Cokal secures funding for BBM
PERTH (miningweekly.com) – ASX-listed Cokal has inked a binding $20-million funding agreement for its Bumi Barito Mineral (BBM) coking coal project, in Indonesia.
Cokal on Wednesday told shareholders that its subsidiary PT Bumi Barito Mineral had executed a capital participation agreement with International Commodity Trade (ICT) for the provision of $20-million in funding.
The debt finance can be drawn-down in multiple tranches, starting in July this year, and each tranche is repayable within five years from the date of draw-down.
The subsidiary has also entered into a binding international coal marketing agreement with ICT, which would enable BBM to market its coal to the international market, and would assist the subsidiary in financing its coal stockpile at the river jetty. In return, BBM has agreed to provide international coal market rights to ICT for overseas markets.
Cokal chairperson Domenic Martino said the agreements marked a very exciting time for the company.
“The funding of the project and additional working capital support has placed the company in a tremendous position to commence mining and production at BBM,’’ Martino said.
“This fully funds the BBM project of which Cokal holds a 60% interest and allows the company to progress into production and generate cashflows.”
Martino said the ICT debt facility and coal rights agreement provided an attractive and strategic funding solution for Cokal, transforming the company to a major international coal producer.
“The funding from ICT is available on similar terms to the previous funding arrangement, which is why Cokal has chosen to obtain the funding from ICT,’’ he said.
A minimum 8-million tonnes of coal will be allocated to ICT over eight years, with first delivery expected in December 2021.
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