An Australia-based coal-mining junior has struck a bargain to ship coal through Prince Rupert, BC.
Coalspur Mines (TSE:CPT, ASX:CPL) said Thursday it has reached a 14-year agreement to export thermal coal from its Vista project in Alberta through Ridley Terminals in Prince Rupert.
The news spiked the shares 5% on the Australian exchange Friday but caused less of a stir on the Toronto bourse, where Coalspur was down about half a percent as the trading day closed.
Canadian Press reported Coalspur saying the deal, whose details were not disclosed, will significantly decrease the risk of developing the deposit which is estimated to contain 260 million tonnes of coal reserves.
According to the pre-feasibility study, the surface mine operation would move 18 million tonnes per year and produce 9 Mt/a of saleable coal, for an estimated mine life of 31 years. A feasibility report is due out early next year.
Coalspur pegs the project’s initial development costs at about $580 million according to CP.
The agreement with Ridley Terminals begins in January 2015. It entitles Coalspur to ship up to 8.5 million tonnes per year through the port, and has an option to increase the term seven more years beyond the initial 14.
“We are exceptionally pleased to have concluded this landmark agreement,” said Coalspur managing director and CEO Gene Wusaty. “It represents a major milestone in the development of Vista as it secures port allocation for the majority of the expected production until 2035. The agreement provides Coalspur committed access to the thermal coal markets in Asia and significantly de-risks the development of Vista as it advances towards the construction phase.”
Graphic by Coalspur Mines Ltd.
