JOHANNESBURG (miningweekly.com) – ASX- and JSE-listed Resource Generation (Resgen) on Friday announced that it would seek to raise A$62.6-million to start major construction work at its Boikarabelo mine, in South Africa’s Waterberg region.
The company would raise the funds through a nonrenounceable entitlement offer of about 284.7-million shares at A$0.22 a share.
Commitments had already been received from three independent parties – Barsington, Value Investments and Altius Investment Holdings – that are interested in taking up about 80% of the shares.
Further, Resgen said it was negotiating the offer of equipment finance, coal handling and preparation plant (CHPP) funding alternatives and was in discussions with ten banks with a view to augmenting the debt facility provided through the Noble Group.
Should the entitlement offer not achieve full subscription or take-up of the shortfall, the company plans to prioritise the expenditure in areas that provide maximum leverage in de-risking project completion.
Meanwhile, Resgen also announced on Friday that it had secured a $55.3-million loan with Noble Resources, a subsidiary of Noble Group, for the construction of the 38 km rail link from the Boikarabelo mine to the existing Transnet Freight Rail network.
The company stated that the rail link was one of the longer lead-time items in the construction of the mine.
“Commencing the rail link is a major catalyst for the construction of the Boikarabelo coal mine. The loan enabling the works is also another innovative example of our efforts to finance construction and mitigate completion risk.
“The knock-on effect of this construction activity is significant in terms of physical site establishment, as well as providing a stimulus for further funding of the remaining construction,” commented Resgen MD Paul Jury.