Coalspur Mines Ltd said today that it is set to acquire new coal leases next to its existing Hinton project in Canada as the company revealed that the new acquisition would be funded by current cash reserves plus some project funding facility from the Highland Park Group.

Company chief executive Gene Wusaty said that Coalspur will pay an upfront option fee of $C6.5 million or $A7.3 million with an additional $C83.5 million or $A94 million to be remitted by November 15 to cover for the lease fees.

Mr Wusaty said that the deal has encouraged the company to develop its export thermal coal mines in North America, potentially the largest so far to be established in the continent.

He said that a scoping study commissioned earlier this year had concluded that the Hinton coal project could be explored with relatively minimal operating expenses.

Mr Wusaty also said that Coalspur is now in the process of "commencing a pre-feasibility study to determine the substantial mining synergies, increased production rate and longer mine life which we anticipate can be achieved with the combined project."

In reaction to the announcement, Coalspur shares increased by more than 10 percent and as of 1118 AEST, company stocks were trading at 90.5 cents, gaining by 11 cents or 13.84 percent.