Kangaroo Island Plantation Timbers has picked its favoured haulage route for logs and wood chips along with buying a $3.6 million pontoon in readiness for its Smith Bay Wharf development to be approved by planners. Source: Adelaide Now
Offshore geotechnical fieldwork was finished and its final report for development assessment was underway, the company said in a quarterly activities report.
Its pontoon was bought in Ulsan, South Korea, and had been relocated to a dry dock in Vietnam for reconditioning and refitting.
In November last year, the company signed a five-year woodchip sale and purchase agreement with Mitsui Bussan Woodchip Oceania, having already secured an exclusive memorandum of understanding marketing arrangement earlier in the year.
It means Mitsui will purchase up to 500,000 green tonnes per annum of woodchip from KPT on a free-on-board basis or equivalent — with sales expected to start in the fourth quarter of 2018-19 “assuming timely development approval and a nine-month construction period of the company’s Smith Bay wharf”.
“While we will sell some of our resources as logs, the majority is likely to be sold as chips to mills in Asia that produce dissolving pulp,” managing director John Sergeant said in a letter to shareholders.
He said the company had changed its mind about “chipping in field”, saying “infield chipping will definitely be a part of our operations, but there may be a case for taking some, or even most, logs to a central static chipping facility”.
The turnaround comes after investigations in other parts of Australia including Bunbury in Western Australia.
The company has also announced the successful completion of a $20 million placement of up to 10 million new KPT shares, issued at a price of $2 a share, representing a 13.5% discount to the 30-day volume weighted average price on November 29 last year, the last day of trading before placement.
Funds will be primarily used for working capital in preparation for commercialisation of KPT’s timber products and increased contingency. It would also be used for repayment of a shareholder loan for the pontoon purchase, pontoon relocation, reconditioning and refit costs and the cost of building the initial wharf site timber stockpile.
“Following the completion of the placement, the board of KPT believes the company is fully funded to undertake ongoing development activities in relation to its proposed export facility at Smith Bay, while it completes the permitting process for the construction of the wharf and site facilities,” the report said.
