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Coalspur Limited (ASX:CPL) Annual Report for Period Ending December 2013

Vancouver, Mar 12, 2014 – During the year ended December 31, 2013, Coalspur’s (ASX:CPL) (TSE:CPT) principal activities were related to progressing detailed engineering and construction plans for the Vista project (“Vista”), advancing the regulatory approval process for Phase 1 of Vista and progressing finance solutions for the development of Vista. The Company was engaged in similar activities during the previous six month period ended December 31, 2012.


Review of Operations for the year ended December 31, 2013

During the year ended December 31, 2013 Coalspur finalised its Vista development plan, executed a senior secured debt facility for part of the development capital to fund Vista, advanced its regulatory applications for Vista, developed its workforce, and completed clean coal transportation arrangements with established port and rail providers.

In June 2013 Coalspur’s Board of Directors approved the Vista development plan with capital of C$458 million for a six million tonnes per annum (“Mtpa”) capacity facility, resulting in a capital efficiency of C$76 per tonne of annual capacity. The capital has remained the same however due to a decrease of the Canadian dollar as compared to the US dollar, the capital cost has increased to C$478 million. A competitive process with globally recognised EPC contractors resulted in an optimised project execution strategy and added confidence around development costs and project delivery. The terms agreed with the selected EPC contractor, Forge group’s Taggart Global (“Forge”), de-risked the capital budget by locking in approximately 50% (US$221 million) of total development capital. Subsequent to June 2013 Coalspur and Forge agreed to expand the scope of work provided by Forge increasing the lump sum turn-key contract to approximately 65% (US$284 million) of development capital.

Since being selected as the EPC for Coalspur, Forge has continued with detailed engineering work under Limited Notice to Proceed (“LNTP”) letter agreements which are reviewed monthly. The current LNTP expires at the end of March 2014. The execution of the definitive contract with Forge will only occur once the Company has received its regulatory permits and has certainty for the balance of development funding for Vista.

The Company’s financial position remains stable following the establishment of a senior secured debt facility of up to US$350 million (the “Facility”) with EIG Global Energy Partners (“EIG”), and the associated restructuring of its C$70 million credit facility with Borrowdale Park S.A.(“Borrowdale Park”) into a C$30 million subordinated note in July 2013. The EIG and Borrowdale Park agreements ensure Coalspur retains all off-take and marketing rights, thereby preserving strategic flexibility to secure the balance of its required development capital. In addition, in January 2013, Borrowdale Park and a number of smaller option holders exercised their options to purchase approximately 13.4 million ordinary shares with an exercise price of A$0.70.

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