Coalspur Mines Limited (ASX:CPL) Vista Project Update
Alberta, Mar 30, 2012 AEST (ABN Newswire) - Coalspur Mines Limited (
ASX:CPL) (TSE:CPT) advises that following the successful release of the Feasibility Study relating to its Vista Coal Project ("Vista"), the Company has continued the process, commenced in December 2011, to identify potential strategic investment partners which may provide future funding for the development of Vista and coal marketing arrangements (the "Process"). The Company has not yet made any material decisions in connection with the Process and will issue another news release once there is a material development.
The Process has resulted in a number of potential strategic partners expressing interest in Vista. The Company has shortlisted several parties with which it continues discussions in relation to funding the development of Vista.
The Company has retained a financial advisor to manage the Process and is progressing to finalise the structure of any potential funding transaction. Consistent with its earlier announcements, the recently executed facility agreement with the Highland Park Group provides flexibility for a strategic investor to acquire up to 25% of Vista.
As previously announced, the Company intends to finalise the Process in the quarter ending June 30, 2012.
The Company also advises that, in another funding initiative, it has commenced discussions with a number of mining contractors to evaluate the potential for using their services during the construction phase and the initial years of mining at Vista. The total estimated capital cost for mobile equipment in the Feasibility Study during construction and as production ramp-ups up to 11.2Mtpa is approximately C$335 million. The Company believes that through utilising mining contractors there is potential to reduce these capital costs by approximately C$250-300 million.
The Company believes that the total estimated capital costs for the development of Vista can be reduced by re-investing free cash flow once production commences in 2015. Vista is projected to produce sufficient cash flows in the first phase of development to fund any additional development costs required to reach full capacity of 11.2Mtpa in the second phase of development
With the completion of the Feasibility Study and the additional port allocation recently negotiated at Ridley Terminals Inc., Coalspur is seeking to optimise the production potential of Vista through production enhancements which are currently underway as part of the detailed engineering work.
Coalspur has also recently completed additional exploration drilling on Vista South which included over 40 rotary holes. Coalspur will utilise this newly acquired data in conjunction with previous drill results to complete a resource update which is expected to be available in the quarter ending June 30, 2012.
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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