Vancouver — Western Canadian Coal (WTN-T, WXJXF-O, WTN-L) has brought its second open-pit coal operation, the Wolverine mine in northeastern British Columbia, into production.
Wolverine is expected to produce about 1.35 million tonnes of hard coking coal for the company in its current fiscal year (ending March 31, 2007) and more than 2.5 million tonnes in the following full year. After receiving provincial approval earlier this year for an expansion of planned production, the mine was brought on-stream with capital spending of about $242 million plus additional equipment and leasing costs of about $80 million.
Having starched a 10-year port services agreement with Ridley Terminals in Prince Rupert, B.C., the first Wolverine coal shipment is expected sometime this month.
Located 23 km west of Tumbler Ridge, the Wolverine deposits — Perry Creek and EB — host proven and probable reserves of 43.2 million tonnes of run-of-mine metallurgical coal. Clean coal proven and probable reserves stand at 27.7 million tonnes and assume an average plant yield of 64% and a strip ratio of 8.6:1.
Initial production from the Perry Creek pit is to be followed by the EB pit in 2013. An underground operation at Perry Creek is slated for later potential development. The new plant site is adjacent to the B.C. Rail Tumbler Ridge branch line that was built in the early 1980s to service past coal operations.
The company has secured coal orders for almost 1.2 million tonnes of Wolverine coal, and expects average settlement prices of US$100 per tonne in its first year. About one-quarter of the coal order is going to the Steel Authority of India.
Western Canadian Coal posts a $193-million market capitalization based on its 84 million shares outstanding and recent $2.30 trading price. The stock has a 52-week range of $1.65-$5.40.
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