Western Canadian Coal Announces First Quarter 2008 Operating Results

    TSX: WTN & WTN.DB and AIM: WTN

    VANCOUVER, Aug. 14 /CNW/ - Western Canadian Coal Corp. (TSX WTN & WTN.DB;
AIM: WTN) ("WCCC" or the "Company) presents its operating results for the
three months ending June 30, 2007:

    Financial Summary:

    -   The Company completed a brokered private placement of
        19,200,000 units at $2.35 per unit for gross proceeds of
        $45,120,000 on June 28, 2007. Each unit consists of one
        common share of the Company and one-quarter of one common
        share purchase warrant. Each whole common share purchase
        warrant entitles the holder to acquire one additional common
        share until June 28, 2012 at an exercise price of $3.25. The
        net proceeds of the private placement were used to repay
        $19,582,500 of the Wolverine project debt facility and will
        be used for general corporate purposes including working

    -   The Company entered into an agreement with its major
        shareholder governing the rights of the Company and its major
        shareholder, Cambrian Mining plc ("Cambrian") with respect to
        the acquisition of Falls Mountain Coal Inc. by Cambrian and
        the possible acquisition by the Company. Cambrian completed
        the acquisition of Falls Mountain Coal Inc. from Pine Valley
        Mining Corp. in accordance with the Sale and Purchase
        Agreement dated April 26, 2007. The Company and Cambrian,
        have entered into an Interim Management Services and Employee
        Supply Agreement under which the Company will provide certain
        services in respect of evaluating and maintaining FMC's
        Willow Creek Coal Mine and the coal handling, processing and
        rail car loading facilities owned by FMC.

    -   Sales for the quarter consist of 629,000 tonnes of coal from
        the Wolverine project, Perry Creek Mine (the "Perry Creek
        Mine") and the Burnt River project, Brule Mine (the "Brule
        Mine"). Revenues recognized during the three months ended
        June 30, 2007 totaled $54.2 million. The average price per
        tonne realized was $86.19 or US$78.36.

    -   Operating loss of $4.0 million for the quarter ending
        June 30, 2007 on sales of $54.2 million.

    -   Net loss for the quarter is $3.1 million compared to a net
        income of $2.3 million for the same quarter in fiscal 2006.

    -   The Perry Creek Mine produced 884,000 tonnes of run-of-mine
        (ROM) coal, and processed approximately 1,004,000 tonnes of
        ROM coal through the Wolverine plant, producing 580,000
        tonnes of coal, for a processing yield of 57.8%.

    -   The Brule mine produced 193,000 tonnes of ROM coal and
        173,000 tonnes were railed to port.

    News Release

    This news release is prepared as at August 14, 2007 and should be read in
conjunction with the Company's audited financial statements for the year ended
March 31, 2007 and notes contained therein, and Management's Discussion and
Analysis (MD&A) for the same period. This news release does not constitute
MD&A as contemplated by relevant securities rules. Western Canadian Coal
Corp.'s First Quarter Report and MD&A for the three months ending June 30,
2007 are filed on SEDAR and are available at www.sedar.com.

    Financial Summary - unaudited:

    (In thousands of Canadian dollars,           June 30,   March 31,
     except tonnes and per share data)              2007        2007
    Cash & cash equivalents                    $  36,640   $  35,272
    Inventory                                     34,533      28,522
    Other current                                 43,130      29,803
    Total Assets                                 463,526     438,575

    Current liabilities                           65,232      75,063
    Long-term liabilities                        185,291     190,130
    Shareholders' equity                       $ 213,004   $ 173,382

                                                 Three months ending
                                                       June 30,
                                                   2007        2006
    Tonnes sold                                  629,000     320,000

    Revenue                                    $  54,214   $  29,982
    Cost of goods sold                            58,187      22,444
    Operating profit (loss)                       (3,973)      7,538
    Other expenses                                   282       3,669
    Income tax recovery (expense)                  1,198      (1,562)
    Net income (loss)                          $  (3,057)  $   2,307

    Earnings (loss) per share, basic           $   (0.03)  $    0.03
    Earnings (loss) per share, diluted         $   (0.03)  $    0.03

    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
three months ended June 30, 2007.


    For the quarter ended June 30, 2007, total sales revenues were
$54,214,000 on 629,000 tonnes of coal sold. The average price per tonne
realized during the period was $86.19 or US$78.36.
    During the period ended June 30, 2006, total revenues were $29,982,000 on
320,000 tonnes sold. The average selling price per tonne realized was $93.76
or US$83.11. These sales comprised solely of PCI coal from the Dillon Mine,
located within the Burnt River property.
    The primary reason for the increase in the Company's total revenues over
the comparable period in the prior year is the increase in sales volume due to
the commencement of sales from the Perry Creek mine. Realized revenues per
tonne were adversely affected by a stronger Canadian dollar and lower ULV-PCI
sales prices compared to the quarter ended June 30, 2006.

    Cost of goods sold

    Cost of goods sold for the three months ended June 30, 2007 totaled
$58,187,000 or $92.52 per tonne compared to $22,444,000 or $70.18 per tonne in
the first quarter of fiscal 2006. Cost of goods sold includes cost of
production, transportation, and depletion, amortization and accretion charges
as presented in the table below:

    (In thousands of        June 30,              June 30,
     Canadian dollars)         2007    $/tonne       2006    $/tonne

    Cost of production    $  35,153  $   55.89  $  10,940  $   34.19
    Transportation and
     other                   16,087      25.58     10,342      32.32
    Depletion, amortization
     and accretion            6,947      11.05      1,162       3.63

    Total cost of
     goods sold           $  58,187  $   92.52  $  22,444  $   70.14

    Cost of product sold in the 2006 period solely relates to ULV-PCI coal
from the Dillon mine as the Perry Creek mine was still in development. The
increase in the current period's per unit cost of product sold over the
comparable prior period is due to the slower than anticipated start-up of the
Perry Creek Mine and the requisite processing required for the Perry Creek
hard coking coal through the coal preparation plant. Per unit cost of product
sold for the Brule mine, based on similar strip ratios and mining operations
as the Dillon mine have remained consistent with those at Dillon.
    The decrease in per unit transportation costs resulted from reduced
trucking expenditures since there is no truck haul associated with Perry Creek
hard coking coal. Burnt River ULV-PCI coal is trucked 94 km to the Bullmoose
    The increase in the depletion, amortization and accretion for the period
ended June 30, 2007 over the prior year period is due to the additional
depletion, amortization and accretion charges related to the Perry Creek mine
    For the current quarter, cash costs, a key performance indicator for the
industry, were $81.47 per tonne compared to $66.51 per tonne for the quarter
ended June 30, 2006. The increase was primarily due to the increased mining
and processing costs realized at the Perry Creek Mine, partly offset by the
lower transportation costs at the Perry Creek Mine, both as described above.

    Operating profit

    The operating loss for the period ended June 30, 2007 was $3,973,000 as
compared to an operating profit of $7,538,000 in the same quarter last year.

    Other expenses

    Other expenses, for the quarter ending June 30, 2007, were $282,000 and
include the following:

                                                 Three months ending
                                                       June 30,
    (In thousands of Canadian dollars)             2007        2006

    General, administration and selling        $   3,917   $   2,982
    Coal exploration                                 799       1,266
    Interest and financing fees on
     long-term debt                                5,667          21
    Unrealized gain on forward currency
     contracts                                    (8,028)          -
    Other income                                  (2,073)       (600)

    Total other expenses                       $     282   $   3,669

    General, administration and selling costs for the period ended June 30,
2007 increased by $935,000 or 31% to $3,917,000 over the same period in the
prior fiscal year. The increase is primarily due to increase in salaries,
benefits and other remuneration as a result of the Company increasing its
staffing levels to support a larger scale operation, an increase in sales and
marketing costs, which are a function of coal sales from the Perry Creek mine,
and an increase in office and miscellaneous costs, which are a function of
supporting a larger scale operation. These increases are partially offset by a
decrease in stock based compensation due to a lower weighted average fair
value of options granted and a decrease in legal and audit due to costs as a
result of the Final Offer Arbitration with CN Rail being incurred in 2006
fiscal year. The remaining increase in other expenses is due to building the
necessary support systems for a larger, multi-operational company.
    Coal exploration expenditures for the period ended June 30, 2007,
including the Company's proportionate share of expenses recorded by the
Partnership of $524,000, decreased to $799,000 from $1,266,000 in the same
period in the prior fiscal year. Coal exploration costs include property
development expenditures, field programs, consultants, coal license and lease
payments, engineering, environmental costs and other project administration
expenses. Exploration costs are charged to earnings in the quarter in which
they are incurred, except where these costs related to specific properties for
which economically recoverable reserves have been established, in which case
they are capitalized.
    Interest and accretion on the Company's convertible debentures, interest
on the Company's debt facilities and capital leases, and the amortization of
deferred financing costs, all of which relate to the Wolverine Project,
commenced being charged to operations effective October 1, 2006, when the
Perry Creek Mine was determined to have reached commercial production.
    The Company recorded an unrealized foreign exchange gain of $8,028,000
resulting from outstanding forward contracts entered into by the Company to
mitigate its exposure to currency fluctuations for the period ended June 30,
2007. There was no similar unrealized gain for the comparable period ended
June 30, 2006.
    Other income amounted to $2,073,000 for the period ended June 30, 2007,
as compared to $600,000 in the prior year. Other income for the period ended
June 30, 2007 consisted of $1,521,000 of realized forward exchange gains on
both forward currency contracts and transactions, $649,000 in interest on
short term investments and $97,000 in miscellaneous expenses. Other income for
the period ended June 30, 2006 consisted of interest on short-term investments
of $650,000, foreign exchange losses realized during the period of $111,000
earned during the period and $61,000 of miscellaneous income.

    Net (loss) income

    Net loss for the period ended June 30, 2007 was $3,057,000 compared to a
net income of $2,307,000 for the same period in the previous fiscal year. Net
loss period reflects: an operating loss of $3,973,000; other expenses
totalling $282,000 including general, administrative and selling expenses;
coal exploration; and interest, accretion and financing fees on long-term
debt; and an income tax recovery of $1,198,000 reflecting both a current
income tax expense of $85,000 and a future income tax recovery of $1,283,000.
The income tax recovery represents the unrecognized 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, in
accordance with CICA Handbook Section 3465 "Income Taxes".

    Long-Term Debt

    The Company has incurred substantial development costs to place its Perry
Creek Mine and Brule Mine into commercial production during the second half of
fiscal 2007 that ended March 31, 2007. The production ramp-up at the larger of
the two mines, the Perry Creek mine, was slower than anticipated and as a
result, cash flows generated to date from the Perry Creek mine were lower than
expected. These productivity issues are expected to be substantially resolved
during the fiscal year ending March 31, 2008, however, the Company still has
capital obligations in respect of the completion of the Perry Creek Mine.
During the quarter ended June 30, 2007 the Company entered into an agreement
with its major shareholder governing the rights of the Company and the major
shareholder with respect to the acquisition of Falls Mountain Coal Inc. by the
Company's major shareholder and the possible subsequent acquisition by the
Company. The Company's ability to meet these planned obligations depends on
its ability to generate positive cash flow and profits from operations, and on
its ability to raise sufficient additional equity or debt. The Company may be
required to seek additional equity financing and/or debt financing from its
major shareholder or other third parties. There is no assurance, however, that
any required funding would be available to the Company on acceptable terms.
    Although commercial production at the Perry Creek Mine was achieved
during the fiscal year ended March 31, 2007, production ramp-up has been
slower than anticipated. Productivity during ramp-up has been constrained by
the shortage of skilled operators and tradesmen, earlier than usual and severe
winter conditions and disrupted shipments to port arising from rail issues
which directly impacted mining and plant operations, as well as rail
operations. As a result, the Company was in violation of certain of its credit
agreement covenants as at March 31, 2007. The Company sought and received
waivers from its lenders in respect of these covenants and an amendment to
certain covenants required to be met in the future.
    In connection with an amendment to the credit agreement subsequent during
the quarter ended June 30, 2007, the Company has agreed: to increase the
mandatory principal prepayments after December 31, 2007 from 55% to 75% of
excess cash flows; to increase the agreement's contingent support account by
$2.5 million to $12.5 million by September 15, 2007; and to ensure by
September 15, 2007, that an additional $10.4 million is available for debt
repayments, including the December 31, 2007 scheduled repayment of $5.8
million. Western has received a letter of support from its major shareholder
in connection with any additional funding requirements to be met with these
obligations at September 15, 2007.
    Subsequent to June 30, 2007, the Company was in violation of certain
covenants relating to the delivery of certain mine and financial planning
information to the lenders. The Company has sought and received waivers from
its lenders in respect of the covenants.

    Market Outlook

    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 the demand for steel, developments in mining technology,
infrastructure capacity constraints, and transportation improvements or
degradation, fluctuations in currency, interest rates, political stability and
overall economic growth.
    The global demand for metallurgical coal rose sharply in late 2004 and
early 2005, as crude steel production expanded in pace with buoyant economic
growth, particularly in China, India and other developing countries. As a
result, prices for coking coal rose sharply for the 2005/2006 coal year, to
US$125 per tonne from the high US$50s in the previous year. With the
announcement of new coal mine developments (spurred by record coal prices) and
with steel mills subsequently drawing down inventories built up in early 2005
as security against supply , coking coal prices fell to between US$95 - $115
per tonne in the 2006/2007 coal year. Similarly, early settlements for the
2007/2008 coal year resulted in price settlements of between US$85 - $98 per
tonne. With continued strong economic growth, the global supply of hard coking
coal is slowly adjusting to increased demand; however, the continued shortage
of transportation infrastructure in the major coal producing countries and
scarcity of key mining inputs such as skilled labour, mining equipment and in
some areas basic inputs like water have once again skewed the supply-demand
balance in favour of the producers. This trend has been in evidence in 2007,
with spot price settlements moving upwards as the year has progressed. There
is no indication that this trend will diminish prior to settling prices for
the 2008 coal year and a number of industry analysts are projecting
metallurgical hard coking coal prices to rise to the US$100 - 120 level.
    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. Constraints on mine production in key supply areas have occurred in
2007 at the same time as demand has increased. Adding to this are recent
thermal coal price increases, which impact PCI pricing in that PCI coals,
which have superior quality (lower ash and higher heat values) command a
substantial price premium above thermal coal benchmark prices. These factors,
in conjunction with 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.
    In the longer term, the Company believes that the market fundamentals for
metallurgical coal will provide substantial opportunity to increase market
diversity and market share. The Company's Wolverine coking coal has received
positive reviews from some of the world's leading steel mills. The Company's
Burnt River low volatile PCI coal is consistently ranked in the top three PCI
coals worldwide and has experienced unparalleled demand. These coals, in
conjunction with highly efficient rail and port infrastructure with excess
capacity, provides to the Company a strategic advantage to grow and diversify.


    The Company's low volatile PCI coal has been sold to major steel mills in
Japan, Korea, Taiwan, China, Europe and South America and its Wolverine hard
coking coal is being placed in similarly diverse and growing markets.
Previously secured term purchase and sales agreements in Korea for hard coking
coal and PCI coal have been augmented with sales agreements with the other
major Asian and European mills. Further negotiations are anticipated in the
coming months to structure longer term supply arrangements with top tier steel
mills with excellent growth and stability prospects.
    At the onset of the 2008 fiscal year, both production and rail service
have achieved targeted levels. With resources now fully deployed for coal year
2007 (the Company's fiscal 2008), the Company anticipates 2.4 million tonnes
of production from the Perry Creek Mine, of which approximately 2.1 million
tonnes will be marketed as hard coking coal.

    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.

    "John Hogg"
    President and Chief Executive Officer

For further information:

For further information: John Hogg, President & CEO or Jeff Redmond,
Director of Finance, 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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