Resgen makes first drawdown from extended facility agreement

JOHANNESBURG (miningweekly.com) – JSE-and ASX-listed Resource Generation (Resgen) has made the first drawdown of $2.4-million under an extended $8.4-million facility agreement.

The company reported on March 14 that it had obtained the $8.4-million extension to a March 2014 facility agreement with Noble Resources International, with the additional funds available to Resgen subsidiary Ledjadja Coal in three tranches to September 30. The money is being used to fund the operations and development of the Boikarabelo mine, in South Africa’s Waterberg coalfield.

In a quarterly update to shareholders on Friday, the company said its main focus during the quarter ended March 31, had been to finalise the key material agreements relating to the mine and logistics including the engineering, procurement and construction (EPC) contract for the coal handling and preparation plant (CHPP), the CHPP operations and maintenance contract, the ancillary works EPC contract and the transportation of coal agreement.

It added that progress has been made towards the funding of the rail link EPC contract and that activities continue to be undertaken at the mine site preparing for the arrival of the EPC contractors.

“We are hopeful that this orderly and deliberate process will result in the conclusion of funding arrangements for the project during this year.”

State 1 of the Boikarabelo mine is expected to produce six-million tonnes a year of coal.

Parallel to advancing the development of the mine, Resgen has also continued work on establishing an independent power producer to produce electricity from coal supplied from Boikarabelo.

It expects to submit a proposal to the Department of Energy when the next submission window for the coal-based independent power producer procurement programme opens towards the end of this year.