Fox Resources collapses with $14.8m debt after Bundaberg coal mine rejection

The company behind a contentious Queensland coal project has folded, owing creditors nearly $15m, after the government rejected its drilling bid and its key backer pulled funding.

Fox Resources went into administration after its application for a mining development licence was rejected.

A company behind a controversial mining project near Bundaberg has gone into administration, with a new report revealing it had almost $15 million in estimated debts.

Perth-based Fox Resources was looking to develop a coal mine in the Bundaberg region of Queensland and had already drilled 29 bore holes for coal surveys under exploration permit contracts.

The company went into voluntary administration last month, after the Queensland Attorney-General knocked back its application for further drilling and surveys on agricultural and residential land north of Bundaberg.

The company’s principal funder, a related entity called Zimprops Coal, cut off its financial support last month, which is likely when the company became insolvent, a report lodged with ASIC on Friday said.

Fox Resources owed $14.8 million in estimated debts, the report from administrators Shaun Boyle and Giovanni Carrello of BRI Ferrier said.

The bulk of its debts, $13.5 million, were owed to related parties. The company had mostly relied on debt funding from related parties for its working capital requirements, the report explained.

The proposed site for MDL3040, on agricultural and residential land in north Bundaberg.

Jungle Creek Gold Mines, a creditor which had previously held a security interest over Fox Resources’ property, exploration licences and permits, had also lodged a claim that it was owed $8.3 million.

However, its status as a secured creditor was unclear as Jungle Creek had intended to release and amend its agreement in 2016, the report said. The administrators wrote they would seek further information.

A further $1.3 million was also owed to unrelated and unsecured creditors, including $1.1 million owed to the company’s landlord, Montclare Superannuation, and $62,231 owed to solicitors at Gilbert + Tobin.

The Australian Taxation Office was owed $78,957, for unpaid PAYG withholding tax and GST.

Corporate regulator ASIC was owed $1,939 for unpaid reporting charges.

Fox Resources had traded at a loss for the last three financial years, but the administrators noted it had been an exploration enterprise and not a miner or producer.

The company’s directors had blamed its financial woes on Zimprops Coal stopping its funding for multiple reasons, including the state government’s ultimate denial of its mineral development licence and the costs involved when it sought a judicial review.

Protesters rallying against Fox Resources’ plans. Source: Coal Free Bundaberg.

Under Mineral Development Licence 3040, Fox Resources sought approval to drill five bore holes for metallurgical coal exploration purposes and to conduct technical studies on a proposed site between the Burnett and Kolan Rivers on 7,800 hectares of residential and agricultural land.

The company initially filed the application for the licence in 2019.

At first, former Queensland minister for resources Scott Stewart rejected the application, but this was overturned when the company won a Supreme Court appeal against the decision.

State Attorney-General and minister for justice and integrity Deb Frecklington had oversight when Fox Resources reapplied and the new state government came to power earlier this year.

She found the project was not in the public interest after there were significant concerns from the community about the potential impacts on water and the region’s agricultural and tourism industries from a future coal mine.

Fox Resources executive director Bruce Garlick.

At the time, executive director and company secretary Bruce Garlick said the company was “disappointed” by the Attorney-General’s decision, and that it would have created hundreds of jobs and fed millions of dollars into the local economy.

The company also said it would consider all available options, including potential legal action.

Fox Resources had already ceased trading by the time the administrators were called in.

The only remaining employee, Mr Garlick, was terminated.

The administrators wrote they had recovered about $25,901 in cash from the company’s bank accounts and they would auction off its office equipment.

Creditors are expected to vote to liquidate the company in a meeting next week, as no deal in the form of a Deed of Company Arrangement (DOCA) has been proposed.

However, the administrators warned creditors are not expected to receive back any of the money owed.

News Corp has contacted Fox Resources for comment.