Coalspur secures debt capital to develop Vista coal project in Canada


Coalspur

Canada-focused coal exploration and development company Coalspur Mines has secured a $300m senior secured debt facility from EIG Global Energy Partners for the advancement of the Vista coal project in Alberta.

Funds from the debt facility will serve a major portion of development costs to attain first production at Vista, scheduled for 2015.

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 combination of funds will provide working capital and repay Coalspur's outstanding loan facility with the Highland Park Group.

The company expects to begin construction at Vista in 2013 and consequently plans to execute and complete the funding and off-take agreements before April 2013.

EIG's eight-year term debt facility carries an annual cash coupon of 8%, with principal capitalising at 3% a year.

Costs at Vista are estimated at an average of C$30.81 ($31.12) a tonne for the first five years of production and C$31.40 ($31.72) a tonne thereafter.

The mine is projected to produce 12 million tonnes a year at full production.

Coalspur president and CEO, Gill Winckler, stated that this facility provides certainty of funding to take Vista through the 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 under-utilised rail capacity and location in a stable jurisdiction," Winckler said.


Image: Coalpsur is on track to commence construction at Vista. Photo: Coalspur Mines Ltd.