AN independent auditor has raised "significant doubt" about whether Dartbrook mine owner Australian Pacific Coal can continue as a going concern after a net loss of $13.23 million by June 30 and rejection of expansion plans it said were needed to make the site financially viable.
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The company's total liabilities exceed its assets by more than $20.1 million, independent auditor Hall Chadwick said in a report on Australian Pacific Coal's annual financial statements lodged with the Australian Stock Exchange on Monday.
"A material uncertainty exists that may cast significant doubt about the company's ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report," Hall Chadwick said.
The $13.23 million loss for the financial year until June 30 followed a $15.86 million loss over 12 months by June 30, 2018.
In its annual financial report Australian Pacific Coal described the figures as accounting losses "largely driven by care and maintenance holding costs associated with the Dartbrook coal mine and corporate expenses incurred during the year, including the interest expense incurred on debt instruments".
Nathan Tinkler famously negotiated purchase of the mothballed mine north of Muswellbrook from Anglo American at Christmas, 2015, a development hailed as a sign of renewed faith in Australian thermal coal and a return to form for Mr Tinkler. But weeks later he was fighting bankruptcy proceedings and stepped aside from his positions with the company.
Australian Pacific Coal's plans to resume mining until the already-approved date of 2022, and obtain approval for an additional five years of mining, were set back on August 13 when the Independent Planning Commission refused the five-year extension.
In its annual financial report Australian Pacific Coal described the modified consent until 2022 as a "significant milestone for Dartbrook as it provides a platform to recommence mining operations".
"Following the approval, the Company will work with the respective government departments to contemporise a range of management plans and a plan of operations for the mine," the company said.
"The consolidated entity intends to continue its exploration and development activities on its existing projects and to acquire further suitable projects for exploration as opportunities arise. The primary focus of the consolidated entity is on the development and approvals for the Dartbrook coal mine."
The auditor's report noted directors believe the company "will be able to realise its assets and settle its liabilities in the normal course of business and at amounts stated in the financial report".
Its ability to remain a going concern depended on capital raising and borrowings from "related and not related parties" to support development of the Dartbrook mine, the auditor noted.
"Should the anticipated capital raisings not generate the expected cash flows, the company may not be able to pay its debts as and when they become due and payable and it may be required to realise assets and extinguish liabilities other than in the ordinary course of business and at amounts different from those stated in the financial statements," the auditor said in its report to the Australian Stock Exchange.
The report noted the company had provided nearly $9 million in a bond for future rehabilitation of the mine site based on "management's best estimate" of costs but "actual costs incurred in the future could differ materially from the estimates".
Lock the Gate Alliance spokesperson Georgina Woods said the group was "deeply concerned" Australian Pacific Coal may not have sufficient funds to rehabilitate the land at its Dartbrook mine site.
"The Dartbrook coal mine had been in limbo, unrehabilitated, for 10 years when Anglo American sold it. This is not a pattern we want to see repeated in the Hunter region, as coal markets shift and mainstream companies begin to consider winding down their involvement in the industry," Ms Woods said.
"It's a relief to know that in this case, the $8.95 million rehabilitation bond is held by the government as cash, so there will be some money if the company goes bust, but it does raise questions about whether there is enough money to properly rehabilitate the Hunter and what will happen to the region if there is not.
"The Audit Office and the Chief Scientist have both recommended the establishment of a fund to pay for the long-term environmental damage from mining but the NSW Government has not acted on those recommendations."
