JOHANNESBURG (miningweekly.com) – Junior coal miner Resource Generation (Resgen) will implement a revised mining plan, based on selective mining and in-pit dumping, following a technical review of its Boikarabelo mine, in the Waterberg region of Limpopo.
The miner on Friday reported that the different approach to the Boikarabelo coal resource would achieve a better opportunity than previously expected, while increasing productivity and reducing operating costs.
Resgen would also implement a project development strategy that would entail the appointment of a small number of reputable engineering, procurement and construction contractors with substantial balance sheets to undertake mine construction, allowing for recourse in the event of failure or delay.
Meanwhile, the dual-listed company said it was aiming to fast-track the preparation of a bankable feasibility study (BFS) for the construction of its 260 MW independent mine-mouth power station to operate as an approved independent power producer (IPP).
The project had received the environmental and land use approvals required for the IPP. “Should the BFS confirm economic viability, construction will provide us with optionality with regard to our domestic coal production and an additional revenue stream,” Resgen chairperson Denis Gately said in a statement.
PROJECT FUNDING
Resgen added that the only credible option available to further fund Boikarabelo was that proposed by the debt club established by the previous board.
FirstRand Bank, acting through its Rand Merchant Bank division, had been appointed lead arranger; work on a new base case financial model and term sheet had begun, based on the recommendations of the technical committee.
“The support we have received from all members of the debt club continues to be positive and encouraging. Although the project funding process necessarily takes time to complete, we have a high degree of confidence in achieving a successful outcome,” Gately said.
In parallel, Resgen would continue to explore any other funding options available, including one recently received from a credible source, in the US.