Resource Generation says it has signed a binding term sheet for a US$55.3 million loan facility with Noble Resources, which will be used for construction of the Boikarabelo rail link.The 38 Km rail link from the Boikarabelo mine situated in the Waterberg region, to the existing Transnet Freight Rail network is one of the longer lead time items for the construction of the mine. The loan will have a term of 8 years and will begin to be drawn down and construction commence as soon as possible. “Commencing the rail link is a major catalyst for the construction of the Boikarabelo coal mine. The loan enabling the works is also another innovative example of our efforts to finance construction and mitigate completion risk. The knock-on effect of this construction activity is significant in terms of physical site establishment as well as providing a stimulus for further funding of the remaining construction.
“It complements action already undertaken with respect to mobile equipment and material handling leveraged funding, in addition to the continuing negotiations with ten banks for project finance,” said Resource Generation’s MD Paul Jury.The company said the agreement to this rail link loan facility has resulted in parties agreeing to reduce the existing loan facility of US$123 million by US$55.3 million to US$67.7 million.