Western Canadian Coal Amends Agreement to Acquire Falls Mountain Coal
VANCOUVER, Feb. 26 /PRNewswire-FirstCall/ — Western Canadian Coal Corp (TSX: WTN and WTN.DB and AIM: WTN) (“WCCC” or the “Company”) announces that it has entered into an amendment to the terms of the conditional agreement (the “Agreement”) between the Company and Cambrian Mining plc (“Cambrian”) for the sale of Falls Mountain Coal Inc. (“FMC”) to Western by Cambrian previously announced on December 3, 2007.
Under the previously announced terms, Cambrian will sell FMC to Western for consideration consisting of 18,740,898 common shares of Western and a deferred payment of $14,055,673 at Cambrian’s election to be paid in cash or by the issuance of 9,000,000 common shares of Western.
In view of the significant appreciation of the Company’s share price since the November 30, 2007 date of the conditional agreement, Western and Cambrian have agreed to amend the agreement to reduce the number of shares to be issued in the event the deferred payment is at Cambrian’s election made in shares, from 9,000,000 common shares to 4,534,088 common shares of Western. In addition, the completion of the sale of FMC will be conditional upon Western having obtained all necessary regulatory and shareholder approvals for the agreement previously announced on December 3, 2007 to amend the conversion rate under the $5 million convertible loan which Western agreed to in exchange for Cambrian waiving its rights to repayment of its loan, setting the interest rate at 8.5% per annum, waiving payment of a $125,000 fee and releasing the security granted in respect of the loan.
The completion of the sale of FMC to Western is also conditional on the parties obtaining all necessary consents and approvals, including shareholder approval, regulatory approval, consents of the relevant lenders to the Company and Cambrian and approval by Cambrian’s Board of Directors. Both parties have agreed to obtain such approvals by March 31, 2008. The Agreement is deemed to be related party transaction under the AIM Rules. The independent directors of the Company, having consulted with the Company’s nominated advisor, consider that the revised terms of the Agreement are fair and reasonable as far as the independent shareholders of the Company are concerned.
About Cambrian
Cambrian is a diversified mining house that manages and supports operations in coal and gold/antimony mining. It also has extensive exposure to energy projects and related technologies, from oil shale assets through to alternative energy projects, as well as exposure to traditional oil and gas exploration and development.
Cambrian has been instrumental in the past three years in supporting the development of a number of mines and moving them into production. These include: the Augusta gold and antimony mine in Victoria, Australia; the 2.4 million tonnes per annum Wolverine hard coking coal mine in Western Canada; the Dillon and Brule PCI mines in Western Canada as well as underground metallurgical coal and underground and surface thermal coal mines in West Virginia, USA.
Cambrian, through its wholly-owned subsidiaries, currently holds approximately 48.4 million common shares of Western, representing approximately 42% of Western’s issued and outstanding shares. Mr. John Byrne, Chairman of Western, is also Chairman of Cambrian and holds approximately 7.2% of the outstanding shares of Cambrian. Mr. John Conlon, a director of Western, is also a director of Cambrian and holds approximately 1.0% of the outstanding shares of Cambrian.
About Western Canadian Coal
Western Canadian Coal Corp. produces 3.1 million tonnes of high quality metallurgical coal from two mines located in the northeast of British Columbia. The Company also has interests in various coal properties in northern and southern British Columbia and a 50% interest in the Belcourt Saxon Limited Partnership, which was formed to explore and develop the Belcourt and Saxon group of properties in northern BC. Currently, these properties provide the Company with an estimated 25 years of coal reserves at current production levels.
CONTACT: David Jan, Manager, Investor Relations & Corporate Development, Phone: (604) 608-2692, Email: djan@westerncoal.com
Western Canadian Coal Corp.
CONTACT: David Jan, Manager, Investor Relations & Corporate Development,Phone: (604) 608-2692, Email: djan@westerncoal.com