The loan secured has a maturity date of eight years and it will be managed by EIG. The funds are obtained at an annual interest rate of 8% in cash and 3% which can be repaid in cash.
It can draw initial $37m following the necessary approvals of funds and 120 million warrants issued by Coalspur to EIG. Additional $120m can be obtained by securing regulatory approvals for commencement of construction of Vista project.
Remaining drawdowns are expected to be executed during first half of 2014, although they are subject to funding arrangements for the construction of stage 1 of Vista project.
Coalspur, meanwhile, has estimated the first phase development costs at CAD445m ($434.4m), majority of which will be funded by the credit obtained.
It anticipates production capacity of three million tons per annum (Mtpa) following the production commencement in 2015.
Besides, the company has drawn CAD40m of the CAD70m credit facility that it acquired from Borrowdale Park. It is planning to repay CAD10m of this outstanding credit, while restructure the remaining CAD30m as a subordinated debt obligation of Coalspur.
Coalspur president and CEO Gill Winckler stated that the agreements mark a milestone for the company that secures development cost for first stage of Vista project.
"EIG is an astute investment group with an excellent track record and their support for Vista, along with the continued support of our major shareholder, Borrowdale Park, will enable us to begin construction activities, as planned, in the coming months.
"It is expected that shareholders will be asked to approve these funding arrangements in June," revealed Winckler.
Vista is estimated to reach coal production rate of 12.0 Mtpa over a mine life of 29 years.
