Curragh Resources (TSE) is set to start construction and development of the Westray coal project in Pictou County, N.S. The company says it has arranged financing through a $100-million loan from the Bank of Nova Scotia and a $12-million subordinated loan from the Nova Scotia government.
Curragh says the bank debt is backed by loan insurance from the Canadian government covering 85% of the loan and an interest buydown of $8.75 million, which can be earned over four years.
The total cost of the project is expected to be $139 million, including $29 million spent so far, $100 million to complete surface facilities and develop the mine and $10 million as an operating line of credit.
With about 45 million tonnes of proven-probable low sulphur coal reserves in place, Curragh expects to produce one million tonnes of coal annually from Westray. The Nova Scotia Power Corp. (NSPC) has signed a 15-year contract to purchase 80% of mine production for use at NSPC’s power generating station at nearby Trenton, N.S.
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