PERTH (miningweekly.com) – ASX-listed Australian Pacific Coal is hoping to restart production at its Dartbrook mine, in the Hunter Valley of New South Wales, by the fourth quarter of this year, subject to financing.
The company on Friday said that dewatering of the Hunter Tunnel had been completed, with 70 megalitres of water having been removed, significantly de-risking the project. The ventilation circuit has also been successfully re-established, enabling ongoing work to re-support the roof and ribs.
The restart project would require between A$100-million and A$120-million in capital funding in order for mining operations to restart, Australian Pacific said, with the company at the end of June providing a A$15.5-million loan to the Darbrook joint venture (JV) to ensure that the restart operations remained on track.
To ensure continuation of the remediation work at Dartbrook, Australian Pacific has agreed binding terms with its major shareholder Trepang Services, for a loan of A$3-million for additional working capital while negotiations with potential lenders for the balance of the restart capital expenditure (capex) funding are finalised.
The A$3-million loan is made up of a loan of A$2.2-million and the sale and lease back of the Australian Pacific-owned parcel of land occupied by the coal handling and preparation plant to Trepang for A$800 000. The lease will be for an initial period of 10 years with the option to extend.
The A$2.2-million balance of the loan plus interest will be repaid within 12 months or when third-party funding is secured.
Australian Pacific said on Friday that the company also has the option to secure an additional A$2-million from Trepang at a future date if required. As Trepang is a related party, the above transaction is subject to shareholder approval which will be proposed at the next annual general meeting anticipated in November 2023.
“Negotiations with multiple third parties to procure restart capex funding have accelerated since the restructure of the Dartbrook operating JV. Understandably, the prevailing market and economic conditions have added another level of complexity to negotiations and extended the timeframe for completion, but by engaging with multiple interested parties we have delivered competitive tension to the process,” said Australian Pacific interim CEO Ayten Saridas.
“By continuing to advance the remediation works at the mine, we have significantly de-risked the project and this has resulted in strong interest in funding the mine since the start of the year. The support of our major shareholder, Trepang, during this period gives us great confidence that we will finalise the restart funding package for Dartbrook in the near future.
“Our operations team continues to make excellent progress on underground remediation and surface rehabilitation works and the project remains well positioned for restart in the fourth quarter of 2023, subject to finalising funding in a timely manner.”