The non-binding letter of intent for the property in Mackenzie, British Columbia, will allow for the transfer or coal from barge to rail. It has also signed a second deal with Conifex subsidiary Navcor to start negotiations for a transload operating agreement.

Cardero Coal plans to transport metallurgical coal from the Carbon Creek mine site to the Ridley Terminals facility at Prince Rupert using a combination of barge and rail transportation.

“The transload facility will be the interface between the two forms of transportation, consisting of a barge-docking system, through which metallurgical coal will be unloaded from a barge, and a railcar loading system, through which the coal will be loaded onto empty rail cars for transportation to Ridley,” the company said.

At prime production levels, Cordero said the facility was expected to handle as much as 5 million tonnes per annum.

The two companies have agreed to an initial 20-year lease term, which can be renewed to 40 years.

Regarding its deal with Navcor, the company said it was attracted to the company’s “considerable expertise and experience in transportation of bulk commodities”, and noted it was projecting its role would be in the operation of both the transload facility and the management of CN Rail shipments between Mackenzie and Ridley.

Moving ahead, officials said the time clock was ticking.

“The LOI provides Cardero Coal with a nine-month period of exclusivity during which time it is anticipated that the definitive lease agreement and operating agreement will be finalized,” it said.

“Over the coming weeks, Navcor and Cardero Coal will move to finalize rail track design and transload layout so that detailed designs can be included in the feasibility study for Carbon Creek presently underway.”

The rail track and civil work’s geotechnical testing is expected to be completed this year.

“Cardero Coal believes that the transportation of metallurgical coal by barge via Williston Reservoir to the railhead at Mackenzie is an elegant and cost-effective solution,” the company said.

It will construct surface facilities and a processing plant in an area north of the planned mine, such that clean coal can be conveyed a short distance to the waiting barge.

From there, the coal will be barged 175km transload facility.

“Barging has a lower environmental impact than the originally envisioned use of haul trucks, since the hydrocarbon fuel consumption is well below that of road-based solutions utilizing haul trucks,” the company said.

“In addition, there are other advantages over traditional trucking, including capital and operating cost reductions as well as improved safety.”