Bens Creek has agreed to sell 20,000 tons of off-spec coal to major shareholder Avani in a deal outside of the companies' offtake arrangement.
In what is described as a one-off coal purchase, Avani will pay a price of US$60 per ton for the coal with US$50 per ton (totalling US$1.0 million) received as an advance payment and the remainder to be paid on delivery.
Bens Creek added the coal being sold does not meet the chemical construction required to meet the definition of High Vol A or High Vol B metallurgical coal.
Depressed metallurgical coal price and interruptions in production at its mine in West Virginia have put more pressure on its cash flow, said Bens Creek, with a working capital facility of US$10 million now fully drawn down.
At the current metallurgical coal prices, the company is also loss-making at the operational level.
In addition, whilst the mine is back in production following the unexpected interruption in early 2024, the company presently has a reduced production capacity which is estimated to be between 30,000 and 35,000 clean tons per month due to a waste disposal issue.
Following the full drawdown of the previously announced loan facility with Avani and the continued challenges the company faces, Bens Creek is managing its working capital position carefully and assessing the options available.