ssw."Still have 82 mill in the bank. No many other jnr mining...

ssw.

"Still have 82 mill in the bank. No many other jnr mining companies in that position"

Look back at a presentation dated 20.05.13 BND Investor Update May 2013 - slide 5

• Bandanna has 4 Mtpa, 10yr rolling contract
• Current port schedule sees commencement of shipping Apr 2015
• Rail expansion works on track to meet shipping commencement
• Rail and port take-or-pay obligations of $28.60 per tonne (average life of mine) are reduced (approx 50%) in first year to allow for ramp up of port capacity.

Then refer to ASX announcement - Commencement of rail haulage for Springsure Creek revised - dated 25.09.13.

Start date has been has been revised from 1 July 2014 to 1 January 2016.

"The revised rail haulage contract also allows for smaller initial production volumes from Springsure Creek to be railed prior to the formal commencement of rail haulage on 1 January 2016. This provides Bandanna Energy and Pacific National with flexibility to accommodate any further change in the construction schedule for WICET Stage 1, currently estimated by WICET for completion in March 2015. The term of the rail haulage services contract with Asciano Limited’s (ASX: AIO) Pacific National coal haulage business has also been extended from 15 years to 20 years".


However this did not cover WICET take-or-pay. My understanding via non related BND parties but from the QLD coal sector, claim that the WICET component could be in the vicinity of $15-17/tonne, so year 1 they pay $30mil (using $15/t and 50% for year 1 ramp up). Year 2 would therefore be $60mil.

So in essence thank god they have $99mil on the books.

In Jan 2014 they stated;

"Commencement of production and exports from the Springsure Creek project remains on track for mid-2015, subject to grant of MLA70486 by 30 June 2014, initial project funding in the first half of 2014 and scheduled completion of construction of Wiggins Island Stage 1".


Estimated funding for stage 1 was circa $740mil which was calculated sometime in 2012, so they could be some savings to this number.

First coal was planned H2 2015 (development coal) I guess that may amount to the planned 2mpta first year commitment (any shortfall wouldn't be material)?

H2 2016 First Long Wall
2020 Second Long Wall


Timings have slipped, however BND is still sticking to H2 2015.

The plan for dual long wall = Massive Capital.

Then today's announcement, point 8 regarding "going concern".

8. As disclosed on 7 March 2014 in the company’s half yearly report, Bandanna Energy foreshadowed that in the event of a delay to the grant of the Mining Lease and consequent delay to project funding, the Group’s ability to continue to adopt the going concern assumption would depend upon the ongoing support of financiers and/or a delay in the commencement of the Take or Pay commitments, both of which currently are being addressed by Bandanna Energy.

Those not familiar with the terminology "going concern"

http://en.wikipedia.org/wiki/Going_concern.


Firstly BND has very good cash position, but the risk is it could get eroded very quickly.

BND like other coalers have been hammered for reasons we already know.

However the greatest issue for BND has been the QLD Government, they have been the miners worst enemy, by their snail paced approach to approvals and their back flipping policies, ala CBX.

Late 2012 they then planted the cherry on top by increasing coal royalties. Even after the US Coal Index plummeted 70% by July that year.

Sovereign risk rules supreme in QLD as they are so out of touch with reality.

It takes a AFR news story for BND to offer some insights to the issues being faced. I would have expected BND to be forthcoming with those issues far earlier, than after the fact via the response we saw today.