Coalspur Mines Ltd. (ASX:CPL) (TSX:CPT), which is developing the big Vista coal mine project in western Canada, announced March 28 that it has reached a second agreement with Ridley Terminals on terms for the shipment of export thermal coal.
Subject to government approvals for the addition of a fourth stacker/reclaimer at the Ridley terminal, the second agreement provides for 4 million tonnes per year to be supplied from an incremental expansion at Ridley that will increase the terminal’s overall capacity from 25 million tonnes per year to 30 million. This extra expansion is expected to be approved during 2012. Also under the second agreement, Ridley has granted Coalspur an option for an additional 1 million tonnes per year from the current expansion plan.
This follows an earlier agreement with Ridley, announced in October 2011, which entitles Coalspur to 8.5 million tonnes per year of port allocation and contains similar commercial terms. Coalspur now has committed port allocation of 10 million tonnes per year and an option for up to a further 3.5 million tonnes per year.
Gene Wusaty, Managing Director and CEO of Coalspur, said: “This additional port allocation is a significant achievement for Coalspur as it fully satisfies the port requirements for Vista and allows for production optimization at Vista and future development opportunities. We are confident that a portion of the excess port capacity will be utilized through production enhancements at Vista that are currently underway as part of the ongoing engineering. We believe we are in a unique position amongst coal development companies worldwide with our fully committed port allocation at an existing facility and access to underutilized rail capacity.”
Ridley Terminals is a Canadian Federal Crown Corporation with a Pacific Ocean-accessible facility located in Prince Rupert, British Columbia. Ridley Terminals is the most northern deepwater port in North America and has the ability to handle capesize vessels. Current handling capacity is 12 million tonnes per year, which is undergoing a first-phase expansion to 25 million tonnes. The facility is serviced by the Canadian National Railroad.
Coalspur said recently that it has contracted with CWA Engineering for detailed engineering on the Vista project. In conjunction with that work, Coalspur is also in the process of finalizing and submitting the necessary regulatory applications required for construction to begin on the first phase of Vista. It anticipates receiving all regulatory approvals of these applications and to have substantially progressed detailed engineering by the end of the first quarter of 2013.
A feasibility study was completed on Vista in January, which defined a 30-year mine plan with forecast annual production capacity of 11.2 million tonnes per year. Initial development costs for Vista are expected to be about C$860m with an additional C$370m required to reach full capacity.