Western Coal re-opens Willow Creek mine

Jun 04, 2010, 07:00 ET from Western Coal Corp.

Company increases reserves base by 88% and plans to produce 1.7 million tonnes per year

VANCOUVER, June 4 /PRNewswire-FirstCall/ - Western Coal Corp (TSX: WTN, WTN.WT and AIM: WTN) ("Company" or "Western") is pleased to announce it will be re-opening its Willow Creek mine, located 45 km from Chetwynd, British Columbia, two months ahead of schedule. Western is also pleased to announce an increase in the Willow Creek mine coal reserve of 88% to 29.6 million tonnes, thereby extending the mine life and supporting potential expansion to 1.7 million tonnes per annum.

Willow Creek Mine Re-opening and Expansion

The mine's current approvals support a production rate of up to 900,000 tonnes of high quality metallurgical coal per year, with applications underway to increase production by late 2011 to 1.7 million tonnes per year over a 13 year life of mine. As part of the expansion, it is planned to increase the throughput capacity to the processing plant and rail load-out facility to handle over 3.7 million tonnes of coal per year. The newly expanded facilities will process coal from both the Willow Creek mine and the nearby Brule mine, eliminating the need to construct a plant and load-out facility for Brule. At full capacity, the mine will be employ over 300 people at the mine and plant facilities.

Mr. Keith Calder, President and Chief Executive Officer of Western Coal Corp. comments, "With plans to grow production in our northeast BC mines from 2.2 million tonnes to nearly 6.0 million tonnes in three years' time, the re-opening of the Willow Creek mine is an important milestone for Western in achieving its goals. With coal markets continuing to move in our favour, Western will be investing the strong cash flow generated to further reduce costs and increase its size and scale to become a major global metallurgical coal producer, all of which will provide even greater stability for employees, communities and our shareholders over the long-term."

Willow Creek Reserve Base Increase

A prefeasibility study ("Study") was recently completed for the Willow Creek property, which provides an update to the previous Technical Report filed on SEDAR in December 2007. The Study identifies in situ Measured Coal Resources of 37.3 million tonnes and Indicated Resources of 11.6 million tonnes (total 48.9 million tonnes) plus 0.3 million tonnes of Inferred Coal Resources. This is an increase of 40% in Measured plus Indicated Resources.

The Study also contributes 27.7 million tonnes of Proven run-of-mine (ROM) coal and 1.9 million tonnes of Probable ROM coal (total 29.6 million tonnes of ROM coal reserves) within a designed open pit mine. This new Reserve is expected to produce up to 7.0 million tonnes of coking coal and 14.6 million tonnes of high quality PCI coal. Previously reported reserves were 14.8 million Proven and 0.9 million tonnes of Probable ROM coal.

A Technical Report based on this Study will be filed on SEDAR. Independent Qualified Persons who are authors of the Technical Report include:

    -   Geology & Resources - Robert J. Morris, P. Geo
    -   Reserves - Jim Gray, P. Eng.
    -   Metallurgy & Coal Processing - Mark Zik, P.E.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws. 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. Many of these assumptions are based on factors and events that are not within the control of Western 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 operations, fluctuating coal prices and currency exchange rates, changes in project parameters, the possibility of 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. Although Western has 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. 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 undertakes 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.

About Western Coal

Western Coal is a producer of high quality metallurgical coal from mines in northeast British Columbia (Canada) and high quality metallurgical coal and compliant thermal coal from mines located in West Virginia (USA). Western Coal also owns approximately 55% of Energybuild Group Plc (EBG: AIM) which produces high quality anthracite and metallurgical coal in South Wales (UK). Other interests owned include a 48% interest in Mandalay Resources Corporation (TSX.V: MND), 38% 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

SOURCE Western Coal Corp.