The Queensland-focused exploration and development company reported a total net loss of $7.7 million for the quarter ended June 30, with the majority of its operating cash flow split between exploration and administrative costs.
The company ended the quarter with $74.5 million cash in the bank but said it increased to $120 million on July 8 following the sale of its preference equity in WICET Holdings for $47 million.
Part of the funds raised will be applied to the ongoing approvals process leading to a mining lease at Springsure Creek.
They will also be used for related predevelopment activities including land acquisition, compensation and further development of the coexistence strategy for agriculture and mining at Springsure Creek.
Some funds will also be applied to further optimisation studies aimed at enhancing productivity and further reducing costs for the project.
The sale of the WICET Holdings has no impact on the company’s allocated port capacity in Wiggins Island coal export terminal stage 1.
Bandanna Energy maintains its 14% shareholding in WICET stage 1 at Gladstone and its representation on the WICET board, together with port allocation of 4 million tonnes per annum and the associated infrastructure capacity for the integrated rail haulage of coal from the Springsure Creek project to the port.
The project itself is progressing through the approvals stage and is the company’s priority development project.
During the quarter, Bandanna finalised and submitted the supplementary environmental impact statement for Springsure, as well as two mining lease applications for the infrastructure corridor and Triumph Creek rail load-out.
Separate impact assessments for the two MLAs had commenced, Bandanna said.
The company received approval for the development application for a 300-room accommodation village and completed the purchase of an allocation of 1000 megalitres per annum of water for the project’s longwall mining activities to ensure the mine is “largely self-sufficient and does not divert water from coexisting agricultural activities”
During the quarter Bandanna also continued discussions with potential joint venture parties in relation to a strategic investment in the project.
The company said it had been in ongoing discussions with a shortlist of interested parties in relation to both offtake and equity investment in Springsure.
At Bandanna’s other 100%-owned project, Dingo West, it continued landowner negotiations for further exploration and development of the anticipated metallurgical coal resource.
Landowner negotiations and exploration will continue to be the focus of attention in the quarter ending September 2013.
EIS and mining lease approvals are expected in the second half of 2014.
The company said it was revising its first production date from the second half of 2014 to prioritise capital investment in Springsure Creek ahead of Dingo West.
Bandanna also has a 50% interest in the South Galilee coal project JV with AMCI.
The SGCP is proposed to be developed as an open cut and underground mining operation, with an estimated mine life of 33 years.
Mine plan development targets an average production rate of 15.2Mtpa raw coal, yielding an average 13.6Mtpa of product coal and peaking at 16.6Mtpa.
Bandanna is attempting to confirm rail and port agreements for the project.