- Forecast annual marketable coal production capacity increases by 7% to 12.0Mtpa up from 11.2Mtpa in the Vista feasibility study
- Production increase result of an optimization study on the coal processing plant utilization and enhanced mine planning
- Increased production decreases mine gate operating costs C$0.47/t over life of mine
- Increased production to be included in Coalspur's recently increased port allocation at Ridley Terminals Inc.
CALGARY, April 26, 2012 /PRNewswire/ - Coalspur Mines Limited ("Coalspur" or "Company") (ASX: CPL, TSX: CPT) is pleased to announce that the annual marketable coal production capacity from the Vista Coal Project ("Vista") has increased by 7% to 12.0 million tonnes per annum ("Mtpa"). The increased production rate is the result of an optimization study on the coal processing plant ("CPP") and mine scheduling and follows a feasibility study on Vista which was published on January 30, 2012.
The optimization study was completed by CPG Resources - QCC Pty Ltd ("CPG") as part of the ongoing engineering work on Vista. CPG was responsible for the processing plant and thermal dryer design components of the recently completed Vista feasibility study. The optimization study included an analysis of the relationship between the clean coal production potential from Vista compared to the annual plant operating hours. The study concluded that the CPP is capable of operating at 7,320 hours per year (83.6% net effective utilization) as compared to 6,835 hours per year (78.0% net effective utilization) which was estimated in the feasibility study. The increase in operating hours is possible through enhanced scheduling between mining operations and the CPP and an optimized maintenance program.
|Optimization Study - Clean Coal Production Summary|
Commenting on the increase in production capacity, Managing Director and CEO, Gene Wusaty said "The results of the optimization study reflects Vista's status as a world-class, Tier one mining project that will be a strategic supplier of thermal coal to the Asian markets. The increased production rate further enhances the economics of Vista as it will require a minimal amount of capital investment and will decrease ongoing operating costs. As we progress to construction we will evaluate additional optimization opportunities to maximize the value of Vista."
The increase in annual production will enhance the economics on Vista. A summary of the optimized production schedule is as follows:
|Optimization Study - Production, Operating Cost and Capital Cost Summary|
|ROM Coal Production (Mt)|
|Val d'Or and McPherson Seams||474.5||474.5||0|
|Total ROM Coal Production||564.8||564.8||0|
|Clean Coal Production (Mt)|
|Val d'Or and McPherson Seams||274.0||274.0||0|
|Total Clean Coal Production||312.3||312.3||0|
|Operating Costs (C$/t)|
|Coal & Waste Mining||28.80||29.10||(0.30)|
|Coal Handling & Processing||4.19||4.29||(0.10)|
|General & Administrative||0.91||0.98||(0.07)|
|Total Mine Gate Cash Costs||33.90||34.37||(0.47)|
|Total Cash Operating Costs (C$/t)||67.59||68.06||(0.47)|
|Capital Costs (C$M)|
|Development Capital to First Production||869.8||863.5||6.3|
|Incremental Development Capital to Full Capacity||373.1||370.3||2.8|
|Total Capital Costs to Full Capacity||1,242.9||1,233.8||9.1|
|Total Sustaining Capital||1,783.4||1,695.9||87.5|
|Average Annual Operating Cash Flows (C$M)||626.2||587.4||38.8|
For further information regarding the Vista Coal Project and 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 projects, please refer to the technical report on the Vista Coal Project titled "Coalspur Mines Limited: Feasibility Study of the Vista Coal Project, Hinton, Alberta" dated January 26, 2012 and the technical report on the Vista South Project titled "Resource Estimate for the Vista South Coal Property" dated December 15, 2010, which 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 Recoverable Coal Reserves and mining capital costs, is based on information compiled by Mr. David Leslie, who is a Member of the Association of Professional Engineers, Geologists and Geophysicists 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 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.
All other scientific and technical information in this Report is based on information compiled by Mr. Eugene Wusaty, who is a Member of the Association of Professional Engineers and Geoscientists of Alberta. Mr. Wusaty is a full-time employee of Coalspur. Mr. Wusaty has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Competent Person" as defined in the JORC Code, and a "Qualified Person" under NI 43-101. Mr. Wusaty has approved and consents to the inclusion of such information in this Report in the form and context in which it appears.
Forward Looking Statements
This news release contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to the development of Vista, future Vista production rates, funding for the development of Vista, the outcome of any arrangements with partners which may provide future funding for the development of Vista or coal marketing arrangements for Coalspur, any reduction in costs for the development of Vista, the Company's feasibility study, the mine plan, drilling programs, time lines and completion dates, permits and approvals, an updated resource for Vista South, business strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, studies, results of exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'will', 'expect', 'potential', 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'plan', 'forecast', 'evolve' or variations of such terms and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, without limitation, inherent uncertainties and risks associated with mineral exploration; uncertainties related to the availability of future financing necessary to undertake activities on the Company's properties; uncertainties related to general economic conditions; uncertainties related to global financial conditions; risks related to the integration of businesses and assets acquired by the Company; risks associated with the Company having no history of earnings or production revenue; uncertainties related to the possible recalculation of, or reduction in, the Company's mineral reserves and resources; uncertainties related to the outcome of studies to be undertaken by the Company; uncertainties relating to fluctuations in coal price; the risk that the Company's title to its properties could be challenged; risks related to the Company's ability to attract and retain qualified personnel; uncertainties related to the requirement for ministerial approval for a change of control of the Company; risks relating to consultation with the public and aboriginal groups; uncertainties related to the competitiveness of the mineral resource industry; risks associated with the Company being subject to government regulation, including changes in regulation; risks associated with the Company being subject to environmental laws and regulations, including a change in regulation; risks associated with the Company's need for governmental licenses, permits and approvals; uninsured risks and hazards; risks associated with fluctuations in foreign exchange rates; risks related to default by joint venture parties, contractors and agents; inherent risks associated with litigation; risks associated with potential conflicts of interest; risks related to effecting service of process on directors resident in foreign countries; uncertainties related to the Company's limited operating history; risks related to the Company's lack of a dividend history; risks relating to short term investments; and uncertainties related to fluctuations in the Company's share price. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
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 third party approvals will be obtained for the development, construction and production of its properties, (2) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (3) permitting, development and expansion proceeding on a basis consistent with the Company's current expectations; (4) currency exchange rates being approximately consistent with current levels; (5) certain price assumptions for coal; (6) production forecasts meeting expectations; (7) the accuracy of the Company's current mineral resource and reserve estimates; (8) labour and materials costs increasing on a basis consistent with the Company's current expectations; (9) that any additional required financing will be available on reasonable terms; and (10) assumptions made and judgments used in engineering and geological interpretation.
There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.
The Company disclaims any intent or obligation to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law.
SOURCE Coalspur Mines Limited