Grande Cache Coal (GCC) produces metallurgical coal for the steel industry and holds 14 coal leases covering over 22,000 hectares containing over 300 million tonnes of coal resources in the Smoky River Coalfield. GCC operates both surface and underground mining operations, which provide coal to a central processing and rail load out facility. Mining is currently underway at the No. 8 Pit and the No. 7 Underground Operations. Mining was completed at the No. 12 South B2 Pit in June 2010. Underground operations will progressively transfer to No. 12 South B2 Underground Operations commencing in August of 2011. In addition, Grande Cache Coal holds additional coal leases which have exploration and development potential. GCC maintains ongoing exploration programs designed to add additional reserves to the existing resource base, which would increase saleable coal production in the medium term.

Coal Leases

GCC is committed to sustainable development, which consists of developing coal resources in an orderly and long-term manner aimed at sustaining the community and GCC. The GCC project area is served by an existing Canadian National Railway (CN) line, which connects with the main lines of CN, allowing access to the three major coal export terminals in British Columbia and to the Great Lakes.

The GCC coal leases are in the Inner Foothills of the Rocky Mountains, which are characterized by exposures of Upper Jurassic and Cretaceous clastic rocks. Coal bearing strata within the Smoky River Coalfield are comprised of interbedded sandstone, siltstone, mudstone, carbonaceous shales and coal. Mineable coal seams occur in the Grande Cache member of the Gates Formation. Stratigraphic units that outcrop in the vicinity are predominantly from the Nikanassin Formation and the Luscar Group. The Fort St. John Group, which overlies the Luscar Group, is present in the northern and eastern parts of the project area.

Climate within the project area is characterized by relatively long, cold, winters and moderate to warm summers. Average annual summer and winter temperatures are 10 degrees Celsius and -15 degrees Celsius, respectively. Frost can occur throughout the year and snow accumulates from late October to May at higher elevations. Precipitation ranges between 800 to 1,100 millimeters annually.