Issue link: http://resourceworld.uberflip.com/i/107613
a u st r a l i a n up date Coalspur Mines developing thermal coal leases in Alberta by Greg Barns While Alberta is attracting billions of dollars in investment, courtesy of its large tar sands deposits, one company is focusing on the province's potential for coal – that other hotly sought after commodity. Coalspur Mines Ltd. [CPT-TSX; CPL-ASX], with offices in Canada as well as in Australia, is developing 55,000 hectares of thermal coal leases in the Hinton region of Alberta. The company's flagship project, the Vista Coal Project, will get underway this year with production expected to commence in 2015. Located 300 kilometres from Edmonton, the Hinton region has a century long history of coal mining and exploration. The infrastructure in the area is excellent with rail and roads cutting through Coalspur's leases. The Vista Coal Project is the most advanced of Coalspur's leases and projects. It currently has a measured and indicated resource of 1.03Bn tonnes, with recoverable reserves of 566Mt. Vista, the company says, will produce high quality bituminous thermal coal which is attractive to Japanese, Korean and Chinese customers. Coalspur proposes to develop the Vista resource in two phases. The first stage of Phase I will see production of 3.0Mtpa commencing in early 2015. The second stage will build up to 2Mtpa by 2017 and then Phase II will produce 7Mtpa by 2019. Mining will be open cut. In addition, the company sees contiguous ground, known as Vista Extension, being developed as an underground long-wall mine. Vista Extension currently has 174Mt in a measured and indicated resource and 969Mt in an inferred resource. Coalspur will undertake extensive drilling and geotechnical testing in 2013 with a pre-feasibility report due late this year, The economics of the Vista Project are, according to Coalspur, robust. Development capital of CDN $527 million is required to get the project into production. In a December 2012 presentation, the company estimates that average after tax free cash flow will ramp up to CDN $154Mpa in the first 10 years of the Vista Project. It estimates average cash operating costs during that period of CDN $57-59.6/t. As with all coal projects, transport infrastructure is critical to success. Logistic costs are approximately 50% of operating costs for the Vista Project. Coalspur has secured CN Rail to haul up to 12.0Mtpa for five years commencing from 2015 and is working on a longer term agreement. In addition, Coalspur has secured port allocation of 11.7Mtpa at Ridley Terminals, located near Prince Rupert, British Columbia. On December 20, 2012, Coalspur announced that Washington DC based EIG Global Energy Partners had entered into a commitment letter to provide Coalspur a US $300M senior secured debt facility. This provides Coalspur with greater certainty in a difficult climate for funding projects. n www.resourceworld.com Near-Term Silver Producer • Acquiring Mine & Mill in Prolific Zacatecas Silver District • 43-101 Compliant Resource • Proven Mine Developers • Tight Share Structure of 21.8 M Shares 604.669.7315 82 www.resourceworld.com info@defiancesilver.com W W W . D E F I A N C E S I L V E R . C O M february 2013