Published: August 18, 2023 |

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Australian Pacific Coal is set to restart operations at its Dartbrook thermal coal mine after the company secured a commitment for $50 million debt financing from a major commodity trading firm.

Under the terms of the funding agreement, Australian Pacific Coal will receive a three-year debt financing with an interest rate consistent with current market conditions.

The mining and exploration company will retain its current 80 percent working interest in the Dartbrook Joint Venture (JV), along with global coal marketing rights for all Dartbrook products.

It can repay the loan through coal offtake with an ability for early repayment.

Australian Pacific Coal aims to conclude the loan documentation and initial drawdown of funds within four to six weeks, subject to final negotiations.

“The receipt of a non-binding letter of intent for up to $50 million debt funding from a highly credible global party in this tough capital market environment is a clear signal that the Dartbrook project presents an attractive and compelling investment for lenders and traders alike. Whilst we have had to rely on our own balance sheet to fund the restart activities to date, it has enabled us to significantly de-risk the project and reflects positively on our progress,” said Australian Pacific Coal interim CEO Ayten Saridas.

“In particular, the de-watering of the Hunter Tunnel has been successfully delivered safely and on time. We have completed the operating joint venture agreement and have developed a revised mine plan which will result in improved yield potential and better product mix,” added Saridas.

Australian Pacific Coal previously said the project would require up to A$120 million ($77 million) in capital expenditure and working capital to recommence the mining operations.

It has offered around A$20 million to the Dartbrook JV and requires an additional A$75 million to fund equipment purchases, with initial working capital requirements estimated at A$20-A$25 million.

The company said that its efforts to raise additional funds to support working capital requirements and reimbursement project loans are well advanced.

The Dartbrook underground coal mine is located in the Hunter Valley, New South Wales, Australia.

The non-binding letter of intent for $50 million debt funding is adequate to fund the current estimated expenditure requirements of the project through to the first coal in Q4 of 2023.

“Thermal coal prices have recently rallied and this is an opportune time to be a new source of supply of NEWC spec coal into the export market,” said Saridas.

“We are on track to commence mining operations in Q4 20231 and anticipate the first coal sales/shipments in Q1 2024. Whilst we still have much work to deliver on our plans, AQC and our JV partner, Tetra, remain focused on the restart of the Dartbrook Mine,” added Saridas.

Source: NS Energy

Australian Pacific Coal is focused on developing, acquiring, and value adding coal projects. AQC’s principal asset is the Dartbrook Coal Mine located in the Hunter Valley, NSW. The Dartbrook site has access to world-class infrastructure, a skilled workforce, and support industries utilised by major mining companies in the region. Dartbrook mine produces a high-quality thermal coal (NEWC spec) that is typical of the Hunter Valley with the potential to produce some semi-soft metallurgical coal. The quality characteristics and the percentage of the overall volume of product coal that may have coking coal properties suitable for end-users are yet to be fully determined

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