Press Releases

Perth, Oct 17, 2011 (ABN Newswire) - Coalspur Mines Limited (ASX:CPL) (TSE:CPT) is pleased to announce positive results from its extensive coal quality test program on the Vista Coal Project ("Vista"), which was undertaken to finalize coal quality specifications and determine the clean coal yield on Vista as part the ongoing Bankable Feasibility Study ("BFS").

The test work demonstrated a substantial 12% improvement in the life of mine clean coal yield to 56% from 50%, as estimated in the Pre-Feasibility Study ("PFS"), and the identification of two separate coal products: Val D'Or and McPherson seams combined and McLeod seam, both now suitable for export markets. These results are expected to further enhance Vista's overall project economics, which will be included in the BFS, which is expected to be ready for publication in early 2012 following completion at the end of 2011.

Commenting on the positive results, Gene Wusaty, Managing Director and CEO, said "We are very pleased that the extensive coal testing program has not only significantly increased coal yields but at the same time validated the marketing potential of both of Vista's coal products for the export thermal coal markets. The significant improvement in clean coal yield is very positive for Vista's project economics as it will increase the additional clean coal produced at Vista and reduce unit mining costs over the life of the mine."

Extensive Test Sampling

The coal quality testing was carried out under the supervision of internationally recognised coal industry consultant Robert Leach.

core holes and a three tonne bulk sample which was completed by Coalspur in September 2010 The core holes represent data from all regional areas and previous operators. Test work performed included raw coal testing for washing, drying, handling, and settling pond design as well as combustion testing on the clean coal product.

The key parameters that were used to conduct the coal quality testing are as fol

- 1,200 raw coal entries encompassing all regional areas in Vista;

- Detailed washability reporting yield, ash and calorific value by density on 300 working sections;

- Detailed clean coal analysis on 200 working section simulated product samples; and

- 200 attrition tests (drop shatter and wet tumble) on both coal and stone samples to support washplant design studies.

Coal Quality Test Results

The testing resulted in a significant increase in the life of mine clean coal yield of the deposit and the identification of two separate coal products which are suitable for export markets. The primary product, which consists of the majority of the current saleable Coal Reserve, is comprised of the Val D'Or and McPherson seams. The secondary product consists of the McLeod seam. The analysis resulted in a combined clean coal yield from the Val D'Or and McPherson seams of 57.9% at an average calorific value of 5,767Kcal/kg gross as received ("gar") basis (dense, medium cutpoint 1.55 case). The McLeod seam averaged 42.5% yield at 5,410Kcal/kg gar basis (dense medium cutpoint 1.55 case).

Increased Clean Coal Yield

The analysis resulted in an increase in the life of mine clean coal yields for the McPherson, Val D'Or and McLeod seams. The combined Val D'Or and McPherson seams averaged a 57.9% yield as compared to 53.3% in the PFS. The average clean coal yield on the McLeod seam increased substantially to 42.5% as compared to 33.8% in the PFS.

The increase in the life of mine clean coal yield was attributed to the following factors:

1) Testing utilised data from 66 core holes as compared to 10 core holes in the test program completed in September 2010;

2) Core data included representative of all regional areas of Vista; and

3) Enhanced mine planning as part of the ongoing BFS resulted in significantly less dilution of the McLeod seam during the mining phase.

Potential for Further Yield Increases

The testing program included an analysis of the relationship between the average gross energy achieved from the combined Val D'Or and McPherson product compared to the clean coal yield obtained. The analysis indicated that if the average gross energy is reduced to 5,700Kcal/kg from 5,800Kcal/kg the result would be a further 7% improvement in the clean coal yield from 56% to 63%. This increase in yield would result in a significant addition to the saleable coal reserves and clean coal production rate on Vista. The decision on final product specifications, including average gross energy, will be finalised once additional market pricing for the marginally lower grade product has been evaluated.

For the complete Coalspur Mines Limited announcement including figures and tables, please view the following link:
http://media.abnnewswire.net/media/en/docs/ASX-CPL-561472.pdf

Contact

Gene Wusaty Managing Director and CEO Telephone: +1-403-975-7901