Western Coal Announces Fiscal Fourth Quarter and Fiscal 2010 Results
VANCOUVER, June 9 /PRNewswire-FirstCall/ - Western Coal Corp. (TSX: WTN, & WTN.WT and AIM: WTN) ("Western" or the "Company") announces its operating results for the three and twelve month periods ended March 31, 2010. For the year ended March 31, 2010, the Company achieved sales of $438.6 million and earnings of $40.8 million, or earnings per share of $0.17 on a basic basis. On sales of $136.6 million, the earnings for the fourth quarter of fiscal 2010 were $11.2 million or earnings per share of $0.04, on a basic basis.
Key points for fiscal 2010:
- Consolidated revenues of $438.6 million were 25% lower than fiscal
2009. The lower revenues were mainly as a result of lower sale prices
driven by the global economic recession.
- Cash costs (cost of product sold plus transportation costs) were $102
per tonne and $72 per tonne for Canadian and US operations,
respectively. Cash costs for the Canadian operations for fiscal 2009
were $133 per tonne.
- Despite experiencing the global economic recession for much of the
fiscal year, all operations were cash flow positive with fiscal 2010
cash from operations at $82.9 million.
- Significant balance sheet strength with cash at year-end of $136
million compared to total long-term debt and capital leases of $48
million. All $41 million of the convertible debentures as at March
31, 2010 were subsequently converted into common shares after year-
end, with the exception of a cash redemption payment of $317,435.
- The acquisition of Cambrian Mining Plc ("Cambrian") on July 13, 2009
has expanded and diversified the Company's coal platform.
- Keith Calder was appointed as President and Chief Executive Officer
effective December 1, 2009.
Key points for fiscal fourth quarter:
- Consolidated revenues of $136.6 million were 15% higher than fiscal
third quarter, despite lower coal prices realized and a stronger
Canadian dollar in relation to the US dollar.
- Cash costs (cost of product sold plus transportation costs) were $99
per tonne and $67 per tonne for Canadian and US operations
respectively, both within previously provided guidance. Cash costs
for the Canadian operations for the fourth quarter 2009 were $136 per
tonne.
- Canadian Operations sale volumes were 94% higher than in fiscal third
quarter, due in part to 260,000 tonnes that was intended to be
shipped in the fiscal third quarter.
- Canadian Operations production volumes were 29% higher than in fiscal
third quarter, reflecting stronger and improving coal markets.
- The fourth quarter results were negatively impacted by year-end
accruals, adjustments and restructuring matters totaling $7.0
million.
- Financial position remains strong with cash in excess of debt by
nearly $48 million.
- Western Coal was included in the S&P/TSX Composite Index on March 22,
2010.
Mr. Keith Calder, President and Chief Executive Officer of Western Coal Corp. comments, "The fundamentals of our business are strong and getting stronger. Costs are in-line and will continue to improve as we recapitalize the mines with larger and more efficient equipment. Markets continue to be robust, with expected coal prices to be higher in the upcoming quarter. Emerging from the global recession, as a company, we are well positioned to take advantage of the strengthening coal markets. We have a stronger financial position, a clearly articulated value accretive growth strategy, and a high quality asset base producing and selling high value products."
Webcast/Conference Call
The Company will be hosting a webcast and conference call to discuss the fiscal fourth quarter and fiscal 2010 results and provide a corporate update at 10:00am (Vancouver) June 10, 2010. Presentation slides will accompany the webcast and conference call and will be available at www.westerncoal.com/investors/financial_information.
The webcast is available at http://event.on24.com/r.htm?e=215455&s=1&k=C2BC0465AE31663BDE08834961458E7F or on the company's website at www.westerncoal.com/investors/financial_information.
Conference call details are 1.888.231.8191 or 647.427.7450, with a replay available at 1.800.642.1687 or 416.849.0833 with code 80745681.
News Release
This news release is prepared as at June 9, 2010 and should be read in conjunction with the Company's audited financial statements for the year ended March 31, 2010 and notes contained therein, and Management's Discussion and Analysis (MD&A) for the same period. This news release does not constitute a MD&A as contemplated by relevant securities rules. Western Coal Corp.'s audited financial statements and MD&A for the period referred to above are available on SEDAR at www.sedar.com under the Company's profile.
Financial Summary - unaudited:
(In thousands of Canadian
dollars, except tonnes and per March 31, March 31,
share data) 2010 2009
-------------------------------------------------------------------------
Cash & cash equivalents $ 136,059 $ 74,853
Amounts receivable 64,597 40,080
Inventory 46,212 62,376
Total current assets 265,149 217,943
Total assets 856,629 662,337
Current liabilities $ 156,112 $ 72,304
Long-term liabilities 95,603 124,625
Non-controlling interests 23,568 -
Shareholders' equity 581,346 465,408
Total liabilities and shareholders' equity 856,629 662,337
Capital expenditures $ 27,459 $ 52,148
Average exchange rate (CAD/USD) $ 1.09 $ 1.13
Three months ended Twelve months ended
March 31, March 31,
-------------------------------------------------------------------------
2010 2009 2010 2009
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Revenue $ 136,571 $ 111,684 $ 438,568 $ 586,093
Cost of goods sold 126,250 52,838 360,477 298,211
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Income from mining
operations 10,321 58,846 78,091 287,882
Other (expenses) (10,301) (4,504) (35,068) (37,692)
Income tax recovery
(expense) 12,473 (6,740) (1,882) (35,658)
Non-controlling
interests (186) - (100) -
Equity loss (1,107) - (237) -
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Net income $ 11,200 $ 47,602 $ 40,804 $ 214,532
Earnings per share,
basic $ 0.04 $ 0.23 $ 0.17 $ 1.17
Earnings per share,
diluted $ 0.04 $ 0.23 $ 0.17 $ 1.14
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Results of Operations
---------------------
The results of the operations are reported in the following reportable segments:
Canadian Operations
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
Financial Excerpts
Revenues $ 103,317 $ 111,684 $ 338,381 $ 586,093
Cost of goods sold 98,023 52,838 274,360 298,211
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Income from mining
operations $ 5,294 $ 58,846 $ 64,021 $ 287,882
Production (tonnes):
Hard coking coal 418,000 360,000 1,458,000 1,295,000
Low-vol PCI coal 268,000 142,000 667,000 1,027,000
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Total Production 686,000 502,000 2,125,000 2,322,000
Sales (tonnes):
Hard coking coal 548,000 277,000 1,521,000 1,226,000
Low-vol PCI coal 321,000 69,000 848,000 816,000
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Total Sales 869,000 346,000 2,369,000 2,042,000
Per sales unit:
Coal price
realized $ 119 $ 323 $ 143 $ 287
Coal price
realized (USD) $ 115 $ 256 $ 131 $ 255
Cost of goods sold
Cost of product
sold $ 74 $ 112 $ 74 $ 102
Transportation
and other $ 25 $ 24 $ 28 $ 31
Depletion,
amortization
and accretion $ 14 $ 17 $ 14 $ 13
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$ 113 $ 153 $ 116 $ 147
Revenues for the three month period ended March 31, 2010 decreased to $103,317,000 from $111,684,000 in the comparable period in the prior year. The decrease is primarily due to a lower coal price realized and a weakening of the USD dollar against the Canadian dollar, both of which were partially offset by an increase in sale volumes. The decrease in sales price is a result of lower coal contract prices for fiscal 2010, which are US$126 per tonne for hard coking coal and US$90 per tonne for ultra-low volatile PCI ("ULV-PCI") compared to US$300 per tonne and US$248 per tonne respectively for fiscal 2009. The decrease in sales price realized during the current quarter was further negatively impacted by the weakening of the US dollar against the Canadian dollar. The average US dollar/Canadian dollar exchange rate for the three month period ended March 31, 2010 was $1.03, compared to $1.26 in the comparable period in the prior year, or a decline of 18%. These decreases were partially offset by an increase in sale volumes of 523,000 tonnes, of which 260,000 tonnes was intended to be shipped in fiscal third quarter 2010. The additional increase in sale volume in the fiscal fourth quarter 2010 is a result of the economic recovery experienced in Asia. The Canadian Operations sells most of its coal into Asia.
For the three month period ended March 31, 2010, total production was 184,000 tonnes higher than in the comparable period in the prior year due to an increase in the production rates at the Canadian operations in response to the economic recovery in Asia. Production of hard coking coal and PCI increased 58,000 and 126,000 tonnes respectively when comparing the three month period ended March 31, 2010 to the three month period ended March 31, 2009.
Cost of goods sold for the quarter ended March 31, 2010 was $98,023,000 or $113 per tonne compared to $52,838,000 or $153 per tonne in the prior comparable period. The 26% decrease in the per unit costs of goods sold during the quarter ended March 31, 2009 compared to the current period is mainly attributable to the Wolverine mine. The Wolverine mine's per unit cost of goods sold decreased 30%, which was a result of improvements in equipment availabilities, an increase in overall productivity, a significant decline in the stripping ratio, and the replacement of the mining contractor on May 18, 2009 with the direct hire of Western Coal employees to operate and manage the pit operations. The Brule mine's per unit cost of goods sold increased 5% in fiscal fourth quarter 2010 as compared to the same quarter in 2009.
US Operations
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
Financial Excerpts
Revenues $ 28,454 $ - $ 85,613 $ -
Cost of goods sold 24,370 - 72,736 -
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Income from mining
operations $ 4,084 $ - $ 12,877 $ -
Production (tonnes):
Metallurgical coal 154,000 - 355,000 -
Thermal coal 204,000 - 608,000 -
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Total Production 358,000 - 963,000 -
Sales (tonnes):
Metallurgical coal 97,000 - 287,000 -
Thermal coal 229,000 - 604,000 -
-------------------------------------------------------------------------
Total Sales 326,000 - 891,000 -
Per sales unit:
Coal price realized $ 87 $ - $ 96 $ -
Coal price realized
(USD) $ 82 $ - $ 90 $ -
Cost of goods sold
Operating
expenses $ 67 $ - $ 72 $ -
Depletion,
amortization
and accretion $ 8 $ - $ 10 $ -
-------------------------------------------------------------------------
$ 75 $ - $ 82 $ -
On July 13, 2009, the Company acquired the US operations, which consist of the Maple and Gauley Eagle coal properties, each operating an underground and open surface mine. The results of the US operations are included in the Company's results from July 14, 2009.
Revenues for the three month period ended March 31, 2010 reflect the sale of 326,000 tonnes at a realized price of $87 per tonne or US$82 per tonne after applying a CAD/USD foreign exchange rate of 1.06. Sales prices realized were 10% lower in the current quarter when compared to the previous quarter. The lower sales price realized was primarily due to the timing of shipping schedules with a higher contracted price customer.
Cost of goods sold for the three months ended March 31, 2010 was $75 per tonne. Cost of goods sold, excluding depletion, amortization and accretion was $67 per tonne which is in line with the expected cash production costs.
UK Operations
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
Financial Excerpts
Revenues $ 4,800 $ - $ 11,920 $ -
Cost of goods sold 4,003 - 9,926 -
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-------------------------------------------------------------------------
Income from mining
operations $ 797 $ - $ 1,994 $ -
Production (tonnes): 41,000 114,000 -
Sales (tonnes): 51,000 124,000 -
Per sales unit:
Coal price
realized $ 94 $ - $ 96 $ -
Coal price realized pnds pnds pnds pnds
(pnds stlg) stlg 61 stlg - stlg 62 stlg -
Cost of goods sold $ 78 $ - $ 80 $ -
On July 13, 2009, the Company acquired a 50.6% interest in Energybuild Group Plc ("Energybuild") which owns the Aberpergwm underground mine and the Nant Y Mynydd open-cast coal site. 100% of the results of the UK operations are included in the Company's results from July 14, 2009. Energybuild's results also include its 50% portion of the operations of its tip processing joint venture. On December 16, 2009, the Company participated in Energybuild's equity fund raising which increased the Company's ownership to 54.7%. The funds were raised to increase production at the underground mine to approximately 750,000 tonnes per year.
Revenues for the three month period ended March 31, 2010 reflect the sale of 51,000 tonnes at a realized price of $94 per tonne or (pnds stlg)61 per tonne. The price realized is consistent with the price in fiscal third quarter 2010.
Cost of goods sold for the three months ended March 31, 2010 reflect a unit cost of $78 per tonne, which is in line with the cost in the fiscal third quarter 2010.
AGD Mining Pty Ltd.
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
Financial Excerpts
Revenues $ - $ - $ 2,654 $ -
Cost of goods sold (146) - 3,455 -
-------------------------------------------------------------------------
Income from mining
operations $ 146 $ - $ (801) $ -
On July 13, 2009, the Company acquired the Costerfield gold and antimony mine based in Victoria, Australia, owned by AGD Mining Pty, Ltd, a wholly owned subsidiary Cambrian. The results of this operation are included in the Company's results from July 14, 2009 until AGD was disposed on November 30, 2009.
Other expenses
Other expenses, for the three and twelve months ended March 31, 2010 include the following:
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
General and
administration $ 14,113 $ 5,143 $ 35,135 $ 19,707
Sales and marketing (184) 4,423 7,469 7,919
Coal exploration and
other mine costs 1,076 1,208 4,805 6,432
Interest, accretion
and financing fees
on liabilities 5,151 3,114 14,109 22,649
Other (income) (9,855) (9,384) (26,450) (19,015)
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-------------------------------------------------------------------------
Total other expenses $ 10,301 $ 4,504 $ 35,068 $ 37,692
General and Administration
General and administration increased by $8,970,000 to $14,113,000 for the quarter ended March 31, 2010 as compared to $5,143,000 for the quarter ended March 31, 2009. The increase is primarily related to the general and administration costs of the Cambrian entities of $4,547,000, an increase in corporate salaries and other compensation in an amount of $2,874,000 and an increase of $1,063,000 in the stock based compensation expense as a result of stock options issued.
Sales and Marketing
Sales and marketing costs have decreased to a recovery of $184,000 for the fourth quarter of 2010 compared to a cost of $4,423,000 for the fourth quarter of 2009. The recovery for the fourth quarter of 2010 is a result of the reversal of a portion of the Wolverine Royalty Sharing Agreement accrual of $1,910,000 while in the fourth quarter of fiscal 2009, the balance included an accrual for the Wolverine Royalty Sharing agreement which was to allow for the potential liability, that was subsequently settled.
Coal Exploration and Other Mine Costs
Coal exploration and other mine costs for the three months ended March 31, 2010 of $1,076,000 were consistent with those for the quarter ended March 31, 2009 of $1,208,000. Exploration costs are charged to earnings in the period in which they are incurred, except where these costs relate to specific properties for which economically recoverable reserves have been established, in which case they are capitalized. Other mine costs include care and maintenance costs relating to the carrying costs of the Willow Creek mine.
Interest, Accretion and Financing Fees on Liabilities
Interest, accretion and deferred financing fees on long-term debt increased to $5,151,000 compared to $3,113,000 in 2009 as a result of additional liabilities assumed in fiscal 2010.
Other Income
Three Three Twelve Twelve
In thousands of months months months months
Canadian dollars ended ended ended ended
unless otherwise March 31, March 31, March 31, March 31,
noted 2010 2009 2010 2009
-------------------------------------------------------------------------
Royalty liability
revaluation loss
(gain) $ 4,893 $ (7,981) $ 4,893 $ (7,981)
Unrealized (gain)
loss on forward
exchange contracts 1,653 4,904 (8,979) 1,501
Loss (gain) on
disposal of
subsidiary 477 - (6,519) -
Net foreign exchange
gains (13,996) (6,111) (6,655) (11,061)
Gain on redemption
of convertible
debentures - - (4,155) -
Interest income (1,413) (1,258) (3,122) (2,269)
Gain on fair value
adjustment of
investments (1,291) (1,393) (1,291) (1,393)
Other (income)
expenses (178) 2,455 (622) 2,188
-------------------------------------------------------------------------
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$ (9,855) $ (9,384) $ (26,450) $ (19,015)
Other income amounted to $9,855,000 for the three month period ended March 31, 2010, compared to $9,384,000 for the three month period ended March 31, 2009. The increase mainly relates to the net foreign exchange differences offset by the revaluation loss on the royalty liability.
Non-Controlling Interests
For the three month period ended March 31, 2010, the Company recognized non-controlling interest loss of $186,000, which relates to the remaining 45.3% interest in Energybuild not owned by the Company.
Equity Loss
For the three month period ended March 31, 2010, the Company recognized an equity loss of $1,107,000 which reflects an estimate of the Company's share of the net losses of Xtract Energy Plc and Mandalay Resources Corporation.
Net Income
Net income for the three month period ended March 31, 2010 was $11,200,000 compared to $47,602,000 for the comparable period in the prior year.
The major impact on the net income for the three month period ended March 31, 2010 was the lower sales prices realized in fiscal 2010 compared to fiscal 2009 as well as the revaluation loss recorded on the Company's royalty liability.
Market Outlook
General
-------
During the January to March 2010 quarter, emerging from the global economic recession, worldwide demand for metallurgical coal strengthened, while supply continued to be constrained, all of which, reinforced an increased recovery within the international steel sector. Following China's record coking coal imports of approximately 35 million tonnes in calendar year 2009, the first quarter of calendar 2010 saw a robust 10.9 million tonnes of coking coal imported into China to help meet China's surging demand for raw materials needed to meet the country's approximately 600 million tonnes of estimated crude steel production in 2010. Also during the calendar first quarter, major metallurgical coal supply disruptions occurred: adverse Queensland weather issues (cyclones and heavy rainfall), as well as serious mine accidents in China (Shanxi & Inner Mongolia) and in West Virginia, USA, further constraining supply.
Capacity utilization in the steel industry is increasing with Asia and South America remaining at near full capacity while European and US steel mills are at 70-80% operating levels. Steel prices have risen during the latter part of the calendar first quarter due mainly from large increases in iron ore and coking coal spot prices, but also due to increased demand for steel products. Coal price settlements for the period commencing April 1, 2010 to June 30, 2010 were US$200 per tonne (FOB) for hard coking coal and $170 per tonne (FOB) for ULV-PCI coal, which is an increase of 59% and 89%, respectively over the 2010 annual prices. The traditional annual benchmark coal pricing system has been replaced with a quarterly pricing system.
The calendar first quarter has also seen increased metallurgical coke export prices as well as scrap steel prices, which are positive indicators of strong future demand for metallurgical coal.
Canadian Operations
-------------------
With the increased demand for high quality metallurgical coals, the Company's Canadian coal products are well positioned. Supply disruptions and record vessel queues on the east coast of Australia have reinforced the benefit of diversifying supply to metallurgical coal producers from Canada. The Company's Wolverine hard coking coal forms a key coke oven blend component with many of the world's leading steel mills, while the Brule mine ULV-PCI coal is consistently ranked among the top PCI coals worldwide. Many steel mills throughout the world are actively increasing ULV-PCI usage in their blast furnaces to reduce costs and also due to coke shortages in many regions. These high quality coals, in conjunction with highly efficient and under-utilised rail and port infrastructure in northern British Columbia, continue to provide the Company a competitive advantage to continue to grow and diversify its customer base.
US Operations
-------------
The Maple and Gauley Eagle coal mines are located in the central Appalachian region of West Virginia. The increased demand for metallurgical quality coals has also benefitted the Company's West Virginia operations as the US economy begins to slowly improve and steel demand starts to increase. This has enabled the Company to sell some of its premium thermal coal from Gauley Eagle into the high-vol metallurgical coal market, while at Maple, metallurgical coal production capacity is being reviewed in an attempt to meet increased demand.
UK Operations
-------------
Current expansion plans are in progress at the Aberpergwm underground colliery, to exploit the large reserves located between the Neath and Dulais valleys and thereby increase production of premium quality anthracite for use mainly in the steel sector. Energybuild's current major customers are an energy plant and steel mill within 40km of the mine. There is a diverse spread of potential customers for Aberpergwm's high quality anthracite. In addition Energybuild operates a small open cut site to produce quality industrial fuel. The company has identified further areas for potential opencast mine development within the Aberpergwm surface lease area.
Guidance
Nearly all of the Company's current fiscal 2011 coal production is under contract for sale to international steel producers. Coal prices for the Company's Canadian operations for the first quarter of fiscal 2011 are approximately US$200 per tonne for hard coking coal and US$170 per tonne for its ULV-PCI coal. Price talks are underway for the West Virginia and Wales operations, but are expected to follow the market trends for increased coal prices across all products.
The metallurgical coal price talks for the next quarter (July 1, 2010 to September 30, 2010) are expected to realize higher prices, due to ongoing tight supply, strong demand and high current spot prices. Recent contract prices for hard coking coal are reportedly US$225 per tonne (FOB).
The Company's coal settlement prices for the April-June quarter 2010 are the second highest on record, and the same as competitor's premium hard coking coal prices. In addition, a high proportion of the Company's contracts are now on a long-term volume basis with six of these customers ranked within the top ten steel mills in the world. The quality of the Company's coal products and the service provided to customers are also factors in the strong market positioning that the Company now enjoys. Considerable interest in the Company's expansion plans has been shown by all of the Company's existing customers as well as new potential buyers.
In the longer term, the market fundamentals for metallurgical coal are expected to continue to improve which will provide continued opportunity for the Company to increase market diversity and market share. China, India, and South America remain the driving forces from a demand point of view.
Both of the Company's metallurgical coal products from Canada, as well as West Virginia's coking and thermal coal products have established market acceptance and are well placed to meet the ongoing worldwide demand. Similarly in Wales, customer demand is expected to exceed availability of the premium Aberpergwm anthracite. Overall, being an independent, growing and diversified coal producer with high quality products has provided a very positive outlook for the Company.
Canadian Operations
-------------------
For the fiscal year ended March 31, 2011, the Company expects to produce between 3.6 and 3.8 million tonnes of metallurgical coal from its three operating mines in Canada. This consists of the Wolverine operations producing 1.7 to 1.8 million tonnes of hard coking coal, the Brule mine producing 1.4 to 1.5 million tonnes of ULV-PCI coal, and the Willow Creek mine producing approximately 0.5 million tonnes of ULV-PCI coal.
The Company expects to ship between 3.7 to 3.9 million tonnes of metallurgical coal in fiscal 2011, which will consist of 1.8 to 1.9 million tonnes of hard coking coal and 1.9 to 2.0 million tonnes of ULV-PCI. This guidance is dependent upon the continued demand from the Company's customers, clean coal production at the mines, rail service and vessel arrivals.
Expected cash cost of production (FOB) at the Canadian operations is $94 to $99 per tonne for the fiscal 2011.
The Company has entered into foreign currency contracts totaling US$241 million as at March 31, 2010 to help manage the uncertainty of foreign exchange fluctuations in the market. The contracts mature each month through to March 2011. They are at an average rate of C$1.0228 per US$1.00. Subsequent to March 31, 2010, the Company entered into a series of forward exchange contracts to fix the rate at which future anticipated cash flows of US dollars are exchanged into Canadian dollars. Such contracts include forward sales of US dollars at an average rate of 1.0015 in the aggregate amount of US$120,000,000 from October 2010 to the end of March 2011.
US Operations
-------------
For the fiscal year ended March 31, 2011, the Company expects to produce 1.6 to 1.8 million tonnes of coal from its mines in West Virginia. This consists of the 0.7 to 0.8 million tonnes of metallurgical coal and 0.9 to 1.0 million tonnes of thermal coal.
The Company expects to ship between 1.7 to 1.9 million tonnes of coal in fiscal 2011, which will consist of 0.8 to 0.9 million tonnes of metallurgical coal and 0.9 to 1.0 million tonnes of thermal coal. This guidance is dependent upon the continued demand from the Company's customers, clean coal production at the mines, rail service and vessel arrivals.
Expected cash cost of production (FOB) at the West Virginia operations is US$68 to US$72 per tonne for the fiscal 2011.
UK Operations
-------------
The Company expects to produce and sell 0.3 million tonnes of coal in fiscal 2011.
Non-GAAP Financial Measures
This press release refers to certain financial measures, such as cash costs which is not a measure recognized under Canadian GAAP and does not have a standardized meaning prescribed by GAAP. These measures may differ from those made by other corporations and accordingly may not be comparable to such measures as reported by other corporations. These measures have been derived from our financial statements, and applied on a consistent basis, because the Company believes they are of assistance in the understanding of the results of operations and financial position.
Cash costs is the term the Company uses to describe the cash costs of production which is defined as operating expenses and would include cost of product and cost of transportation.
About Western
Western is a producer of high quality metallurgical and thermal coal from mines located in northeast British Columbia (Canada) and West Virginia (USA). The mines have the capacity to produce 7 million tonnes per year and have over 20 years of coal reserves. Western also owns a 54.7% interest Energybuild (EBG: AIM) which produces high quality anthracite and thermal coal in South Wales (UK). Other interests owned include a 40% interest in Xtract Energy (XTR: AIM), 20% interest in NEMI Northern Energy & Mining (NNE.A: TSX). The Company is headquartered in Vancouver, BC, Canada, and trades on the AIM and TSX stock exchanges under the symbol "WTN". More information can be found at www.westerncoal.com
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.
SOURCE Western Coal Corp.
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