Quarterly Activities and Cashflow Reports
Perth, July 31, 2012 AEST (ABN Newswire) - Coalspur Mines Limited (
ASX:CPL) (TSE:CPT) is pleased to present its quarterly report for the three months ending 30 June 2012.
Highlights:
- Ms Gill Winckler, a former senior BHP Billiton executive, was appointed President and CEO following the resignation of Mr Gene Wusaty. Ms Winckler's previous roles include Chief Development Officer of the Energy Coal division where she was responsible for BHP Billiton's thermal coal business development activities and project growth pipeline around the world (announced 30 May 2012).
- Completed a production optimization study on Vista which resulted in an increase in the forecast annual marketable coal production capacity to 12.0Mtpa from 11.2Mtpa (announced 26 April 2012).
- Submitted the regulatory applications necessary to construct, operate and commission Phase 1 of Vista. Approval of these applications is targeted for early 2013 with construction on Vista to commence thereafter (announced 2 May 2012).
- Acquired an additional 14,432 hectares of coal bearing leases in the Hinton region for C$13 million which are adjacent to the northeast boundary of Vista ("Vista Extension") (announced 30 April 2012).
- Increased the Company's Measured and Indicated Coal Resources to 1.7 Billion tonnes ("Bt") following:
- an initial Coal Resource estimate on Vista Extension, comprising 173.7 million tonnes ("Mt") in the Measured and Indicated Mineral Resource categories and 969.3Mt in the Inferred Mineral Resource category (announced 9 May 2012); and
- a substantial increase in the Vista South Coal Project ("Vista South") Measured and Indicated Coal Resources to 470.5Mt and an increase in the Inferred Coal Resource to 604.5Mt (announced 23 May 2012).
- The Company is continuing its process to identify strategic investment partners as part of the financing strategy to fund Phase 1 of Vista. Original expectations were to finalize this process by 30 June 2012, however, uncertain global markets and weak short-term coal prices have resulted in this process taking longer than anticipated.
Subsequent to quarter end, the Company:
- Completed a scoping study on Vista Extension which confirms the potential for an economic and technically feasible underground longwall mine (announced 30 July 2012).
CANADIAN COAL PROJECTS
Vista Coal Project
Optimization Study on Vista Increases Production to 12.0Mtpa
On 26 April 2012 Coalspur announced the results of an optimization study on Vista which resulted in the increase in forecast annual marketable coal production capacity by 0.8Mtpa to 12.0Mtpa.
The optimization study was completed by CPG Resources - QCC Pty Ltd ("CPG") as part of the ongoing engineering work on Vista. The optimization study included an analysis of the relationship between the clean coal production potential from Vista compared to the annual plant operating hours. The study concluded that the coal process plant is capable of operating at approximately 7,300 hours per year (83% net effective utilization) as compared to 6,800 hours per year (78% net effective utilization) which was estimated in the Feasibility Study. The increase in operating hours is possible through enhanced scheduling between mining operations and the coal process plant and from optimized equipment selection.
Submission of Regulatory Applications for Phase 1 of Vista
Coalspur submitted the regulatory applications for Phase 1 of Vista required for the construction, operation, and commissioning of Phase 1 of Vista, allowing for production of up to 5.0Mtpa for 20 years. These applications include an Environmental Impact Assessment and regulatory applications under the Coal Conservation Act, Alberta Environmental Enhancement Act and Public Lands Act. Coalspur expects to receive approval of these regulatory applications in early 2013.
Following submission of the Phase 1 regulatory applications, Coalspur commenced preparing for the regulatory applications for Phase 2 of Vista, which will expand the capacity of Vista from 5.0Mtpa to 12.0Mtpa. Coalspur is planning to submit the Phase 2 applications in 2013. This two-phase regulatory approach follows the schedule outlined in the Vista Feasibility Study which utilizes the Mine Permit and Coal Processing Plant Approval obtained from the Alberta Government in May 2011.
Vista South Coal Project
Vista South Resource Upgrade
During the quarter the Company announced that, following a recent drilling program, it had substantially increased the Vista South Measured and Indicated Coal Resources to 470.5Mt and upgraded the Inferred Coal Resource to 604.5Mt. The preparation of the Coal Resource estimate was undertaken by Moose Mountain Technical Services in accordance with the JORC Code (2004) and National Instrument 43-101.
Vista Extension
Acquisition, Initial Resource Estimate, and Scoping Study Completion
On 30 April 2012 the Company acquired Vista Extension for $13 million in cash. Vista Extension covers 14,432 hectares of coal bearing leases adjacent to Vista and is located on the northeast boundary of Vista. During the quarter the Company announced an initial Measured and Indicated Coal Resource of 173.7Mt and a further 969.3Mt in the Inferred Resource category on Vista Extension. The Company's Coal Resource estimates for Vista, Vista South, and Vista Extension are outlined in Table 2 below.
On 30 July 2012 the Company announced the results of a scoping study for an underground longwall mine on Vista Extension. Coalspur believes Vista Extension could provide the Company with a third phase of growth, leveraging off Vista's coal mining, handling and processing infrastructure and the rail and port capacity that has already been secured. Further details of the scoping study on Vista Extension are contained in the news release dated 30 July 2012.
CORPORATE
Key Management Appointments
On 30 May 2012, the Company announced the appointment of Ms Gill Winckler as President and CEO and a member of the Board, effective 1 July 2012, following the resignation of Mr Gene Wusaty.
Gill Winckler joins Coalspur from BHP Billiton, where she worked for the past 15 years in a number of senior executive roles. Gill was Chief Development Officer of the Energy Coal division where she was responsible for BHP Billiton's thermal coal business development activities and project growth pipeline around the world. During her tenure BHP Billiton significantly increased its thermal coal presence in Australia and also initiated and advanced various expansion projects in South Africa.
Most recently Gill was Vice President of Strategy and Development for BHP Billiton's Diamonds and Specialty Products division based in Canada. In this role she was instrumental in advancing the company's potash growth program in Canada, specifically delivering two successful market acquisitions and multiple exploration programs, as well as progressing projects towards Feasibility Study and securing the required port and rail options.
Gill is a Chartered Accountant and holds a B Comm (Hons) and a B.Sc.
During the quarter Gene Wusaty resigned from the Board and as Managing Director and CEO effective 30 June 2012. Coalspur wishes to sincerely thank Mr Wusaty for his invaluable contributions to the Company having done an outstanding job in building Coalspur from a junior explorer into a major thermal coal development company on the cusp of production. The Company wishes him well in his future endeavours.
Credit Facility
On 16 May 2012, the Company drew C$20 million against its C$70 million credit facility with Highland Park to make scheduled deposits against port capacity, and provide for continued exploration and development of its coal projects. The Company has an additional C$50 million available to it under the facility.
Potential Strategic Investment and Funding
The Company continues to advance its process of identifying strategic investment partners which will form part of the financing strategy to fund Phase 1 of Vista (the "Process"). The Process may also include long term marketing arrangements for the purchase of coal from Vista. The Company has concluded trips to Japan, Korea and China visiting with potential joint venture partners / off-takers.
The Company had expected to complete the Process by 30 June 2012, however, uncertain global markets and weak short-term coal prices have resulted in this process taking longer than anticipated.
Coalspur has also commenced discussions with financial institutions and coal trading entities to evaluate options for the balance of the capital required for Phase 1 of Vista. The Company anticipates this funding to comprise a mix of traditional debt financing and funding linked to coal marketing arrangements.
Going Forward
The Company is currently focusing on the financing, regulatory and technical efforts necessary to commence construction on Vista. Activities in the coming months are expected to include:
- Continue discussions with potential strategic investment partners;
- Progress the regulatory applications for Phase 1 of Vista;
- Progress the detailed design engineering on Vista;
- Progress negotiations with CN on the definitive transportation agreement; and
- Continue discussions with mining contractors who may be utilized during the construction phase and the initial years of mining at Vista.
To view the complete Coalspur quarterly report, please click the link below:
http://media.abnnewswire.net/media/en/docs/ASX-CPL-598265.pdf
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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