In Longwalls’ experience going through that amount of cash either means there is a bit going on or the company is digging a big hole. Ironically, in this industry, a lot going on and digging a big hole can be synonomous.

The Canadian coal player’s flagship is the Vista Coal project which it believes has the potential to become the largest export thermal coal mine in North America. It expects phase 1 of that project to be in operation by 2015.

Better yet, it is close to existing transport infrastructure.

Coalspur also holds coal leases directly to the south and the north of Vista, which it believes has the potential to host a significant coal resource and leverage off planned Vista infrastructure.

The company completed a feasibility study on Vista, submitted regulatory applications for the first phase of the project and initiated detailed design work. That design work will allow construction work to start once the regulatory approvals are in place.

Phase 1 is expected to produce five million tonnes per annum. Construction of phase 2 is planned to start in 2015 and be producing another 7Mtpa by 2018.

Coalspur also negotiated terms for up to 11.7Mtpa of part capacity at Ridley Terminals, near Prince Rupert, British Columbia, for up to 21 years.

Along the way the company increased its measured and indicated coal resources to 1.8 billion tonnes and obtained a $70 million credit facility.

It expects that credit facility to provide the company with enough funds to complete detailed engineering and the regulatory process for Vista phase 1.

All of this led to the $68 million it finished the year to June 30 2011 with it to dwindle to $7 million at June 30 2012.

Coalspur’s year to date net loss grew to $22.3 million in 2012 from $16.7 million in 2011-12 due to the increased activity associated with its projects.

Big spends during the period included:

• $37.5 million to secure 9.5Mtp coal shipping capacity at Ridley Terminals
• $12 million for a potential further 4Mtpa at Ridley Terminals pending federal government approval of its export panels. Subsequent to year end, though, Ridley advised its future expansion plans had been delayed and agreed to provide 2.2Mtpa from its existing expansion. That takes Coalspur’s allocation to 11.7Mtpa. Due to the downsize of the allocation, Ridley refunded $3.2 million in deposits
• $19 million to progress technical and regulatory works associated with Vista and the company’s other coal projects
• $5.7 million to run the company.

The company partly offset that spending by borrowing $20 million under its credit facility and from net proceeds of a $12. 8 million exercise of options to buy ordinary shares.

This leaves Coalspur with $50 million to draw under its credit facility.

In the 2011-12 year Coalspur increased its cash by $45 million and spent $94 million. That was offset by $140 million in equity contributions from public and private offerings of its stock and from the exercise of listed and unlisted options to buy ordinary shares.

Conditions have toughened for the company, due to the ongoing economic issues in Europe and the falling coal price.

However, the spot price of Newcastle thermal coal seems to have been heading the correct way – up. By June 30 it had fallen to $US87 per tonne. Since June 30 it has increased to more than $US91/t.