REG - Bens Creek Group PLC - Trading update and Directorate change

Bens CreekAnnouncement

09/02/2024 07:00

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RNS Number : 5658C  Bens Creek Group PLC  09 February 2024

Prior to publication, certain information contained within this announcement
was deemed by the Company to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.
With the publication of this announcement, this information is now considered
to be in the public domain.

 

 

9 February 2024

 

Bens Creek Group plc

("Bens Creek" or the "Company")

 

Trading and operational update

Proposed Directorate change

 

Bens Creek Group plc (AIM:BEN), the owner of a metallurgical coal mine in
North America supplying the steel industry, provides the following trading
update and announces the intention for Adam Wilson to stand down from the
board of Bens Creek and his position as Chief Executive Officer ("CEO") of the
Company.

 

Trading and operational update

 

Following a period of falling metallurgical coal prices and certain
operational challenges, the Company announced on 26 June 2023 and 7 July 2023
that it had issued $13 million of convertible loan notes to Avani Resources
Pte Ltd ("Avani"), the Company's largest shareholder owning 29.9% of the
issued share capital of the Company. This financing, taken with the Company's
budgeted cashflows, was expected by the Board to be sufficient to meet the
Company's working capital requirements through to 31 December 2024.

 

Whilst metallurgical coal prices recovered near the end of 2023 the Company's
cash flows since the start of the year have been further negatively affected
by a combination of factors. These include West Virginia experiencing severe
weather conditions at the start of the year and a short period of unexpected
interruption to production at the Ben's Creek mine due to an issue with waste
disposal and refuse cells at the mine. These issues have now been resolved and
the mine is back in production. In addition, as detailed in previous
announcements, the shipment of coal from the Ben's Creek mine is reliant on
Norfolk Southern Railroad providing a reliable train service to transport the
coal that is produced. Unfortunately, as highlighted in the Company's
announcement of 8 January 2024, a number of trains that were scheduled to
collect contracted coal sales have been delayed, resulting in a substantial
backlog of coal delivery since the start of the year. The Company can confirm
that it has fulfilled the previously announced coal order of 33,000 tonnes
with Avani.

 

These factors have put an additional strain on the Company's working capital
position and as such Avani have, contingent on an off take agreement between
Avani and the Company being entered into, agreed to provide an additional
working capital facility of up to $5 million, the commercial terms of which
are acceptable to the Board.  This additional working capital facility is in
the process of being documented and, once an agreement is executed, a further
announcement will be made. The broad terms of the working capital facility
have been agreed between Avani and the Company.

 

Pending execution of any working capital facility agreement, Avani has
advanced $1.25 million to support the Company's operating requirements. It is
also anticipated that as part of agreeing the new working capital facility
that there will be amendments made to certain terms of the $6.5 million loan
facility put in place in July 2023 between Avani and the Company.

 

The Company is also in advanced discussions to enter into a 12 month offtake
agreement with Avani which it is anticipated would be a non-exclusive offtake
arrangement for the delivery of a total of circa 400,000 short tons of coal
commencing in the next couple of months.  Discussions on the proposed offtake
agreement are advanced in nature and the commercial terms of the proposed
offtake agreement are acceptable to the Company. The offtake agreement is in
the process of being documented and once it is executed a further announcement
will be made.

 

The entering into by Avani and the Company of agreements relating to: (i) the
new working capital facility of up to $5m; (ii) the proposed amendments to the
existing loan facility put in place in July 2023 by the parties; and (iii) the
new proposed offtake agreement, would all constitute related party
transactions pursuant to Rule 13 of the AIM Rules for Companies.

 

Directorate change

 

Adam Wilson has informed the Board of his intention to stand down from the
board of Bens Creek and his position as CEO of the Company once a replacement
CEO has been appointed. A process to appoint a successor has commenced.

 

The Board would like to thank Adam for the unstinting efforts he has made in
his role as CEO since the Company floated in 2021.

 

Related party transaction

 

The advancement of the $1.25 million by Avani to the Company is deemed to be a
transaction with a related party pursuant to rule 13 of the AIM Rules for
Companies by virtue of Avani being a 29.86% shareholder of the Company. The
directors of the Company (except for Rajesh Johar who represents Avani on the
Company's board) consider, having consulted with the Company's nominated
adviser, Allenby Capital Limited, that the terms of the $1.25 million
advancement from Avani are fair and reasonable insofar as the Company's
shareholders are concerned.

 

Further announcements will be made by Bens Creek in due course.

 

For further information please contact:

 

 Bens Creek Group plc                                            +44 (0) 204 558 2300

 Adam Wilson, CEO

 Peter Shea, Chief of Staff

 Allenby Capital Limited (Nominated Adviser and Joint Broker)    +44 (0) 203 328 5656

 Nick Athanas / Nick Naylor / George Payne (Corporate Finance)

 Kelly Gardiner / Guy McDougall (Sales and Corporate Broking)

 WH Ireland Limited (Joint Broker)                               +44 (0) 207 220 1666

 Harry Ansell / Katy Mitchell

 

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