As part of its recent half-year results, Malabar said it was aware of the funding challenges faced by other junior coal players.

“The board believes the company to be well placed with key shareholder support anticipated to be forthcoming when funding is required,” Malabar said.

Malabar flagged seeking a strategic partner for the Spur Hill project at the “appropriate juncture” while it was also investigating longer term financing options for project development.

A cost-focused review for Spur Hill is underway, with work being done on the environmental impact statement and development application for the project.

“If compelling opportunities present themselves Malabar may also seek to acquire other coal assets as part of the company’s strategy of becoming a large-scale coal developer and producer,” the explorer said.

Malabar’s cash position fell by almost 50% in six months to end December at $3.15 million.

The company has a 37.39% interest in the Spur Hill Joint venture with the right to acquire up to 80% interest.

While engineering work remains underway, last year the project was targeting 6-8 million tonnes per annum of capacity with first longwall coal expected in the second half of 2018.

The project is located near the Mt Arthur mine and Anglo American’s Drayton South project in the Hunter Valley.