Vista, which would produce approximately 9Mtpa of saleable coal, is well located near infrastructure and in an established coal mining region of Alberta, Canada, reducing infrastructure and start-up costs, managing director Gene Wusaty said.

“The PFS is a landmark study as it is the first comprehensive study to assess the potential of the consolidated project area. Production of 9 million tonnes per annum saleable coal over a 31-year mine life has exceeded our expectations and confirmed that the VCP is now a strategic world-scale project,” he said.

“The VCP has the potential to create one of the largest first world export thermal coal developments with existing modern rail and port infrastructure, and will elevate Coalspur into the top echelon of global export thermal coal developers.”

Infrastructure costs to first production of $C327 million highlight the project’s location and access to underutilised rail facilities that lead to a world-class port, Wusaty said.

“We have all the fundamentals in place to supply much needed energy resources in the medium term to the ever expanding Asian Pacific economies establishing Canada as a strategic alternative supplier of export thermal coal for the long term.”

The PFS found Vista has 260Mt marketable coal reserve defined from a 522Mt recoverable coal reserve. Vista has the potential to achieve cash costs of approximately $C51 per tonne over the first 10 years and $C56.5/t over the first 20 years.

Using forecast coal prices from Wood Mackenzie and an exchange rate of C92c to 1 US dollar results in predicted strong EBITDA cash flows of $C361 million per annum in the first 10 years of operations and $C375Mtpa over the 31-year mine life.

The development of the mine is planned to be completed in two phases to enable the company to use an existing mine permit which covers the eastern half of the Vista.

The permit provides for the first phase construction of a 4.2Mtpa operation. In addition to improving initial development timelines, this phased approach will reduce the upfront capital required before achieving significant operating cash flows.

“The company anticipates building some of the core infrastructure required to meet the projected additional production from the second phase in the first phase of construction,” Coalspur said.

The PFS schedule shows the second phase production beginning two years after the initial first phase such that full production capacity of 9Mtpa is achieved in the fourth year of operation.

The PFS first phase development schedule is based on the existing mine permit enabling the project to secure all other regulatory requirements.

“Coalspur has initiated permitting discussions with the respective regulatory government authorities with respect to development of the first phase to 4.2 million tonnes per annum saleable production as per the existing permit that was acquired with the purchase of the New Coal Leases in July 2010,” the company said.

The first module of the process plant, a single ROM crusher and a coal dryer are constructed with a design throughput of 1100 tonnes per hour enabling the production of 4.2Mtpa saleable coal as per the existing mine permit by the end of year 2.

Development of conveyors and rail load out facility will be built to support 18Mtpa ROM and 9Mtpa clean. Mining equipment will be added to enable the mining of 8.4Mtpa ROM coal.

The first phase will allow the company to utilise the initial cash flows earned from Phase 1 to pay for a significant portion of the development in second phase. The first phase manpower will reach approximately 400.

Ramp-up of production will start in year three and full capacity will be achieved by end of year four.

Development will be funded primarily from first phase cash flows and will entail the addition of a second 1100tph process plant module, coal dryer module, raw coal crusher and the addition of further mining equipment over the ramp-up period to achieve nameplate capacity at the mine and processing plant.

At full capacity there will be 8Mtpa of export coal production and 1Mtpa of domestic coal production. During the later years of production manpower levels will reach 900.

Coalspur’s share price rose by 3c to $1.73c this morning.