Vancouver — Robust prices for coal have spurred
The company recently applied to boost the annual production limit at the Dillon mine to 80,000 tonnes per month from the current 240,000 tonnes per year. If the application is approved, Dillon’s output in WCC’s first fiscal year of operation (ending March 31, 2006) would increase to about 800,000 tonnes of ultra-low-volatile pulverized coal injection (PCI) material.
The Dillon mine is on the Burnt River property, which includes the proposed Brule mine, near Tumbler Ridge. Dillon produced 284,000 tonnes in the quarter ended March 31, 2005, of which 152,000 tonnes were sold for revenue of $11.3 million.
A project description for Brule has been submitted to the government, with an environmental assessment to follow later this year. If these are approved, the company’s annual production of PCI coal would likely rise to 2 million tonnes by 2009.
WCC is meanwhile forging ahead with development plans at its Wolverine group of properties, also near Tumbler Ridge. An environmental assessment was filed for a project capable of producing 1.6 million tonnes of clean metallurgical coal per year over a projected life of 11 years. With permits in hand, construction of a $180-million coal mine and related facilities is under way. Permits were also filed to boost annual production to 2.4 million tonnes from the initially proposed rate of 1.6 million tonnes.
Drilling is planned at the Hermann deposit in hopes of supplementing production at Perry Creek. This would allow the company to achieve its goal of producing 3 million tonnes of coal per year at the Wolverine properties, and 5 million tonnes company-wide by 2009.
WCC will explore the Saxon and Belcourt coal properties, also in northern British Columbia, on a joint-venture basis. About $20 million has been committed to advance the projects to feasibility and, potentially, expand production beyond 5 million tonnes annually.
The company posted a net loss for the quarter and year ended March 31, 2005, of $3.4 million and $11 million, respectively. An operating profit of $1 million in the latest quarter was based on sales of 152,000 tonnes of PCI coal at an average price of US$60.93 per tonne.
Prices of more than US$100 per tonne have been negotiated for the year starting April 2005.
Be the first to comment on "WCC on expansion spree in BC"