Emerging ASX and JSE-listed energy company, Resource Generation Limited (ResGen), has secured R4.2 billion of funding, through a binding agreement, for the Boikarabelo coal project, located in South Africa’s Waterberg region which accounts for around 40% of the country’s currently known coal resources.

This follows ResGen’s announcement on 3 December 2019 that, along with its subsidiary, Ledjadja Coal, that it had entered into two non-binding term sheets, being the equity and debt term sheets with a group of three potential funders (lending syndicate) for the funding of the project.

The R4.2 billion loan facility excludes the additional debt facility that is being arranged for ramp-up working capital of R 550 million, and the additional debt facility that is being arranged for construction of 44km of rail infrastructure to link the project to the Transnet main line of R750 million .

The company also advised that work on drafting definitive legal and binding documentation based on the term sheets was well progressed.

The key terms of the project funding agreements essentially mirror the terms set out in the term sheets, including with respect to having the provision of funding being conditional on satisfaction or waiver of a number of conditions precedent as described in that announcement.

ResGen’s interim MD and interim CEO, Leapeetswe Molotsane, said that the transition of the non-binding term sheets into legal agreements is a most important milestone.

“Subject only to satisfactory completion of the conditions precedent, funding for the construction of the remainder of the mine is now assured. The agreements are the product of a lot of hard work and we are grateful for the drive and commitment of the lending syndicate and the professional advisors on both sides of the transaction in converting the agreed indicative funding terms into full form binding agreements”

The Boikarabelo coal resources total 995Mt and the coal reserves total 267Mt applying the JORC Code 2012. The first stage of the mine development targets saleable coal production of 6 million tonnes per annum.

Additional Reading?

Request Free Copy