About 95% of the revenue for the 2010 financial year was from its mining contract at the Chain Valley mine operated by LD Operations.
Bounty chairman Gary Cochrane outlined the start of the troubled times in the company’s recent annual report.
“Despite the fact that the impact of the global financial crisis was relatively short lived for the coal sector as a whole, the impact on Bounty itself was severe,” he said.
“A series of events in early 2009, including the abrupt termination of the Aquila and
Bundoora contracts in Queensland, the move to NSW with one remaining small contract and the associated redundancy payments and equipment compliance constraints in NSW, created severe financial restrictions for Bounty.”
Bounty raised $500,000 through a share issue in mid-July 2009, but still entered voluntary administration in August as operating conditions remained poor at Chain Valley and “negative” cash flows were continuing.
After emerging from voluntary administration the following month, the contractor raised another $1.9 million through a share placement in December.
Since then it has won an agreement with LDO for the hire of Bounty’s equipment at Chain Valley, with this contract expiring at the end of July 2010.
In May, Bounty won a six-month contract to provide labour hire services to assist gate road development at Xstrata’s Oaky Creek North longwall operation in Queensland.
Last month, Bounty won a two-year contract to operate Anglo American Metallurgical Coal’s Aquila and Bundoora mines at German Creek.
The Aquila project will use one fleet of Bounty equipment which includes its continuous haulage gear.
But the Bundoora contract mainly uses AAMC’s equipment.
AAMC also has an option to extend Bounty’s contract for the two mines for one year.
Cochrane said Bounty was continuing to discuss new contracts at mines in both Queensland and New South Wales.
“The directors of Bounty are confident that the fortunes of the company have begun to turn around, as evidenced by these significant new contracts,” he said.
“This has supported our view of the long-term strength of the export coal sector.
“On the back of these new contracts, Bounty is working towards a further capital
raising to move the company beyond current debt support and, contingent upon that, to return as soon as practicable to ASX listing.”
For the 2008-09 financial year Bounty lost $12.88 million.