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Wednesday 29 April, 2009

Cambrian Mining PLC

Western Canadian Coal Operati

RNS Number : 3262R
Cambrian Mining PLC
29 April 2009
 



AIM: CBM

Cambrian Mining Plc

('Cambrian')


Western Canadian Coal Operations Update


London29 April 2009; Cambrian would like to refer shareholders to the announcement made by Western Canadian Coal Corp ('WCCC') on 28 April 2009, the full text of which is below:


'Wolverine and Brule to Remain Operational


VANCOUVER, April 28 /CNW/ - 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 million tonnes of its hard coking coal and approximately 0.8 million 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.


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.''



For further information contact:


Cambrian Mining Plc

Mark Burridge / Braam Jonker

+44 (0)20 7409 0890

Singer Capital Markets

Jeff Keating / Gareth Price

+44 (0)20 3205 5000

Seymour Pierce

Mark Percy

+44 (0)20 7107 8000

Bankside Consultants

Simon Rothschild / Oliver Winters

+44 (0)20 7367 8888

Scott Harris

Stephen Scott / Ian Middleton

+44 (0)20 7653 0030



About Cambrian Mining Plc:


Cambrian is an operating mining company that manages and supports operations in coal and gold/antimony mining. The Group has been instrumental in supporting the development of a number of mines and moving them into production. These include: the Augusta gold and antimony mine in VictoriaAustralia; the Wolverine hard coking coal mine in Western Canada; the Dillon and Brule PCI mines in Western Canada as well as metallurgical and thermal coal mines in West VirginiaUSA. For more information, please visit www.cambrianmining.com.



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. For more information, please visit www.westerncanadiancoal.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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