Australian Pacific Coal welcomes new $90m Dartbrook funding package
Australian Pacific Coal (ASX: AQC) and joint venture partner Tetra Resources have received major new funding support for their plan to restart the “world-class” Dartbrook coal mine in New South Wales’ Hunter Valley.
Leading global energy and commodities company Vitol Asia has come forward with a credit committee-approved offer on agreed terms for a 3-year $90 million debt facility that will cover all remaining restart capital expenditure (capex) through to first coal at Dartbrook and the acquisition of additional mining systems during ramp-up.
Surface infrastructure at Dartbrook includes power, water and office facilities. Existing on-site train load out and rail loop connect to the Hunter Valley Coal Rail Network for coal transportation to the port of Newcastle, the largest coal export operation in the world.
The Dartbrook mine is a permitted 6 million tonnes per annum underground mine, which operated from the mid-1990s to 2006.
The Dartbrook coal handling and preparation plant is reported to be in good condition since the mine was placed on a care and maintenance basis in 2007.
Coal marketing rights
Under the new funding agreement, Vitol will be assigned Dartbrook coal marketing rights via a coal supply and marketing agreement between the parties.
Australian Pacific Coal’s interim chief executive officer Ayten Saridas said the Vitol offer is well-placed and well-timed.
“After reviewing multiple funding proposals, and working under increasingly difficult global economic conditions, I am very pleased that we have received a credit committee approved offer from Vitol, a leading global energy and commodities company, based on mutually agreed terms,” Ms Saridas said.
“For the past 12 months, Australian Pacific Coal has been focused on de-risking the Dartbrook project and obtaining a debt funding package that gives Dartbrook the best chance of succeeding and delivers the best outcome for shareholders and stakeholders.”
“The Dartbrook Mine is a tier one asset and this transaction is testament to the quality of the resource.”
“Vitol was selected as our preferred funding partner for their ability to provide a comprehensive funding solution that covered all of our restart capex needs. This facility will allow us to complete all remediation and refurbishment works and acquire the critical equipment necessary to restart mining operations and ramp-up to full capacity.”
Ms Saridas said the loan agreement with Vitol is a significant milestone for Australian Pacific Coal and the Dartbrook project.
New start-up schedule
“We have revised our schedule to align with the receipt of funding and we anticipate an intensive capital works program leading up to first coal, targeted in Q1 of 2024. During that period, Australian Pacific Coal will be working towards finalising a working capital facility to underpin our commercial operations going forward.”
The coal sales and marketing agreement with Vitol is for all Dartbrook coal production, including assigning coal marketing rights, for the life of the mine (including any extensions).
“Thermal coal prices remain robust and we have received numerous inbound inquiries for Dartbrook’s NEWC spec product. We are confident in Vitol’s marketing capabilities and we look forward to working with them as we bring this world-class asset back to full operational status,” said Ms Saridas.
“With the project’s critical funding in place, Australian Pacific Coal and our JV partner, Tetra, are fully focused on restarting production at Dartbrook in the new year.”