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Coalspur Secures US$300 Million Senior Debt Commitment to Fund Majority of Initial Development Capital at Vista

December 19, 2012

Coal Off-Take / Marketing Discussions to Complete Funding, Expected to
be Finalised in Early 2013

Highlights:

        --  Commitment received from EIG Global Energy Partners to provide
            a US$300 million senior debt facility
        --  Advanced discussions underway with a number of trading parties
            to provide remaining required funding
        --  Financing arrangements will fully fund capital requirements to
            achieve first production at Vista
        --  Definitive financing agreements expected to be finalised in the
            first quarter of 2013
        --  Recently agreed binding rail terms with CN provide certainty
            around a substantial portion of FOB cash costs
        --  Vista remains on track for construction in 2013 and first
            production in 2015

CALGARY, Dec. 20, 2012 /CNW/ – Coalspur Mines Limited (“Coalspur”) (ASX: CPL, TSX: CPT) is pleased to announce that it has entered into a Commitment Letter with
EIG Global Energy Partners (“EIG“) to provide Coalspur a US$300 million senior secured debt facility (the “Facility“). Proceeds from the Facility will fund the majority of the development
capital required to achieve first production at the Vista Coal Project
(“Vista“). Advanced discussions are also underway with a number of strategic
trading/off-take parties to secure additional funding for Vista and
finalise coal marketing arrangements.

The Facility, combined with the anticipated additional funding, will
provide Coalspur with the funds required to commence production at
Vista, provide working capital and repay the outstanding loan facility
with the Highland Park Group. Coalspur expects the funding and off-take
agreements to be executed and effective by the end of the first quarter
of 2013.

Commenting on the Facility, President and CEO, Gill Winckler said, “This
is a significant milestone for Coalspur as it provides certainty of
funding for the initial development capital of Vista and enables us to
maintain our development timeline. Our ability to secure a significant
portion of financing for Vista, at competitive terms in a difficult
market, is a testament to the quality of our project. We believe we are
in a unique position amongst coal development companies worldwide with
our robust economics, fully committed and contracted port allocation,
access to underutilised rail capacity and location in a stable
jurisdiction.

“We continue to build our team and we look forward to finalising the
remaining coal-linked financing arrangements early in 2013 and
continuing to deliver on our commitments as we move forward into
construction in the second quarter of 2013.”

The Facility, which has been approved by EIG’s Investment Committee, is
for a term of eight years with a cash coupon of 8% per annum and with
principal capitalising at 3% per annum. Coalspur has the ability to
cash-pay this additional 3% instead of having it capitalise. The
Facility is subject to a number of conditions, including completion of
confirmatory due diligence (regarding technical, tax and accounting,
insurance and legal matters) and documentation being entered into.
Documentation will include customary terms and conditions including as
to fees, representations and warranties, covenants, events of default
and any early repayment.

EIG will be granted 100 million warrants to purchase Coalspur shares, as
noted below. The grant of the warrants is subject to necessary
shareholder and regulatory approvals.

        --  40 million warrants with an exercise price of A$0.90 (unless
            the five day volume weighted average price ("VWAP") prior to
            the financial close date is lower, in which case the exercise
            price will be the VWAP). These warrants expire 36 months from
            financial close;
        --  30 million warrants with an exercise price of 125% of the five
            day VWAP prior to financial close. These warrants expire 96
            months from financial close; and
        --  30 million warrants with an exercise price of 150% of the five
            day VWAP prior to financial close. These warrants expire 96
            months from financial close.

Project Update

The Company continues to advance the detailed engineering studies for
Vista, the definitive transport agreement with CN, the requirements for
the regulatory approval process and other activities that will ensure
Coalspur is ready to commence construction in 2013.

Logistics and Operating Costs

On December 14, 2012 Coalspur announced that it had entered into a
binding legal agreement with CN which outlined the key terms for a
definitive rail transportation agreement. The agreement will have a
seven year term, commencing in 2013. In terms of the contract CN will
supply the equipment to transport coal from Vista to tidewater and
there will be no “take or pay” exposure for Coalspur. The haulage rates
and price escalation agreed with CN represent significant savings from
the rates quoted in the Vista Feasibility Study.

As a result of the agreement with CN, Coalspur’s logistics’ costs, which
include port handling charges at Ridley Terminals Inc. (“Ridley Terminals“) and haulage rates with CN, are now contractually defined until 2020.
The agreements in place with CN and Ridley Terminals provide a high
degree of certainty in Coalspur’s future operating costs as
approximately 50% of Coalspur’s projected free on board (“FOB“) costs are represented by logistics.

The logistics costs for Vista will average C$30.81 per tonne over the
first five years of production and C$31.40 per tonne at full production
of 12.0 million tonnes per annum (“Mtpa“). These costs are respectively C$1.88 per tonne and C$2.29 per tonne
lower than estimated in the Vista Feasibility Study.

The finalised terms with CN reduce the projected total FOB operating
costs for Vista to C$56.98 per tonne in the first five years of
production. The FOB costs are projected to be C$59.55 per tonne in the
first ten years of production and C$66.40 per tonne over the life of
the mine.

Vista Project and Engineering

Detailed engineering studies for Vista are ongoing and the Company is
preparing for civil earthworks and mine pre-development work to
commence in the second quarter of 2013. The initial bid packages for
the load out area, rail siding grading and drainage, access roads,
plant site grading, surface water management and haul roads have been
issued to pre-qualified contractors. Firm bids for this work are
expected in early 2013. The bids will be evaluated and contracts will
be awarded in time to mobilise equipment ahead of the final approvals
to start construction.

Selection of process equipment, including crushing, wash plant and load
out facilities, to handle up to 3.0 Mtpa is substantially complete.
Letters of Intent or purchase orders have been issued to the selected
vendors to receive engineering drawings for the detailed design of the
process plant. This will allow the plant structural and foundation
design to be completed in early 2013. The detailed engineering
completed to date confirms that the current capital cost estimate
continues to track the budget.

The decision regarding the use of a mining contractor for the initial
years of operation will be made in early 2013 as the final bid
submissions are received from contractors and the financing
arrangements for Vista are finalised.

Regulatory and Key Stakeholder Update

The Company remains on track with its regulatory approval process and
continues to engage with the Energy and Resources Conservation Board (“ERCB“) in this regard. As part of this process, final supplementary
information requests (“SIRs“) were received from the ERCB in November and formal written responses
have recently been submitted.

Coalspur is seeking approval to commence forest harvesting in designated
construction areas in the first quarter of 2013. Completion of logging
in these areas will support Vista’s construction schedule.

Coalspur continues to engage with all key stakeholders and has recently
received formal public support from the Town of Hinton. The Company
also continues to engage with Aboriginal groups, and in this regard, an
agreement has been reached with one of the main groups setting out the
terms for the ongoing cooperation and collaboration between the
parties.

Coalspur continues to deliver on its targets and remains on schedule
with its financing, project and all other activities necessary to
commence construction on Vista by mid-2013, following the receipt of
requisite approvals.

About EIG

EIG is a leading institutional investor in the global energy sector,
with US$10.3 billion under management as of September 30, 2012.  EIG
specialises in private investments in energy, resources and related
infrastructure and was formerly the Energy & Infrastructure Group of
Trust Company of the West.  During its 30-year history, EIG has
invested over $14 billion in the sector through more than 290 projects
or companies in 33 countries on six continents.  EIG’s clients include
many of the leading pension plans, insurance companies, endowments,
foundations and sovereign wealth funds in the United States, Asia and
Europe.  EIG is headquartered in Washington, DC, with offices in
Houston, London, Sydney, Hong Kong, Seoul and Rio de Janeiro.

The full version of this news release is available on the Company’s
website at www.coalspur.com and SEDAR at www.sedar.com.

Regulatory Disclosures

For further information regarding the Vista Coal Project and Vista
Extension, including a description of Coalspur’s quality assurance
program, quality control measures, the geology, samples collected and
testing procedures in respect of the projects, please refer to the
technical report titled “Coalspur Mines Limited: Updated Resource
Estimate for the Vista Coal Project” dated September 12, 2012. For
further information regarding the Vista South Coal Project, including a
description of Coalspur’s quality assurance program, quality control
measures, the geology, samples collected and testing procedures in
respect of the project, please refer to the technical report titled
“Resource Estimate for the Vista South Coal Property” dated June 25,
2012. The technical reports for the Vista Coal Project, the Vista South
Coal Project, and Vista Extension are compliant with National
Instrument 43-101 – “Standards of Disclosure for Mineral Projects” (“NI 43-101“) and are available for review on SEDAR at sedar.com.

Competent Person / Qualified Person Statements

The information in this news release that relates to Coal Resources on
the Vista Coal Project and Vista Extension, mining engineering,
Recoverable Coal Reserves, capital costs, mining operating costs, and
economic financial analysis, process capital costs and associated
infrastructure, and all other scientific and technical information in
this Report is based on information compiled by Mr. David Leslie, who
is a Member of the Association of Professional Engineers and
Geoscientists of Alberta. Mr. Leslie is a full-time employee of
Coalspur.  Mr. Leslie has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and
to the activity he is undertaking to qualify as a “Competent Person” as
defined in the 2004 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’ (“JORC Code“), and a “Qualified Person” under NI 43-101. Mr. Leslie has approved
and consents to the inclusion of such information in this news release
in the form and context in which it appears.

The information in this news release that relates to coal quality and
process yield estimates to derive Marketable Coal Reserves is based on
information compiled by Mr. Gordon Mudryk, who is a Member of the
Association of Professional Engineers, Geologists and Geophysicists of
Alberta. Mr. Mudryk is a full-time employee of Coalspur. Mr. Mudryk has
sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity he is
undertaking to qualify as a “Competent Person” as defined in the 2004
Edition of the JORC Code, and a “Qualified Person” under NI 43-101. Mr.
Mudryk has approved and consents to the inclusion of such information
in this news release in the form and context in which it appears.

The information in this news release that relates to Coal Resources on
Vista South is based on information compiled by Mr. John Innis, who is
a Member of the Association of Professional Engineers, Geologists and
Geophysicists of Alberta. Mr. Innis is a full-time employee of
Coalspur. Mr. Innis has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to
the activity he is undertaking to qualify as a “Competent Person” as
defined in the 2004 Edition of the JORC Code, and a “Qualified Person”
under NI 43-101. Mr. Innis has approved and consents to the inclusion
of such information in this news release in the form and context in
which it appears.

Forward Looking Statements

This news release contains forward-looking statements concerning
Coalspur, including statements regarding the Facility and use of the
Facility, the issuance of warrants, additional funding for Vista, coal
marketing arrangements, engineering studies, regulatory approvals,
Coalspur’s plans for its mineral projects, development and construction
plans and timing, development and operating costs, production,
exploration and development activities, and other matters. These
statements relate to analyses and other information that is based on
forecasts of future results, estimates of amounts not yet determinable
and assumptions of management. Actual results could differ materially
from the conclusions, forecasts and projections contained in these
forward-looking statements. Statements concerning Mineral Resource
Estimates may also be deemed to constitute “forward-looking statements”
to the extent that they involve estimates of the mineralization that
will be encountered if a given property is developed.

Any statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as “expects”, “is expected”, “anticipates”,
“plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”,
“goals”, “objectives”, “potential” or variations thereof or stating
that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved, or the negative of
any of these terms and similar expressions) are not statements of
historical fact and may be forward-looking statements. Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or
results to materially differ from those reflected in the
forward-looking statements, including those referred to in the
Company’s Annual Information under the heading “Description of the
Business – Risk Factors”, and elsewhere.

Coalspur’s forward-looking statements are based on the beliefs,
expectations and opinions of management as of the date hereof and which
Coalspur believes are reasonable in the circumstances, but no assurance
can be given that these expectations will prove to be correct.  In
making the forward-looking statements the Company has applied several
material assumptions which may prove to be incorrect, including, but
not limited to: (1) that all required approvals will be obtained for
the Facility and the development, construction and production of its
properties; (2) that a definitive agreement will be entered into with
respect to the Facility and that additional financing will be available
on reasonable terms; (3) there being no significant disruptions
affecting operations, whether due to labour disruptions, supply
disruptions, power disruptions, damage to equipment or otherwise; (4)
permitting, development and expansion proceeding on a basis consistent
with the Company’s current expectations; (5) currency exchange rates
being approximately consistent with current levels; (6) certain price
assumptions for coal; (7) production forecasts meeting expectations;
(8) the accuracy of the Company’s current mineral resource and reserve
estimates; (9) labour and materials costs increasing on a basis
consistent with the Company’s current expectations; and (10)
assumptions made and judgments used in engineering and geological
interpretation.

Coalspur disclaims any intention or obligation to update or revise
forward-looking statements if circumstances or management’s beliefs,
expectations or opinions should change, except as required by law. For
the reasons set forth above, undue reliance should not be placed on
forward-looking statements.

SOURCE Coalspur Mines Limited


Source: PR Newswire