Corporate and Vista Project Update
Perth, May 30, 2014 AEST (ABN Newswire) - Coalspur Mines Limited ("Coalspur" or "Company") (
ASX:CPL) (TSE:CPT) provides the following update in relation to its progress on the development of the Vista project ("Vista"), ongoing funding discussions and liquidity.
As a thermal coal opportunity, Vista represents excellent development potential with its favorable geology, attractive construction costs and low-cost, open cut mining operations. The project is uniquely positioned given its accessibility to high quality, secured infrastructure and logistics and location within a mining friendly jurisdiction (Alberta, Canada).
Over the past year, the Company has focused on:
- developing a revised and executable construction plan for Vista with first quartile capital efficiency;
- securing an engineering, procurement and construction ("EPC") contract with Forge Group and subsequently transitioning the contract to Sedgman Limited;
- securing First Nations agreements that paved the way for approval of Vista Phase 1 by the Alberta Energy Regulator ("AER") on February 27, 2014; and
- running a competitive mining contractor tender process that will deliver mining costs in line with market guidance.
The Company's ongoing viability and its ability to continue with development work on Vista is subject to it raising additional capital. Given the on-going depressed coal price environment, challenging equity and debt market conditions and the Company's current share price, Coalspur is facing a substantial challenge in its attempts to secure full funding for the development of Vista. In the absence of being able to fully fund Vista, the Company's primary objective is to protect and preserve the value of the Vista asset.
In order to achieve this, the Company continues to engage with EIG Global Energy Partners (the Company's senior secured lender) on its final debt sizing process, along with other strategic and financial sponsors on the potential recapitalization and restructuring of the Company's balance sheet through the injection of short and/or longer term equity and debt.
While these discussions continue, the Company has taken further steps to reduce its cash expenditure and preserve liquidity by reducing the size of its workforce and focusing on critical short term activities. Within this context, the Company continues to progress:
- securing the final licenses and permits for Vista Phase 1;
- finalizing the transition of the EPC contract to Sedgman;
- concluding binding terms with the selected, preferred mining contractor; and
- continuing the process of seeking funding for the development of Vista.
The Company will make further announcements updating the market as and when it is appropriate to do so.
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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