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Coalspur Secures US$300 Million Senior Debt Commitment To Fund Majority Of Initial Development Capital At Vista

Commenting on the Facility, President and CEO, Gill Winckler said, "This is a significant milestone for Coalspur as it provides certainty of funding for the initial development capital of Vista and enables us to maintain our development timeline. Our ability to secure a significant portion of financing for Vista, at competitive terms in a difficult market, is a testament to the quality of our project. We believe we are in a unique position amongst coal development companies worldwide with our robust economics, fully committed and contracted port allocation, access to underutilised rail capacity and location in a stable jurisdiction.

"We continue to build our team and we look forward to finalising the remaining coal-linked financing arrangements early in 2013 and continuing to deliver on our commitments as we move forward into construction in the second quarter of 2013."

The Facility, which has been approved by EIG's Investment Committee, is for a term of eight years with a cash coupon of 8% per annum and with principal capitalising at 3% per annum. Coalspur has the ability to cash-pay this additional 3% instead of having it capitalise. The Facility is subject to a number of conditions, including completion of confirmatory due diligence (regarding technical, tax and accounting, insurance and legal matters) and documentation being entered into. Documentation will include customary terms and conditions including as to fees, representations and warranties, covenants, events of default and any early repayment.

EIG will be granted 100 million warrants to purchase Coalspur shares, as noted below. The grant of the warrants is subject to necessary shareholder and regulatory approvals.

  • 40 million warrants with an exercise price of A$0.90 (unless the five day volume weighted average price (" VWAP") prior to the financial close date is lower, in which case the exercise price will be the VWAP). These warrants expire 36 months from financial close;
  • 30 million warrants with an exercise price of 125% of the five day VWAP prior to financial close. These warrants expire 96 months from financial close; and
  • 30 million warrants with an exercise price of 150% of the five day VWAP prior to financial close. These warrants expire 96 months from financial close.

Project Update

The Company continues to advance the detailed engineering studies for Vista, the definitive transport agreement with CN, the requirements for the regulatory approval process and other activities that will ensure Coalspur is ready to commence construction in 2013.

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