Morien said in March that Kameron also has begun the process of clearing right-of-way for a 69-kV electric transmission line as part of the project.

Cline/Kameron have had “positive discussions” with prospective overseas buyers of Donkin’s coal, as well as with Nova Scotia Power (NSP), the province’s local utility, Morien said. An NSP spokeswoman has confirmed that her utility is “very interested” in buying coal from Donkin, located on the rugged Atlantic Ocean coastline of Cape Breton Island, although no sales agreement had been announced by the end of March.

Morien said it received an initial $2 million payment from Kameron as part of the $5.5 million Donkin purchase price when the deal closed in early March. The remaining cash consideration of $3.5 million is to be paid in stages, with $2 million on the earlier of either first production from the mine and the second anniversary of the sale closing, and an additional $1.5 million on the earlier of either first export sales from Donkin and the third anniversary of closing.

Kameron also agreed to pay Morien a gross production royalty of 2% on the first 500,000 metric tons (mt) of coal sales per calendar quarter and 4% on any coal sales from quarterly tonnage above 500,000 mt. Based on Donkin’s permitted production rate of 2.75 million mt annually, and current and forecast coal prices, Morien estimated that royalty payments could range from $4.6 million to $6.7 million a year.