief Financial OfficerFinancial specialist with over 20 years experience in the mining sector
Kevern Mattison, NHD (Mining), B. Tech.│General ManagerMore than 20 years operational coal mining experience
Spent over 20 years with Anglo Coal, most recently Manager Mining
6
TSX/JSE : FMC Directors
Stan Bharti, P.Eng. │ Executive Chairman
Business consultant and a professional mining engineer with more than 25 years experience
Founder and Chairman of Forbes & Manhattan, Inc., a private merchant focused on the resource
sector, since July 2001
Stephan Theron, B.Comm, CGA , │ President and CEO
David Stein, MSc., CFA │ Director
Over nine years of asset evaluation, research and corporate finance experience
President and Director of Aberdeen International (seed investor in Forbes Coal)
Grant Davey, P. Eng. │ Director
Mining Engineer with close to 20 years experience in coal, platinum and gold mining industry
Previously held senior operational management roles for Anglo American in South Africa & Australia
David Gower, P. Geo. │ Director
Professional Geologist and the former Global Head of Nickel Exploration for Falconbridge
Ryan Bennett, M.Mining Eng. │ Director
Masters degree in Mining Engineering from the Colorado School of Mines
Extensive technical mining project analyses experience
Senior Partner of Resource Capital Fund;(significant shareholder in Forbes Coal)
7
TSX/JSE : FMCProgress to Date
September 2010
Completed RTO within 60
days, began trading on the
Toronto Stock Exchange under
the symbol “FMC”
March 2011
Closed CDN$42 million capital
raise at $4.55/share; Forbes
Coal increased ownership in
Slater Coal to 76.75%;
Completed second NI 43-101
Technical Report
Corporate Milestones…dual listed with experienced management team
December 2010
Increased export capacity at
Navitrade Terminal at Richards
Bay; Magdalena upgraded mining
operations; increased saleable
production capacity by 330,000
tonnes per annum
Signed three year offtake agreement
with leading energy trading company
for 1.75 million tonnes of thermal coal;
January and February 2011 production
increases 28%
April 2011
Operational Highlights…production up 53% since acquiring the Slater Coal properties
Q2 2012 revenue
increased 80% to $35.2
million as a result of record
export sales of 192,400
tonnes
October 2011
November 2011
Secured ZAR230 million
(approximately $C30
million) loan facility from Investec to fund
Company’s expansion
December 2011
Delivered solid fiscal Q3
2012 production number,
including a 235%
increase in total sales
year-over-year
January 2012
Forbes Coal reports
revenue of $31.2 million
in fiscal third quarter
2012, an increase of
245% year-over-year
8
TSX/JSE : FMC Ramping Production and Sales1
Run of Mine Production Saleable Production
Total Sales
1. All figures are tonnes
+ 22%
+ 31%
+ 235%
290,278
354,003
FY11Q3 ROM
(Sep 10 - Nov 10)
FY12Q3 ROM
(Sep 11 - Nov 11)
95,610
320,251
FY11Q3
(Sep 10 - Nov 10)
FY12Q3
(Sep 11 - Nov 11)
187,802
246,570
FY11Q3 SALE
(Sep 10 - Nov 10)
FY12Q3 SALE
(Sep 11 - Nov 11)
9
TSX/JSE : FMC Strong Financial Results Reflecting Growth
Q1 2012(Mar – May 2011)
Q2 2012(Jun – Aug 2011)
Q3 2012(Sept- Nov 2011)
% Change(YTD)
Revenue $19.6 million $35.2 million $31.2 million + 59 %
Gross Profit $4.2 million $5.6 million $6.8 million + 62 %
Consolidated EBIDTA
$5.6 million $6.9 million $8.2 million + 46 %
Cash and Cash Equivalents
$19.8 million $24.2 million $16.8 million - 15 %
10
TSX/JSE : FMC
• In Q3 2012 Forbes Coal reported record export sales of 199,200 tonnes an increase of 117% from March 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 growth1
Access to Lucrative Export Markets
Global Thermal Coal
Trade Flows
1. Source : Company Reports
11
TSX/JSE : FMCCoal Markets Overview
• Thermal (bituminous) coal sold directly to independent industrial companies in South Africa
• Thermal coal sold at circa US$80 per tonne vs low quality coal sold to Eskom priced at US$20 - 30 per tonne
• Demand increasing from emerging Asian markets, especially India and China
• Indian government expecting domestic coal shortfall of approx. 112 million tonnes for year ended March 2012; 35% increase from previous forecasts
• South African coal exports to India increased 161% 2008 – 2009
• China imported165 million tonnes of coal in 2010, up 31% from prior year
Domestic
Export
• Aviemore one of four listed metallurgical (anthracite) coal producers in South Africa
• Cost-effective replacement for coking coal/coke
• Applications include iron ore pelletizing, PCI for blast furnaces, calcining for electrode manufacturing, ferroalloys and power generation
Thermal Metallurgical
Source: Company reports1. McCloskey Coal Report, March 22, 2 011
• Demand driven by the metal refining industry
• Pricing highly correlated with PCl coal prices
• Australian coal producers starting to settle PCl contracts at a record US$275 per tonne FOB for April –June quarter 1
12
TSX/JSE : FMC Established Mining Region
Source: Company reports
13
TSX/JSE : FMC
Company Outlook
14
TSX/JSE : FMC 2010 – 2013 Mine Plan
Saleable Production1
• Increasing production: saleable production is expected to grow at a CAGR of 41% from 2010 to 2013
– Driven by expansion of production from the Magdalena and Aviemore underground mines
(000 t)
1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
505
648
1,061
1,423
2010FY 2011FY 2012FY 2013FY
Bituminous Anthracite
15
TSX/JSE : FMC Organic Growth Opportunities
Ramp up at Magdalena
• Double production from fiscal 2010 to fiscal 2013
• FY2011 CAPEX: $9.7 million
• Estimated FY2012 CAPEX: $12.4 million
Increase wash plant recovery rates
• Improve from current level of 60% to 70%
• Investigate product upgrade potential
• FY2011 CAPEX: $1.5 million
• Estimated FY2012 CAPEX: $1.2 million
Aviemore anthracite operations
• Ramp-up saleable production to 500,000 by tonnes/year by fiscal 2014
• FY2011 CAPEX: $0.16 million
• Estimated FY2012 CAPEX: $3.7 million
Source: Company reports, all figures in CDN $ unless otherwise indicated
16
TSX/JSE : FMCPositioned for Multi-Year Export Growth
Milestone agreement inked on December 7, 2010 increases
export capacity incrementally by 960,000 tonnes per annum for a total export capacity of 1,157,000 tonnes in 2013.
SECURED ADDITIONAL EXPORT CAPACITY AT RICHARD’S BAY
SIGNIFICANT OFFTAKE AGREEMENT PROVIDES STEADY
CASH FLOW
Three year offtake agreement reached with global energy trading company for 1.75 million tonnes (total) of thermal coal
Cash flow from offtake agreement will fund continued ramp up of production at the two operating mines
17
TSX/JSE : FMC Mining Resource
NI 43 – 101 Global Resource1
Measured Indicated MI Inferred YearlyROM2
LOM
Magdalena
Bituminous
51.7 m - 51.7 m - 1.0 m + 20 years
Aviemore Anthracite
1.6 m 34.1 m 35.7 m 15.1 m 0.25 m + 20 years
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
18
TSX/JSE : FMCU/G LOM Production Profile1
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.
Magdalena2
• Section 1: ABM30 High Seam, 40,000 tonnes/month
• Section 2: Conventional Low Seam, 10,000 tonnes/month
• Section 3: Dyke, 12,000 tonnes/month
• Section 4: ABM30 High Seam, 40,000 tonnes/month
• Section 5: CM Low Seam, 25,000 tonnes/month
• Section 6: CM Low Seam, 25,000 tonnes/month
• Section 7: CM Low Seam, 25,000 tonnes/month
Aviemore2
• Section 1: Conventional, 22,000 tonnes/month
• Section 2: Conventional, 22,000 tonnes/month
• Investigate low seam CM’s for future
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Ton
ne
s
Magdalena O/C Magdalena U/G Aviemore U/G
19
TSX/JSE : FMCMagdalena Bituminous Coal Operations
20
TSX/JSE : FMC Magdalena Bituminous Coal Operations
Location: • Dundee, Kwa-Zulu, Natal
Coal Type: • Bituminous
Resource: • 51.7 million tonnes
Acres: • 4,557
Average BTU: • 12,250 BTU/lb
• 6,800 kcal/kg
Ash: • 15.0%
Volatility: • 16.7%
Saleable
Production:
• 2011FY2: 555,000 tonnes
• 2012FY2: 900,000 tonnes
Mine Life: • Approximately +20 years
Infrastructure: • Wash plant, processing plant
and siding
Asset Summary1
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
Magdalena Operations and Site Layout
21
TSX/JSE : FMCMagdalena Bituminous Coal Production Profile
• Ramp-up on schedule
• New ABM30 continuous miner arrived in December 2010 (further increased saleable production capacity by close to 30,000 tonnes per month)1
• Second ABM30 continuous miner scheduled for delivery end September 2011
Magdalena Saleable Bituminous Coal Production2
(000 t)/February 28 year-end
299347 326
449485
556
900
1,003
2006 2007 2008 2009 2010 2011 2012E 2013E
Magdalena - open pit Magdalena - underground
1. As per management’s guidance2. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
22
TSX/JSE : FMCMagdalena Project Area & Mining Rights1
1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
23
TSX/JSE : FMCAviemore Anthracite Coal Operations
24
TSX/JSE : FMC Aviemore Anthracite Coal Operations
Location: • Dundee, Kwa-Zulu, Natal
Coal Type: • Anthracite
Resource: • 35.7 million tonnes(15.1 million tonnes inferred)
Acres: • 13,818
Average BTU: • 12,800 BTU/lb
• 7,100 kcal/kg
Ash: • 13.7%
Volatility: • 7.9%
Saleable
Production:
• 2011FY2: 92,000 tonnes
• 2012FY2: 161,000 tonnes
Mine Life: • Approximately +20 years
Infrastructure: • Wash plant, processing plant
and siding
Asset Summary1
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
Aviemore Operations
25
TSX/JSE : FMC Aviemore Anthracite Coal Production Profile
• Annual production capacity expected to hit 500,000 tonnes of saleable coal
per annum in fiscal 20141
Aviemore Anthracite Coal Saleable Production2
(000 t)/February 28 year-end
59 62 61102
20
92
161
420
2006 2007 2008 2009 2010 2011 2012E 2013E
1. As per management’s guidance2. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
26
TSX/JSE : FMCAviemore Project Area & Mining Rights1
1. Source: National Instrument 43 – 101 Report (Minxcon March 1, 2011) available under the profile of the Company on SEDAR at www.sedar.com.
27
TSX/JSE : FMC Corporate Structure
Source: FM Coal Corp
Forbes Coal Ownership Structure
Slater Coal (Proprietary) Limited (South Africa)
Zinoju Coal (Proprietary) Limited(South Africa)
AviemoreAnthracite Coal
Magdalena Bituminous Coal
76.75% → 100%
70%
100% 100%
Forbes and Manhattan Coal Inc.(Ontario)
23.25% → 0%
30%
Corondale Prospecting and Mining (Proprietary) Limited
Dormant Company 100%
Forbes and Manhattan Coal Corp.(Ontario, TSX/JSE Listed)
Slater Vendors
BEE (Nulane)
100%
28
TSX/JSE : FMC
• Good working relationship with its two unions: National Union of Mineworkers (NUM) and Amalgamated Mining & Construction Union (AMCO)
• Labour contracts are negotiated on an
annual basis
• 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
Responsible Development
29
TSX/JSE : FMCCapitalization and Share Performance
Company Ticker TSX: FMC
Closing Price (February 3, 2012) C$1.88
Trading Range
(52 week)
C$1.65 – $4.64
Market Capitalization (Basic) C$65 million
Market Capitalization (FD) C$72 million
Canadian Share Performance South African Share Performance
Company Ticker JSE: FMC
Closing Price (February 3, 2012) ZAR 1,625
Trading Range
(since July 28, 2011)
ZAR 1,430 –2,750
Market Capitalization (Basic) ZAR 565 million
Market Capitalization (FD) ZAR 642 million
1 Includes 2,700,000 performance warrants that convert into common shares upon the company reaching certain operating targets. Also includes 3,445,300 options with a weighted average exercise price of C$5.35 per share, 763,887 broker warrants convertible into common shares at an exercise price of C$2.80 per share and expiring on January 23, 2012 and 480,000 broker warrants convertible into common shares at an exercise price of C$4.55 per share and expiring on February 22, 2013.
Basic Shares Outstanding 34.8 million
FD Shares Outstanding1 39.5 million
Share Structure
30
TSX/JSE : FMCPeer Group Trading Analysis
Exxaro
Optimum Coal
Coal of Africa
Keaton Energy
Forbes Coal
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
-5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0
Sale
s G
row
th (
FY
12 t
o F
Y13)
FY12 P/E
23.4x
11.2x 11.0x
5.1x
2.3 x
12.2x10.9x
8.3x
5.5x
1.3 x
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
Coal of Africa Optimum Coal Keaton Energy Exxaro Forbes Coal
Corp.
FY 12 P/E FY 13 P/E
Source: Bloomberg, 20 December 2011(1) Excluding Forbes Coal
FY+1 average (1)= 12.7x
FY+2 average(1) = 9.2x
Sales growth (FY12 to FY13) versus FY12 P/E: South African listed peers
Market cap represented by bubble size
x
Share price performance: South African listed peers Relative valuation: South African listed peers
0
50
100
150
200
250
Forbes Exxaro Optimum Coal Keaton
Wescoal Hwange Firestone Resgen
31
TSX/JSE : FMC
Comparable Trading Analysis
Comparable Trading AnalysisMarket Cap EV
Company (US$M) (US$M) 2011E 2012E 2011E 2012E
U.S. Coal Producers
Alliance Resource Partners LP $2,500 $2,882 5.0x 4.6x 5.6x 5.0x
Alpha Natural Resources Inc.1
$4,483 $6,856 4.8x 3.4x 4.0x 2.7x
Arch Coal2
$3,239 $7,162 5.7x 4.1x 3.4x 2.6x
Cloud Peak Energy Inc. $1,052 $1,312 3.8x 3.6x 3.5x 4.0x
Consol Energy, Inc. $7,859 $11,270 6.1x 5.0x 5.5x 4.7x
Corsa Coal Corp. $160 $177 5.8x 3.5x 7.4x 4.8x
James River Coal Co. $245 $725 3.5x 3.5x 1.8x 1.8x
Lipari Energy, Inc. $95 $97 4.2x 2.9x 6.7x 3.7x
Natural Resource Partners LP $3,762 $4,469 14.9x 13.3x 13.3x 13.5x
Oxford Resource Partners, LP $535 $654 11.5x 7.5x 13.2x 9.4x
Patriot Coal Corporation $829 $955 4.8x 2.2x 6.7x 2.8x
Peabody Energy Corp.3
$10,029 $12,812 5.1x 4.0x 5.6x 4.3x
Rhino Resource Partners LP $509 $669 7.4x 5.8x 6.0x 5.4x
Xinergy Ltd. $173 $265 5.5x 2.4x 7.5x 2.8x
Walter Energy, Inc. $4,001 $6,266 5.1x 4.5x 5.1x 3.9x
U.S. Coal Producers Average (excluding high and low) 5.8x 4.2x 6.2x 4.3x
African Coal Producers
Coal of Africa Limited $428 $429 7.4x 2.0x 14.4x 5.3x
Continental Coal Limited $77 $93 4.7x 1.3x 419.3x 1.4x
Exxaro Resources Limited $7,930 $7,415 8.7x 5.9x 10.7x 6.5x
Keaton Energy Holdings Limited $53 $50 NA 4.2x NA NA
Optimum Coal Holdings Limited $1,129 $985 5.2x 4.0x 6.6x 4.5x
Petmin Limited $188 $79 NA 2.0x NA 0.0x
African Coal Producers Average (excluding high and low) 6.3x 3.0x 12.5x 3.7x
Other Coal Producers
Cline Mining Corp. $281 $196 NA 1.4x NA 2.3x
Coal & Allied Industries Ltd.4
$8,204 $7,952 8.4x 7.1x 11.4x 9.2x
Gloucester Coal Ltd.5
$1,350 $1,517 9.0x 6.4x 8.3x 6.8x
Grande Cache Coal Corporation $484 $536 NA 3.3x NA 2.5x
Macarthur Coal Ltd.6
$3,567 $3,008 8.0x 6.5x 14.7x 9.6x
Other Coal Producers Average (exluding high and low) 8.4x 5.4x 11.4x 6.2x
Overall Average (excluding high and low) 6.3x 4.2x 8.0x 4.6x
Forbes Coal (C$)7
$83 $86 2.9x 1.7x 3.9x 1.9x
Forbes Coal - Discount to Comparables (54%) (60%) (52%) (58%)
EV / EBITDA P/CFPS• Forbes Coal trades at
a significant discount to comparable coal producers on an EV/EBITDA and P/CF basis
Note: As of September 22, 20111. Pro forma acquisition of Massey Energy Inc.2. Pro forma acquisition of International Coal Group3. Pro forma the joint takeover offer with ArcelorMittal SA to acquire Macarthur Coal Ltd.4. Coal & Allied Industries is shown pre-announcement of a bid by Rio Tinto and Mitsubishi Development Pty to acquire the remaining 14% of Coal & Allied Industries on August 8, 20115. Gloucester Coal is shown pro-forma the acquisition of Donaldson Coal and Monash Group6. MacArthur Coal is shown pre-announcement of a joint take-over offer by ArcelorMittal and Peabody Energy on July 11, 20117. Forbes Coal’s operating forecast is based on Canaccord Genuity Research estimates. Market cap and EV includes 2.7M in performance warrantsSource: Consensus estimates and company reports
32
TSX/JSE : FMC Summary
Currently producing high quality bituminous and anthracite coal
Plans to organically TRIPLE production from 2010 historic levels to 1.5 million
saleable tonnes per annum in three years
Export capacity at Richards Bay Coal Terminal and Grindrod Terminals Richards
Bay to increase incrementally to 1,157,000 tonnes per annum by 2013
Offtake agreement with global energy trading company provides cash to fund
ramp up at two operating mines
Growing demand for coal from emerging markets
Looking at strategic acquisition opportunities in the region
Strong balance sheet and coal-focused management team
33
TSX/JSE : FMC
Appendix
34
TSX/JSE : FMCSouth Africa – Overview
• South Africa is the most attractive country in
Africa in which to do business according to
Ernst & Young 2011 Africa Attractiveness
Survey
• Modern infrastructure system supporting
distribution of commodities for both domestic
and export markets
– Extensive rail network (10th longest in
the world)
– Majority of electricity generated via
coal fired power stations
– Richard’s Bay port in South Africa is the
world’s largest bulk coal terminal
• 91 million tonne capacity
• Coal railed from approximately
49 mines
• Long history in resource development
– World’s largest PGM & ferrochrome
producer
– Significant coal, iron ore and
manganese resources
Richard’s Bay Port
World’s Largest Coal Terminal
35
TSX/JSE : FMCHistorical Coal Prices
• South African thermal coal (Richard’s Bay terminal) and coking coal prices have increased significantly
over the last several months
• The recovery to 2008 levels have been driven by increased demand, particularly from China and India,
and higher cost supply from key producing nations such as Russia and the U.S.
Historical South African Thermal Coal and PCI Coal Prices
$0
$50
$100
$150
$200
$250
$300
Jan
-07
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r-0
7
Ma
y-0
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p-0
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v-0
7
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-08
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-09
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y-0
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Jul-0
9
Se
p-0
9
No
v-0
9
Jan
-10
Ma
r-1
0
Ma
y-1
0
Jul-1
0
Se
p-1
0
No
v-1
0
Jan
-11
(US
$/
ton
ne
)
Richards Bay Thermal Coal Spot Price McCloskey/Xinhua Infolink's Coking Coal Price
Source: Bloomberg
36
TSX/JSE : FMCThermal Coal Global Overview
• Significant upside potential to export prices
• A tightening of the global seaborne market in late 2010 provided the initial base for thermal coal to rise
• Robust import demand from India
• Growing imports into China due to increasing demand and production curtailments
• Slowing export supply growth from Indonesia as more coal is diverted for domestic use
• Short-term supply constraints caused by flooding in Australia
• Australia is the second-largest exporter of bituminous coal
• Wood Mackenzie stated that prices could exceed 2008 highs
Global Thermal Demand and Supply Forecast
Source GTIS, Macquarie Research, February 2011
37
TSX/JSE : FMCThermal Coal Global Overview
• India will be relying heavily on coal fired power plants in the near future
38
TSX/JSE : FMCThermal Coal Global Overview
• As a result of reliance on thermal power generation, Indian thermal
imports are expected to rise significantly
Source GTIS, Macquarie Research, February 2011
39
TSX/JSE : FMCThermal Coal Global Overview
• Chinese thermal coal imports have been huge; this trend is expected to
continue into near future
40
TSX/JSE : FMC
Global Thermal Demand and Supply Forecast
Metallurgical Coal Global Overview
• The coking coal market was fundamentally tight prior to the Queensland floods, which have further constrained the market
• Current situation highlights the lack of geographical diversity to supply side portfolio, leaving it prone to shocks
• Market deficit likely to prevail, keeping price at decent premium to cost support
• Requirement for projects in high geopolitical and infrastructure risk regions will keep long-term prices elevated
Source GTIS, Macquarie Research, February 2011
41
TSX/JSE : FMCMetallurgical Coal Global Overview
Source GTIS, Macquarie Research, February 2011
• Many metallurgical coal basins exist, however there is a challenge in
bringing new projects online
42
TSX/JSE : FMCMetallurgical Coal Global Overview
• Supply growth in 2011 is set to be much lower than in 2010, while key
regions increase demand
43
TSX/JSE : FMC
• Global anthracite coal demand driven by the metal refining industry
– Cost-effective replacement for coking coal/coke
• Emerging markets consuming the most steel
• China is the world largest steel producer
– Accounts for 44% of global steel production
– Expected to sustain steel consumption growth of 6%-8% annually
• China accounts for 52% of the world’s coking coal consumption
– Imports more than half of coking coal consumed from export markets
Global steel consumption: Macquarie Commodities Research February 2011
Increasing steel
production and
consumption
drives demand
for anthracite
coal
Metallurgical Coal Global Overview
44
Stephan TheronPresident & CEO
Forbes & Manhattan Coal Corp.
Tel: + 1 416 861 5912
www.forbescoal.com
February 2012
CONTACT INFORMATION
65 Queen Street West, Suite 815 P.O. Box 71, Toronto, Ontario, Canada, M5H 2M5
Sabina SrubiskiInvestor Relations Manager
Forbes & Manhattan Coal Corp.
Tel: + 1 416 309 2957
www.forbescoal.com
TSX/JSE : FMC