Coalspur Enters into C$70 Million Facility Agreement
Alberta, Feb 27, 2012 AEST (ABN Newswire) - Coalspur Mines Limited (
ASX:CPL) (TSE:CPT) is pleased to announce that it has entered into a binding agreement with the Highland Park Group for a C$70 million loan facility ("Facility Agreement"). The purpose of the Facility Agreement is to provide the Company with substantial capital resources to commence detailed engineering on its flagship Vista Coal Project ("Vista") and pursue further business development opportunities.
Commenting on the agreement, Managing Director and CEO, Gene Wusaty said "We are extremely happy to have concluded this agreement in the current market. The Facility Agreement will significantly strengthen the Company's financial position as we will have access to approximately C$100 million in cash and credit lines. The Company is now positioned to fund all anticipated activities at Vista through to the start of construction in early 2013. We expect these activities to have a positive impact on shareholder value during 2012. The agreement underlines the Highland Park Group's commitment to the Company and provides Coalspur with significant flexibility to assemble an optimal funding solution for the remaining capital requirements of Vista."
Coalspur anticipates that detailed engineering on Vista will commence in the coming weeks with completion scheduled for early 2013. In addition, Coalspur is focused on several additional initiatives as it prepares for construction on Vista. These initiatives include progressing project financing discussions with potential off-take partners, evaluating the utilization of a mining contractor and submitting the final regulatory applications required to begin construction.
The Facility Agreement will be subject to the necessary shareholder and TSX approvals.
Facility Agreement
The key terms and conditions of the Facility Agreement are as follows:
1. The facility is for up to C$70 million;
2. Interest is payable every 180 days and bears an annual interest rate of 6.25%;
3. Facility type - secured;
4. Drawdown period - 12 months from the satisfaction of the conditions precedent;
5. Repayment period - 24 months with from first draw down;
6. Coalspur may repay the facility early, at its discretion, with no penalty;
7. Subject to shareholder approval Coalspur will issue the Highland Park Group 8 million unlisted options with an exercise price equal to the volume weighted average market price
for the 5 trading days prior to execution of the Facility Agreement expiring 3 years from the date of issue and 7 million unlisted options (which will vest at the rate of 1 million options on the draw down date of each C$10 million tranche) at an exercise price equal to the greater of 80% of the volume weighted average market price for the 5 trading days prior to execution of the Facility Agreement and 120% of the volume weighted average market price for the 5 trading days prior to each vesting date and each tranche of 1 million options expiring 3 years from their respective vesting date. Unvested options cannot be exercised and will expire on repayment or termination of the Facility Agreement.
About Coalspur Mines Limited
Coalspur Mines Limited (ASX:CPL) (TSE:CPT) is a coal development company with approximately 55,000 hectares of coal leases located within the Hinton region of Alberta, Canada. Coalspur's flagship project is Vista, which covers approximately 10,000 hectares and provides a large scale, surface mineable, thermal coal development. Vista is located adjacent to CN Rail's main line, which is suitable for the transport of coal to deepwater ports on Canada's west coast. Coalspur has secured a port allocation agreement with Ridley Terminals Inc., which is essential to the logistics supply chain necessary to export coal from Vista to the growing demand from the Asia Pacific countries.
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