JOHANNESBURG (miningweekly.com) − ASX-listed Continental Coal on Wednesday announced that it had secured a seven-year, $35-million loan from Absa Capital bank to fund the development of its Penumbra mine in South Africa.
The coal miner also managed to secure a $15-million loan to refinance its existing debt and a yearly working capital facility of $15-million from the bank.
In addition, Absa Capital would provide risk management facilities to allow the company to hedge a portion of its exposure to thermal coal prices and interest rate fluctuations.
Continental said that legal documentation and satisfaction of the outstanding due diligence sign offs was advanced and scheduled for completion by the end of July.
The South African-focused coal miner also set the wheels in motion to secure a broad-based black-economic empowerment (BBBEE) transaction, in line with the country’s Mining Charter.
The transaction would see the BBBEE participants acquire the 26% BEE interest currently held by Masawu Investment.
The BBBEE would assume the R215-million intercompany loan of Masawu to Continental and had further agreed to pay R140-million upon settlement.
Documentation and settlement of the agreement would be completed by August 2011.