Continental Coal has appointed Deloitte, Perth as an independent financial advisor to conduct a solvency review as part of its ongoing recapitalisation efforts.

This follows the coal-mining company’s request on 8 January for a voluntary suspension of its securities.

In a statement, CEO Don Turvey said that Continental’s financial position “has been affected by the production impact of the previously announced availability of the continuous miners at its new Penumbra operation, which has resulted in lower-than-expected production in recent months.

“Whilst the production will be augmented by the implementation of an additional drill-and-blast production section, the ramp-up of production from this is expected to take several months, placing additional pressure on the company’s working capital requirement.”

Deloitte, Perth will review the overall funding and restructuring strategy, as well as conduct a balance sheet and working capital review.

Deloitte will present its findings to the board, and advise on appropriate steps to be taken, given its assessment of the financial position of the company.