Sorrows in battalions

It was our soliloquising chum Hamlet’s fratricidal Uncle Claudius who came to the conclusion that “when sorrows come, they come not single spies, but in battalions”, and while he clearly wasn’t thinking about the travails of Buffalo Coal at the time, it’s a pretty apt summary of the recent fortunes of the troubled miner. The company suspended operations at its Magdalena bituminous mine in the last quarter of 2018, and its remaining asset, to use the word in its broadest sense, is the anthracite mine at Aviemore.

Magdalena had been operated under contract by STA, but when its contract came to an end in October 2018 it decided not renew it due to difficult geological conditions, high levels of methane gas and a “challenging” workforce that meant that run-ofmine production was insufficient to cover STA’S fixed costs. When STA pulled out, Buffalo Coal accepted the inevitable, retrenched the workforce after stripping out any equipment and infrastructure of value, and placed the mine on care and maintenance.

Meanwhile, over at Aviemore, the company has been scrambling to extend the life of the mine, which had been expected to end in February 2020. It is looking at pillar extraction, which should add a further 16 months of life to the mine, and the hope is that together with other short-term opportunities, this will enable Buffalo to settle its outstanding liabilities over the next 18 months, and allow it to raise funds for medium- and long-term opportunities. However, the company remains in breach of covenants to its lenders, and its future as a going concern looks precarious.