Grande Cache Coal Corporation
TSX : GCE

Grande Cache Coal Corporation

June 17, 2009 08:00 ET

Grande Cache Coal Corporation Earns Net Income Of $106.2 Million During Fiscal 2009

CALGARY, ALBERTA--(Marketwire - June 17, 2009) - Grande Cache Coal Corporation (TSX:GCE) ("Grande Cache Coal" or the "Corporation") today announced its financial and operating results for the three and twelve months ended March 31, 2009. The Corporation's audited consolidated financial statements and related management's discussion and analysis for its fiscal year ended March 31, 2009 will be available at www.sedar.com and the Corporations website at www.gccoal.com.

- Grande Cache Coal earned a net income of $106.2 million, or $1.18 per basic share ($1.15 per diluted share), during fiscal 2009, including $18.9 million, or $0.20 per basic and diluted share, during the fourth quarter. In the comparable periods of last fiscal year the Corporation incurred net losses of $15.5 million, or $0.24 per basic and diluted share, and $1.2 million, or $0.02 per basic and diluted share, respectively.

- Coal sales volumes during the current fiscal year were 1.06 million tonnes sold at an average price of $234 per tonne, compared to annual sales volumes of 1.65 million tonnes at an average price of $89 per tonne in the previous fiscal year. Sales volumes were lower than last fiscal year mainly because of a decrease in the demand for steel brought on by the worldwide economic slowdown, which resulted in a reduced demand for metallurgical coal, primarily in the latter part of the year. The higher coal price realized in fiscal 2009 was due to contractual agreements negotiated at the beginning of the fiscal year when there was a high demand for metallurgical coal due to supply constraints and a strong global economy.

- Despite the decrease in coal sales volumes, the Corporation's fiscal 2009 revenue increased 70% over last year to $248.6 million, mainly because of higher coal prices. Fourth quarter revenue of $38.7 million was fairly stable compared to the same period last fiscal year as the substantial increase in price and favorable exchange rate were offset by a reduction in sales volumes caused by the decrease in the demand for metallurgical coal.

- The average cost of sales during fiscal 2009 increased to $119 per tonne (fiscal 2008 - $86 per tonne) largely because of higher mining input costs driven by high demand for labour, services and supplies, particularly at the beginning of the year, and in part due to lower sales volumes and lower productivities. Fourth quarter cost of sales were $96 per tonne, up from $86 per tonne in the same period last year largely due to a decrease in sales volumes.

- In June 2009, Grande Cache Coal entered into an agreement with HSBC Bank Canada to provide the Corporation with an operating credit facility of up to $25 million and the ability to enter into foreign exchange hedging arrangements.

- Coal sales for the first quarter of fiscal 2010 are expected to be approximately 0.40 million tonnes, compared to 0.25 million tonnes during the first quarter of fiscal 2009.

- Please refer to the Outlook section below for additional guidance information for fiscal 2010.

"Fiscal 2009 was a very challenging year for us as we encountered production issues in the early part of the year and then saw an extreme downturn in the worldwide economy during the latter portion of the year" said Robert Stan, President and Chief Executive Officer. "Even with the decrease in sales volumes we were able to generate substantial earnings because of high coal prices that were negotiated for the coal year. During fiscal 2009, we increased our cash position, eliminated our revolving and long term debt and made necessary investments in capital assets."

Mr. Stan continued, "We have recently seen some increased demand for our product, as a result we have cancelled any further production curtailments that were previously announced and are revising our projected fiscal 2010 sales volumes to a range of 1.2 to 1.4 million tonnes. Pricing contracts for the current coal year, including spot sales, continue to be settled at much lower prices than last year therefore we are placing a significant emphasis on cost reduction initiatives and productivity improvements throughout all areas of our operations to offset the decline."

"While there remains a level of uncertainty in the metallurgical coal market, we continue to believe that demand will stabilize and it appears early signs of this are beginning to occur as coal imports into China have recently increased. We are aggressively seeking to expand our customer base and pursue spot sales in order to maximize potential sales volumes for fiscal 2010. Given the strength of our balance sheet we believe we are in a position to weather the current economic conditions and at the same time position ourselves for future growth as market conditions improve."



Highlights

As at As at As at
March 31 March 31 March 31
(millions of dollars) 2009 2008 2007
----------------------------------------------------------------------------

Balance Sheet

Cash and cash equivalents 68.0 4.2 4.6
Total assets 259.2 123.5 107.5
Long-term liabilities 16.7 21.5 13.9
Shareholders' equity 228.4 83.6 69.8



(millions of dollars, except
per share amounts) 2009 2008 2007
----------------------------------------------------------------------------
Statement of Net Income (Loss)
and Comprehensive Income (Loss)
Revenue 248.6 146.6 101.3
Cost of sales 126.0 141.3 93.2
Income (loss) from operations 118.8 (13.9) (2.4)
Net income (loss) and
comprehensive income (loss) 106.2 (15.5) (7.0)
Basic net income (loss) per
share 1.18 (0.24) (0.14)
Diluted net income (loss) per
share 1.15 (0.24) (0.14)


(millions of tonnes, except
per tonne amounts) 2009 2008 2007
----------------------------------------------------------------------------
Statistics
Clean coal production (tonnes) 1.31 1.42 0.99
Coal sales (tonnes) 1.06 1.65 1.00
Average sales price (US$/tonne) 210 86 93
Average sales price ($/tonne) 234 89 101
Average cost of sales ($/tonne) 119 86 93
Average cost of production ($/tonne) 86 58 63


Fiscal 2009

Net income in fiscal 2009 was $106.2 million, or $1.18 per basic share ($1.15 per diluted share), compared to a net loss of $15.5 million, or $0.24 per basic and diluted share, in fiscal 2008. Income from operations was $118.8 million in the current year versus a loss from operations of $13.9 million in the comparable period.

Net income in the current fiscal year was significantly higher than the previous fiscal year as coal prices for the coal year commencing April 1, 2008 were settled at record high levels due to supply constraints and a robust economy. However due to production issues during the first part of fiscal 2009, the Corporation had lower than expected clean coal production which led to lower than planned sales volumes. Production was improving as the fiscal year progressed however the economy slowed dramatically during the third quarter and lower sales volumes forced the Corporation to reduce production. Despite the lower sales volumes, the sales price remained high due to the contractual agreements that were in place for the coal year. The strength of the economy during the first portion of fiscal 2009 led to higher costs for the Corporation as there were significant increases in mining input costs. Certain mining costs stabilized or subsided late in the fiscal year and some productivity improvements were achieved.

Revenue

Fiscal 2009 sales volumes were 1.06 million tonnes, a 36% decrease from 1.65 million tonnes sold in the prior year. The decline in sales volumes was primarily caused by a slowdown in the global economy during the second half of the fiscal year which caused a decrease in the demand for steel, and subsequently a reduced demand for metallurgical coal. Also contributing to the lower sales volumes was lower than planned production during the first part of the fiscal year due to an extended period of development in the underground mine and issues with the deployment of people and equipment in the surface mine. The lower than planned production resulted in a decrease in sales during this period as there was a temporary shortage of available coal.

The average sales price achieved in the current fiscal year was US$210 per tonne representing a 144% increase over US$86 per tonne last fiscal year. The increase in price was primarily due to higher contractual sales prices for the coal year commencing April 1, 2008. At the time of negotiations, the economy was strong and there was a high demand for steel and subsequently metallurgical coal. At the same time, there were concerns about the supply of metallurgical coal as other coal producers around the world encountered production issues primarily caused by flooding in Australia. As a result, all of the product sold during fiscal 2009 was hard coking coal and ranged in price from US$300 per tonne, for current coal year sales, to US$81 per tonne for carryover sales from the prior year. The product sales mix in fiscal 2008 included hard coking coal sales (87%) at an average price of US$89 per tonne and Pulverized Coal Injection (PCI) sales (13%) at an average price of US$68 per tonne.

In fiscal 2009, the stronger US dollar (USD) in relation to the Canadian dollar had a positive impact on the Corporation's financial results. On average, US$1 equaled Cdn$1.11 in the current fiscal year compared to fiscal 2008 during which US$1 equaled Cdn$1.03. The average Canadian sales price for USD denominated sales was $234 per tonne in the current year compared to $89 per tonne in the comparable period.

Revenue in fiscal 2009 increased 70% to $248.6 million (fiscal 2008 - $146.6 million). The increase in revenue was predominantly a result of higher USD sales prices, marginally aided by the stronger USD, partially offset by lower sales volumes.

Production Costs and Cost of Sales

The average clean coal production cost for the current year was $86 per tonne, compared to $58 per tonne last fiscal year. The increase was caused by a higher strip ratio in the surface mine, a lower plant yield and higher mining input costs, especially for diesel fuel and contract labour. Additionally, the underground mine spent a higher proportion of time in development compared to fiscal 2008, which temporarily decreased coal production, increasing the unit cost.

In the current fiscal year, cost of sales were $126.0 million ($119 per tonne), versus $141.3 million ($86 per tonne) in the prior year. The cost of sales consisted of cost of product sold of $90.4 million ($85 per tonne) and distribution costs of $35.6 million ($34 per tonne). In the prior period, cost of product sold was $96.2 million ($59 per tonne) and the distribution costs were $45.1 million ($27 per tonne).

The increase in the unit cost of product sold in the current fiscal year was a result of lower sales volumes combined with lower productivity in the underground mine, a lower plant yield and a higher surface mine strip ratio. In addition, mining costs were considerably higher during fiscal 2009. During the current year a number of contractual service arrangements were terminated and replaced with Grande Cache Coal employees and the pre-existing coal haul contractor was replaced with a new contractor. These measures resulted in additional transition costs but are expected to reduce operating costs going forward.

The increase in distribution costs in the current fiscal year was primarily caused by the inclusion of fuel surcharges in the rail rates due to higher diesel fuel prices. Additionally, there were a higher proportion of shipments to eastern North America, which carry higher rail rates than shipments to port in western Canada. Also contributing to the higher distribution costs, but to a lesser extent, was an increase in demurrage charges due to a temporary shortage of available coal in the first few months of the fiscal year.

Other Operating Expenses

General and administrative expenses during the current fiscal year were $7.1 million, down from $7.2 million in fiscal 2008. Included in these expenses were head office administrative and marketing charges of $6.1 million (fiscal 2008 - $5.6 million) and non-cash charges for stock-based compensation of $1.0 million (fiscal 2008 - $1.6 million).

The Corporation recorded a foreign exchange gain of $12.5 million in fiscal 2009 due to a significant weakening of the Canadian dollar against the US dollar. In the prior fiscal year, there was a foreign exchange loss of $1.9 million as the Canadian dollar strengthened in relation to the US dollar.

Depreciation, depletion and accretion expenses for the fiscal year were $9.3 million, compared to $10.1 million in fiscal 2008. The decrease was a result of lower coal production levels, as well as the change in the value of depreciation and depletion included in inventory, offset by the addition of productive capital assets.

Other Income (Expenses)

Interest and other income in fiscal 2009 was $1.3 million versus $1.1 million in the prior year and consisted primarily of interest earned on restricted cash, interest earned on short term investments and access fees charged for the use of roads belonging to the Corporation.

Interest and other expenses were $0.6 million in the current fiscal year, down from $1.7 million in the prior period due to a reduction of interest being paid on the revolving and long term debt.

Taxes

The Corporation incurred tax expenses of $13.3 million during fiscal 2009, compared to $1.0 million in fiscal 2008. Taxes were comprised of a current tax expense of $2.1 million for provincial Crown royalties as well as a future income tax expense of $11.2 million. In the prior fiscal year the Corporation did not incur any income taxes as it was not profitable, therefore the entire tax expense related to provincial Crown royalties, which was comparably lower due to the lower sales price during the year.

Liquidity and Capital Resources

The Corporation's cash position increased $63.8 million during fiscal 2009 resulting in cash and cash equivalents of $68.0 million at March 31, 2009. In the prior fiscal year, the Corporation's cash position decreased $0.4 million to $4.2 million.

Operating activities produced cash of $86.0 million during fiscal 2009 compared to $10.6 million in fiscal 2008. The increase in cash generation in the current year was primarily related to the net income of $106.2 million due to the substantial increase in the price of coal. In the prior year, the Corporation's $15.5 million net loss was largely a result of reduced revenue due to lower contract sales prices and a weaker US dollar.

Financing activities during the current fiscal year included the exercise of warrants for cash proceeds of $17.4 million and the exercise of common share options for cash proceeds of $3.0 million. The Corporation also made net repayments on a revolving debt facility of $5.0 million bringing the balance to nil. The revolving debt facility expired on April 1, 2009.

In June 2009, the Corporation entered into an agreement with HSBC Bank Canada to provide the Corporation with a credit facility up to $25 million and the ability to enter into foreign exchange hedging arrangements.

Investing activities led to a cash decrease of $45.1 million in fiscal 2009, compared to a decrease of $34.6 million in the prior fiscal year. Capital additions in fiscal 2009 were $45.2 million (fiscal 2008 - $38.8 million) and consisted of the addition of equipment totaling $36.9 million (fiscal 2008 - $37.4 million) and the development of mineral properties of $8.3 million (fiscal 2008 - $1.4 million).

In order to ensure the continued availability of, and access to, facilities and services to meet operational requirements, the Corporation has entered into multi-year agreements for the lease of coal properties, light vehicles, equipment, buildings and office space.

The Corporation entered into an agreement with a property and development company to purchase condominium units for employees. At March 31, 2009, $4.2 million remained owing on this commitment. Subsequent to March 31, 2009 the Corporation made all remaining payments required to purchase the condominium units.

The Corporation entered into various purchase commitments for mining equipment. At March 31, 2009, remaining payments owing on the mining equipment totalled $43.1 million, which included USD commitments of US$29.0 million. The Corporation intends to enter into lease financing arrangements denominated in US dollars to acquire this new mining equipment.



Fiscal 2009 Fourth Quarter

Three months ended
March 31
(millions of dollars, except per share -----------------------------
amounts) 2009 2008
----------------------------------------------------------------------------

Statement of Net Income (Loss) and
Comprehensive Income (Loss)
Revenue 38.7 39.9
Cost of sales 10.2 35.9
Income (loss) from operations 25.7 (0.7)
Net income (loss) and comprehensive income
(loss) 18.9 (1.2)
Basic and diluted net income (loss) per
share 0.20 (0.02)


Three months ended
March 31
----------------------------
(millions of tonnes, except per tonne amounts) 2009 2008
----------------------------------------------------------------------------

Statistics
Clean coal production (tonnes) 0.26 0.37
Coal sales (tonnes) 0.11 0.42
Average sales price (US$/tonne) 292 94
Average sales price ($/tonne) 364 95
Average cost of sales ($/tonne) 96 86
Average cost of production ($/tonne) 82 63


In the fourth quarter of fiscal 2009, Grande Cache Coal earned net income of $18.9 million, in contrast to a net loss of $1.2 million in the same period last fiscal year. Income from operations was $25.7 million during the quarter compared to a loss from operations of $0.7 million in the fourth quarter of fiscal 2008.

During the fourth quarter, Grande Cache Coal sold 0.11 million tonnes of coal at an average price of $364 per tonne (US$292 per tonne) generating revenue of $38.7 million. In the same period of fiscal 2008 the Corporation sold 0.42 million tonnes of coal at an average price of $95 per tonne (US$94 per tonne) generating revenue of $39.9 million. Overall, fourth quarter revenue remained fairly stable compared to the same period last fiscal year as the substantial increase in the average sales price and the favorable impact of the exchange rate were offset by a considerable reduction in sales volumes. The decrease in sales volumes in the fourth quarter was due to the downturn in the global markets which led to a decrease in the demand for steel and a resulting decrease in the demand for metallurgical coal.

The average cost of production during the fourth quarter increased to $82 per tonne (fiscal 2008 - $63 per tonne) largely due to a 30% decrease in clean coal production volumes, which was in response to a decline in the demand for metallurgical coal. Additionally, development work continued in the underground mine leading to a lower productivity, the strip ratio in the surface mine was higher and the plant yield was lower. In response to the decreased demand for metallurgical coal and resulting lower production requirements, the Corporation reduced its workforce at the mine site by approximately 100 employees and contractors.

Cost of sales in the fourth quarter was $96 per tonne, up from $86 per tonne in the same period last fiscal year. The cost of sales consisted of cost of product sold of $72 per tonne (fiscal 2008 - $59 per tonne) and distribution costs of $24 per tonne (fiscal 2008 - $27 per tonne). The cost of product sold was higher than the comparable period largely due to a decline in sales volumes. During the fourth quarter the Corporation achieved some productivity improvements in the surface mine and benefited from cost saving measures implemented in previous quarters as well as the stabilization and in some cases, decreases of certain mining input costs. Distribution costs were lower in the fourth quarter as previously accrued demurrage charges were settled at lesser amounts.



Summary of Quarterly Results

(millions, except per
unit amounts) 2009 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Clean coal production
(tonnes) 1.31 0.26 0.35 0.43 0.27
Coal sales (tonnes) 1.06 0.11 0.36 0.34 0.25
Average sales price
(US$/tonne) 210 292 213 214 165
Average sales price
($/tonne) 234 364 254 223 166
Average cost of sales
($/tonne) 119 96 128 104 135
Average cost of
production ($/tonne) 86 82 97 70 100

Revenue ($) 248.6 38.7 91.9 76.6 41.4
Income from operations ($) 118.8 25.7 51.7 37.4 4.0
Net income ($) 106.2 18.9 36.8 47.1 3.4
Basic net income per
share ($) 1.18 0.20 0.38 0.52 0.04
Diluted net income per
share ($) 1.15 0.20 0.38 0.51 0.04


(millions, except per
unit amounts) 2008 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Clean coal production
(tonnes) 1.42 0.37 0.35 0.37 0.33
Coal sales (tonnes) 1.65 0.42 0.44 0.36 0.43
Average sales price
(US$/tonne) 86 94 87 81 82
Average sales price
($/tonne) 89 95 85 85 89
Average cost of sales
($/tonne) 86 86 85 91 81
Average cost of
production ($/tonne) 58 63 50 62 55

Revenue ($) 146.6 39.9 37.7 30.8 38.2
Loss from operations ($) (13.9) (0.7) (3.0) (8.5) (1.7)
Net loss ($) (15.5) (1.2) (3.4) (8.8) (2.0)
Basic and diluted net
loss per share ($) (0.24) (0.02) (0.05) (0.14) (0.04)


The Corporation earned net income in all four quarters of fiscal 2009 compared to net losses in all quarters of fiscal 2008. The primary reason for the improvement in earnings relates to an increase in the USD price of coal. Coal price contracts are settled on a coal year, which coincides with the Corporation's fiscal year, and record high prices were contracted for the coal year commencing April 1, 2008. During the first quarter of fiscal 2009 the Corporation sold a portion of carryover tonnage from the previous coal year, which was settled at lower prices. In addition to the increase in the USD coal price, the USD began to strengthen in relation to the Canadian dollar during the second quarter of fiscal 2009, thus having an additional positive impact on the Corporation's revenue. The average cost of sales increased in fiscal 2009 because of a decrease in sales volumes, as well as lower productivity from the underground mine due to additional development, a higher strip ratio in the surface mine and a lower plant yield. In addition, mining costs were higher coming into fiscal 2009 as a strong economy drove up the cost of certain mining inputs, most notably diesel fuel and contract labour.

Outlook

Metallurgical Coal Markets

Metallurgical coal prices are expected to remain volatile for the near future as a result of market uncertainties over the supply and demand of this commodity due to the current state of the world economies and the ongoing global credit and liquidity concerns.

The Corporation anticipates sales volumes of 1.2 to 1.4 million tonnes in fiscal 2010, a significant amount of which has already been contracted. The Corporation is continuing to aggressively pursue new markets and spot sales, and will also maintain relations with existing customers should their coal requirements change. Anticipated annual coal sales volumes are contingent upon market demand and adequate production levels. Coal sales for the first quarter of fiscal 2010 are expected to be approximately 0.40 million tonnes.

The average sales price for fiscal 2010 is expected to be in the range of US$115 to US$125 per tonne, which includes carryover shipments from the prior coal year, spot sales and contract sales negotiated for the new coal year that commenced on April 1, 2009. The expected average sales price may vary depending on the Corporation's ability to successfully negotiate additional spot sales or sales within new markets.

Operations

Grande Cache Coal intends to manage production levels throughout fiscal 2010 to meet the anticipated demand for coal. While it is expected that the average cost of sales will vary from quarter to quarter, the average cost of sales for fiscal 2010 is anticipated to be in the range of $110 to $115 per tonne. The Corporation will continue to focus on productivity improvements and cost control measures throughout the operations. An escalation of mining input costs or lower than expected production levels would have a negative impact on the anticipated cost of sales.

Capital Expenditures

The Corporation anticipates capital expenditures will total approximately $67 million in fiscal 2010. This includes approximately $20 million related to the development of the No. 8 surface mine and the No. 12B2 underground mine, subject to receipt of pending regulatory approval for both mines. The anticipated capital expenditures also include the acquisition of new surface mining equipment required for the development of the No. 8 surface mine totaling approximately $28 million. The Corporation intends to enter into lease financing arrangements denominated in US dollars to acquire this new mining equipment. This equipment was ordered in 2008 for delivery early in 2009 and was subsequently deferred to the fall of 2009. Fiscal 2010 capital expenditures are expected to be funded by existing cash, cash flow from operations and equipment leases.

Foreign Exchange

The recent strengthening of the Canadian dollar against the US dollar is expected to have a negative impact on Grande Cache Coal's fiscal 2010 first quarter financial results. Substantially all of the Corporation's coal sales occur in US dollars and the Corporation has not entered into hedges to mitigate the effect of a weaker US dollar. Sustained or additional strengthening of the Canadian dollar, without hedges, would continue to have a negative impact on Grande Cache Coal's financial results.



Grande Cache Coal Corporation
Consolidated Balance Sheets
(thousands of Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

As at As at
March 31 March 31
2009 2008
----------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 68,035 $ 4,238
Restricted cash 8,440 6,528
Accounts receivable 15,153 20,171
Inventory 49,800 10,477
Prepaid expenses 965 1,084
----------------------------
142,393 42,498

Deposit for future reclamation expenditures 82 82
Capital assets 116,707 80,937
----------------------------
$ 259,182 $ 123,517
----------------------------
----------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 13,130 $ 13,484
Future income taxes 886 -
Revolving debt - 5,000
----------------------------
14,016 18,484

Long term debt - 17,382
Asset retirement obligations 6,429 4,020
Capital lease obligations - 52
Future income taxes 10,298 -
----------------------------
30,743 39,938
----------------------------

Shareholders' equity
Share capital 194,541 154,676
Equity portion of convertible debenture - 118
Contributed surplus 3,362 4,468
Retained earnings (deficit) 30,536 (75,683)
----------------------------
228,439 83,579
----------------------------

$ 259,182 $ 123,517
----------------------------
----------------------------


Grande Cache Coal Corporation
Consolidated Statements of Net Income (Loss), Comprehensive Income (Loss)
and Retained Earnings (Deficit)
(thousands of Canadian dollars, except per share amounts)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Three months ended Twelve months ended
March 31 March 31
-----------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------

Revenue $ 38,704 $ 39,944 $248,628 $146,579

Expenses
Cost of product sold 7,675 24,861 90,428 96,246
Distribution 2,515 11,059 35,548 45,081
General and administrative 2,010 2,593 7,086 7,205
Foreign exchange (gain) loss (1,249) (119) (12,535) 1,884
Depreciation, depletion and
accretion 2,012 2,241 9,281 10,057
-----------------------------------------
12,963 40,636 129,808 160,473
-----------------------------------------

Income (loss) from operations 25,741 (692) 118,820 (13,894)

Other income (expenses)
Interest and other income 679 193 1,290 1,123
Interest and other expenses (45) (400) (574) (1,672)
-----------------------------------------

Income (loss) before taxes 26,375 (899) 119,536 (14,443)

Taxes
Current tax expense 8,469 (289) (2,133) (1,015)
Future income taxes expense (15,850) - (11,184) -
-----------------------------------------

Net income (loss) and comprehensive
income (loss) 18,994 (1,188) 106,219 (15,458)

Retained earnings (deficit),
beginning of period 11,542 (74,495) (75,683) (60,225)
-----------------------------------------

Retained earnings (deficit), end of
period $ 30,536 $(75,683) $ 30,536 $(75,683)
-----------------------------------------
-----------------------------------------

Net income (loss) per share
Basic $ 0.20 $ (0.02) $ 1.18 $ (0.24)
Diluted $ 0.20 $ (0.02) $ 1.15 $ (0.24)


Grande Cache Coal Corporation
Consolidated Statements of Cash Flows
(thousands of Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Three months ended Twelve months ended
March 31 March 31
-----------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
Cash provided by (used for)

Operating activities
Net Income (loss) and
comprehensive income (loss) $ 18,994 $ (1,188) $106,219 $(15,458)
Items not affecting cash
Stock-based compensation 293 667 952 1,575
Unrealized foreign exchange (gain)
loss (937) 131 (7,646) 1,433
Future income taxes 15,850 - 11,184 -
Depreciation, depletion and
accretion 2,012 2,241 9,281 10,057
Settlement of asset retirement
obligations (1) - (147) (19)
-----------------------------------------
36,211 1,851 119,843 (2,412)
Net change in non-cash working
capital relating to operating
activities (47,187) (811) (33,834) 13,042
-----------------------------------------
(10,976) 1,040 86,009 10,630
-----------------------------------------

Financing activities
Proceeds on exercise of warrants - 1,377 17,354 1,377
Proceeds on exercise of options 7 200 2,955 200
Repayment on revolving debt - - (5,000) (10,000)
Proceeds on long term debt - 7,500 - 7,500
Proceeds on issuance of share
capital - - - 27,956
Share issuance costs - - (2) (1,979)
Payment on capital lease
obligations (24) (17) (71) (62)
Net change in non-cash working
capital relating to financing
activities - - - 2
-----------------------------------------
(17) 9,060 15,236 24,994
-----------------------------------------
Investing activities
Additions to mineral properties
and development (4,127) (203) (8,319) (1,380)
Additions to buildings and
equipment (7,171) (9,982) (36,894) (37,369)
Restricted cash - - (1,912) -
Net change in non-cash working
capital relating to investing
activities 1,718 (368) 2,031 4,198
-----------------------------------------
(9,580) (10,553) (45,094) (34,551)
-----------------------------------------
Effect of foreign exchange on cash
and cash equivalents 937 (131) 7,646 (1,449)
-----------------------------------------

Decrease (increase) in cash and
cash equivalents (19,636) (584) 63,797 (376)

Cash and cash equivalents,
beginning of period 87,671 4,822 4,238 4,614
-----------------------------------------

Cash and cash equivalents, end of
period $ 68,035 $ 4,238 $ 68,035 $ 4,238
-----------------------------------------
-----------------------------------------


Grande Cache Coal is an Alberta based metallurgical coal mining company whose experienced team of coal professionals are managing a mine that produces metallurgical coal for the steel industry and holds coal leases covering over 22,000 hectares in the Smoky River Coalfield located in west-central Alberta. Grande Cache Coal's common shares are listed on the Toronto Stock Exchange under the trading symbol "GCE".

ADVISORY REGARDING FORWARD-LOOKING STATEMENTS

In the interest of providing Grande Cache Coal's shareholders and potential investors with information regarding Grande Cache Coal, including management's assessment of Grande Cache Coal's future plans and operations, certain statements in this news release are "forward-looking statements" within the meaning of applicable Canadian securities legislation. In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this news release speak only as of the date of this document and are expressly qualified by this cautionary statement.

Specifically, this news release contains forward-looking statements relating to: anticipated sales volumes of metallurgical coal in fiscal 2010; management of coal production in fiscal 2010; future development activities and related capital expenditures; our capital expenditure program for fiscal 2010; and funding sources for our capital program.

These forward-looking statements are based on certain key assumptions regarding, among other things: no material disruption in production; no material variation in anticipated coal sales volumes; no material variations in markets and pricing of metallurgical coal other than anticipated variations; continued availability of and no material disruption in rail service and port facilities; no material delays in the current timing for completion of ongoing projects; financing will be available on terms favourable to the Corporation; no material variation in historical coal purchasing practises of customers; coal sales contracts will be entered into with new customers; parties execute and deliver contracts currently under negotiation; and no material variations in the current regulatory environment. The reader is cautioned that such assumptions, although considered reasonable by Grande Cache Coal at the time of preparation, may prove to be incorrect.

Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: changes in general economic, market and business conditions; uncertainties associated with estimating the quantity and quality of coal reserves and resources; commodity prices, currency exchange rates, the availability of credit facilities for capital expenditure requirements, debt service requirements; dependence on a single rail system; changes to legislation; liabilities inherent in coal mine development and production; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; geological, mining and processing technical problems; ability to obtain required mine licenses, mine permits and regulatory approvals required to proceed with mining and coal processing operations; ability to comply with current and future environmental and other laws; actions by governmental or regulatory authorities including increasing taxes and changes in other regulations; and the occurrence of unexpected events involved in coal mine development and production; and other factors, many of which are beyond the control of Grande Cache Coal. These risk factors are discussed in Grande Cache Coal's Annual Information Form for the fiscal year ended March 31, 2008, as filed with Canadian securities regulatory authorities.

There is no representation by Grande Cache Coal that actual results achieved during the forecast period will be the same in whole or in part as those forecast and Grande Cache Coal does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • Grande Cache Coal Corporation
    Ian Bootle
    Vice President, Finance and Chief Financial Officer
    (403) 543-7070
    (403) 543-7092 (FAX)
    Website: www.gccoal.com