Coalspur Mines Limited - Vista Project Update
CALGARY, March 29, 2012 /PRNewswire/ - Coalspur Mines Limited ("Coalspur" or "Company") (ASX: CPL) (TSX: CPT) advises that following the successful release of the Feasibility Study relating to its Vista Coal Project ("Vista"), the Company has continued the process, commenced in December 2011, to identify potential strategic investment partners which may provide future funding for the development of Vista and coal marketing arrangements (the "Process"). The Company has not yet made any material decisions in connection with the Process and will issue another news release once there is a material development.
The Process has resulted in a number of potential strategic partners expressing interest in Vista. The Company has shortlisted several parties with which it continues discussions in relation to funding the development of Vista.
The Company has retained a financial advisor to manage the Process and is progressing to finalise the structure of any potential funding transaction. Consistent with its earlier announcements, the recently executed facility agreement with the Highland Park Group provides flexibility for a strategic investor to acquire up to 25% of Vista.
As previously announced, the Company intends to finalise the Process in the quarter ending June 30, 2012.
The Company also advises that, in another funding initiative, it has commenced discussions with a number of mining contractors to evaluate the potential for using their services during the construction phase and the initial years of mining at Vista. The total estimated capital cost for mobile equipment in the Feasibility Study during construction and as production ramp-ups up to 11.2Mtpa is approximately C$335 million. The Company believes that through utilising mining contractors there is potential to reduce these capital costs by approximately C$250-300 million.
The Company believes that the total estimated capital costs for the development of Vista can be reduced by re-investing free cash flow once production commences in 2015. Vista is projected to produce sufficient cash flows in the first phase of development to fund any additional development costs required to reach full capacity of 11.2Mtpa in the second phase of development
With the completion of the Feasibility Study and the additional port allocation recently negotiated at Ridley Terminals Inc., Coalspur is seeking to optimise the production potential of Vista through production enhancements which are currently underway as part of the detailed engineering work.
Coalspur has also recently completed additional exploration drilling on Vista South which included over 40 rotary holes. Coalspur will utilise this newly acquired data in conjunction with previous drill results to complete a resource update which is expected to be available in the quarter ending June 30, 2012.
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
All 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves', 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, 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