Canada-focused Coalspur warns of funding crunch

Canada-focused Coalspur warns of funding crunch

Photo by Bloomberg

30th May 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Coal developer Coalspur shares took a beating on the ASX on Friday after the company expressed concern over the development of its Vista project, in Canada.

Coalspur told its shareholders on Friday that the company’s ongoing viability and the ability to continue the development of the Vista project were subject to Coalspur raising additional funding.

“Given the ongoing depressed coal price environment, challenging equity and debt market conditions, and the company’s current share price, Coalspur is facing a substantial challenge in its attempts to secure full funding for the development of Vista,” the ASX- and TSX-listed company said.

It noted that in the absence of being able to fully fund the Vista project, Coalspur’s primary objective would be to protect and preserve the value of the asset.

Phase 1 of the Vista development, in the Hinton region of Alberta, would involve the construction and commissioning of a six-million-tonne-a-year thermal coal facility with the capacity to expand to 12-million tonnes a year.

In August last year, Coalspur pushed back the development schedule of the Vista project from mid-2015, as it awaited regulatory approval, which was granted in February.

Meanwhile, Coalspur said on Friday that its discussions with its senior secured lender continued on the final debt sizing process for the Vista project, along with other strategic and financial sponsors on the potential recapitalisation and restructuring of its balance sheet.

“While these discussions continue, the company has taken further steps to reduce its cash expenditure and preserve liquidity by reducing the size of its workforce and focusing on critical short-term activities,” Coalspur said.

The company would also continue to progress the project, where possible, including securing the final licences and permits for the Phase 1 development, finalising the engineering, procurement and construction contract, concluding its terms with a preferred mining contractor and weighing its funding options for the development of Vista.

Coalspur shares were trading at a low of A$0.048 a share on the ASX on Friday, down from the previous day’s closing price of A$0.054 a share and a high of A$0.055 a share earlier on Friday.

On the TSX, the stock on Friday fell by 8.33% to C$0.055 apiece, having lost 75% of its value since the start of the year.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online


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