Coalspur is an Australian Securities Exchange-listed Canada-focused thermal coal development company with about 55,000ha of leases within the Hinton region of Alberta.
The new plan, announced on Wednesday following the board’s approval, gives the green light for the development of a 6Mtpa operation in one stage for $C458 million, rather than in two stages at a cost of $C655 million.
The revised development plan was the result of a front-end engineering and design process during which the company consulted contractors and reviewed a variety of options for engineering design.
"We are extremely pleased with the development plan that the board has approved as it significantly enhances shareholder value,” Coalspur president and chief executive officer Gill Winckler said.
“Being able to construct the facility in one stage as opposed to the previously envisaged two stages provides for more effective project execution and delivery.”
Winckler also found a silver lining in the current commodities downturn, saying it allowed the company so reach a competitive per ton costing.
“The current downturn in the commodities industry with the associated pressure on commodity prices and service industries afforded us considerable opportunity as we finalized our project execution strategy and capital.
“This is evident through our capital efficiency of $C76 per ton of capacity, which is very competitive with comparable thermal coal greenfield and brownfield expansion projects.”
The development plan focuses on the first phase of the Vista project and will support a 6Mtpa thermal coal facility. The facility will be completed in mid-2015 and produce three million tons of clean coal in 2015 and be capable of producing 6Mtpa from 2016 onwards.
The plan also includes the ability to efficiently expand to 12Mtpa when necessary, Coalspur said in the statement.
Taggart Global has been selected as the preferred engineering, procurement and construction contractor for a fixed price contract of $US221 million, and a fixed date of mid-2015 for first production, on the condition that construction commences before 2014.
Taggart will be responsible for the design optimisation, construction and commissioning of the coal handling, preparation and processing plant, the overland conveyors and the load-out infrastructure.
“We are pleased to have selected an EPC contractor, Taggart Global, who have an extensive track record in North America in designing, constructing and commissioning coal preparation and material handling plants,” Winckler said.
Amid all the good news, Coalspur said that regulatory approvals had been slow and the anticipated approval date of June 30 for the remaining four key decisions pending was unlikely.
“We continue to make good progress with the Alberta regulators. The regulatory approval process is taking longer than anticipated, however the review process is in its final stages and we remain confident that we will be able to commence construction in the coming months and deliver our first coal in mid-2015,” Winckler said.
Coalspur said Vista is one of the largest undeveloped export thermal coal projects in North America with measured and indicated coal resources of more than 1 billion tonnes and marketable reserves of 313 million tonnes.
Vista covers approximately 10,000ha, providing a large-scale surface mineable thermal coal project containing a strike length of over 20km of continuous gently dipping coal seams.