Coalspur Mines Ltd. (ASX: CPL, TSX: CPT), which has a major coal mining project in the works in Alberta, Canada, announced Feb. 27 that it has entered into a binding agreement with the Highland Park Group for a C$70 million loan facility.
The purpose of the agreement is to provide the company with substantial capital resources to commence detailed engineering on its flagship Vista Coal Project and pursue further business development opportunities.
Coalspur 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 said it anticipates that detailed engineering on the Vista project 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 include 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.
A recent bankable feasibility study on Vista shows it could become a strategic supplier of thermal coal to Asian-Pacific economies. The forecast annual marketable coal production capacity of of this strip operation is 11.2 million tonnes per year, after ramp-up to full production, with a 30-year mine life.