Bens Creek commences HVB delivery to Integrity Coal Sales
Bens Creek shares were flat at 90p in early afternoon trading on Monday following the company’s reported delivery of High Vol B (HVB) product to offtake partner Integrity Coal Sales, after transport commenced on 1 June via railroad. Bens Creek had built up an inventory of clean coal which it started delivering at approximately 11,000 tonnes per train load from its 3.2 mile rail spur connecting to the Norfolk Southern Railway system, which transports the coal to Norfolk, Virginia. – Advertisement –
The move comes on the back of the group’s supply of Run of Mine coal by truck, which it used while it finished the remediation of its wash plant and railway spur line. The company noted that additional rail deliveries of its HVB product at a similar quantum were expected over the coming weeks. “The arrival of the first railway cars is a significant milestone, as it affirms the full remediation of the Bens Creek project, from the commencement of both High Wall Mining (HWM) and Underground Mining, the processing of the coal through the wash plant, the buildup of inventory and delivery via a “fast flood” rail load out system onto Norfolk Southern railcars on our remediated 3.2 mile rail spur,” said Bens Creek CEO Adam Wilson.
“Whilst we were some weeks behind our originally planned schedule of railroad deliveries, we are very pleased now to be fully functional and we remain on track to meet our obligations to our offtake partner, Integrity, for the supply of HVB coal, as previously announced.”
Bens Creek also confirmed an update on its existing loan facility with major shareholder MBU Capital Group Limited. The firm pointed out its initial loan facility of up to GBP10 million in October 2021, on admission of Bens Creek’s ordinary shares to AIM trading, with GBP2.3 million drawn down by the company at admission. The loan facility is set to remain in place to support the company’s ongoing working capital requirements, however the terms of the MBU loan facility have reportedly been varied.
The group commented that the conversion price had been increased, with any additional amounts drawn down under the loan facility from 7 April 2022 increased to 60p instead of 15p per share. Bens Creek said GBP7.3 million had been drawn down by the company as of 5 June 2022, of which GBP5 million was capable of conversion at 60p per share, and the firm added that it had cash balances in excess of GBP5 million. “With the necessary buildup of Inventory (circa 30,000 tons of clean and 5,000 tons of ROM, equating to circa £12m of revenue), ahead of the first train arriving, the board of directors increased the conversion price on its pre agreed GBP10m facility with MBU for any subsequent drawdowns post the date of Admission to 60p from 15p per share, to reduce the potential dilution to shareholders, should the loan be converted rather than repaid,” said Wilson.
“Because of the buildup of inventory, management felt it was prudent to draw down on the facility to maintain a strong surplus cash balance, whilst we waited for the delayed train to arrive from Norfolk Southern.”