Pembroke Resources is reporting financial strain at its Olive Downs steelmaking coal operation near Moranbah in Central Queensland, posting further losses as the recently built mine works through a ramp-up phase.

Half year accounts reported an operating loss of US$67 million for the half-year to 30 June 2026, against US$72 million a year earlier, and negative operating cash flow of US$69 million. 

The trend improved late in the period with the company generating positive earnings before interest, tax, depreciation and amortisation of US$10 million in the June quarter and narrowed its net loss, as shipments and coal prices rose, though it remained in the red after finance costs. 

Pembroke held about US$112 million in cash at 30 June 2026, against total debt of about US$534 million. The bonds are senior secured backed by security over the company’s material assets, including its land, mining tenements and shares.

Large start up

Olive Downs is one of the larger metallurgical coal mines developed in the Bowen Basin in recent years, about 40 kilometres south-east of Moranbah. 

The project holds a JORC-compliant reserve of about 514 million tonnes of steelmaking coal and is designed for a mine life of roughly 80 years. It won federal environmental approval in 2019, broke ground in April 2022 and completed construction in early 2024. 

The mine is now ramping up from an initial rate of about 4.5 million tonnes a year toward a planned capacity of up to 15 million tonnes, and in the June quarter it produced 1.4 million tonnes of run-of-mine coal and shipped 1.1 million tonnes.

Financer

The mine is wholly owned by Pembroke Resources, a private steelmaking coal company backed by the energy and resources private equity firm Denham Capital. 

Olive Downs is financed in part through US$550 million of senior secured bonds, issued in February 2025 at an 11.5 per cent coupon and maturing in 2030. 

The bonds were raised in the Nordic market and are quoted on the Oslo Børs-administered Nordic ABM, with Nordic Trustee acting as bond trustee. 

That listing carries reporting obligations to bondholders, which requires the operating company, Pembroke Olive Downs Pty Ltd, to publish half-year accounts.

Against that backdrop, the half-year accounts carry a going-concern warning. 

Note 2.2 (Going concern) states that current forecasts and projections indicate the company “may breach certain debt covenant requirements under its existing financing arrangements within the next twelve months, …” and that it will require additional funding — not yet secured — to meet those covenants and its working-capital needs. 

The same note says these conditions “indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern, …” while adding that the report was nonetheless prepared on a going-concern basis which assumes the company keeps operating normally.

The company is currently compliant. 

A separate compliance certificate, signed by chief financial officer Pieter Marais, confirmed the financial covenants were currently met and that no event of default had occurred, flagging only that the accounts identified uncertainties that could give rise to a breach in future periods. 

Pembroke Olive Downs also holds letters of support from its parent entities, committing to fund its operating, investing and financing activities for up to twelve months, until 29 April 2027. 

The directors said they were actively pursuing funding alternatives and initiatives to improve the company’s financial position.

If a covenant were breached and not waived or cured, the accounts noted, the bond debt could become repayable before its stated 2030 maturity.

Pembroke has been contacted for comment.