Western Canadian Coal Agrees to Provide Loan Facility to Cambrian Mining

    VANCOUVER, Jan. 1 /CNW/ - Western Canadian Coal Corp (TSX: WTN, WTN.WT
and WTN.DB and AIM: WTN) (the "Company" or "Western") announces that it has
entered into an agreement dated December 31, 2008, pursuant to which Western
will make available a loan facility on a secured basis (the "Loan") of up to
US$36 million to Cambrian Investment Holdings Limited ("CIH"), a wholly-owned
subsidiary of Cambrian Mining Plc (AIM: CBM) ("Cambrian"), the Company's major
shareholder. The Loan will be used to repay CIH's existing indebtedness under
a financing facility with Investec Bank (UK) Limited.
    The Loan will be available to Cambrian immediately subject to and upon
satisfaction or waiver of the conditions set out in the loan agreement. These
include the obtaining of all necessary regulatory approvals and lender
consents and documentation and opinions satisfactory to Western (including
without limitation that the loan and the security are in accordance with
and/or are not contrary to any applicable laws or restrictions, including
those restricting companies within the Cambrian group from providing financial
assistance in connection with the proposed acquisition of the shares in
Cambrian (see December 24, 2008 press release). CIH shall pay a fee of
US$600,000 in connection with the Loan. The Loan shall accrue interest at a
rate of 12% per annum until repayment and shall become payable in full on the
earlier of (i) 90 days after the delivery of a written notice from Western to
CIH that Western has failed to obtain the necessary approvals of its
shareholders for the proposed business combination (see December 24, 2008
press release) and (ii) December 31,2009.
    The conditions contained within the Loan are such that there can be no
assurance that monies will be advanced under the Loan and the market will be
updated accordingly.
    Cambrian and its wholly-owned subsidiaries, Deepgreen Minerals
Corporation Ltd. and CIH, currently hold approximately 72.1 million shares,
representing approximately 34% of the issued shares of the Company. In
addition, Mr. John Byrne, Chairman of the Company, is also a Director and
Chairman of Cambrian and Mr. John Conlon, a director of the Company is also a
director of Cambrian.
    As Cambrian is a substantial shareholder of the Company, the provision of
the Loan to the Company is deemed to be a related party transaction under
Canadian securities laws and under AIM rules. The directors of the Company,
other than Messrs. Byrne and Conlon, having consulted with Cenkos Securities
plc, the Company's nominated adviser (NOMAD), consider that the terms of the
Loan are substantially similar to what would be provided to an arm's length
party and that the transaction is fair and reasonable in so far as the
shareholders of the Company are concerned.
    Western has also entered into a conditional agreement with Cambrian
relating to the CDN$5 million loan facility provided by Cambrian to Western in
September 2007, pursuant to which Cambrian has agreed to accept prepayment in
full of the indebtedness outstanding under the loan facility. The Loan of up
to US$36 million between Western and Cambrian will be reduced by any
prepayment of the 2007 Loan Facility. Cambrian also holds CDN$29 million of
Western's 7.5% convertible debentures.
    The Directors of Western accept responsibility for the information
contained in this announcement. To the best of the knowledge and belief of the
Directors of Western, (who have taken all reasonable care to ensure that such
is the case), the information not relating to Cambrian contained in this
announcement is in accordance with the facts and does not omit anything likely
to affect the import of such information. Cenkos Securities plc ("Cenkos"), is
acting for Western and no one else in connection with the matters described in
this announcement and will not be responsible to anyone other than Western for
providing the protections afforded to customers of Cenkos nor for providing
advice in relation to the matters referred to in this announcement.

    Dealing Disclosure Requirements

    Under the provisions of Rule 8.3 of the UK Takeover Code, if any person
is, or becomes, "interested" (directly or indirectly) in 1% or more of any
class of "relevant securities" of Western or of Cambrian, all "dealings" in
any "relevant securities" of that company (including by means of an option in
respect of, or a derivative referenced to, any such "relevant securities")
must be publicly disclosed by no later than 3.30 pm (London time) on the
London business day following the date of the relevant transaction. This
requirement will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends. If two or more persons act
together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of Western or
Cambrian, they will be deemed to be a single person for the purpose of Rule
8.3. Under the provisions of Rule 8.1 of the UK Takeover Code, all "dealings"
in "relevant securities" of Western or of Cambrian by Western or Cambrian, or
by any of their respective "associates", must be disclosed by no later than
12.00 noon (London time) on the London business day following the date of the
relevant transaction. A disclosure table, giving details of the companies in
whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Takeover Panel's website at
    "Interests in securities" arise, in summary, when a person has long
economic exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities. Terms in quotation
marks are defined in the UK Takeover Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.


    The Board of Directors of Western has established a special committee
(the "Western Committee") of directors that are independent of Cambrian to
consider, negotiate and make a recommendation regarding the transaction to the
Western board of directors. The Western Committee has engaged Cormark
Securities Inc. to provide it with financial advice with respect to the
transaction, including formal valuations of Western and Cambrian. Cenkos
Securities plc is the Company's nominated advisor (NOMAD), broker and
financial advisor. Lawson Lundell LLP and Reynolds Porter Chamberlain LLP are
acting as external legal counsel to Western. Fraser Milner Casgrain LLP is
acting as legal counsel to the Western Committee.

    About Cambrian Mining Plc

    Cambrian Mining Plc is a diversified mining group, headquartered in
London, UK. Cambrian operates in three continents and produces four
commodities. The Group produces metallurgical coal, thermal coal, gold and
antimony from four locations; West Virginia USA, Western Canada, Wales and
Victoria, Australia. Cambrian's customers are located in Asia, Western Europe
and USA. Cambrian actively looks for growth through acquisitions and organic
development. For more information, visit www.cambrianmining.com.

    About Western Canadian Coal

    Western Canadian Coal Corp. produces high quality metallurgical coal from
mines 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

    Forward-Looking Information

    This news release contains "forward-looking information" within the
meaning of applicable securities laws. Forward-looking information includes,
but is not limited to, information concerning the proposed business
combination between Western and Cambrian and matters relating thereto.
Generally, forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", or "does not expect",
"is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of such
words and phrases or statements that certain actions, events or results "may",
"could", "would", "might", or "will be taken", "occur", or "be achieved".
Forward-looking information is based on the opinions and estimates of
management at the date the information is made, and is based on a number of
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking information. Assumptions upon which
such forward-looking information is based include, without limitation, that
the shareholders of Western and Cambrian will approve the Proposal, that all
required third party, court, regulatory and governmental approvals to the
Proposal will be obtained and all other conditions to the making of any offer
and/or the completion of the Proposal will be satisfied or waived. Many of
these assumptions are based on factors and events that are not within the
control of Western and Cambrian and there is no assurance they will prove to
be correct. Factors that could cause actual results to vary materially from
results anticipated by such forward-looking information include changes in
market conditions, variations in coal recovery rates, risks relating to
international operations, fluctuating coal prices and currency exchange rates,
changes in project parameters, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes and other risks of the
mining industry, failure of plant, equipment or processes to operate as
anticipated, the business of the companies not being integrated successfully
or such integration proving more difficult, time consuming or costly than
expected as well as those risk factors discussed in the Annual Information
Form for the year ended March 31, 2008 for Western available on www.sedar.com
and the June 30, 2008 Annual Report for Cambrian. Although Western and
Cambrian have attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking information, there may be other factors that cause actions,
events or results not to be anticipated, estimated or intended. As noted the
conditions within the Loan mean there can be no assurance that monies will be
advanced under the Loan. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information. Western
and Cambrian undertake no obligation to update forward-looking information if
circumstances or management's estimates or opinions should change except as
required by applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking information.

For further information:

For further information: Western Canadian Coal Corp., David Jan,
Manager, Investor Relations & Corporate Development, Phone: (604) 608-2692,
Email: djan@westerncoal.com; Cenkos Securites plc (NOMAD to the Company),
Nicholas Wells, Ivonne Cantu, Adrian Hargrave, Phone: +44 (0)20 397 8920

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890