JOHANNESBURG (miningweekly.com) – Aim-listed coal developer Strategic Natural Resources (SNR) on Friday confirmed that it would deliver first coal from its 74%-owned Eastern Cape-based Elitheni mine to the East London port next month, where its offtake partner would collect it.

This followed an announcement by the company in May that it had targeted coal delivery to the port by early July.

SNR had since reached an agreement with the unnamed customer that the coal would be collected by the client rather than shipped.

The company reported in March that key delivery targets at the mine had been missed, which resulted in a failure to meet planned coal shipments to offtake partner Trasteel International South Africa for late January and early February.

However, CEO Gabriel Ruhan said at the time that an operational review of the mine that had since been undertaken had dealt with the start-up and commissioning challenges, adding that mining production levels had since increased.

“Over the last couple of months, the company's operations at the Elitheni mine have continued to improve in the underground mining section, with valuable input from technical consultants.

“Despite some operational challenges, the wash plant continues to improve yields and the company has successfully demonstrated its road and rail logistics from the mine, with over 500 containers of washed product having been delivered to the port,” SNR said in a statement.

Meanwhile, the coal producer said that discussions with potential investors had been progressing “positively”, and it was in advanced discussions with three interested parties. 

“I am very encouraged by both the level of interest and the calibre of companies interested in becoming a strategic investor in SNR and am optimistic that we can conclude the right deal soon,” Ruhan commented.

He added that the board viewed an investment as an opportunity to accelerate the development of the mine and to secure the long-term funding required to allow SNR to refinance its existing short-term bridging loan with Land Consultants Limited (LCL), as well as provide funding for SNR's growth plans. 

“We have held encouraging discussions with LCL on the possibility of extending the term of the short-term bridging loan, should a transaction with a strategic investor not be concluded by the repayment deadline.

“In the event that an investment is not forthcoming, the board will have to consider alternative ways of repaying LCL and financing the company, including issues of equity or the taking on of additional debt.  There can be no guarantee that such alternative funding will be available,” he said.

SNR made a loss of £2.53-million for the year ended February 28, as a result of the additional corporate overhead required to fund increased business and operational activities.