Exploration company Bandanna Energy has gone into voluntary administration following its failure to sign take or pay contracts for the proposed Springsure Creek coal mine in Queensland's Bowen Basin.
Bandanna has been in negotiations with Credit Suisse to restructure the senior secured guarantee facility agreement (SSGFA) in order to confirm the take or pay obligations of Springsure Creek Coal to Wiggins Island Coal Export Terminal (WICET) for ship loading capacity and to Aurizon for rail access.
The company said that during the negotiation, it also explored alternative funding sources including from Credit Suisse, existing and potential new major equity investors, as well as options for binding commitments for asset sale.
As the Bandanna could not raise sufficient funds to gain a mining lease, the company decided to voluntarily go into administration.
Bandanna chairman John Pegler said: "Over the past few years, the BND Group has made substantial progress towards the development of the Springsure Creek project, including obtaining EIS approval from the Queensland Government, environmental approval from the Commonwealth Government and broad support from the local community and local government.
"Unfortunately, progress has been impacted by delayed approval of the Springsure Creek mining lease and the deepening cyclical decline in seaborne thermal coal prices, which together have further exacerbated delays in investor interest and participation."
The Board of Bandanna Energy (BND) appointed Grant Sparks, Martin Ford and Phillip Carter of PPB Advisory of the BND Group as joint and several voluntary administrators.
Located 47km south-east of Emerald, Springsure Creek underground coal mine has the potential to produce 5.5 million tonnes of coal a year with an estimated life-span of 40 years.
The mine was expected to employ around 600 people.