Loan secured to progress Tahmoor expansion

AUSTRAL Coal’s settlement of a multi-million dollar syndicated loan facility will accelerate cash flow and contribute to the Tahmoor mine expansion program.

Staff Reporter

The syndicate included NM Rothschild & Sons, HSBC Precious Metals and Fortis Bank SA/NV Singapore branch.

The deal follows the company's raising of a net $30 million in new equity through a recently concluded placement and Share Purchase Plan.

"The facilities include an $18 million project loan facility half of which was used to restructure the Company's foreign currency contracts, US$55 million foreign exchange hedging limit, $2 million guarantee facility and US$7.5 million coal sale facility," said managing director Ugo Cario.

Austral said the restructure of existing foreign exchange contracts is expected to accelerate cash generated from operations over the next two years. This, together with the balance of the project loan facility, will assist in funding the infrastructure upgrade and new asset purchases currently underway at the Tahmoor mine in preparation for extraction of the Tahmoor North reserves beginning in 2004.

"Austral Coal's expansion plans remain on track with year to date mine operating performance and infrastructure investment on schedule. The syndicated facility represents the completion of another strategic plank in the funding and development of Tahmoor North," Cario said.

"The support which the company is receiving from financial institutions as well as our shareholders is extremely pleasing and reflects a recognition of the company's fundamental strengths and the opportunities to be realised from our expansion program," Cario said.

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