PERTH (miningweekly.com) – Developer Coalspur has completed a bankable feasibility study (BFS) for its flagship Vista project, providing a blueprint for the largest export thermal coal mine in North America.

ASX- and TSX-listed Coalspur on Monday reported that the study defined a 30-year mine life, with Vista expected to produce some 11.2-million tons of coal a year.

The mine, in Alberta, Canada, would cost C$1.2-billion to develop.

“The positive results of the BFS confirm Vista’s potential as a first-class export thermal coal project. The BFS includes a very detailed evaluation of Vista’s productive potential and a comprehensive assessment of the capital costs required to develop the mine,” said Coalspur MD and CEO Gene Wusaty.

He noted that the growing demand for thermal coal in the Asia Pacific economies continued to support the underlying fundamentals required to proceed with the development of the Vista project.

The project was expected to average an operating cash flow of around C$421-million a year, over an initial ten years, and a life-of-mine average operating cash flow of C$587-million a year.

After tax, the project was estimated to have a net present value of some C$2.1-billion.

“Vista is expected to also generate significant value for the Hinton region through job creation and infrastructure expansion. Following the completion of the BFS, Coalspur will now proceed to submit the final first phase regulatory applications and commence detailed engineering on Vista,” said Wusaty.

The company would also focus on other initiatives expected to enhance the project’s economics, and ensure that the timeline to production remained on schedule. These included evaluating the use of contractors for prestrip and initial years of mining, to reduce capital costs, progressing project financing discussions with potential offtake partners, and submitting the final regulatory applications to start construction.

These initiatives would likely be completed early in 2013, with construction expected to follow shortly thereafter.

Coalspur would develop the mine in phases, with the first phase producing five-million tons a year from early 2015. The second phase would start production later that year, with full output of 11.2-million tons a year of marketable coal production scheduled for 2018.

The company secured port allocation at Ridley Terminals for up to 8.5-million tons a year over 21 years and has signed a memorandum of understanding with Canadian National Railway (CN Rail), under which it would develop a logistics supply chain from Vista to deep-water ports on Canada’s west coast, including Ridley Terminals.

Coalspur is still to secure additional port capacity and negotiate a definitive transportation agreement with CN Rail.

“With an existing, high-quality logistics supply chain in place and compelling project economics, Coalspur is expected to become a strategic supplier of export thermal coal in the next few years, which will enable our shareholders to capitalise on strong coal market dynamics,” said Wusaty.
 

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