Western Canadian Coal locks in exchange rates for current year production
Western Canadian Coal Corp., has announced that as at 31 October 2008, the Company has entered into forward sales contracts for US$188M at a rate of C$1.2424 per US$1.00 and US$150 million at a rate C$1.2188 per US$1.00.
These contracts mature monthly through to April 2009. The company's coal contract sales are in US dollars, while a majority of its expenses are in Canadian dollars.
The company has now fixed approximately 65% or US$338M of its expected forward coal sales to protect the company's earnings. Prior to entering into these contracts, the company's exposure to the US dollar on the balance of this year's sales is such that for every $0.01 change in the Canadian dollar in relation to the US dollar, income from operations changes by C$5.1M.
Western Canadian Coal Corp. produces high quality metallurgical coal from three mines - Wolverine, Brule and Willow Creek - located in the northeast of British Columbia. The coal is sold to many of the top steelmakers in the world.
The company also has interests in various coal properties in northern and southern British Columbia and a 50% interest to explore and develop the Belcourt and Saxon group of properties in northern BC. Currently, these properties provide the company with an estimated 15 years of coal reserves at current production levels.
