- There were no recordable injuries or incidents during the March 2023 quarter with nil injuries or incidents recorded YTD
- Discussions with JV partners to finalise the terms and structure the Dartbrook Joint Venture Agreement are nearing completion
- Negotiations with multiple parties for restart capex debt funding continue and are well advanced
- The Dartbrook Mine is on track for restart in H2 2023 with de-watering of the 4 km Hunter Tunnel largely complete and the procurement of long lead items and mining equipment underway
- The Company has no debt and $13.4 million of available cash at the end of the March quarter
- Ms Ayten Saridas appointed Interim CEO and Executive Director and Mr Mike Ryan appointed Interim Chairman
According to the company’s website press release on April 28, 2023, comments from Executive Director and CEO (Interim), Ms Ayten Saridas: “the Company made significant headway over the March quarter in terms of progressing the Dartbrook Joint Venture Agreement, mine development and remediation works, and funding negotiations.
“Operations continued to make good progress with development and remediation works on schedule. Importantly, dewatering of the Hunter Tunnel is substantially complete which is a significant operational milestone.
“Discussions with our Joint Venture partners to finalise the terms and structure of the Dartbrook Joint Venture Agreement continued and are nearing completion. All Joint Venture partners are taking a constructive and collaborative approach which is positive for the future operation of the Dartbrook asset.
“Negotiations with various entities to implement the restart capex funding package are well advanced. A substantial portion of the funding package will be linked to coal offtake rights and negotiations with an international third party with extensive global coal marketing experience are in the final documentation stage. We anticipate being in a position to announce this funding agreement in the shortly.”
Dartbrook Mine Restart
During the March 2023 quarter the joint venture partners continued to make good progress towards recommissioning the Dartbrook Mine. The mine remains on track to recommence production in H2 2023.
The Health and Safety of all personnel is a core value and the development of the site Safety & Health Management System (SHMS) continues with induction training, risk assessments of key management plans and procedures, health assessments and the procurement of safety related equipment. Emergency plans have been updated and implemented along with underground communication systems and first response procedures. There were no recordable injuries or incidents during the period.
Additional technical and trade labour was engaged to enable work to dewater the Hunter Tunnel and re-support the roof and ribs to progress on a 24/7 shift rotation. The mine has now engaged approximately 50 personnel to complete the re-support and dewatering activities and additional administration tasks including re-establishing the bath-house, workshops and offices.
The primary focus of underground activities has been dewatering the Hunter Tunnel. The Hunter Tunnel connects the mine with the CHPP and is approximately 4 kms in length. The tunnel contained approximately 57 megalitres of water of which the majority has now been removed. Only minor water remains in ponds and is being managed through the general pumping activities. The tunnel ventilation system has been restored and a complete ventilation circuit established. The entire tunnel is expected to be trafficable for wheeled vehicles in early May. The conditions of the of tunnel were better than expected with no significant failures identified.
During the quarter the mine plan was reviewed. Mining is planned to commence at the Kayuga seam, approximately 4.8 kms from the train load out facility. The Kayuga inter-seam drift conveyor system and the hunter tunnel conveyor system has been re-designed and procurement well advanced.
Procurement of mining equipment and the ancillary diesel fleet continues with the initial mining equipment expected onsite during early stages of H2 2023. Key electrical items have been identified and orders have been placed for transformers, motors, drive heads, ventilation ancillary equipment. A detailed assessment and report of the insurable risks was conducted for the insurance brokers and underwriters.
Environmental monitoring has been updated in line with the recommissioning program. All six Environmental Management Plans which are required to be approved by the Department of Planning and Environment (DPE) for the transition from care & maintenance activities to construction and mining have been approved. In addition, the Rehabilitation Management Plan (RMP), previously known as the Mine Operations Plan (MOP), has also been approved along with the Forward Work Plan which provides for the recommencement of mining activities to take place. The Annual Environmental Report was submitted as well as the Annual Dam Safety Review Report. Mining Lease ML 1456 was approved from a pending status to 27 September 2043.
Community consultation has continued with the Dartbrook Community Consultation Committee. Voluntary Planning Agreements (VPA) for the Upper Hunter Shire Council was signed off and the Muswellbrook Shire Council VPA is approved and waiting for Council signatory.
Dartbrook Joint Venture
Discussions to finalise the terms and structure of the Dartbrook Joint Venture Agreement (“JVA”) continued over the March quarter. The JV is being structured to reflect the roles and responsibilities of each participant and discussions to date have been constructive. It is anticipated that the JVA and other contingent agreements will be finalised and announced in the near future.
Restart Capex Funding
The Dartbrook underground mine will require capex funding of $100 million to $120 million to enable mining operations to restart in H2 2023. To the end of April 2023, AQC has advanced a loan to the JV of approximately $10 million (31 March 2023: ~$7 million) to enable the procurement of long lead items and mining equipment and avoid disruption to the development program. This loan will be repaid when the third-party debt facility is executed. A substantial portion of the third-party funding will be linked to Dartbrook coal offtake rights which are currently being negotiated with an international third party with extensive global coal marketing experience.
Corporate and Financial
On 9 January 2023, Mr Nick Johansen and Mr Jeff Beatty were appointed Non-Executive Directors of the Company.
CEO and Executive Chairman, David Conry, resigned on 16 January 2023. Ms Ayten Saridas, previously an Independent Non-Executive Director, was appointed as Interim CEO and will remain on the Board as an Executive Director. Mr Mike Ryan, an Independent Non-Executive Director, was elected to the role of Interim Chairman. External searches for each role are underway.
On 31 January 2023, Mr Tony Lalor resigned as a Director of AQC effective 3 March 2023. The Board thanks Mr Lalor for his contribution to the achievements of the Company to date and wish him all the best.
At quarter end the Company held $13.4 million in cash reserves. Funds during the quarter were primarily used in relation to the care & maintenance holding costs ($0.4 million), staff costs ($0.3 million), funding to advance the Dartbrook Joint Venture ($4.8 million), and corporate administration and transaction costs ($0.6 million).
The Company’s accompanying Appendix 5B (Quarterly Cashflow Report) includes an amount in item 6.1 of $0.25 million which constitutes executive and non-executive directors’ fees during the quarter.
This announcement has been authorised for release by the Board.
All enquiries:
Corporate
Murray Aitken, Australian Pacific Coal Limited
M. +61 (0)408 932 158 E. maitken@aqcltd.com
Investors
Matt Sullivan, Meridian Investor Relations
M. +61 (0)412 157 276 E. meridianir@outlook.com
Media
Paul Ryan, Citadel-MAGNUS
M. +61 (0) 409 296 511 E. pryan@citadelmagnus.com
