Coalspur Mines Limited (ASX:CPL) Half Yearly Accounts
Perth, Mar 8, 2010 AEST (ABN Newswire) - The Board of Directors of Coalspur Mines Limited (
ASX:CPL) (PINK:CSPZF) present their report on Coalspur Mines Limited ("Company" or "Coalspur") and the entities it controlled during the half year ended 31 December 2009 ("Consolidated Entity").
REVIEW AND RESULTS OF OPERATIONS
Review of Operations
During the half year, the Company continued the aggressive exploration and development of its Hinton Coal Project ("HCP" or "Project") located in Alberta, Canada.
Highlights during the half year and since the end of the half year include:
- Completed a Scoping Study on the Project which confirms the technical and economic viability of the Project, based on an annual production rate of 7.4Mtpa run-of-mine producing 4.0Mtpa saleable coal for a minimum 14 year mine life;
- Defined an additional Coal Resource estimate of 128.1 million tonnes of low sulphur, high volatile, bituminous C thermal coal, increasing the Company's total Coal Resource to 467.3Mt for the Project;
- Acquired additional coal leases covering 16,247 hectares adjacent to Coalspur's existing leases in Alberta, increasing the total size of the Company's projects to 24,647 hectares;
- Appointed Mr Gene Wusaty, a highly respected Canadian coal industry executive, as Managing Director and Chief Executive Officer;
- Appointed additional key management personnel, including Mr Denis Lehoux as Vice President, Operations and Mr Dermot Lane as Vice President, Development; and
- Completed placement of 25 million shares at A$0.32 each to raise A$8.0 million before costs.
The Company is currently completing a drill program on the HCP with coal quality and washability results expected to be released over the coming months. In addition the Company is assessing the potential for further Coal Resources on the Coalspur Project ("CSP").
Hinton Coal Project
The HCP is a large scale, open pit potential, thermal coal project located adjacent to the main line of the CN Rail in Alberta, Canada.
The leases comprising the HCP cover approximately 4,976 hectares and together contain a JORC Coal Resource of approximately 467 million tonnes of low sulphur, high volatile, bituminous C thermal coal. The HCP is split into Hinton East and Hinton West. Hinton East comprises six coal leases covering approximately 3,984 hectares and Hinton West comprises 2 coal leases and 3 coal lease applications covering 992 hectares.
HCP Scoping Study
Wardrop Engineering Inc. ("Wardrop") recently completed a Scoping Study on the Project based on an annual production rate of 7.4Mtpa run-of-mine producing 4.0Mtpa saleable coal for a minimum 14 year mine life.
The Scoping Study concentrated on the Hinton East and West regions of the HCP consisting of an area of 4,967 ha which has a current Coal Resource estimate of 467.3 million tonnes of low sulphur, high volatile, bituminous C thermal coal.
Favourable geology, low strip ratios and existing infrastructure allow for low operating costs of approximately US$46.80/t in the first five years of production and averages approximately US$48.40/t free-on-board Ridley Island Coal Terminal over the life-of-mine. The costs are based on existing CN Rail haulage capacity and existing capacity at Ridley Island Coal Terminal at the Port of Prince Rupert.
The existing infrastructure has greatly reduced the Project's upfront fixed capital requirements, with capital expenditure for the coal handling and process plant and project infrastructure totalling US$185 million. Wardrop has allowed a further US$69 million for the Project's indirect costs, engineering, procurement and construction management ("EPCM") and Company costs during the development period. The Company will be looking at the use of a mining contractor or leasing options for an additional US$151.6 million included in the study for mining equipment capital.
The Scoping Study did not include an additional 19,671 ha in the CSP leases which are now being evaluated for additional coal resources.
HCP Coal Resource
The combined Coal Resource estimates for the HCP totals 467.3 million tonnes of low sulphur, high volatile bituminous C thermal coal. Significantly, the Measured and Indicated Coal Resources represents 90% of the total Coal Resource.
The Coal Resource estimates have been based on considerable drilling and exploration activities which were undertaken on the HCP by Esso in the 1980's and prepared by respected Canadian independent technical consultants Moose Mountain Technical Services ("MMTS") and is reported in accordance with the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' ("JORC Code") and National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects' ("NI 43-101").
HCP Coal Quality
MMTS have also undertaken an indicative assessment of coal quality based on historical core hole information and coal qualities of nearby mines including Coal Valley and Obed Mountain. Based on this information MMTS has indicated that the washed clean coal product could have the following characteristics with a forecast yield of at least 50%:
HCP Washed Clean Coal Quality----------------------------------------------------------Coal Characteristic Gross As Received Air Dried Basis----------------------------------------------------------Moisture 11.5% 4.5%Ash Content 11.1% 11.9%Volatile Matter 31.2% 33.7%Fixed Carbon 46.2% 49.9%Sulphur 0.3% 0.3%Calorific Value 5,758 kcal/kg 6,212 kcal/kg----------------------------------------------------------
Coalspur Project and Additional Coal Leases
The CSP comprises coal leases covering an area of approximately 19,671 hectares located approximately 6km south west of the CSP and includes the additional coal leases acquired by the Company on 3 December 2009 in the Alberta governments public offering of crown coal lands.
The CSP was subject to previous drilling by Denison Mines Ltd in the 1980's. The considerable historical drilling and studies undertaken are expected to provide a solid foundation to assess the coal contained on the leases in accordance with the JORC Code in early to mid 2010.
Importantly, the proximity to the HCP allows for the CSP to leverage off potential infrastructure that will be developed closer to the town of Hinton and the main line of the CN Railway.
A resource estimate for the CSP is currently being undertaken with completion expected in the March 2010 quarter.
Corporate
The following material corporate events occurred during the half year ended 31 December 2009:
- On 14 August 2009, the Company issued 20,000,000 ordinary shares at A$0.11 each to sophisticated investors to raise A$2.2 million before costs. This placement was ratified by shareholders at a General Meeting held on 30 September 2009;
- On 17 August 2009, Mr Eugene Wusaty was appointed Managing Director and Chief Executive Officer of the Company;
- On 31 August 2009, Mr Peter Woodman resigned as a Non-Executive Director of the Company;
- Following shareholder approval at a General Meeting held on 30 September 2009 the Company changed its name from "Xenolith Resources Limited" to "Coalspur Mines Limited";
- Following shareholder approval at a General Meeting held on 30 September 2009 the Company granted the following Incentive Options to Mr Eugene Wusaty, Managing Director and Chief Executive Officer:
- 2,750,000 Incentive Options exercisable at A$0.10 each on or before 31 December 2013, vesting immediately;
- 2,750,000 Incentive Options exercisable at A$0.15 each on or before 30 June 2014, vesting after 8 months service;
- 2,750,000 Incentive Options exercisable at A$0.20 each on or before 31 December 2014, vesting after 16 months service; and
- 2,750,000 Incentive Options exercisable at A$0.25 each on or before 30 June 2015, vesting after 24 months service;
- On 30 September 2009, the Company granted 600,000 Incentive Options exercisable at A$0.50 each on or before 31 March 2011 to key consultants of the Company;
- On 9 October 2009, the Company issued 25,000,000 ordinary shares upon the conversion of 25,000,000 C class performance shares after achieving an independent estimation of 400Mt of coal resources that can be reported in accordance with the JORC Code; and
- On 24 November 2009, the Company completed the first tranche of a placement of 25,000,000 ordinary shares at A$0.32 each to raise A$8,000,000 before costs, consisting of 24,000,000 ordinary shares at A$0.32 each to predominately institutional investors. This first tranche of the placement was ratified by shareholders at a General Meeting held on 12 January 2010.
Operating Results
Net operating loss after tax for the half year ended 31 December 2009 was A$3,902,648 (2008: A$571,604). This loss is largely attributable to:
(i) The Consolidated Entity's accounting policy of expensing exploration and evaluation expenditure incurred by the Consolidated Entity subsequent to the acquisition of the rights to explore and up to the commencement of feasibility studies. During the half year, exploration expenditure totalled A$2,239,071 (which includes non-cash share-based payment expenses of A$1,594,423); and
(ii) The Consolidated Entity's accounting policy of expensing the value (estimated using a Binomial option pricing model) of share options granted to key employees and consultants. The value is measured at grant date and recognised over the period during which the option holders become unconditionally entitled to the options. During the half year, non-cash share-based payment expenses (excluding those classified as exploration costs) totalled A$1,224,247.
It is noted that all of the options granted to key employees and consultants during the half year had exercise prices above the respective share price of the Company at the time that the options were agreed to be granted.
SIGNIFICANT POST BALANCE DATE EVENTS
- On 15 January 2010, the Company issued 1,000,000 ordinary shares at A$0.32 each being the second tranche of a placement of 25,000,000 ordinary shares to raise A$8 million before costs. Shareholder approval for this second tranche of the placement was obtained at a General Meeting held on 12 January 2010 as the second tranche was to Mr Gene Wusaty and/or his nominees.
- On 10 February 2010, the Company announced the completion of a positive Scoping Study which confirmed the economic viability of the Company's Hinton Coal Project, based on an annual production rate of 7.4Mtpa run-of-mine producing 4.0Mtpa saleable coal for a minimum 14 year mine life.
Other than as disclosed above, at the date of this report there were no significant events occurring after balance date requiring disclosure.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Deloitte Touche Tohmatsu, to provide the directors of Coalspur Mines Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is attached to and forms part of this Directors' Report.
Signed in accordance with a resolution of the Directors.
In accordance with a resolution of the Directors of Coalspur Mines Limited, I state that:
In the opinion of the Directors:
(a) the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
(i) section 304 (compliance with accounting standards and Corporations Regulations 2001); and
(ii) section 305 (true and fair view); and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
On behalf of the Board
EUGENE WUSATY
Managing Director & CEO
DIRECTORS
The names and details of the Company's directors in office at any time during the financial year or since the end of the financial year are:
Mr Ian Middlemas Non-Executive ChairmanMr Eugene (Gene) Wusaty Managing Director and CEO (appointed 17 August 2009)Mr Anastasios (Taso) Arima Executive DirectorMr Mark Pearce Non-Executive Director and Company SecretaryMr Peter Woodman Non-Executive Director (resigned 31 August 2009)
Unless otherwise stated, Directors held their office from 1 July 2009 until the date of this report.
For the complete Coalspur Mines Half Yearly Accounts, please click the link below:
http://www.abnnewswire.net/media/en/docs/62406-ASX-CPL-483088.pdf
About Coalspur Mines Limited
Coalspur Mines Limited (ASX:CPL) (TSE:CPT) is a coal development company with approximately 55,000 hectares of coal leases located within the Hinton region of Alberta, Canada. Coalspur's flagship project is Vista, which covers approximately 10,000 hectares and provides a large scale, surface mineable, thermal coal development. Vista is located adjacent to CN Rail's main line, which is suitable for the transport of coal to deepwater ports on Canada's west coast. Coalspur has secured a port allocation agreement with Ridley Terminals Inc., which is essential to the logistics supply chain necessary to export coal from Vista to the growing demand from the Asia Pacific countries.
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