ASX- and JSE-listed emerging coal producer Resource Generation (Resgen) says that significant progress has been made towards securing final approval for the development of the company’s major project, the Boikarabelo coal mine in South Africa’s Waterberg coal field.
Rob Lowe, Chief Executive Officer of the company and its BEE operating subsidiary, Ledjadja Coal, said the company was advancing in parallel a number of inter-related agreements which together provide for long term risk management and financial confidence in the mine development.
In a key step forward, Ledjadja Coal has selected Stefanutti Stocks Mining Services (SSMS) as the preferred mining contractor. Commented Lowe: “The appointment is in line with our execution strategy to appoint contractors with good track records and strong balance sheets and thereby reduce the company’s exposure to operating risks inherent in a self-operated mine. This appointment is another important step towards validating the Base Case Financial Model and the financial close of our debt funding arrangements. This brings us one step closer towards the development of the Boikarabelo mine.”
Updating on the funding of the project, Resgen says it advised the market on 8 August 2016 that it had agreed commercial terms with a Financing Syndicate for the development of Boikarabelo subject to a number of Conditions Precedent.
The Financing Syndicate convened a series of due diligence presentations and a visit to the Boikarabelo mine during the week of 29 August 2016. The outcome of the presentations and site visit were satisfactory and no serious flaws were identified, says Resgen.
Ledjadja Coal has reported probable reserves of 744,8 Mt of coal on 35 % of the tenements under its control. Stage 1 of the mine development targets saleable coal production of 6 Mt/a.