A coal development is expected to be quickly revived following a new partnership agreement.
Australian Pacific Coal (AQC) recently struck a combined deal with resources mogul Nathan Tinkler, M Resources, Evolution Capital, and a joint venture (JV) between Tetra Resources and Javelin Private Capital Group.
The mutual decision means AQC can immediately start reopening the Dartbrook Coal Project, 122km northwest of Newcastle. The operation has been under care and maintenance since 2006, following multiple workplace accidents and low commodity prices.
“AQC is pleased to announce that it has agreed [to] terms and entered into a binding term sheet with each of Trepang, M Resources and Tetra Resources for a strategic partnership between all of the parties that aims to see Dartbrook re-commissioned as a coal producing mine as soon as practicable,” the proponent said in a public statement.
The strategic partnership gives M Resources and Tetra Resources each a 20 per cent direct JV interest. Tetra will operate the mine.
Trepang will receive a 10 per cent stake if it agrees to extend the existing AQC access and compensation agreement. This includes various easement arrangements and transferring a water rights term to resume underground mining operations for the duration of mine life extension approvals. AQC will retain a 50 per cent JV interest in the project.
Mining/operational diligence, five year mine planning, capital budgeting for resuming work, and most commitments for personnel, equipment, and contractor/vendor services are already complete. QMEB can reveal the partnership has 27 months to resume production, otherwise M Resources and Tetra Resources must surrender their JV interests to AQC. Replacing critical mine infrastructure is estimated to cost about $300 million.
The strategic partnership requires a fully underwritten entitlement offer and shareholder approval. The deal is expected to close at 5pm on 3 October 2022.
“[We intend] to begin the restart work immediately upon financial close,” the JV previously said.
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