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Coalspur And CN Sign Definitive Rail Transportation Agreement

Stocks in this article: CPT

  • Coalspur and CN complete seven-year definitive transportation agreement for haulage of coal from Vista to Ridley Terminals
  • Agreement also signed to govern the construction of a 6.5km rail line

CALGARY, March 27, 2013 /CNW/ - Coalspur Mines Limited ("Coalspur") (ASX: CPL), (TSX: CPT) is pleased to announce that it has reached a definitive agreement (the " Agreement") with CN (TSX: CNR) (NYSE: CNI) for the transportation of thermal coal from its Vista Coal Project (" Vista") to Ridley Terminals Inc. (" Ridley Terminals"), as well as final agreement with CN regarding the construction of the railway line to serve the mine.

Definitive Rail Transportation Agreement

The Agreement with CN is for a seven-year period, effective from 1 January 2013 and extending through to 31 December 2019. Pursuant to the terms of the Agreement, as with most western Canadian coal producers, CN will supply the equipment to carry Coalspur's coal to tidewater. The key elements of the Agreement are consistent with the terms announced by Coalspur on 14 December 2012 and include transportation of up to 12 million tonnes per annum (" Mtpa") of coal; and defined rates with agreed escalation and fuel surcharge calculations.

As a result of signing this Agreement, Coalspur is able to confirm that its logistics costs for Vista will be as outlined in the Coalspur press release date 20 December 2012. Total FOB operating costs for Vista are projected to be C$56.98 per tonne in the first five years of production, C$59.55 per tonne in the first ten years of production and C$66.40 per tonne over the life of the mine.

Rail Line Construction Agreement

Coalspur and CN have also signed an agreement which will govern the construction of a 6.5km long railway line providing CN access to Coalspur's loading site. The rail line will enable Coalspur to load the entire train in one continuous load. Subject to regulatory approval construction activity is expected to begin in Q3 2013 and be completed in early 2015.  CN will ensure the rail line meets their design and construction specifications.

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