JOHANNESBURG (miningweekly.com) – TSX-listed coal-miner Homeland Energy has concluded a loan arrangement with its largest shareholder, GMR Energy, to advance it nearly C$5-million for its Kendal project, in South Africa’s Mpumalanga province.

The C$4,9-million loan, which is to be repaid by March 31, would be secured by a pledge of certain noncore assets, as well as a secondary position with respect to certain assets related to the Kendal colliery that were already subject to a first priority pledge to Nedbank, Homeland said in a statement.

In November, the coal-miner had entered into an agreement with Nedbank Capital to amend the terms of an existing credit facility, which would require it to invest additional funds of about R70-million by January.

At the time, Homeland said that its Kendal operation had experienced a funding gap in terms of the required capital expenditure to improve the Kendal plant's performance and the completion of phase-two construction at the operation.

GMR had, as required under the amendment of the credit facility with Nedbank, agreed to loan Homeland about C$4,2-million.

The coal-miner on Monday said that it was continuing to pursue additional sources of capital to meet the balance of its obligations.

Production at the Kendal colliery was expected to increase to 180 000 t/m run-of-mine during this year.