Western Canadian Coal Announces Fourth Quarter 2007 Operating Results



    TSX: WTN & WTN.DB and AIM: WTN

    VANCOUVER, June 29 /CNW/ - Western Canadian Coal Corp. (TSX WTN & WTN.DB;
AIM: WTN) ("WCCC" or the "Company") presents its operating results for the
three and twelve months ending March 31, 2007:

    
    Financial and Operating Summary:

    -   Sales for the quarter consist of shipments of 102,000 tonnes
        of ultra-low volatile pulverized coal injection (ULV-PCI)
        coal at an average price of $77.58 (US$66.78) per tonne and
        372,000 tonnes of hard coking coal at an average price of
        $99.00 (US$84.59) per tonne. Year-to-date sales consist of
        669,000 tonnes of ULV-PCI coal at an average price of $84.54
        (US$74.59) per tonne and 741,000 tonnes of hard coking coal
        at an average price of $104.61 (US$90.52) per tonne.

    -   Net loss for the quarter is $3.3 million compared to a net
        loss of $1.9 million for the same quarter in fiscal 2006.
        Year-to-date net loss is $13.0 million compared to a net
        income in fiscal 2006 of $7.5 million. The increased loss in
        fiscal 2007 is primarily due to the operating costs and debt
        servicing costs associated with the start up of the Wolverine
        mine.

    -   Operating loss of $1.1 million for the quarter ending
        March 31, 2007 on sales of $44.8 million. Year-to-date
        operating profit is $8.9 million on sales of $134.1 million.
        Operating profit for the quarter and year ending March 31,
        2006 are $ nil and $19.3 million, respectively, on sales of
        $11.1 million and $59.6 million.

    -   The operating loss during the current quarter was a result of
        a slower than expected start-up at Wolverine. This was caused
        by shortages of skilled operators and tradesmen, severe
        weather and disrupted shipments to port arising from rail
        issues. The Company believes that these issues have been
        substantially overcome effective the first quarter of fiscal
        2008.

    -   Mining operations began at the Brule mine in the fourth
        quarter after receiving an amended mine permit allowing for
        production of 2.0 million tonnes of ULV-PCI coal. The Brule
        mine produced 173,000 tonnes of run-of-mine (ROM) coal and
        hauled 115,000 tonnes of coal to the rail loadout.

    -   During the fourth quarter, mining operations at the Wolverine
        mine included waste stripping of 3.3 million bank cubic
        metres (BCMs) and 696,000 tonnes of ROM coal mined, resulting
        in a 4.7 to 1 strip ratio. For the quarter, 381,000 tonnes of
        clean coal were produced from 549,000 tonnes of ROM coal (a
        yield of 69.4%).

    -   To March 31, 2007, mining operations at the Wolverine mine
        include waste stripping of 10.1 million BCMs and
        1,486,000 tonnes of ROM coal mined, resulting in a 6.8 to
        1 strip ratio. To March 31, 2007, 921,000 tonnes of clean
        coal were produced from 1,335,000 tonnes of ROM coal (a yield
        of 69.0%).
    

    News Release & Conference Call Details

    This news release is prepared as at June 29, 2007 and should be read in
conjunction with the Company's March 31, 2007 audited financial statements and
notes contained therein, as well as the interim unaudited financial statements
and MD&A's for the quarters ended June 30, September 30, and December 31,
2006. This news release does not constitute Management's Discussion and
Analysis as contemplated by relevant securities rules. Western Canadian Coal
Corp.'s March 31, 2007 audited financial statements and MD&A and the interim
financial statements and MD&A's for the periods referred to above are
available on SEDAR at www.sedar.com under the Company's profile.
    John W. Hogg, President & Chief Executive Officer of the Company, will
host a conference call and webcast to discuss the fourth quarter results on
Friday, July 6, 2007 at 8:00am Pacific/11:00am Eastern. The conference call
can be accessed by calling 416-644-3420 or toll-free on 1-800-814-4861 prior
to the scheduled start time. An archived recording of the call will be
available for two weeks after the completion of the call by dialing
416-640-1917 or 1-877-289-8525, both using passcode 21238900 followed by the
number sign.
    A live and archived audio webcast of the conference call will also be
available on the Company's website at www.westerncoal.com.

    
    Financial Summary:

    (In thousands of Canadian dollars,           March 31,  March 31,
     except tonnes and per share data)             2007       2006
    -----------------------------------------------------------------
    Cash & cash equivalents                     $  35,272  $  71,274
    Inventory                                      28,522     23,631
    Other current                                  29,803     19,153
    Total Assets                                  445,305    341,280

    Current liabilities                            75,063     53,621
    Long-term liabilities                         196,860    125,920
    Shareholders' equity                        $ 173,382  $ 161,739
    -----------------------------------------------------------------


                           Three months ending   For the year ending
                                March 31,             March 31,
                             2007       2006       2007       2006
    -----------------------------------------------------------------
    ULV-PCI coal tonnes
     shipped                102,000    142,000    669,000    548,000
    Hard coking coal
     tonnes shipped         372,000          -    741,000          -

    Revenue               $  44,760  $  11,094  $ 134,121  $  59,594
    Cost of goods sold       45,869     11,057    125,231     40,296
    Operating profit         (1,109)        37      8,890     19,298
    Other expenses            5,965      3,562     27,999     18,364
    Income tax recovery       3,785      1,585      6,124      6,520
    Net income (loss)     $  (3,289) $  (1,940) $ (12,985) $   7,454

    Earnings (loss) per
     share, basic         $   (0.03) $   (0.03) $   (0.14) $    0.09
    Earnings (loss) per
     share, diluted       $   (0.03) $   (0.03) $   (0.14) $    0.09
    -----------------------------------------------------------------
    

    Included in the above balances and results are the Company's
proportionate share of its interest in and results from the Belcourt-Saxon
joint venture, as disclosed in note 4 to the financial statements for the year
ended March 31, 2007.

    Revenues

    For the quarter ended March 31, 2007, sales revenues were $44,760,000 on
shipments of 102,000 tonnes of ULV-PCI coal and 372,000 tonnes of hard coking
coal. ULV-PCI coal shipments included the initial production from the Brule
mine and the remaining inventories from the Dillon mine. ULV-PCI revenues of
$7,911,000 were at an average price per tonne of $77.58 or US$66.78. Hard
coking coal revenues from the Wolverine mine of $36,849,000 were at an average
price per tonne of $99.00 or US$84.59.
    For fiscal 2007, the Company recorded sales of $134,121,000 and included
shipments of 669,000 tonnes of ULV-PCI coal for revenues of $56,556,000 and
shipments of 741,000 tonnes of hard coking coal for revenues of $77,565,000.
For fiscal 2007, the average ULV-PCI price per tonne was $84.54 or US$74.59
and the average coking coal price per tonne was $104.61 or US$90.52.
    Revenues of $11,094,000 and $59,594,000 for the quarter and year ending
March 31, 2006, respectively, were realized on shipments of 142,000 tonnes and
548,000 tonnes of ULV-PCI coal from the Dillon Mine. The average price
realized for the quarter and year ending March 31, 2006 were $78.21 (or
US$68.25) and $108.67 (or US$90.48), respectively.
    The increase in the revenues over the prior quarter and fiscal year is
due to the inclusion of hard coking coal sales on which prices are higher than
those realized for ULV-PCI. Although ULV-PCI shipments increased by 22% in
fiscal 2007, ULV-PCI sales revenues decreased by 5%. This was partly due to a
stronger Canadian dollar during fiscal 2007 and because fiscal 2007 price
settlements for ULV-PCI coal decreased substantially to the mid-to-high US$60s
from the prior year's settlements of just in excess of US$100 per tonne.
Fiscal 2007 included approximately 175,000 of carryover tonnage from the prior
year.

    Cost of goods sold

    Cost of goods sold for the three months and year ended March 31, 2007
were $45,869,000 or $96.77 per tonne, and $125,231,000 or $88.81 per tonne,
respectively. Cost of goods sold for the three months and year ended March 31,
2006 were $11,057,000 or $77.87 per tonne and $40,296,000 or $73.47 per tonne,
respectively. Cost of goods sold to September 30, 2006 solely relate to
ULV-PCI coal as the Wolverine mine had not reached commercial production. Cost
of goods sold is comprised of the following:

    
    -----------------------------------------------------------------
    (In thousands of          For the three months ending March 31,
     Canadian dollars)
                             2007     $/tonne      2006     $/tonne
    -----------------------------------------------------------------

    Cost of production    $  28,027  $   59.13  $   4,619  $   32.53
    Transportation and
     other                   12,997      27.42      5,322      37.48
    Depletion, amortization
     and accretion            4,845      10.22      1,116       7.86

    Total cost of
     goods sold           $  45,869  $   96.77  $  11,057  $   77.87
    -----------------------------------------------------------------


    -----------------------------------------------------------------
    (In thousands of             For the years ending March 31,
     Canadian dollars)
                             2007     $/tonne      2006     $/tonne
    -----------------------------------------------------------------

    Cost of production    $  73,947  $   52.44  $  17,003  $   31.00
    Transportation and
     other                   39,991      28.36     20,113      36.67
    Depletion, amortization
     and accretion           11,293       8.01      3,180       5.80

    Total cost of
     goods sold           $ 125,231  $   88.81  $  40,296  $   73.47
    -----------------------------------------------------------------
    

    The increase in the current periods' per unit production costs over the
prior periods' costs is due to the processing required on the Wolverine hard
coking coal through the coal preparation plant and due to mining costs at
Wolverine which were adversely affected by the slower than anticipated
ramp-up. Production costs at Brule have remained in line with the now depleted
Dillon Mine.
    Transportation and other costs include the coal haul to the rail
load-out, rail costs including surcharges and fuel allocations, port charges,
as well as various surveying and agent fees incurred in loading vessels. The
decrease in per-unit transportation costs from 2006 to 2007 is a result of
reduced truck haul expenditures, as there are no such haulage costs associated
with Wolverine coking coal. Burnt River ULV-PCI coal continues to be hauled by
truck 94 km to the Bullmoose load-out.
    Depletion and amortization relate to the various capital expenditures
required for mine development and production, and accretion represents charges
incurred on the asset retirement obligation. The increase in per-unit
depletion, amortization and accretion charges relates to Wolverine assets
which have reached commercial production.
    For the current quarter, cash costs, a key performance indicator for the
industry, were $86.55 per tonne compared to $70.01 per tonne for the same
quarter in fiscal 2006. The increase was primarily due to the increased mining
and processing costs at Wolverine, partly offset by lower transportation costs
at Wolverine, both as described above. Subsequent to March 31, 2007, the
Wolverine mine reached a clean coal production run-rate of approximately
200,000 tonnes per month, and this has resulted in significant reductions
being achieved in per unit mining and processing costs.

    Operating profit

    The operating loss for the fourth quarter of 2007 was $1,109,000 as
compared to an operating profit of $37,000 in the same quarter last year. For
fiscal 2007, operating profit is $8,890,000 (2006 - $19,298,000).

    Other expenses

    Other expenses for the quarter and year ending March 31, 2007 comprise
the following:

    
                           For the Three Months     For the Years
    (In thousands of          Ending Mar 31,        Ending Mar 31,
     Canadian dollars)       2007       2006       2007       2006
    -----------------------------------------------------------------
    General, administration
     and selling          $   3,690  $   3,021  $  13,839  $  12,538
    Coal exploration            422      1,454      6,739     10,343
    Interest and financing
     fees on long-term debt   5,356         13     10,525         32
    Net break fee settlement   (907)         -       (233)         -
    Other income             (2,596)      (926)    (2,871)    (4,549)
    -----------------------------------------------------------------

    Total other expenses  $   5,965  $   3,562  $  27,999  $  18,364
    -----------------------------------------------------------------
    

    General, administrative and selling costs for the quarter and year ended
March 31, 2007 increased by $669,000 and $1,301,000, respectively, over the
same periods in the prior year. The increases are primarily due to an increase
in sales and marketing costs which are a function of coal sales, and an
increase in salaries, benefits and other remuneration as a result of the
Company increasing its staffing levels to support a larger scale operation.
Included in such costs for fiscal 2007 are $1,914,000 (2006 - $3,130,000) in
non-cash stock based compensation.
    Coal exploration expenditures for the quarter and year ended March 31,
2007 decreased by $1,032,000 and $3,604,000, respectively, over the same
periods in fiscal 2006. Exploration expenditures include the Company's
proportionate share of expenses recorded by the Belcourt-Saxon joint venture
and relate to properties on which the capitalization criteria have not been
met. During fiscal 2007, such expenditures by the joint venture have been
significantly reduced.
    Effective October 1, 2006, interest on the Company's convertible
debentures, debt facility and capital leases, and the amortization of deferred
financing costs, all of which related to the Wolverine mine, are being charged
to operations. Prior to achieving commercial production on that date, such
costs were capitalized to the project.
    The net break fee settlement for the year ended March 31, 2007 includes
the break fee settlement of $1,275,000 received from NEMI Northern Energy &
Mining Inc. in the fourth quarter, offset by the costs related to the proposed
business combination with NEMI that was abandoned during the year.
    Other income amounted to $2,596,000 for the quarter ended March 31, 2007,
as compared to other income of $926,000 in the prior year's quarter. In the
current quarter, the Company recorded gains of $2,105,000 on its foreign
exchange forward contracts, entered into in order to mitigate exposure to
currency fluctuations. Of this amount, $2,363,000 was unrealized as at March
31, 2007 and relates to outstanding forward contracts at that date. For the
quarter ended March 31, 2006, the Company recorded gains of $427,000 on its
put and call option contracts, or costless collars.

    Net (loss) income

    Net losses for the quarters ended March 31, 2007 and 2006 were $3,289,000
and $1,940,000, respectively, and included future income tax recoveries of
$3,785,000 and $1,585,000. Net loss for the year ended March 31, 2007 was
$12,985,000 as compared to a net income of $7,454,000 in the year ended March
31, 2006. Fiscal 2007 and 2006 reflect future income tax recoveries of
$6,124,000 and $6,520,000, respectively. The income tax recoveries represents
the future income tax asset to be realized as a result of it being more likely
than not that sufficient future taxable income will be available to utilize
such tax assets.

    Outlook and Guidance

    The financial performance of the Company is strongly influenced by the
price of metallurgical coal, which is set in a highly competitive marketplace
and impacted by numerous factors outside the control of the Company. These
would include demand for steel, mining and transportation improvements or
degradation, fluctuations in currency, interest rates, political stability and
overall economic growth.
    In recent years, economic growth particularly in developing countries has
been strong. Continuing transportation infrastructure issues and scarcity of
key mining inputs such as skilled labour, mining equipment and in some areas
basic inputs like water have significantly impacted producers' abilities to
meet the increasing demand for hard coking coal. Rail and port infrastructure
constraints in the major coal producing countries have limited the ability to
deliver adequate coal to meet demand. These infrastructure constraints have
been further exacerbated by severe weather disruptions. As a result, the
global supply of hard coking coal is slowly adjusting to increased demand.
This trend has been in evidence in 2007, with spot price settlements moving
upwards as the year has progressed. Additionally, industry operating costs,
particularly with respect to inputs like labour, power, fuel and
transportation costs, including ocean freight, have increased over the last
few years and are not expected to retreat. There are no indications that these
trends will diminish prior to settling prices for the 2008 coal year and a
number of industry analysts are projecting hard coking coal prices to rise
back to the US$110-120 level in the next coal year.
    A similar situation exists in the supply-demand balance for low volatile
PCI coals, though the price volatility for these coals will likely be more
acute. The Company's own experience with increased prices now being received
for its low and mid-volatile PCI coals, is strongly indicative of buoyant
pricing for such coals. For the coal year 2008, ULV-PCI coal prices are
projected to rise well above the current mid-US$70s spot price.
    With the start-up of the ULV-PCI Brule Mine replacing production at the
Dillon Mine and with Wolverine reaching commercial production during the year,
the Company views fiscal 2007 as a transition period. The Company's Wolverine
coal has been well received from some of the world's leading steel mills and
the Company's ULV-PCI coal consistently ranked in the top three PCI coals
worldwide. In conjunction with highly efficient rail and port infrastructure
with excess capacity, these factors provide the Company the strategic
advantage to grow and diversify.
    The Company anticipates 2.4 million tonnes of production from the
Wolverine mine in fiscal 2008, of which approximately 2.2 million tonnes will
be marketed as hard coking coal at prices in the mid to high US$80s and the
remainder sold as a Mid-Vol PCI coal at prices in the high US$60s to
mid-US$70s. The Company has secured sales agreements covering over 90% of this
production. Similarly, targeted production and sales volumes for fiscal 2008
for the Brule mine remains at approximately 1.1 million tonnes. The Company
has firm sales commitments for virtually all projected ULV-PCI production at
prices in high to US$60s to mid-US$70s.

    Forward-Looking Information

    This release may contain forward-looking statements that may involve
risks and uncertainties. Such statements relate to the Company's expectations,
intentions, plans and beliefs. As a result, actual future events or results
could differ materially from those suggested by the forward-looking
statements. Readers are referred to the documents filed by the Company on
SEDAR. Such risk factors include, but are not limited to changes in commodity
prices; strengths of various economies; the effects of competition and pricing
pressures; the oversupply of, or lack of demand for, the Company's products;
currency and interest rate fluctuations; various events which could disrupt
the Company's construction schedule or operations; the Company's ability to
obtain additional funding on favourable terms, if at all; and the Company's
ability to anticipate and manage the foregoing factors and risks.
Additionally, statements related to the quantity or magnitude of coal deposits
are deemed to be forward-looking statements. The reliability of such
information is affected by, among other things, uncertainties involving
geology of coal deposits; uncertainties of estimates of their size or
composition; uncertainties of projections related to costs of production; the
possibilities in delays in mining activities; changes in plans with respect to
exploration, development projects or capital expenditures; and various other
risks including those related to health, safety and environmental matters.

    WESTERN CANADIAN COAL CORP.
    "John Hogg"
    President and Chief Executive Officer





For further information:

For further information: John Hogg, President & CEO or Fausto Taddei,
CFO, Western Canadian Coal Corp., 900 - 580 Hornby Street, Vancouver, B.C.,
V6C 3B6, CANADA, Phone (604) 608-2692, Fax (604) 629-0075, Email
info@westerncoal.com, www.westerncoal.com

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WESTERN COAL CORP.

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