Grande Cache Coal Corporation

Grande Cache Coal Corporation

October 26, 2006 05:00 ET

Grande Cache Coal Announces Management Changes and Transition to an Owner Operated Surface Mining Fleet

CALGARY, ALBERTA--(CCNMatthews - Oct. 26, 2006) - Grande Cache Coal Corporation (TSX:GCE) ("Grande Cache Coal" or the "Corporation") is pleased to announce that Mr. Lloyd E. Metz has been appointed to the position of Vice President, Operations effective immediately and that Mr. Timothy P. Riordan has been appointed to the position of General Manager, Grande Cache Operations effective November 1, 2006.

Mr. Metz is a Professional Engineer having graduated from the University of Alberta with a degree in Mineral Engineering - Mining. He has over 25 years of coal mining experience in western Canada and has extensive knowledge of mining in mountain conditions. Mr. Metz most recently was the Director, Engineering and Planning for Grande Cache Coal. In his new position, Mr. Metz will be responsible for all aspects of the Corporation's operational and development activities and will report to Robert Stan, President and Chief Executive Officer.

Mr. Riordan is a graduate of the Haileybury School of Mines and obtained a civil engineering degree from Lakehead University. He has over 25 years of open pit and underground mining experience both within Canada and internationally. Mr. Riordan joins Grande Cache Coal from North American Energy Partners where he was Mine Manager responsible for the contract mining operations in the Corporation's No. 12S B2 surface mine. Mr. Riordan will be responsible for the day to day operation of the Corporation's mining and processing activities and will report to Lloyd Metz, Vice President, Operations.

"We are extremely pleased to announce these executive appointments" said Robert Stan, President and Chief Executive Officer. "Lloyd has made an important contribution to our development and we look forward to having Tim join us in this new capacity."

The Corporation also announced the end of its relationship with North American Energy Partners ("NAEP"). Grande Cache Coal hired NAEP on a contract basis to develop infrastructure for its No. 12S B2 surface mine and its No. 7 underground mine and to operate the surface mine through the initial high strip ratio phase of mining. As this stage of operations has been completed, Grande Cache Coal is phasing out NAEP's presence on-site and transitioning to an owner-operated, appropriately-sized surface mining fleet to reduce its production costs.

Grande Cache Coal's underground mining and coal processing activities will not be affected by the change in surface mining activities. The Corporation will be able to comfortably meet its sales commitments for the remainder of the current fiscal year by utilizing the raw coal inventory currently available in the surface mine together with production from its underground mine which remains strong.

Mining operations at the No. 12S B2 surface mine will resume with Grande Cache Coal employees and equipment. The Corporation is currently securing equipment and financing to resume mining operations in the surface mine during the first quarter of its next fiscal year. Capital expenditure requirements for the appropriate mix of new and used equipment will be met through a combination of capital lease and debt financing.

"Mining during the remaining life of the No. 12S B2 surface mine will be at a significantly lower strip ratio than our experience to date. This will allow for a smaller, more cost-effective fleet of mining equipment than the fleet utilized by NAEP" said Mr. Stan. "We thank NAEP for their service and we wish them the best in the future. Lloyd and Tim have worked closely during the past year to improve productivity in the surface mine operations and we anticipate that productivity improvements will continue with an appropriately sized fleet of equipment owned and operated directly by Grande Cache Coal."

Grande Cache Coal is an Alberta based metallurgical coal mining company whose experienced team of coal professionals have developed a sustainable, long-term mining operation to produce metallurgical coal for the steel industry from 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".

This news release contains forward-looking statements, which are based on Grande Cache Coal's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. The forward-looking statements are not guarantees of future performance and undue reliance should not be placed on them. Actual results may differ materially as a result of any number of factors and uncertainties, many of which factors are beyond the Corporation's control. Many of these risks and uncertainties are described in Grande Cache Coal's 2006 annual information form, Grande Cache Coal's management's discussion and analysis and other documents Grande Cache Coal files with the Canadian securities authorities. Grande Cache Coal undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws.

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

Contact Information

  • Grande Cache Coal Corporation
    Anita L. Roncin
    Vice President, Finance and Chief Financial Officer
    (403) 543-7070
    (403) 543-7092 (FAX)