The restart of the Dartbrook underground coal mine in New South Wales has taken a significant step forward as Australian Pacific Coal (AQC) announced the receipt of a non-binding letter of intent from a reputable global commodities firm for potential debt funding of up to $50 million.

AQC has previously highlighted that reviving the Dartbrook mine would necessitate an investment of around A$120 million. Currently, the company has extended A$20 million in loans to the Dartbrook joint venture (JV). An additional A$75 million is needed to cover equipment acquisitions and refurbishment to achieve initial coal production, while an estimated A$20 million to A$25 million is required for initial working capital.

According to AQC's statement on Thursday, the receipt of this non-binding letter of intent, especially in the challenging capital market environment, underscores the attractiveness of the Dartbrook project to potential investors. AQC's interim CEO, Ayten Saridas, emphasized that the project has been successful in minimizing risks, including the safe and timely dewatering of the Hunter Tunnel. The operating JV agreement has been finalized, and an improved mine plan has been developed to enhance yield potential and product mix.

Saridas noted the company's timeline, with mining operations targeted to commence in Q4 2023 and the first coal sales or shipments projected for Q1 2024. While acknowledging the work ahead, AQC and its JV partner Tetra are resolute in their focus on restarting the Dartbrook mine.

The loan documentation process and initial fund drawdown are expected to be completed within four to six weeks, contingent upon final negotiations. AQC also reported that it is well-progressed in securing additional funding to cover working capital requirements and the reimbursement of loans to the Dartbrook project.