PERTH (miningweekly.com) – The restart of the Dartbrook underground coal mine, in New South Wales, is a step closer to reality with Australian Pacific Coal (AQC) announcing it had received a non-binding letter of intent from a global commodities firm for up to $50-million in debt funding.

AQC has previously noted that the restart of the Dartbrook operation would require a capital investment of up to A$120-million. To date, the company has provided A$20-million through loans to the Dartbrook joint venture (JV).

A further A$75-million is required to fund equipment purchases and refurbishment activities to achieve first coal, and initial working capital requirements are estimated at A$20-million to A$25-million.

The company on Thursday said that provided the full $50-million debt funding is made available, it would fund the current estimated capital cost requirements through to first coal production in the fourth quarter of this year.

“The receipt of a non-binding letter of intent for up to $50-million of 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,” said AQC interim CEO Ayten Saridas.

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

“We are on track to commence mining operations in the fourth quarter of 2023 and anticipate first coal sales/shipments in the first quarter of 2024. While we still have much work to deliver on our plans, AQC and our JV partner Tetra remain focused on the re-start of the Dartbrook mine.”

AQC is targeting the completion of the loan documentation and initial drawdown of funds within four to six weeks, subject to final negotiations.

The company on Thursday said that the process to raise additional funding to cover the working capital requirements and reimbursement of its loans to the project is also well advanced.