PERTH (miningweekly.com) – Coal developer Cokal has welcomed Cedrus International as a funding partner for its Bumi Barito Mineral (BBM) coal project, in Indonesia.
Cedrus has joined Platinum Partners in providing a nonbinding term sheet in relation to $110-million in funding to develop the BBM project.
The project facility would be equally funded between Platinum and Cedrus, and would be sufficient to fund the construction and commissioning of the two-million-tonne-a-year BBM project, as well as the working capital requirements during the development phase.
The syndicated facility would have an interest rate of 13% and a marketing fee of 2.5% of the gross sales from coal produced and sold from the first phase of operations. A royalty of 1.35% would be payable of the gross sales from the project as a whole.
The financiers would also be awarded 85-million options, at an exercise price of 13c each, with an exercise period of eight years.
Cokal chairperson and CEO Peter Lynch said that the addition of Cedrus supported Cokal’s view of the merits of the BBM project, and confidence in Indonesian mining opportunities generally.
“The confirmation of the Platinum/Cedrus financing is a significant achievement for the company and, when completed, will put us on target to start construction promptly after receiving the final forestry approval, which is expected this quarter.”
The feasibility study estimated that a capital investment of $75-million would be required to build the operation. Based on the current resource of 266.6-million tonnes, the project would have an estimated life of ten years.