Late February delivery for first shipment of Brule Mine Coal

The Port of Prince Rupert is looking forward to the arrival of coal from the Brule Mine project in late February, product that is destined to ship out of Ridley Terminals. The mine located in Northeastern British Columbia is run by Western Canadian Coal and the company is expecting great success from its mining ventures there as the demand for the coal being produced is exceeding the supply, commitments for all of the expected production is now accounted for.

This will add throughput volumes to Ridley Terminals which has seen an increase in shipping from the terminal in the last year.

The Daily News had an in depth look at the mining project and its impact on Prince Rupert in Tuesday’s paper.

NEW MINE ANOTHER BOOST FO RIDLEY
By Leanne Ritchie
The Daily News
Tuesday, February 13, 2007
Page one

Western Canadian Coal, a mining company with properties in Northeastern B. C., has received approval to open a new mine.

Gary K. Livingstone, president and CEO of Western Canadian Coal (WCC), said the company recently received approval to start up its Brule Mine, which will replace production at the Dillon Mine, a 1.3 million tonne mine that is now depleted.

Mining at the Brule Mine commenced in January 2007 and the first vessel taking PCI coal from Brule is expected to depart Ridley Terminals in Prince Rupert later in February.

“With current demand for the Burns River PCI coal exceeding supply, the company has commitments from its customers covering all of the Brule Mine’s expected production,” said Livingstone.

Production at the Brule Mine will be approximately 800,000 tonnes of PCI coal per year.

The company ships all of its product from Northeaster B. C. by rail through Ridley Terminals to overseas markets.

Meanwhile, it is anticipated that of the 1.0 million tonnes of coking coal produced in the current fiscal year, approximately 900,000 tonnes will be shipped prior to March 31, 2007, representing all available production except that portion required to maintain adequate mine and port inventories.

“Despite the slower than expected ramp up at the Perry Creek mine and delays by some customers in completing the testing required to determine the product’s suitability, more than 578,000 tonnes of Wolverine hard coking coal has been shipped to customers through January 2007 and the company has secured coal supply agreements for its Wolverine hard coking coal in Asia, Europe, South America and India,” said Livingstone.

“The company has recently secured large volume sales commitments to major Asian steel mills and a European mill for coal year 2007 (fiscal year 2008) and negotiations are ongoing to secure additional Wolverine hard coking coal contracts with steel mills both in new and existing markets.

“Efforts are being made to seek new customers in North and South America, as well as in Eastern Europe and the Middle East. The company anticipates this will result in more than a doubling of sales volumes for Wolverine coal in the fiscal year ending March 31, 2008 to between 2.2 – 2.4 million tonnes.”

Livingstone notices that coal prices are down a bit for 2007, the largest metallurgical coal exporters settled their coal pricing in Japan and Korea for the 2007 coal year, down US$18- $20 per tonne, at between US$98-$70 per tonne with Wolverine equivalent quality coals selling in the US$94-85 per tonne range.

While the other major steel mills have not completed their 2007 coal year settlements, the company believes that the final price settlements will not be materially different from these initial settlements.

Pricing of ULV-PCI for the upcoming coal and fiscal year is expected to remain in the high US$60s per tonne.