The Australian coal explorer, Minergy has said that its mine, Masama, which is located on the southwestern edge of the Mmamabula Coalfield will partially re-open on 03 April 2023 as efforts to return to normalcy continues.
Through a market update statement, Minergy said that an ‘arrangement’ has been made with the mine contractor, Jarcon Opencast Mining Botswana (Pty) Limited that will see the restart of mining operations at Masama mine.
“The Masama Coal Mine will restart on Monday, 3 April 2023. This will not be at full capacity but rather at a reduced level”, said Minergy in a statement issued to the capital markets on Friday.
The Botswana Stock Exchange quoted company also said that the start-up of operations at the Masama mine is in line with robust cost reviews and significant cost reductions identified to reduce the saleable cost of coal to ensure a viable operation.
“These cost reductions will be stringently implemented and monitored”
The miner also said that the restart of mining operations is a short-term arrangement pending payment of overdue balances to Jarcon and discussions with various funding parties.
Minergy has in the past admitted that it faces cash flow crises. The coal miner has to date accessed approximately P418 million in funding locally: where P165 million was raised through selling of shares and P253 million through borrowing. The cash proceeds from these raisings and facilities were utilised for establishment of the Masama Coal Mine, and its mining infrastructure and related costs.
The funding includes a P125 million of additional convertible debt financing through government owned Minerals Development Company Botswana (MDCB) which was secured in 2020. The Botswana Development Corporation (BDC) advanced P40 million to Minergy in 2019 and extended another P40 million in 2020. The two tranches from BDC have been converted into a new six-year P80 million secured convertible preference share facility.
Minergy began production at its wholly owned Masama mine in 2019 and has in the recent past said that it expects both an operating and EBITDA profit for the first six months of the 2023 financial year. As of June 2022, Minergy had accumulated losses of P376.4 million, with net liabilities exceeding net assets by P180.2 million.