The company has agreed to abandon certain licenses and coal applications in return for the payment.

The agreement constituted a final settlement of claims Cline had outstanding against British Columbia.

The company initially sued the government in 2012 for expropriation of three coal properties in the Flathead Valley region, believed to be worth $C500 million each.

Cline was seeking an affirmation that the rights under its coal licences and coal licence applications for the Lodgepole, Sage Creek and Cabin Creek properties were expropriated or critically affected by the state’s passing of the Flathead Watershed Area Conservation Act.

The act created a mineral and coal land reserve on all lands within the Flathead watershed area.

Cline sought compensation for the loss of the value of the licences and applications for licences for these properties, each estimated at $C500 million.

The company is currently operating under forbearance agreements with its senior lenders, which will expire on April 30, if no other forbearance termination event takes place before that time.

Proceeds from the settlement of $C9.8million will be subject to the terms of the forbearance agreements and the underlying indentures.