Compliance Energy, which for years has been developing a Canadian coal mining project, announced March 12 that it has arranged a loan in the principal amount of C$200,000 to its wholly-owned subsidiary, Compliance Coal.
The lender is a director of both Compliance Energy and Compliance Coal. The loan bears interest at rate of 10% per annum calculated monthly and compounded monthly. The loan and all accrued interest will be payable by the borrower to the lender on Dec. 31, 2015. The loan is secured by a security interest over the assets of the borrower. Loan proceeds will be used for working capital.
Compliance Energy had announced on March 4 that Compliance Coal withdrew its application for an Environmental Certificate at the British Columbia Environmental Assessment Office (BCEAO) on March 2 as a result of incorrect information which had been circulating in certain communities regarding its Raven Underground Coal Project. The company said it remains confident that the Raven project will be developed in an environmentally favorable manner and will provide considerable economic and social benefits to the Comox area of Vancouver Island.
The Raven reserve holds a semi–soft coking coal resource that the company has estimated at 72 million tonnes in the measured and indicated category, as well as 59 million tonnes of inferred resources. Its location puts it much nearer to a deep water port than the major surface mines in British Columbia that produce met coal for the Pacific Rim market. In a 2009 pre-application filed at the BCEAO, the company proposed to develop a new underground coal mine with a production capacity of up to 1.88 million tonnes of a combination of raw and clean coal per year. The expected mine life is 17 years.