Coalspur & CN Sign Definitive Rail Transportation Agreement
Alberta, Mar 27, 2013 AEST (ABN Newswire) - Coalspur Mines Limited (
ASX:CPL) (TSE:CPT) is pleased to announce that it has reached a definitive agreement with CN (TSE:CNR) (NYSE:CNI) for the transportation of thermal coal from its Vista Coal Project ("Vista") to Ridley Terminals Inc., as well as final agreement with CN regarding the construction of the railway line to serve the mine.
Definitive Rail Transportation Agreement
The Agreement with CN is for a seven-year period, effective from 1 January 2013 and extending through to 31 December 2019. Pursuant to the terms of the Agreement, as with most western Canadian coal producers, CN will supply the equipment to carry Coalspur's coal to tidewater. The key elements of the Agreement are consistent with the terms announced by Coalspur on 14 December 2012 and include transportation of up to 12 million tonnes per annum ("Mtpa") of coal; and defined rates with agreed escalation and fuel surcharge calculations.
As a result of signing this Agreement, Coalspur is able to confirm that its logistics costs for Vista will be as outlined in the Coalspur press release date 20 December 2012. Total FOB operating costs for Vista are projected to be C$56.98 per tonne in the first five years of production, C$59.55 per tonne in the first ten years of production and C$66.40 per tonne over the life of the mine.
Rail Line Construction Agreement
Coalspur and CN have also signed an agreement which will govern the construction of a 6.5km long railway line providing CN access to Coalspur's loading site. The rail line will enable Coalspur to load the entire train in one continuous load. Subject to regulatory approval construction activity is expected to begin in Q3 2013 and be completed in early 2015. CN will ensure the rail line meets their design and construction specifications.
"We are very pleased to have finalized these contracts with CN," said Gill Winckler, Coalspur President and CEO. "The agreements provide further clarity and stability over our operating costs in the initial years of mining at Vista. Rail and port logistics costs account for approximately 50% of Coalspur's FOB cash costs, which are now under contracted rates.
"Coalspur continues to deliver on its milestones. We are in the final stages of detailed negotiations for the funding arrangements for Vista and remain engaged with regulatory agencies so that we can secure regulatory approvals for Vista Phase 1, enabling us to commence construction in the second quarter of 2013."
For a table of JORC / 43-101 Compliant resources, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-CPL-629851.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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