Chairman Rob Stewart told a general meeting that by the beginning of April the company had drawn the full amount [$20 million] of the first loan facility made available by Bounty's largest shareholder Amaroo.

"We have met all covenants under this facility," he said.

 

"While most of the funds drawn have been used to cover operating cash shortfalls as we build towards a sustainable business, we have also used funds to acquire critical spare parts and conveyor belting, and for a payment to Glencore towards the completing the acquisition.

 

"We have continued to work toward sustained positive cash flows through managing plant reliability, increasing production and reducing costs."

 

Run-of-mine production is currently the restriction on our revenue stream and we have been making changes in mine layout to enable increased productivity, Stewart said.

 

"In the past three months our ROM production has been 56,108 tonnes for March, 43,286 tonne for April when we made most of the relocations underground, and 58,532 tonnes in May starting to show the impact of the changes," he said.

 

"Contract negotiations for rail and port access have been finalised and we expect to conclude these contracts within the next few weeks. These contracts will give us security of access to logistics, but have been structured to minimise adverse exposure to take or pay provisions - until now we have been shipping under ad-hoc agreements."

 

Since February, Bounty CEO Jim Griffin and Cook general manager John Hart and staff have been building an efficient and productive culture, reducing costs and planning the future for the mine, according to Stewart.

 

"By end of June they will have completed and presented to the board a business strategy, mine plan and financial forecast that will form the blueprint for the next two years," he said.

 

"The board have already seen preliminary drafts. The final strategy will include conversion of operations to place change methodology within the next 12 months. This is the technique that has been used successfully at Ensham's underground operation and is aimed at delivering a significant uplift in production."