Vancouver, B.C. April 28, 2009 ? Western Canadian Coal Corp (TSX: WTN, WTN.WT and WTN.DB and AIM: WTN) (?Company? or ?Western?) is pleased to announce it has secured sufficient sales contracts and prices for the fiscal year ending March 31, 2010 to continue mining operations at the Wolverine operation and Brule mine.
John Hogg, President & CEO of Western Canadian Coal Corp. comments, ?Despite the significant curtailments taken by our customers during the current economic environment, we are pleased to achieve coal sale prices that are the second highest on record, which speaks well to the quality of our coal and the service we provide our customers. We are very pleased that today?s announcement allows the Wolverine Operations and Brule Mine to keep operating.?
The Company expects to produce approximately 1.7 million tonnes of metallurgical coal from its two operating mines:
?Wolverine Operations producing approximately 1.2 million tonnes of hard coking coal
?Brule Mine producing approximately 0.5 million tonnes of low-volatile PCI (?ULV-PCI?) coal
? Willow Creek Mine continues to be in care and maintenance The Company has the flexibility to adjust production to respond to changes in demand for its coal.
Western expects to ship approximately 2.0 million tonnes of metallurgical coal which consist of approximately 1.2 tonnes of its hard coking coal and approximately 0.8 tonnes of ULV-PCI. The Company expects the average price realized for its products to be in the range of US$120 to US$125 per tonne.
The Company has entered into forward sale contracts for US$175 million at a rate of C$1.21 per US$1.00. These contracts mature monthly from now to April 2010. The Company?s coal sales are in US dollars, while a majority of its expenses are in Canadian dollars, thereby reducing the Company?s exposure to the fluctuations in the dollar.
During fiscal 2009, considerable waste rock was removed at the Wolverine Operations so the stripping ratio in fiscal 2010 is expected to average 12:1. Further cost reductions will be achieved as the mining contractor at Wolverine will be replaced with Company employees on May 19, 2009.
John Hogg, President and CEO of Western Canadian Coal confirmed in a telephojne interview that 291 personnel will remain on site, a reduction from the 430 to 440 employees that were employed.
Hogg stated that with the world recession the demand for steel has dropped dramatically. Steel mills are operating at 50 percent of their capacity, further reducing the need for the high grade metallurgical steel that Tumbler Ridge produces.
Tumbler Ridge coal is currently shipped to Japan, Korea, Europe and China. Canada and the United States are significant exporters, however Australia is the world?s largest exporter.
As always in the mining industry, events in the community are impacted by global markets. Tumbler Ridge was built for and because of the coal industry, and has seen more significant down turns in its history since the town was built in 1982. We live and work in one of the most beautiful places in the province, and as residents will be happy to tell you, the town will not only continue to survive, it will certainly thrive.
Aside from strict cost control initiatives and working capital discipline, the Company?s cash preservation plan will limit fiscal 2010 capital expenditures to approximately C$3 to $4 million. The mines are in good condition and do not require extensive capital at this point.
?While there is still uncertainty in the markets, we believe demand for high quality metallurgical coal may improve as the year progresses. Therefore we will remain flexible to match production with demand conditions,? John Hogg states. ?We?ve worked hard over the past few months to remove the waste rock and get our stripping ratios lowered, which allows us to operate at a lower cost structure and remain competitive through the year.?
About Western Canadian Coal
Western Canadian Coal Corp. produces high quality metallurgical coal from two mines (Wolverine and Brule) located in the northeast of British Columbia. The coal is sold to many of the top steelmakers in the world. The Company also has interests in various coal properties in northern and southern British Columbia and a 50% interest to explore and develop the Belcourt and Saxon group of properties in northern BC. Currently, these properties provide the company with an estimated 15 years of coal reserves at current production levels.