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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "****" AND HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION."
EXHIBIT 4.23
PINE VALLEY MINING CORPORATION
BCOL-C-0219
THIS CONFIDENTIAL TRANSPORTATION AGREEMENT ("Contract") is made as of the 8th
day of June, 2004 and is
BETWEEN:
BC RAIL PARTNERSHIP, a partnership having no general
partner, comprised of BC Rail Ltd., BCR Properties Ltd., and
British Columbia Railway Company pursuant to a partnership
agreement dated December 5, 1997
("BCOL")
AND:
FALLS MOUNTAIN COAL INC.
("Customer")
WHEREAS, the Customer, a wholly-owned subsidiary of Pine Valley Mining
Corporation, requires freight service from and to its Willow Creek Coal Mine
located at Falls, British Columbia (herein called the "Mine" or "Origin").
WHEREAS, BCOL wishes to provide freight service for the Customer.
NOW THEREFORE, the Customer and BCOL (the "Parties" and each a "Party") agree as
follows:
1. EFFECTIVE DATE AND TERM
Notwithstanding its actual execution date, this Contract shall take
effect upon the first to occur of the 2004 start of production at the
Mine and the 1st day of July 2004, and shall remain in effect until the
30th day of June 2009 ("Contract Period").
2. TRANSPORTATION SERVICE AND CHARGES
A. This Contract specifies the terms and conditions applicable to the
transportation by BCOL of products specified in Schedule 1 to this
Contract (the "Commodity") from the Origin to each destination
described in Schedule 1 to this Contract.
B. The Customer represents to BCOL that it controls the transportation of
the Commodity covered by this Contract and it agrees to ship the
Commodity in accordance with the terms and conditions set forth herein.
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3. CUSTOMER TO ADVISE
The Customer shall advise BCOL of the contract number when cars are
released pursuant to this Contract or cause the shipper to advise BCOL
of the contract number. The ▇▇▇▇ of lading and any other written
documentation issued by the Customer in connection with the shipment of
the Commodity under this Contract shall include the following statement
- "Subject to BCOL Confidential Transportation Contract No.
BCOL-C-0219"
4. INCORPORATION BY REFERENCE
This Contract incorporates by reference all tariffs, rules and
regulations of BCOL that are applicable to the transportation of the
Commodity by BCOL including, without limitation BCOL Tariff 750, except
to the extent that such tariffs, rules and regulations are in conflict
with this Contract. In the event of any conflict, the terms and
conditions of the Contract shall govern.
5. LIABILITY AND CLAIMS
The liability of BCOL and any other railway used by BCOL as
contemplated herein for any alleged loss, damage or delay to the
Commodity shall be limited to that stated on the ▇▇▇▇ of Lading or
Bills of Lading respecting the shipment of the Commodity.
6. CONFIDENTIALITY
This Contract is confidential and shall not be disclosed to any third
party except and to the extent as may be required by law, regulatory
authority, or as consented to by BCOL. BCOL acknowledges that the
Customer's parent corporation, Pine Valley Mining Corporation, is
subject to certain disclosure obligations imposed by the policies of
the TSX Venture Exchange and securities laws applicable to public
companies in Canada and the United States, and agrees that,
notwithstanding the provisions of this Contract, the Customer will not
be in violation of this Contract as a result of any disclosure made by
the Customer or Pine Valley Mining Corporation which, in the reasonable
opinion of the Customer, is required to comply with such disclosure
obligations.
7. RESTRICTIONS
Except as may be otherwise specifically provided for in Schedule 1 to
this Contract, this Contract does not include any transit, diversion or
reconsignment privileges and may not be used in combination with any
transportation of the Commodity from any origin or destination other
than as specified in Schedule 1.
8. FORCE MAJEURE
A. The Parties and any railway identified in Schedule 1 to this Contract
shall not be liable for any failure to perform under this Contract
while such performance is prevented or delayed by any cause or
condition of Force Majeure, which is not within the control of the
Party affected. The term "Force Majeure" shall include, but shall not
be limited to, acts of God, act of public enemy, war, insurrection,
authority of law, fire or explosion, lock-out, strike or other labour
dispute, refusal of third party railway to accept interchange,
derailment, damage to tracks, or any other causes not within the
control of the Party affected.
B. The Party affected by Force Majeure shall give to the other Party
notice of:
(i) the Force Majeure, including a reasonable description and
expected duration of the same, to the other Party within three
(3) days, excluding weekends and holidays, following the
occurrence of the Force Majeure condition;
(ii) any change in the expected duration of the Force Majeure
condition, promptly following such a change coming to the
attention of the affected Party; and
(iii) the end of the Force Majeure condition within three (3) days,
excluding weekends and holidays, following the end of the Force
Majeure condition.
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C. Force Majeure shall not extend the Contract Period. Force Majeure may
have the effect of reducing the commitments of the Parties to the
extent specifically provided in this Contract.
9. NOTICE
A. Except as otherwise provided herein, notices shall be in writing and
shall be delivered to the Party entitled to receive the same by
personal delivery, or by registered or certified mail. Notices may be
also communicated by any electronic means which can produce a written
copy provided that acknowledgement of receipt of the electronic
communication notice is obtained.
B. Any notice given under this Contract shall be effective as of the date
of delivery in the case of personal delivery, date of receipt in the
case of notices sent by registered or certified mail, and as of the
date of electronic transmission, in the case of notices given by
electronic communication where receipt of the communication has been
acknowledged.
C. Notices shall be communicated to the Parties as follows:
If to BCOL:
BC Rail Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Marketing and Sales
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Customer:
Pine Valley Mining Corporation
Suite 501 - 535 ▇▇▇▇▇▇▇ St.
Vancouver, B.C.
Canada
V6E 3L2
Attention: President
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
Or to such other person or address as either Party may designate by
notice given in accordance with this Contract.
Any communication relating to Force Majeure, or any matter of an
emergency or operating nature, may be given be any reasonable means. If
given verbally or by telephone, such communication shall, as soon as is
reasonable in the circumstances, be confirmed in writing or if given by
electronic communication, the Party receiving the electronic
communication must specify if written confirmation is required.
10. PLANT RATIONALIZATION
If BCOL or any other railway specified in Schedule 1 to this Contract,
pursuant to lawful authority, embargoes, abandons, sells or otherwise
disposes of a line of railway or facility on which service is provided
pursuant to this Contract, such embargo, abandonment, sale or other
disposal shall not be deemed a breach of this Contract and the
provisions of this Contract shall be inapplicable with respect to such
line or facility on or after the date such line or facility is
embargoed, abandoned, disposed of or sold.
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11. PAYMENT OF ACCOUNT
A. Without in any way limiting any other provision of this Contract, BCOL
will invoice the Customer weekly and the Customer will pay each invoice
within seven (7) business days from receipt of that invoice, except to
the extent such invoice is in good faith contested by the Customer. An
interest rate equal to the prime lending rate of the Royal Bank of
Canada for Canadian dollar commercial demand loans, as published from
time to time, plus 2% per annum shall apply to all overdue amounts, and
unpaid contested amounts which are subsequently determined to be
correct.
B. In the event, at anytime, the amount owing to BCOL hereunder shall
exceed the credit limit established by BCOL and communicated to the
Customer from time to time in total or the Customer shall become
insolvent, then (1) BCOL may, at its election and without terminating
this Contract, and without limiting any other right, remedy or claim it
may have under this Contract or at law or in equity, suspend the
provision of services under this Contract until full payment of the
outstanding amount is received and seize any Commodity of the
Customer's and hold or sell same in satisfaction of any amount
outstanding to BCOL. If BCOL suspends services under this provision,
then BCOL shall give three (3) days advance written notice to the
Customer and, upon receipt of all payment as aforesaid, BCOL shall
recommence service as quickly as reasonably possible unless BCOL has
proceeded under Section 12 hereof; or (2) all amounts to BCOL
outstanding, in the sole discretion of BCOL, shall become due on demand
and BCOL may declare this Contract in default by the Customer.
12. DEFAULT AND TERMINATION
A. In the event of a material breach of this Contract by either Party or,
without limiting the rights of BCOL set out in Section 11 hereof, upon
any failure by the Customer to pay any amount when due hereunder, and
after the Party suffering such breach gives the defaulting Party ten
(10) calendar days' notice within which to remedy the breach, the Party
suffering such breach may, without prejudice to any other rights or
remedies that that Party may have, terminate this Contract, unless the
defaulting Party has remedied the breach within the ten (10) day notice
period to the reasonable satisfaction of the Party suffering the
breach, or (excluding the payment of monies) such longer period as may
be reasonable in the circumstances.
B. If either Party commits an act of bankruptcy or has a receiver or
liquidator appointed for its assets, then the other Party may, without
prejudice to any other rights or remedies that that Party may have,
terminate this Contract, by written notice of not less than thirty (30)
days' given to the other Party.
13. SCHEDULES
A. In the event that any schedule hereto is inconsistent with the terms
and conditions of the Contract, the schedule shall prevail.
B. This Contract includes and incorporates the following schedules:
Schedule 1 - Commodity and Transportation Particulars
Schedule 2 - Ancillary Charges
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14. MISCELLANEOUS PROVISIONS
A. Entirety: This Contract constitutes the entire agreement and merges and
supersedes all prior understandings and representations between BCOL
and the Customer concerning the subject matter hereof, including
without limitation the Freight Transportation Agreement made as of
February 14, 1996 between BC Rail Ltd., Pine Valley Coal Ltd., the
Customer (Falls Mountain Coal Inc.), Mitsui Matsushima Canada Ltd., and
BCR Ventures Inc. For greater certainty, the Parties acknowledge and
agree that, prior to the making of this Contract, the Customer had
assumed the rights and obligations of Mitsui Matsushima Canada Ltd. and
BCR Ventures Inc. under that Freight Transportation Agreement.
B. Assignment: This Contract may be assigned by BCOL, but shall not be
assigned by the Customer hereto without the consent of BCOL, which
consent shall not be withheld unreasonably. BCOL hereby consents to the
assignment of this Contract to Mitsui Matsushima Canada Ltd. and
Marubeni Corporation pursuant to security agreements entered into
between such corporations and the Customer to secure financing provided
to the Customer and its affiliates in connection with the acquisition
and development of the Mine.
C. Non-Waiver: The failure of a Party to enforce any provisions of this
Contract shall not be considered as a waiver of that provision and
shall not prevent termination of this Contract due to default.
D. Other Destinations: The Customer may desire to transport the Commodity
to other destinations than the Destination (Neptune Bulk Terminals,
North Vancouver) during the term of this Contract. The Customer and
BCOL will negotiate in good faith to achieve mutually satisfactory
terms in the event of this occurring and the volume transported to such
other destinations shall be included in the Volume Commitment described
in Section 15
15. VOLUME COMMITMENT
CONFIDENTIAL TREATMENT REQUESTED
A. Volume Commitment: The Customer shall ship with BCOL during each
12-month period of the Contract Period, not less than ********* tonnes
of the Commodity between the Origin and Destination specified in
Schedule 1.
B. Default of Volume Commitment: In the event that the Customer fails to
ship in accordance with the Volume Commitment (as described in 15A
above), BCOL may invoice the Customer for liquidated damages amounting
to ***** per tonne times the total shortfall (i.e. the Volume
Commitment less all tonnes actually shipped during the applicable
12-month period.)
C. Effect of Force Majeure on Volume Commitment: In the event of Force
Majeure which affects either the Customer or BCOL and which prevents or
delays the Customer from shipping the Commodity for a period in excess
of seven (7) consecutive calendar days or an aggregate of 14 calendar
days in any 12-month period, then the Volume Commitment shall be
reduced by 1/365 for each day that the Customer is unable to ship the
Commodity as a result of the Force Majeure.
16. VOLUME FORECAST
A. The Customer shall, before the end of each quarter of each calendar
year, provide BCOL with a written forecast of the Commodity production
at the Origin and shipment via BCOL during the next quarter and each of
the following four quarters.
B. Subject to the specific provisions of this Contract, BCOL shall supply
to the Customer the rail equipment and infrastructure, including
rolling stock, all maintained to a prudent and sound standard, and
render shipping services to ship the Commodity, all in accordance with
the Customer's forecasts. The Customer shall make shipments of the
Commodity and BCOL shall accept such shipments in approximately equal
monthly quantities and fairly evenly distributed throughout each twelve
month period.
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17. MINE INFRASTRUCTURE
The Customer's loading facility, weighing system and track
infrastructure at the Mine shall be constructed and maintained by the
Customer, at its sole expense, including replacement of materials from
time to time as may be necessary, in a manner which (i) meets the
reasonable specifications of BCOL; (ii) meets any applicable government
regulations; and (iii) preserves such infrastructure in condition
reasonably suited to the loading and handling the Customer's traffic.
The siding track at the Mine will be designed and constructed to load
unit trains of 104 cars.
18. FURTHER ASSURANCES
The Parties will from time to time promptly execute and deliver all
further documents and take all further action necessary or appropriate
to give effect to the provisions and intent of this Contract and to
carry out the transactions contemplated hereby.
19. MODIFICATION
Neither this Contract nor any provision hereof will be modified,
changed, discharged or terminated except by an instrument in writing
signed by the Party against whom any waiver, change, discharge or
termination is sought.
20. TIME OF THE ESSENCE
Time will be of the essence of each provision of this Contract.
21. ENUREMENT
This Contract enures to the benefit of and binds the Parties and their
respective successors and permitted assigns.
22. CURRENCY
Except as otherwise specifically provided, all references in this
Contract to amounts of money are expressed in Canadian dollars.
23. SEVERABILITY
Each provision of this Contract is several. If any provision of this
Contract is or becomes illegal, invalid or unenforceable in any
jurisdiction, the illegality, invalidity or unenforceability of that
provision will not affect: (i) the legality, validity or enforceability
of the remaining provisions of this Contract, or (ii) the legality,
validity or enforceability of that provision in any other jurisdiction,
except that if: (iii) on the reasonable construction of this Contract
as a whole, the applicability of the other provision presumes the
validity and enforceability of the particular provision, the other
provision will be deemed also to be invalid or unenforceable, and (iv)
as a result of the determination by a court of competent jurisdiction
that any part of this Contract is unenforceable or invalid and, as a
result of this Section, the basic intentions of the parties in this
Contract are entirely frustrated, the Customer and BCOL will use all
reasonable efforts to amend, supplement or otherwise vary this Contract
to confirm their mutual intention in entering into this Contract.
24. GOVERNING LAW AND VENUE
This Contract, any amendment, addendum or supplement hereto, and all
other documents relating hereto will be governed by and construed in
accordance with the laws of the Province of British Columbia, and the
federal laws of Canada applicable therein, governing contracts made and
to be performed wholly therein, and without reference to its principles
governing the choice or conflict of laws. The parties hereto
irrevocably attorn and submit to the exclusive jurisdiction of the
courts of the Province of British Columbia, sitting in the City of
Vancouver, with respect to any dispute related to or arising from this
Contract.
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IN WITNESS WHEREOF, this Contract has been executed by the Parties as of the day
and year first above written.
PINE VALLEY MINING CORPORATION
By:
Title:
________________________________
Authorized Signatory
BC RAIL PARTNERSHIP
By:
Title:
________________________________
Authorized Signatory
SCHEDULE 1
BCOL-C-0219
COMMODITY AND TRANSPORTATION PARTICULARS
COMMODITY: COAL, THERMAL AND SEMI-HARD COKING IN BULK FOR EXPORT
TERM: THE FIRST TO OCCUR OF THE 2004 START OF PRODUCTION AT
THE MINE AND THE 1ST DAY OF JULY 2004, TO AND INCLUDING
JUNE 30, 2009.
EFFECTIVE DATE: UPON THE COMMENCEMENT OF THE TERM AS DESCRIBED ABOVE.
EQUIPMENT: UNIT TRAINS OF RAILWAY SUPPLIED ROTARY DUMP GONDOLA
CARS
ORIGIN(s): FALLS, BC
DESTINATION: NEPTUNE BULK TERMINALS, NORTH VANCOUVER, BC
RATES: RATES IN CANADIAN DOLLARS PER METRIC TONNE
CONFIDENTIAL TREATMENT REQUESTED
COMMENCEMENT OF THE TERM AS DESCRIBED ABOVE TO AND
INCLUDING JUNE 30, 2005: $****** (BEING A RATE OF
$****** MINUS $***** DEVELOPMENT INCENTIVE FOR FIRST
YEAR)
JULY 1, 2005 TO JUNE 30, 2009: $*******
ROUTE: BCOL ( INCLUDING CN DELIVERY )
MINIMUM WEIGHT: 95 METRIC TONNES PER CAR
MAXIMUM WEIGHT: GROSS WEIGHT ALLOWED ON RAIL LINE (CURRENTLY 268,000
POUNDS PER LOADED RAILCAR), OR THE MAXIMUM GROSS WEIGHT ALLOWED FOR THE CAR AS
STENCILED ON THE CAR, WHICHEVER IS LESS.
MINIMUM SHIPMENT OF 80 CARS PER UNIT TRAIN, WITH THE SPECIFIC NUMBER OF CARS UP
TO 104 CARS PER UNIT TRAIN BEING AT THE SOLE DISCRETION OF BCOL
OTHER CONDITIONS:
THE ABOVE DESCRIBED RATES DO NOT INCLUDE LOADING, UNLOADING AND PORT TERMINAL
CHARGES ALL OF WHICH WILL BE THE RESPONSIBILITY OF THE CUSTOMER
BCOL WILL PROVIDE POWER AND CREW TO MOVE THE UNIT TRAIN THROUGH LOADING
FACILITY, SUBJECT TO LOADING TIMES OUTLINED IN SCHEDULE 2 - "ANCILLARY CHARGES"
OF THIS CONTRACT
BCOL WILL PROVIDE ALL MAINTENANCE AND CLEARING OF THE SWITCHES FROM THE SIDING
TO THE MAIN RAIL LINE, AND INVOICE THE CUSTOMER FOR THIS WORK.
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COAL LOADING OPERATION MUST INCLUDE THE CUSTOMER TREATING THE COAL AFTER THE CAR
IS LOADED TO PREVENT UNREASONABLE DUSTING FROM COAL WHILE ON ROUTE TO NORTH
VANCOUVER OR TO MEET ANY ACTUAL OR FUTURE ENVIRONMENT REGULATION OR REQUIREMENT.
NOTWITHSTANDING THE OTHER PROVISIONS OF THIS SCHEDULE AND THE CONTRACT, BCOL
WILL ALLOW 20 CAR BLOCKS TO BE LOADED AT THE ABOVE RATE DURING THE CONSTRUCTION
OF THE CUSTOMER'S UNIT TRAIN SIDING, BUT ONLY TO OCTOBER 31, 2004. ON THESE
SMALLER BLOCKS OF LOOSE CARS THE CUSTOMER WILL BE RESPONSIBLE TO MOVE CARS ON
THE SIDING AS REQUIRED DURING LOADING. BCOL WILL CONSOLIDATE THESE SMALL BLOCKS
INTO A MINIMUM 80 CAR UNIT TRAIN FOR DELIVERY TO NEPTUNE BULK TERMINALS.
CUSTOMER SHALL PROVIDE BCOL WITH A ▇▇▇▇ OF LADING AND LIST OF THE RAILCARS
INCLUDING PAYLOAD WEIGHTS AND DESTINATION FOR EACH RAILCAR UPON RELEASE OF
LOADED CARS FROM THE MINE.
SCHEDULE 2
BCOL-C-0219
ANCILLARY CHARGES
THE FOLLOWING APPLIES ON UNIT TRAINS OF GREATER THAN OR EQUAL TO EIGHTY (80)
RAIL CARS:
(1) Loading time of seven (7) hours will be allowed for unit trains up to eighty
eight (88) cars from the time empty train is placed until released loaded. BCOL
will place the first car of the train at origin for loading. Unit trains of
greater than eighty eight (88) cars will have the loading time allowance
increased on a prorated basis.
(2) Unloading time of eight (8) hours at Destination for all unit trains of
eighty (80) to one hundred and four (104) cars from time unit train is placed on
Destination siding. Unloading shall be deemed complete when the unit train is
empty and returned to the CN Rail ready for movement.
(3) Three hundred and forty five dollars ($345.00) detention per hour per unit
train will be assessed for the first forty eight (48) hours when, for reasons
attributable to the Customer, loading and unloading times exceed the allowances
specified in this Schedule, trains are delayed, or trains cannot be received at
origin or destination. Two hundred dollars ($200.00) detention per hour per unit
train will be assessed for each hour after the first forty eight (48) hours
when, for reasons attributable to the Customer, locomotives and railcars are
detained.
(4) Three thousand dollars ($3,000.00) will be assessed for each occurrence of
delay, attributable to the Customer, which requires an additional loading,
unloading, or road crew for a unit train.
(5) Ancillary charges may be assessed unless a Force Majeure notice has been
issued. A Force Majeure notice may be issued only if the occurrence lasts twenty
four (24) hours or more. Charges will resume immediately after the Force Majeure
condition has ceased.
THE FOLLOWING APPLIES TO LOADING SMALLER BLOCKS OF LOOSE CARS, AND NOT UNIT
TRAINS:
(1) Loading time of twenty four (24) hours free time will be allowed for smaller
blocks of cars from the time cars are placed empty until they are released
loaded. After the twenty four (24) hours free time railway demurrage terms and
charges, as found in BCOL Tariff BCOL 1100, or its future replacement, will
apply. BCOL will supply loose cars up to October 31, 2004.
(2) Unloading time will be the same as for unit trains as these blocks of loose
cars will be consolidated to meet the eighty (80) car minimum requirement for
unloading at Destination.