APC's Dartbrook Coal Project now fully funded

Australian Pacific Coal Limited (ASX: AQC) is now fully funded to restart mining operations and a production ramp-up period at the Dartbrook coal mine in the NSW’s Hunter Valley.

In an enhanced funding package for the Dartbrook JV $20.0 million equity raising has been launched.

Funding Package

AQC and its JV partner Tetra Dartbrook have agreed with Vitol Asia to upsize the existing Senior Debt Facility from US$60 million to US$90 million on similar terms. The upsized Senior Debt Facility will:

• provide US$30 million of additional funds for working capital for approved operating expenses during ramp- up; and
• continue to fund ongoing approved budgeted capital expenditure to enable the restart of mining operations and commercial production.

The Senior Debt Facility is contingent upon securing a $20 million Junior Debt Facility, of which AQC will fund 50% (being $10 million), which may only be drawn once the Senior Facility is fully drawn down.

The Dartbrook Project is expected to be fully funded and have access to both debt facilities upon confirmation of AQC providing $10 million for the Subordinated Facility and satisfaction of customary Conditions Precedent, including the AQC Equity Raising.

AQC Equity Raising

AQC’s $20.0 million Equity Raising is being supported by the company’s largest shareholder Trepang Services, together with its related parties (who collectively hold 35.96% of AQC’s ordinary shares). It has committed to subscribe for $6 million in the Equity Raising, comprising a subscription of approximately $3.4 million under the Institutional Entitlement Offer and priority sub-underwriting the first approximately $2.6 million of shortfall in the Retail Entitlement Offer.

Proceeds from the Equity Raising will be used:

• to satisfy AQC’s 50% share of the A$20 million Subordinated Facility (being A$10 million);
• to meet general working capital requirements of the company; and
• to cover the fees associated with the Equity Raising.

“This funding package and the decision by Vitol to upsize the Senior Debt Facility by US$30 million to encompass Dartbrook’s working capital requirements is a huge vote of confidence in the Dartbrook project,” Australian Pacific Coal’s Managing Director and CEO, Ayten Saridas, said.

“We acknowledge and appreciate the strong support provided by our shareholders, particularly Trepang, and by Vitol, and will continue our efforts to bring Dartbrook back into commercial production before the end of the year.

“With this new funding package in place, the Dartbrook project is expected to be fully funded through to commercial production and ramp-up.

“The Dartbrook mine is an extraordinary asset with significant potential to generate value for the community, our shareholders and our workforce for years to come. The high-quality specs of the Dartbrook product remain in high demand globally and this is the right time to bring this mine back to life.”