The company was forced to force to extend its capital raising for a second time as it seeks to re-establish itself as a specialist contractors after losing key contracts with Anglo American.
On August 18, Bounty offered 4.5 million shares at 30c each in an effort to raise up to $4.5 million but later extended the offer until September 26. It has now once again extended the offer until October 10.
Recapitalising Bounty was essential, with the company’s chairman Gary Cochrane saying it would continue to source revenue from contract mining work as it arose.
“During FY2013, using place-change mining, Bounty produced coal at a rate of greater than 40m per shift with a single mining unit, well above industry standard performance. Bounty has also demonstrated capability to provide greater than 17m per shift (again above industry standard performance) of place-change gate road drivage at a competitive cost.”
The company was well positioned to find work when the market improved, Cochrane said.
Following expiry of the mining contract at Anglo American’s Aquila mine in Queensland, Bounty’s equipment remains on care and maintenance pending a recovery of economic conditions and finding new revenue opportunities.
“The equipment has been valued by an independent valuer in June 2014 and with some limited investment can be ready for make a prompt return to profitable use when a favourable contract becomes available,” Cochrane said.
Bounty has secured a new revenue source by entering agreements with joint venture partner Aust-Pac Capital under which Bounty has the right to earn up to 51% of the Wongai coal project in far north Queensland through farm-in and acquisition.
In addition, Bounty has a life-of-mine contract to develop and operate the mine.
“The Wongai mine is well suited to Bounty’s core expertise of underground place-change mining,” Cochrane said.
“These agreements secure a potential long-term revenue stream for the company without the level of uncertainty attached to short-term contracts with third party mining companies.”
In June 2014, Bounty obtained shareholder approval to restructure and strengthen the balance sheet by debt reduction and fund raising in order to resume quotation on the ASX and provide funding to progress the Wongai project.