WCCC cashes up on heels of Wolverine approval

Vancouver – Western Canadian Coal (WTN-V) is a few steps closer to becoming a significant metallurgical coal producer by taking advantage of existing rail, port, and town facilities in the northeast British Columbia coalfields.

On the heels of getting the environmental assessment certificate for its Wolverine metallurgical coal project, the Vancouver-based company is raising $100 million through a private placement equity financing. The financing, led by Sprott Securities, is scheduled to close around February 9.

London-based Cambrian Mining Plc, which already owns 48% of the company’s shares agreed to subscribe for $20 million worth of the offering which will bring its stake in Western Canadian to 42%. Western Canadian’s chairman, John Byrne is also the CEO of Cambrian.

Western Canadian plans to spend the money on environmental and regulatory permitting of the Brule mine situated on its Burnt River property; and on construction and development at Wolverine, namely the Perry Creek and EB properties.

Wolverine is about 25 km from the town of Tumbler Ridge. “It’s exciting for us and northeast B.C., where economic development has been in a depression over the last decade”, says Bill Burton, the company’s vice president of operations.

The EA certificate will allow Western Canadian Coal to produce 1.6 million tonnes of clean metallurgical coal per year on the Perry Creek and EB open pit properties over a projected 11-year period. The certiicate shows that the B.C. government is satisfied with the technical, environmental and socio-economic aspects of the proposed project.

The company plans to start off by constructing the $180-million, 2.4 million-tonne-per-year coal preparation plant and rail load-out adjacent to the Perry Creek open pit. It then wants to expand the facility to 3 million tonnes a year to accommodate coal from the nearby EB, Hermann and the Perry Creek underground resource.

The company expects to make its final decision on Wolverine after it receives the mines act permit for the open pit at Perry Creek in March 2005. It plans to begin construction the following quarter.

With construction taking up to a year and a half, and all else on schedule Perry Creek could see production in the first quarter of 2007.

Western Canadian Coal began loading its first coal ship at Ridley Terminals in Prince Rupert in mid-January. The Burnt River pulverized injection coal is destined for steel production at Posco’s South Korean steel works.

What a difference a year makes – shares of Western Canadian Coal which peaked around $6.88 earlier this month, finished around $6.20 on January 19, a far cry from its 52 yearly low last January.