Australian Pacific Coal (AQC) and its joint venture (JV) partner Tetra Resources have finalised a $60m (A$91.01m) debt facility with Vitol Asia for resuming operations at the Dartbrook coal mine, which has been in care and maintenance for 18 years.

The move is aimed at covering the forecasted restart expenditure at the mine, including equipment purchases and remediation works.

The debt facility, initially disclosed on 30 November 2023, was executed after an extensive due diligence period.

The facility is designed to support the mine through to its first coal production, encompassing the acquisition of additional mining systems necessary to reach full capacity.

Structured as a loan notes issuance agreement, the $60m facility offers a three-year term, with repayments set to commence following an initial grace period. This period is intended to facilitate the mine’s production start-up without immediate financial pressure.

The JV’s assets and shares, along with an APC parent company guarantee, will serve as senior security for the loan.

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Additionally, the agreement includes the subordination of shareholder loans and an interest rate pegged to the one-month SOFR (secured overnight financing rate) plus a margin.

Notably, the facility allows for the repayment to be offset against coal sales and does not impose penalties for early repayment.

AQC interim CEO Ayten Saridas said: “This is a landmark event for Australian Pacific Coal, our shareholders and the Dartbrook mine. The $60m restart funding package we have agreed with Vitol opens the door for Dartbrook to restart production after 18 years in care and maintenance.

“Our ability to secure debt funding for Dartbrook during a period of high inflation and global tension is testament to the quality of the project, the vision and work ethic of the team of people bringing it back to market and the commitment of our shareholders.

“We are excited with the potential of the Dartbrook mine and we are focused on bringing it back into production and delivering jobs and economic benefits for the people of the Hunter Valley.”