Forbes & Manhattan Corp is pleased to provide an operations update for the first quarter of fiscal 2012. Total Run of mine monthly coal production increased 45% when compared to the fourth quarter of fiscal 2011 and export sales rose 61% compared to the quarterly average of fiscal 2011.

First quarter highlights include:

1. Total combined ROM production for the first quarter was 311,000 tonnes, 45% higher than total ROM production during the fourth quarter of fiscal 2011.
2. Average combined monthly sales in the first quarter of 2012 were 44% higher than the average combined monthly sales for fiscal 2011. When compared with the fourth quarter of 2011, first quarter 2012 sales increased by approximately 14%.
2. Average monthly ROM production at Magdalena increased to 86,800 tonnes from 58,200 tonnes, a 49% improvement from the fourth quarter of 2011.
3. When compared to fiscal 2011 monthly averages, Magdalena monthly ROM production increased 33% during the first quarter of 2012.
4. Total export sales for the first quarter of fiscal 2012 were 80,800 tonnes, 61% higher compared to quarterly average for fiscal 2011.
5. Total domestic sales for the first quarter fiscal 2012 were 110,000 Tonnes, 34% higher when compared to quarterly average for fiscal 2011.
6. Chief Operating Officer, Malcolm Campbell started his new role effective June 13 2011 compared to previously announced August 1 2011.
7. Mr Johan Louw, previously Vice President Operations, will now take the role as Vice President Business Development and will focus on coal marketing, logistics and new projects.

Mr Stephan Theron President and Chief Executive Officer said "The positive results we have achieved reflect the success of the additional continuous miner at Magdalena and the steady improvements in made to rail performance leading to an increase in export sales. The production ramp-up is on track and management expects that a significant improvement in coal sales will directly translate into higher cash flows. We are also very pleased to have Malcolm Campbell officially on board as the Chief Operating Officer of the Company, based out of South Africa, and expect the operations team to leverage of his vast coal mining experience and knowledge base. Furthermore, a special thanks to Johan Louw for successfully leading the team up to this point. Johan will now have an opportunity to focus on coal marketing and business development projects."

1. Production

ROM production at Magdalena for the first quarter of 2012 was 260,300 tonnes. Average monthly ROM production at Magdalena during this period was 86,800 tonnes. This represents a 33% higher than the average monthly ROM production at Magdalena as compared to fiscal 2011 ROM production at Magdelena and a 45% increase compared to the fourth quarter results of 2011.

ROM production at Aviemore for the first quarter of 2012 was 50,700 tonnes with average monthly ROM at Aviemore for the same period at 16,900 tonnes. This represents a 29% improvement from Aviemore fourth quarter 2011 average monthly production. When compared to average ROM production for fiscal 2011, first quarter 2012 monthly production was slightly lower than the average monthly ROM production at Aviemore for fiscal 2011.

Total saleable production for the first quarter of 2012 was 207,200 tonnes, a 29% improvement when compared to total saleable production from fourth quarter 2011. Magdalena produced 175,400 tonnes and Aviemore produced 31 200 tonnes.

2. Logistics

Rail performance at the Company siding facilities improved by 42% in first quarter 2012 when compared to fourth quarter of 2011. Management remains encouraged by these results as during this period, the Company was subject to an annual coal line shut down at the end of May 2011 which impacted rail performance for all South African coal operators.

At the end of May 2011 a combined 46,000 tonnes of coal was in stock at the Navitrade terminal.

3. Sales

Average combined monthly sales were 63,600 tonnes for the first quarter of 2012, representing a 44% increase to the average combined monthly sales for fiscal 2011. When compared to fourth quarter 2011 average combined monthly sales increased 14%.

Export sales for first quarter 2012 were 80,800 tonnes, 61% higher than average quarterly sales in fiscal 2011. Domestic sales in first quarter 2012 were 110,400 tonnes, a 34% increase when compared to the fiscal 2011 quarterly average. When compared to the fourth quarter of fiscal 2011, domestic sales increased 43%.