Fresh doubts over Dartbrook Mine as investors Stella Natural Resources withdraw

INVESTOR IRRITATION: The future of Australian Pacific Coal's Dartbrook Mine proposal is in doubt yet again. FILE PHOTO
INVESTOR IRRITATION: The future of Australian Pacific Coal's Dartbrook Mine proposal is in doubt yet again. FILE PHOTO

THE ever contentious Dartbrook Mine has thrown up yet another chapter, as a failed sale agreement has put a dark cloud over the project's future.

Already in front of the Independent Planning Commission (IPC) and subject to a raft of criticism from personalities and groups within the community, Australian Pacific Coal's (AQC) proposed underground mining site hasn't had an easy path to approval so far.

However, depending on who you ask, the latest setback may be their biggest with joint venture partner Stella Natural Resources (SNR) failing to meet the conditions of their agreement.

The Canadian investors were set to provide $20 million to the project, but that agreement has now been terminated and serious concerns over AQC's ability to finance Dartbrook have been raised.

SNR were also set to contribute mining expertise given, at the admission of AQC's chairman and managing director John Robinson Jr, his company has no experience in the area.

One of the organisations most vocal in their opposition to the proposal, the Upper Hunter Shire Council (UHSC), have revealed in a recent submission to the IPC they are not surprised with the sale agreement's breakdown.

"In our original presentation to the commission we highlighted our various concerns with SNR; which our investigations indicated to be a bottom tier mining start up that did not actually mine anything anywhere," they stated.

They also found Stella's loss of CEO David Stone to be problematic, as they viewed the former head of global underground mining company Xstrata to be SNR's principal asset.

"With Mr. Stone's exit, AQC has lost whatever experience, technical ability and limited credibility the company might have had to be a bona fide mining company," claim UHSC.

But perhaps council's most damning statement comes in relation to AQC's financial position, as they raised questions over how the company will pay out their existing secured loan from Anglo American without the $10 million loan they were set to receive from SNR, as well as their ongoing financial subsidies from "cornerstone investors".

"Not only was the cart before the horse with this application, there was no horse," reads the submission.

"Put simply, the company exists only at the whim of two men, if and when they tire of continuously subsidising Australian Pacific Coal via unsecured loans, council is of the view that the company will collapse."

However, hope is not lost for those hoping the mine does go ahead and bring jobs to the region, as AQC themselves have stated there are other potential development partners interested in the project.

In fact the possibility of SNR funding Dartbrook is still alive, as the company is keeping an 'open dialogue' with them.

Trying to arrest concerns over their future in general, they also assured all parties involved that major backers still have faith in their operations.

"Importantly, the company's cornerstone shareholder Trepang Services Pty Ltd has confirmed its continued commitment to AQC by way of further specified funding support," stated an ASX press release.

"The company remains committed to realising its plan to develop the Dartbrook Coal Mine in NSW."