LONDON (ShareCast) - (Sharecast News) - Metallurgical coal miner Bens Creek Group announced an agreement with its largest shareholder Avani Resources on Monday, for the purchase of 20,000 tons of off-spec coal.
The AIM-traded firm said the deal, distinct from the existing offtake agreement, involved a one-time coal purchase order.

It said Avani would pay $60 per ton for the coal, with $50 per ton already received by Bens Creek as an advance payment.

The remaining $10 per ton would be settled on coal delivery.

It said the off-spec coal in question did not meet the chemical composition required for High Vol A or High Vol B metallurgical coal.

In an operational update, Bens Creek acknowledged facing various challenges since the start of 2024, including depressed metallurgical coal prices and production interruptions at its West Virginia mine.

To address cash flow strains, Avani provided a working capital facility of $10m to Bens Creek in February and March.

Despite the long-term offtake agreement with Avani, the company said it was continuing to grapple with industry uncertainties, remaining unprofitable at current metallurgical coal prices.

Additionally, production capacity was reduced to an estimated 30,000 to 35,000 clean tons per month due to waste disposal issues earlier in 2024, leading to the temporary removal of one highwall miner from the site.

Given these ongoing challenges and the full drawdown of the loan facility with Avani, Bens Creek said it was carefully managing its working capital position and exploring available options to address its current circumstances.

At 1101 BST, shares in Bens Creek Group were down 18.64% at 1.2p.

Reporting by Josh White for Sharecast.com.

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