Metallurgical coal producer Coronado Global Resources is making headway with its liquidity improvement plan, having secured a covenant waiver under its asset-based lending (ABL) facility and continued its cost-cutting programme to preserve cash in a sustained low-price environment.

The company on Monday announced that it had obtained an extension of its existing waiver, including the removal of the $100-million minimum cash covenant, giving Coronado access to additional cash without triggering a default. All other financial covenants and review events under the ABL facility were also waived.

“These measures are expected to enhance Coronado’s ability to withstand the current period of sustained low Met Coal pricing,” the ASX-listed company said in a statement.

The waiver extension follows what Coronado describes as “substantial progress” in securing more flexible sources of liquidity and executing a company-wide cost and capital reduction programme, which aims to free up about $100-million during 2025.

The company has already spent about $140-million in capital for the year to the end of May, leaving only $80-million forecast for the remainder of the year. Coronado's cash balance at the end of May stood at $160-million, after outflows related to capital investment and cash-backing of bank guarantees.

The cost-saving measures were first outlined in Coronado’s first-quarter report in April, with early gains already evident. Average mining costs per tonne sold were down 10% in the March quarter, attributed largely to the removal of five excavator and truck fleets at the Curragh Complex, in Queensland. 

Further reductions are being implemented across the business. These include the rephasing of development at the Buchanan Complex, in Virginia, US, to reduce direct mining costs, idling of surface operations at the Logan Complex, also in Virginia, and sweeping budget cuts at Curragh alongside supplier negotiations.

Coronado reported some operational headwinds in the June quarter, including heavy rainfall, unplanned maintenance and enabling works for expansion ramp-up. However, the company stated that the Buchanan and Mammoth projects remain on budget and are expected to lift saleable production and lower capital spend in the second half of the year.

The Mammoth project is expected to deliver 1.5-million to 2-million tonnes of run-of-mine production in 2025, with Buchanan producing 1-million tonnes.