Tetra Resources will be the exclusive Operator of the JV and will continue to support the ongoing operations of the mine
AQC finalises Dartbrook Joint Venture Agreement. (Credit: Albert Hyseni on Unsplash)
Australian Pacific Coal Limited (ASX: AQC) (“AQC” or the “Company”) has agreed new terms and executed a restructured Joint Venture Agreement (“JVA”) that will underpin the restart of the Dartbrook underground coal mine as planned in early Q4 2023. The binding term sheet announced in September 2022 has been renegotiated and the new JVA will see AQC increase its direct working interest in the project from 50% to 80% and its net economic interest increase from 50% to 70%.
With the JVA in place, the Dartbrook Joint Venture is currently finalising funding arrangements to meet future restart capex and working capital needs. A significant portion of the funding package will be linked to a new coal marketing and offtake agreement and negotiations with an international third party with extensive global coal
marketing experience are in the final documentation stage. Once finalised, this agreement and associated funding will materially de-risk the project and provide a clear pathway for additional funding. Discussions for additional funding involve multiple parties that are in advanced stages of due diligence.
The Dartbrook mine has ROM coal reserves of 470 million tonnes and saleable coal reserves of 370 million tonnes. Operations are expected to ramp up towards a steady state production of approximately 3 million tonnes ROM coal per annum. AQC owns the coal handling and processing plant that is critical infrastructure and negotiations for rail and port access are progressing well. The Dartbrook mine produces a high-quality coal that is typical of Hunter Valley specification. The Operator has recently updated the mine plan which indicates that the Dartbrook mine should be capable of delivering improved yields relative to historical outcomes, and that there exists the potential to produce some semi-soft metallurgical (i.e. coking) coal into the market, which is ssential in the manufacture of steel. The quality characteristics and the percentage of the overall volume of product coal that may have coking coal properties suitable for end-users are yet to be fully determined. With a revised mine plan and developmentworks underway, the JV partners are confident of the target date to commence operations in early Q4 2003.
Tetra Resources Pty Ltd (“Tetra”) will be the exclusive Operator of the JV and will continue to support the ongoing operations of the mine. Tetra has been a long-term partner on the Dartbrook project and they have led the operations through the initial development stage including the regulatory, operational and safety requirements
associated with the mine.
A key change from the previous JV announcement is that Trepang Services Pty Ltd (“Trepang”) will no longer have a 10% working interest in the project. Instead, Trepang will provide land and water access to the mine via a long-term lease which will be equivalent to an indirect 10% economic interest, with a minimum payment of $5 million per annum, that will be a cost to the JV. Further details on the lease will be provided when the terms are finalised.
Under the terms of the revised agreements, M Resources Pty Ltd (“M Resources”) will no longer be the coal marketing agent but will continue to support AQC by providing ongoing Technical Services advice on marketing and operations. The terms of the advisory role includes a 10% economic interest in the project and advisory fees as
outlined in the term sheet attached to this release.
Source: Company Press Release