The Queensland coal explorer’s chairman Neville Sneddon called that situation “unjustified and unsustainable in the longer term” at the annual general meeting two weeks ago.

Stanmore has responded by launching an on-market share buyback scheme for up to 10% of the company’s fully paid ordinary shares (20.9 million shares).

“The buyback reflects Stanmore’s strong cash balance in poor market trading conditions at a cyclical low point in the coal market,” Stanmore managing director Nick Jorss said.

“Importantly it will see the company retain the vast majority of its significant cash reserves for ongoing project development and retain the ability to pursue valuable growth opportunities.”

Yesterday the explorer said the buy-back period would start in a fortnight and would run for up to 12 months.

“The company reserves the right to suspend or terminate the buy-back at any time and there is no guarantee that Stanmore will purchase the full 20.9 million shares referred to,” Stanmore said.

Morgans Financial was selected as Stanmore’s broker for the buyback scheme.

The buyback announcement had no immediate impact on Stanmore’s share price which was unchanged at 8c yesterday.