ATH Resources secures £30m credit facility

ATH Resources, the Doncaster-based coal producer and mine operator, has secured a new £30m credit facility in a ‘club’ deal with two banks which will allow it to fund further mining projects.

The new arrangements with HSBC and Yorkshire Bank secure long-term funding for the group and provide a more appropriate capital structure to continue developing surface mining and coal recovery projects in the UK.

The deal replaces ATH’s existing debt arrangements, which were due to expire in February next year. The combined outstanding balances under the previous arrangements totalled £20m at October 4 – the group’s most recent financial year-end.

Commenting on the new banking arrangements, Tom Allchurch, chief executive of ATH Resources, said: “The new facility provides ATH Resources with greater flexibility and the capacity to fund future projects.

“We are very pleased to be working with HSBC and Yorkshire Bank, both of whom know ATH Resources well and have been very supportive in developing these new financing arrangements.”

Last month the firm warned that it expected profits to be hit because of wet weather, which had affected production.

ATH said although production at its sites had been maximised during the second half of its financial year, “exceptionally” wet weather in August and September hampered the opening up of two mine extensions at Skares and Glenmuckloch, with the result that the full amount of lost production was not entirely replaced.

Full production was resumed in late August at the group’s mine at Muir Dean, Fife following the implementation of an ongoing comprehensive water reduction plan to deal with groundwater problems.

In a trading update ahead of its full year announcement, ATH said: “The reduction in sales volumes will, to a limited extent, result in the profit for the year being below the directors’ expectations although, as planned, debt levels reduced by £5m in the second half, to around £40m.”

ATH is appealing against a decision by Derbyshire County Council to refuse planning permission for a 500,000 tonne coal reclamation scheme at Langton and expects a decision in December.