Australian Pacific Coal extends senior debt facility with Vitol Asia

Australian Pacific Coal said it had amended its senior debt facility with Vitol Asia.

Australian Pacific Coal is the second coal company under close watch by investors after Coronado Global Resources, with it owing over $US100m at a time that its market value is just $US41m.

The mining exploration and development company that focuses on thermal and metallurgical coal prospects has the Dartbrook underground mine project in the Hunter Valley region of NSW, as well as numerous coal exploration tenements located primarily in the Queensland Bowen Basin.

Last month, the company said it had amended its senior debt facility with Vitol Asia to increase the commitment by $US4.6m ($7.11m) from $US104m to $US108.6m to cover short-term funding needs of the Dartbrook Project, and on Friday that was extended by a further $US4.2m to $US112.8m.

The company has recently resumed underground mining at Dartbrook after launching a restart program last year.

In addition to its Vitol debt, the company has an unsecured loan from major shareholder Trepang Services.

The company’s executive director John Robinson said the additional funding was needed due to the softer coal price environment.

On Monday, Australian Pacific Coal told investors that Vitol had informed it that it reserves its rights, as it has defaulted on two of the conditions of the loan, although it is not taking further action.

To date, the company has relied on waivers extended by Vitol until the conditions subsequent could be satisfied, with the most recent waiver elapsing on May 31.

The coal company said most of the conditions have been satisfied.

But one of the two remaining conditions subsequent requires the project to rail 20,000 tonnes of produced coal in a consecutive 30-day period.

Australia Pacific Coal said its Dartbrook joint venture has contracts in place to rail the required tonnage and remains focused on starting exports of its high quality thermal coal product in the near future once steady state production is reached.

There is currently about 150,000 tonnes of run-of-mine coal stockpiled.

All sales and logistics require the assistance of Vitol as the sole and exclusive marketing agent of the project.

The other conditions subsequent outstanding relates to the registration of its Trepang Lease, with the NSW Land Registry Service, which is underway.

The outstanding matters are largely administrative, the company said, and they were expected to be satisfied in due course.