The company said late last week that, for the period ended March 31, it incurred a net loss of $US631,574 and a working capital deficiency of almost $2.2 million.
Additionally, Cobalt confirmed it was unable to repay the lender of a bridge loan, due on June 30, for $1.2 million plus accrued interest and had gone into default under the companies’ forbearance agreement.
“The company continues discussions with the lender, however there is no guarantee that the lender will extend the forbearance agreement or if it is extended, on what terms,” officials said.
Cobalt also owed a quarterly interest payment for the debentures on June 30, and due to a lack of cash resources was unable to pay that amount. The company said it would now be in default under the terms of this transaction as well.
“The company continues to seek additional equity to resolve these debt defaults, for future expansion and for working capital purposes,” the company said.
Cobalt currently owns and operates two high-grade metallurgical coal projects, the Westchester mine and the Westchester Expansion. According to its website, Cobalt is currently involved in the acquisition of a third property.
The first season of the series Coal, which follows the crews and management of the Westchester operation, wrapped up on US television station Spike TV earlier this month.
The network has not confirmed that it will return for a second season, though chief executive officer Mike Crowder told media outlets last month the possibility had been discussed.
“[The reaction has] been somewhere between great and phenomenal,” he told West Virginia MetroNews.
While the show has focused on the day-to-day struggles of the mine’s operation, including financial and transportation issues, Crowder told the news service that the 40-worker McDowell County operation had also shown the public the strength of the bond shared by coal miners.
“It's a tough industry and it takes tough people and there's a lot of challenges and, when you go through the battle together, you tend to have more passion," Crowder said.
Cobalt is headquartered in Calgary, Alberta, and has a field office in Welch, West Virginia.