Canada-focused explorer Coalspur Mines says it stands little chance of developing its flagship Vista thermal coal project in the near-term as tough equity market conditions threaten the company's ongoing viability.
Canada-focused explorer Coalspur Mines says it stands little chance of developing its flagship Vista thermal coal project in the near-term as tough equity market conditions threaten the company's ongoing viability.
Canada-focused explorer Coalspur Mines says it stands little chance of developing its flagship Vista thermal coal project in the near-term as tough equity market conditions threaten the company's ongoing viability.
Coalspur told the market it was weighing up a potential recapitalisation, engaging with senior lender EIG Global Energy Partners and other financial sponsors in a bid to secure a short-term debt and equity injection.
"The company’s ongoing viability and its ability to continue with development work on Vista is subject to it raising additional capital," Coalspur said.
"Given the ongoing depressed coal price environment, challenging equity and debt market conditions and the company’s current share price, Coalspur is facing a substantial challenge in its attempts to secure full funding for the development of Vista.
"In the absence of being able to fully fund Vista, the company’s primary objective is to protect and preserve the value of the Vista asset."
The West Perth-based explorer said it had reduced the size of its workforce and cut spending in an attempt to preserve liquidity.
The company's share price has taken a massive dive over the course of the year, sitting at just 4.9 cents in early trade today after trading as high as 39 cents in January.
A depressed coal price and high costs of production have weighed on investment in the sector for junior explorers.
Coalspur last month dumped Forge Group's still-active North American business as its preferred engineering, procurement and construction contractor, appointing ASX-listed contractor Sedgman as its preferred EPC provider.
The company had hoped for construction to commence at Vista in the first half of this year ahead of first coal production in 2015, but any further development is unlikely to commence without fresh funding.