Adjusted EBITDA, adjusted net income and funds from operations decreased in the fourth quarter of 2012 compared to 2011. The decrease is primarily due to remarketing coal from Milner for a gain on the derivative coal contract in 2011 as opposed to nil in 2012.
On a year to date basis, net revenue and adjusted net income improved in 2012 when compared to 2011. The increases in these financial measures are primarily due to the same factors impacting the fourth quarter.
On a year to date basis, adjusted EBITDA, funds from operations and net income attributable to shareholders declined in 2012 when compared to 2011. The decrease in these financial measures is primarily due to the same factors impacting the fourth quarter. Net income attributable to shareholders further decreased primarily due to recognizing an unrealized loss on the derivative coal contract in 2012 as opposed to a gain in 2011.
During the fourth quarter of 2012, MAXIM appointed financial advisors to review the Corporation's investments in the United States and France in order to identify options to maximize shareholder value. Credit Suisse Securities (USA) LLC has been engaged as financial advisor with respect to MAXIM's investments in the United States and HSBC Bank plc has been engaged as financial advisor with respect to MAXIM's investments in France. The evaluation of these initiatives is ongoing.
Summit Coal Limited Partnership ("SUMMIT") Mine 14 Project
During 2012, SUMMIT acquired two additional coal leases adjacent to its Mine 14 project, which is located north of Grande Cache, Alberta, advanced the development all of the Mine 14 project, and acquired an additional coal lease for a potential new property, Mine 16S. SUMMIT's lease holdings increased by 140% to 6,669 hectares following these additions. SUMMIT has since completed the 2012 exploration program for Mine 14 and reported the results in an updated NI 43-101 Technical Report filed on SEDAR on March 21, 2013. Current estimates for Mine 14, which includes the two additional adjacent leases, are 18.9 million tonnes of low-mid volatile metallurgical coal reserves with a mine life of 17 years. Mine 16S is located 30 kilometers northwest of the Mine 14 leases and represents 1,792 hectares or 29% of SUMMIT's total area of leases. An NI 43-101 Technical Report has not been prepared for the Mine 16S property.
SUMMIT has previously entered into a ten-year terminal services agreement with Ridley Terminals Inc., commencing January 1, 2015. This agreement provides SUMMIT with firm terminal capacity and terminal processing services to enable SUMMIT's proposed coal production to access the valuable seaborne metallurgical coal market. Signing this agreement reduces development risk as SUMMIT advances to the construction phase of its Mine 14 project. In addition to this, SUMMIT has secured firm 2014 delivery dates for critical mining equipment. During the fourth quarter of 2012, SUMMIT amended the agreement with the mining equipment supplier to allow for an extension for delivery to 2014.
SUMMIT plans to spend additional funds in 2013 on a further deposit for mining equipment and approvals to construct and operate a coal beneficiation plant as well as amend the existing ERCB mine license in order to increase annual coal production. SUMMIT anticipates receiving the mine license amendment and coal beneficiation plant approvals in the second quarter of 2013.
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