Dual-listed Resource Generation (Resgen) has recorded changes to the common terms agreement for its mine funding package, it noted in its market update.
On December 5, 2019, the company announced that, along with its majority-owned subsidiary, Ledjadja Coal, it had executed principal binding agreements for the funding of the construction of the Boikarabelo coal project, in South Africa's Limpopo province.
The project funding agreements include a senior facility, three mezzanine facility agreements, an equity contribution agreement, a common terms agreement, a comprehensive security package and certain other security agreements covering release, counter indemnity and subordination.
The common terms agreement includes a number of conditions precedent that require satisfaction, deferment or waiver prior to the project funding agreements completing and Ledjadja Coal being able to issue the first drawdown notice (financial close).
The common terms agreement has a sunset date which was until recently June 30.
A deed of amendment to the common terms agreement has been confirmed in principle by all lenders and is now at various stages of being formally executed under their governance processes, extending the sunset date to September 30.
This extension enables the company to reassess the target date for financial close, which currently requires completion, satisfaction, deferment or waiver of the several remaining key tasks.
These include rail link funding, ramping-up working capital and yellow goods financing.
Moreover, Noble Group is making steady progress in its discussions with third parties to secure a back to back domestic offtake agreement for the domestic coal product to be produced at the mine.
This also includes logistics contracts, a project cost review and a pricing review.
Lastly, the company is working towards having final lender investment committee approvals in place before the end of August, despite the sunset date having been extended to September 30.
The funding calendar has been updated based on what management believes are achievable timelines for addressing the key tasks set out above. On the basis of the updated funding calendar, the revised target for financial close is now the end of August.
WORKING CAPITAL FUNDING
On June 19, the company confirmed that legal documentation had been finalised and executed for an additional working capital facility of $2.25-million in the form of an eighth deed of amendment to the facility agreement with Noble Group, dated March 3, 2014.
The additional working capital facility under the eighth deed had an availability period through to June 30, at which time only $250 000 had been received.
The company has been able to agree amendments to the eighth deed, mainly, the extension of the period of availability of the undrawn facility totalling $2-million to July 31; and extension of the first date for repayment under the facility agreement to September 30 to align with the new sunset date agreed with the lenders.