ASX- and JSE-listed Resource Generation (Resgen) is due to host a shareholders meeting in late March or early April to vote on approving its proposed mine funding package for the Boikarabelo coal project, in South Africa’s Limpopo province.
Given the national lockdown declared in South Africa, the company now expects to only achieve financial close on the project by June 30.
However, Resgen has confirmed that its lenders have communicated their continued support for development of the mine.
Resgen is also monitoring the macroeconomic impacts of Covid-19 on the Boikarabelo coal mine project, including foreign exchange and interest rate fluctuations, as well as potential supply chain constraints.
If the rand:dollar exchange rate does not improve before the project’s financial close, some parts of the mine funding package will require further negotiation.
Meanwhile, Resgen has reached an in-principle agreement with the Noble Group to provide additional working capital to its partly-owned subsidiary Ledjadja Coal, in the form of a further extension to the facility agreement between the companies originally signed in 2014.
The in-principle agreement has terms including extending the facility agreement by up to an additional $2.2-million, which should facilitate the satisfactory completion of the conditions precedent to the mine funding package by June 30.
The first repayment date of the facility agreement has been moved from March 31 to July 31.
The total amount due to Noble would accrue to $29.15-million, including the extended facility, which would be repaid from the proceeds of the mine funding package upon financial close.