Universal Coal has delivered the coal to the coal handling and preparation plant (CHPP) for processing and sale.
[quote]Opencast mining at New Clydesdale colliery (NCC) is expected to ramp up over the next quarter, reaching steady state in H2, 2017 – complementing the underground coal currently being mined from three underground sections at the adjacent Diepspruit shaft.
“With both NCC’s underground and the opencast pit now being mined simultaneously, the colliery is set to contribute significantly to the cash flows that Universal Coal currently receives from our Kangala colliery, and its exposure to the improved thermal coal export market will diversify our revenue,” says Universal Coal’s CEO, Tony Weber.
“The debt funding will allow us to complete construction and meet the delivery requirements of our Eskom and long-term export off-take agreements, with no further financing needed.”
Opencast operations at NCC commenced in January 2017 as the second phase of NCC’s planned 3.3 Mtpa ROM mine development programme, following the commencement of underground operations in September 2016.
The third section of the CHPP, totalling an additional 100 tph capacity, has been fully rebuilt and is currently being commissioned, bringing the net annual throughput capacity in line with the projected 3.3 Mtpa ROM tonnage.
Details of NCC’s mining operations
The underground operation delivers primarily 6 000 Kcal thermal coal, focused towards export markets, and is set to achieve 900 000 tpa ROM during the next quarter.
Opencast operations will deliver a further 2 -2.4 Mtpa ROM premium quality domestic thermal and low phosphorous metallurgical coal once steady state is achieved in mid-2017.
The NCC mining operations are forecast to produce contracted sales of; 1.2 Mtpa to Eskom, with supply beginning in March 2017 and ramping up to reach full capacity over the next quarter.
Commencement of the long-term supply of 0.65 Mtpa, 6 000 Kcal quality export coal in May 2017, following the winding down of the interim agreement.
NCC loan facility
All outstanding conditions precedent on the A$21 million NCC loan facility with Investec Bank, acting through its corporate and institutional banking division, have been satisfied.
The facility will fund the balance of the capital required for development of the opencast mine and additional infrastructure, expansion of the CHPP capacity and general owners’ costs, and will re-balance the project debt/equity ratio.
The first drawdown notice under the facility is anticipated to be issued before the end of April 2017 and the first scheduled repayment date is scheduled for 30 April 2018.
Repayment of the facility will benefit from a capital repayment holiday for the first 12 months, and 16 equal quarterly instalments will be required thereafter.