Corsa Files Fiscal 2011 Financial Results and Updates Production Guidance

TORONTO, Feb. 22, 2012 /CNW/ - Corsa Coal Corp. (TSXV: CSO) ("Corsa" or the "Company") announces that it has filed its Audited Consolidated Financial Statements and Management's Discussion and Analysis for the fiscal year ended November 30, 2011 on SEDAR and has posted these documents to its website www.corsacoal.com.

Significant achievements for the fiscal year ended November 30, 2011 included:

• Purchase of Wilson Creek
• Completion of a Cdn$ 69 million equity private placement
• Arrangement of Coal Sales Contract
• Purchase of the Alumbaugh Property adding an indicated resource of 29.5 million in place tons
• Purchase and commencement of mining operations at the Casselman underground mine with an indicated resource of 16.2 million in place tons
• Completion of $25 million Credit Facility
• Commencement of Coal Preparation Plant operations and met coal shipments of 252,000 tons with coal quality better than sales contract specifications
• Purchase of the Keyser Property with an indicated resource of  approximately 11 million in place tons
• Completion of a Cdn$22 million equity private placement

Refer to the Audited Consolidated Financial Statements and Management's Discussion and Analysis filed for the details of the financial performance of the Company and the matters referred to in this release including the technical reports and independent qualified person.

Don Charter, President and Chief Executive officer stated "We are very pleased with our performance and achievements in our start-up year with met coal sales of 252,000 tons, five surface mines in production (soon to be six), the purchase and successful start-up of the Casselman underground mine and the successful start-up of our coal processing plant.  While the industry slowdown in the fourth quarter 2011, which has continued into the first quarter 2012, has affected us like everyone else we still expect to ship approximately 65,000 tons of met coal for the quarter. We continue with the expansion of our mining operations at the Casselman mine and property acquisitions as evidenced by our recent purchase of the Keyser property."

2011 Production and Sales

The Company sold 252,000 clean tons of metallurgical coal (including raw tons of metallurgical coal sold prior to the commencement of the plant and converted to equivalent clean tons) during the year ended November 30, 2011. The average realized price was $167 per ton. The Company produced 201,000 raw tons of metallurgical coal with 164,000 tons from its surface and 37,000 from its underground mine during fiscal 2011. Three surface mines were operating at the start of the year and two additional surface mines commenced during the year. Although the Casselman underground mine, which commenced operations in July 2011, experienced some production difficulties due to initial mining conditions and low seam coal, productivity has improved continuously. The mining cash costs of metallurgical coal (not including royalties) for fiscal 2011 were $60 per raw ton. These costs were higher than normal due to the start-up of the Casselman Mine as well as the start-up of two surface mines and the changeover of equipment at the Quarry surface mine. The Company purchased 238,000 raw tons of metallurgical coal in fiscal 2011 from third parties.

The coal preparation plant, following its June 2011 start-up, processed 365,000 raw tons of metallurgical coal and produced 226,000 clean tons in fiscal 2011. The cash processing costs of $17 per clean ton in 2011 were impacted by higher costs due to the start-up of the plant, double handling of raw coal while the plant raw coal area is expanded and third party refuse handling pending the start-up of the Company's refuse site.

The Company sold 142,000 raw tons of thermal coal during the year ended November 30, 2011. The average realized price was $39 per ton. As part of the purchase of Wilson Creek, an out of the money thermal coal sales agreement was inherited that required the delivery of approximately 87,000 tons at prices between $32 and $34 per ton. The agreement was completed by November 30, 2011. The Company sold 55,000 tons of thermal coal to other customers at an average price of $50 per ton. The thermal coal mined is ancillary to the mining of metallurgical coal. The Company produced 169,000 raw tons of thermal coal from its surface mines during fiscal 2011. The mining cash costs of thermal coal (not including royalties) were $53 per raw ton.

2012 Outlook

The industry experienced a slowdown in the fourth quarter of 2011 which has continued into the first quarter of 2012 as a result of global economic conditions and the demand for steel. A number of producers have announced reductions in planned metallurgical coal production and guidance for 2012 as a result of this slow down. As previously disclosed, this sudden slowdown in demand resulted in the Company shipping less metallurgical coal than expected in the fourth fiscal quarter of 2011 resulting in the Company not achieving its guidance targets although it had the production capability to have achieved its targets. This slowdown has continued into fiscal 2012 Q1 resulting in lower than expected sales to date.  The Company had expected to ship approximately 90,000 tons of metallurgical coal in the first quarter but it now expects sales to be approximately 65,000.  The Company, as a result, reduced its surface mine production and third party coal purchases in the quarter to meet these lower demand levels. For the remainder of the year the Company will adjust its production and third party purchases to match actual demand and sales orders.

Mine Production

In 2012, the Company expects to add new surface production from the Hastings and Ankeny mines to that from the five surface mines currently operating, however it is expected that the Cramer mine will cease operations as the reserve is exhausted.  A portion of the anticipated production of the Hastings mine has been permitted but the Ankeny production and the balance of the Hastings production will depend on obtaining permits to allow operations there to commence on schedule. Entering the 2012 fiscal year, the Company had the capacity to produce between 320,000 to 340,000 raw tons of metallurgical coal from its surface operations. However, due to the reductions in surface mine production in the first quarter to match demand, production was approximately 30,000 tons less than expected.  Accordingly, if surface mine production were to operate at full capacity for the balance of the year the Company expects to have the capacity to produce between 290,000 to 310,000 raw tons of metallurgical coal from its surface operations. The Company did not significantly reduce production at the Casselman underground mine as it continues the mine expansion. The Company plans to add a second continuous mining unit in the second quarter of fiscal 2012 and a third unit in the fourth quarter. With improved mine productivity and the three continuous mining units operating by the end of 2012 fiscal year, the Company expects to have the capacity this year to produce between 405,000 to 455,000 raw tons of metallurgical coal from this underground operation.

On a combined basis the Company expects to have the capacity to produce between 695,000 to 765,000 raw tons of metallurgical coal. The Company expects the mining cash costs to be approximately $47 to $50 per raw ton based on production at these levels. The lower cash costs are mainly due to expected improvements at the underground mine with the completion of the development phase of the Casselman mine and the planned expansion. The Company's actual production in fiscal 2012 will be adjusted to reflect actual customer demand during the year.

With the surface mines operating throughout the 2012 fiscal year discussed above, the Company expects to have the capacity to produce approximately 105,000 to 115,000 raw tons of thermal coal. The Company expects the mining cash costs to be approximately $52 to $54 per raw ton based on production at these levels.  The Company's actual production in fiscal 2012 will be adjusted to reflect actual customer demand. Production of thermal coal will also be dependent in part on the level of metallurgical coal production at the surface operations.

In the 2012 fiscal year, the Company expects to have the capacity to purchase between 300,000 and 460,000 raw tons of metallurgical coal. The Company's actual purchases will be adjusted to reflect actual customer demand during the year. The level of purchased coal is also impacted by the coal qualities of the purchased coal and the Company's coal due to blending requirements. The cost of purchased metallurgical coal is typically based on a formula so that the price paid is dependent on the actual sale price realized by the Company.

Processing

At full production from the surface and underground mines and third party coal purchases all as discussed above, the Company would have up to 995,000 to 1,225,000 raw tons of metallurgical coal available for processing through the coal preparation plant in the 2012 fiscal year. The Company expects its average recovery in the plant in 2012 to be below its long term targets due to the out of seam dilution from the low seam coal area in the initial phase of the Casselman mine. At an expected recovery rate of approximately 61%, the coal preparation plant could produce from 605,000 to 745,000 clean tons. The Company expects the cash processing costs to be approximately $12 per clean ton based on processing this level of coal. The Company's actual production in fiscal 2012 will be adjusted to reflect actual customer demand during the year which may also affect the processing cost per ton.

Sales

The Company has arrangements in place for the sale of 500,000 clean tons of metallurgical coal for the period from April 2011 to March 2012  at a price of  $170 per ton, subject to  normal industry discounts based on coal specifications. The Company has sold and delivered a total of 179,000 tons under this arrangement to November 30, 2011. From December 1, 2011 to February 17, 2012, the Company has delivered an additional 39,000 tons. With the market slowdown discussed, the Company has sold less than expected tonnage under this agreement to date. While the Company has sold metallurgical coal to other customers on a spot basis in the first fiscal quarter of 2012, the Company has not entered into any longer term contracts.

As discussed above, in the 2012 fiscal year, the Company expects to have the capacity to sell from 605,000 to 745,000 clean tons of metallurgical coal. The Company's actual production in fiscal 2012 will be adjusted to reflect customer demand during the year and will be dependent on the sales orders received. Sales could be less than the Company's capacity to produce as a result of weak demand.

In the 2012 fiscal year, the Company expects to have the capacity to sell between 105,000 to 115,000 raw tons of thermal coal. The Company's actual sales will be dependent on the sales orders received.

Winner Property

The Winner underground property is located in Garrett County, Maryland. A Technical Report dated July 29, 2011 was prepared and filed with respect to this Property which contained an indicated coal resource. While initial pre-filing meetings with the Maryland Department of Environment ("MDE") by the Company and the independent qualified person provided indications that this property could be permitted, further discussions with the MDE prior to filing the permit application have resulted in the Company being advised in February 2012 that the proposed mining plan would not be acceptable to MDE and would not receive a permit. The Company will consider alternative mine plans but at this time the Company does not believe this property will receive a permit to be mined and is dropping this project.

Caution

The estimated coal production, purchases, sales and cash costs per ton of coal and processing costs per ton of coal sold disclosed in this press release are considered to be forward looking information. Readers are cautioned that actual results may vary from this forward looking information. There can be no assurance as to when or if the required permits will be issued. Actual production, sales, shipments, purchases, total cash costs and sales and processing costs are subject to variation based on a number of risks and other factors referred to under the heading "Forward-Looking Statements" as well as actual demand and sales orders received. Costs will be impacted by production levels actually achieved.

Technical Reports

The mineral resource estimates for the projects referred to in this press release have been prepared under the supervision of, and the technical information in this press release was verified and approved by, Dennis Noll of Earthtech Inc., a qualified person, as such term is defined in NI 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").  Dennis Noll is independent of Corsa and Wilson Creek Energy.  The mineral resources estimates for Alumbaugh and Casselman referred to in this press release were derived from the following technical reports prepared in accordance with NI 43-101:  "Technical Report for Wilson Creek Energy, LLC, Coal Resources for the Alumbaugh Property in Somerset County, Pennsylvania, USA, Dennis A. Noll, P.G., C.P.G., Earthtech, Inc., May 5, 2011" ; "Technical Report for Wilson Creek Energy, LLC, Coal Resources for the Casselman Mine Site in Garrett County, Maryland, USA, Dennis A. Noll, P.G., C.P.G., Earthtech, Inc., May 5, 2011".

The estimate of mineral resources in this press release reflects known environmental, permitting, title and other relevant matters. The footprint will require further definition in the following areas in order to achieve the classification of a coal reserve: surface and mineral control, mineability related to geologic conditions, and economic viability.  The mineral resources referred to have not been classified as a mineral reserves and a feasibility study has not been completed. Accordingly the economic viability of the Casselman Mine operations and the Alumbaugh property and Keyser property has not yet been demonstrated.

Information about Corsa

Corsa's main operating subsidiary is Wilson Creek Energy LLC based in Somerset County, Pennsylvania.  Its primary business is the mining, processing and selling of metallurgical coal, as well as actively exploring, acquiring and developing resource properties consistent with its coal business.

Forward-Looking Statements

Certain information set forth in this press release contains "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of future plans and operations and are based on current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "estimates", "expects" "anticipates", "believes", "projects", "plans", "outlook", "capacity" and similar expressions. These statements are not guarantees of future performance. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Corsa's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: risks that transactions referred to will not be completed; the Company's production and/or sales numbers are not achieved; liabilities inherent in coal mine development and production; geological, mining and processing technical problems; inability to obtain required mine licenses, mine permits and regulatory approvals or renewals required in connection with the mining and processing of coal;  unexpected changes in coal quality and specification; risks that the Wilson Creek coal preparation plant will not operate at production capacity during the relevant period; variations in the coal mine or preparation plant recovery rates; dependence on third party coal transportation systems; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; changes in the regulations in respect to the use, mining and processing of coal; changes in regulations on refuse disposal; the effects of competition and pricing pressures in the coal market; the oversupply of, or lack of demand for, coal; inability of management to secure coal sales or third party purchase contracts; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on forward-looking statements. The Company does not undertake to update such forward looking statements, unless required to do so by law. The statements as to the Company's capacity to produce coal are no assurance that it will actually achieve these levels of production or that it will be able to achieve these sales levels.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.  Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Corsa Coal Corp.:

Don Charter,

President and Chief Executive Officer

416-214-9800

[email protected]
www.corsacoal.com