THE CANADIAN PRESS

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VANCOUVER, B.C. - Western Canadian Coal (TSX:WTN) said Friday it has agreed to lend US$36 million to a subsidiary of Cambrian Mining, the company's primary shareholder and future merger partner.

Western Coal said the deal, reached on Wednesday, will help Cambrian Investment Holdings Ltd. repay its debt to a British bank. Cambrian will pay a fee of $600,000 for the loan, which will accrue interest a rate of 12 per cent a year and is still subject to regulatory approval..

Last week, the Vancouver-based miner and Cambrian announced a merger agreement valued at $52 million intended to help both companies weather the global economic turmoil.

Cambrian, a British coal and gold mining company, already owns about 34 per cent of Western Coal's shares.