The company said it had been optimising and deferring capital expenditure to preserve cash reserves where possible and had been taking advantage of a competitive contracting market.

This has been evidenced both by the recently completed flood levee construction, which was delivered under budget and the fact that newly submitted tenders are showing significant cost savings against the feasibility study estimates.

“The increase in production at Baralaba North is an important milestone for the company and is critical in ensuring Cockatoo can meet its infrastructure take-or-pay obligations,” Cockatoo said in a statement.

“This includes the delivery of coal to the new Wiggins Island Coal Export Terminal, which is now more than 80% complete.”

Cockatoo and its major shareholders are currently in advanced stage discussions with JFE Shoji Trade Corporation regarding the future direction and funding of the Baralaba joint venture.

JFE has a 37.5% shareholding in the Baralaba mine and a 20% interest in Baralaba North expansion.

Cockatoo and its two major shareholders – Noble Group and SK Networks – and its principal bank ANZ are also in advanced negotiations over the release of up to $37 million of restricted cash that the company has provided for infrastructure guarantees.

The release of the restricted cash is a critical element of Cockatoo’s funding plan. The finalisation of the proposal is subject to entry into formal agreements and a resolution of the JFE discussions to the satisfaction of Noble Group, SK Networks and ANZ.

The agreements with Noble Group and SK Networks will then be subject to approval by Cockatoo’s shareholders in a general meeting.

“The company is closely managing its cashflow … deferring works which are not on the expansion project’s critical path, and pre-sales of coal through facilities provided by its major shareholders,” Cockatoo said.

“Following release of the restricted cash, Cockatoo intends to progress with a potential mezzanine financing.”