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Western Canadian Coal Corp. (TSX: WTN) Secures Contracts for its High Grade Coal through May 2010

The fact that there are differing grades of coal is the key to solid coal investing and profit. High sulfur coals find additional costs while high grade coal finds fewer costs and higher pricing potential. A commodity coal investor that can find a high grade efficient coal mining company is an investor that may find solid profit potential as the industrial and consumer markets rebound.

Western Canadian Coal Corp., a coal mining concern operating in Northern British Columbia, Canada, works to extract metallurgical grade coal. The company recently announced that it has secured contracts that will meet its budget needs through May 2010.

With difficult economic and regulatory pressures in place at the moment, the company appears to be weathering the storm in fine fashion. It has secured contracts ranging from US$121 to US$125 per ton through May 2010. It has also secured forward contracts at relatively respectable rates. Although Coking contracts are a smaller part of the company’s contracts, its other high grade coal contracts are sufficient to meet needs, given the company’s facilities require little upgrading. In a general sense, it does appear that the “leg work” done to put processes in place has been successful to meet need. From a general perspective, the company estimates that it has a 15 year reserve of coal supplies at its 3 current operations and two additional locations where it has secured exploration rights.

As the environmental picture for coal becomes increasingly murky, Western Canadian Coal appears to be in a good place to profit. Its efficiency is a solid plus in its favor, also indicating its desire to be a solid corporate coal citizen. Waste rock removal makes the mining operation more efficient and reduces general waste within the processing system. This practice also increases the stripping ratio to 12:1, which reduces waste and possible contamination.

In a general way, the company has become a model that increases efficiency, reduces costs and helps to keep the local environment a better place for all involved in a necessary activity. Western Canadian Coal has put processes in place that will make it a profitable and efficient operation for the life expectancy of its reserves.

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