20 Jun 2011 07:00
Amsterdam, 20 June 2011
New World Resources Board approves the Debiensko project
New World Resources Plc ("NWR" or the "Company"), one of Central Europe's leading hard coal and coke producers, today announced that the Board of Directors of NWR has given its final approval for the Debiensko project (the "Project"). The decision is based on the outcomes of the Detailed Feasibility Study ("DFS") and an extensive internal review of the Project, as well as general market considerations.
NWR holds a 50-year mining license, granted in 2008, to extract coal from Debiensko. This allows the Company to start work on the Project immediately and thus NWR remains on track to break ground at the project site before end 2011. In 2010 NWR applied for an amendment to this license to enable the Company to mine the additional coal seams at Debiensko. Approval for this is now expected by mid-2012 following the completion of the environmental review.
The DFS comprised a range of studies using global and local experts in the fields of Surface Infrastructure, Coal Preparation Plants, Slopes and Shafts, Reserve Modeling, Mine Planning and Rail Facilities. Detailed engineering has also commenced and is planned for completion by end March 2012.
The main parameters of the Project based on the DFS are:
Reserves 190Mt
Average annual production 2 Mt p.a.
Schedule First coal in 2017 and full production shortly thereafter
Mine entrance Twin slopes plus two existing shafts
Expected number of long walls 3 operational, 1 spare
Development CAPEX EUR 411 million
Pre-production operating
costs associated with existing EUR 133 million
infrastructure
Expected product mix 7/8 coking coal and 1/8 thermal coal
Expected coking coal quality 2/3 hard coking coal and 1/3 semi-soft coking coal
As Debiensko is an existing mine site, there are pre-production operating costs involved in the Project, which cannot be offset against revenue. These operating costs include maintenance of the existing shafts and mine workings, operating and maintaining electrical and water pumping infrastructure as well as the ventilation system.
The development CAPEX includes the acquisition of all mining equipment required to ramp up to full capacity. It is expected that EUR 50m CAPEX will be incurred during 2011. The major components of this will be detailed engineering, land acquisitions, operating existing infrastructure and commencement of the first slope.
NWR expects to finance the Project using a combination of cash flow from existing operations and debt.
Jan Fabian, Chief Operating Officer of NWR was appointed to oversee the Project and to report to the Board of NWR with regard to progress.
NWR believes that the coking coal market in Europe will remain lucrative in the coming years due to projected growth in regional steel production. Mike Salamon, Executive Chairman of NWR commented: "Following a rigorous development process we are now in a position to push the button at Debiensko. This reflects our confidence in the quality of the asset and the long-term strength of coking coal markets. This is a significant moment in the growth and development of NWR as a company, and illustrates our commitment to investing in the development of our operations in Poland. "
NWR's senior management will hold an analyst conference call on Friday 24 June 2011, at 15:00 CET (14:00 BST), to discuss some technical aspects of the Project.
A live webcast of the call will also be made available on NWR's website at www.newworldresources.eu.
Dial in details:
The Netherlands +31 (0)20 201 5468
UK & the rest of Europe +44 (0)20 71362054
USA +1 718 247 0880
Confirmation Code: 4034774#
For further information please contact:
Investor Relations Corporate Communications
Tel: +31 20 570 2270 Tel: +31 65 476 4119
Email: ir@nwrgroup.eu Email: pmasinova@nwrgroup.eu
Website: www.newworldresources.eu
About NWR
NWR is one of Central Europe's leading hard coal and coke producers. NWR produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, a.s. ('OKD'), the largest hard coal mining company in the Czech Republic. NWR's coke subsidiary, OKK Koksovny, a.s. ('OKK') is Europe's largest producer of foundry coke. NWR currently has two development projects in Poland, Debiensko and Morcinek, which form part of NWR's regional growth strategy. NWR is a FTSE 250 company, with listings in London, Prague and Warsaw.
Disclaimer and Cautionary Note on Forward Looking Statements and Notes on Certain Other Matters
Certain statements in this document are not historical facts and are or are deemed to be "forward-looking". The Company's prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; "may", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "will", "could", "may", "might", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond NWR's ability to control or predict. Forward-looking statements are not guarantees of future performances.
Factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Company's products, and demand for the Company's customers' products; coal mine reserves; remaining life of the Company's mines; coal production; trends in the coal industry and domestic and international coal market conditions; risks in coal mining operations; future expansion plans and capital expenditures; the Company's relationship with, and conditions affecting, the Company's customers; competition; railroad and other transportation performance and costs; availability of specialist and qualified workers; and weather conditions or catastrophic damage; risks relating to Czech or Polish law, regulations and taxation, including laws, regulations, decrees and decisions governing the coal mining industry, the environment and currency and exchange controls relating to Czech and Polish entities and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are as described in the Company's annual report.
Forward-looking statements are made only as of the date of this document. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this report to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law.