Bounty chairman Colin Knox says the production contribution, while lower than expected, reflects the start-up issues that come with introducing thin seam mining into Australia.

“The early completion of the Ivanhoe contract from poor coal quality also contributed to the lower than expected revenue streams,” Knox said.

As previously announced, Bounty is in discussions with another major mine owner based in Central Queensland relating to several mining opportunities involving the recovery of quality hard coking coal from residual coal reserves.

“These are reserves that are no longer economically recoverable from opencut operations, and inappropriate for longwall mining, but accessible and economically recoverable with our equipment and systems of work,” he said.

“Last week we agreed with the mine owner on two projects involving up to 10 years of mining. Commercial terms have been agreed. The arrangements are to be formalised and to be presented to our respective boards for approval.”

In addition to its current equipment, Bounty has sourced two further continuous miners in the United States and is making arrangements to fund the acquisition in fiscal year 2006-07.

On the basis of these developments, Bounty is confident that it will achieve a net profit after tax for the 2007 financial year of at least $10 million from the production of coal alone.