JOHANNESBURG (miningweekly.com) – Dual-listed Resource Generation (Resgen) on Tuesday said all efforts were now focused on preparing the Boikarabelo coal mine, in the Waterberg region, for the mobilisation of the first of the engineering, procurement and construction (EPC) contractors in the fourth quarter of this year.
This followed the near conclusion of the technical committee review and the adoption of a new execution strategy to reduce the capital cost and reduce risk of the project through the appointment of established EPC contractors with good records and substantial balance sheets.
Resgen, in May, signed a heads of agreement with project house Sedgman for the design, procurement and construction of a $141-million coal handling and preparation plant at the Boikarabelo mine.
Further, the junior coal miner also developed a new mining plan to maximise recovery from the coal deposit by mining all seams and minimising out-of-pit dumping of waste, resulting in increased productivity and reduced operating costs.
The appointment of a mining contractor was expected to occur during July, after Resgen shortlisted three candidates in June.
In addition, Resgen said it was on course to finalise the required debt funding.
“The base case financial model (BCFM) has now been completed by the lead arranger and, based on the information contained in the BCFM, the project is believed to be fundable without recourse to the shareholders for further equity,” the company explained.
Further, a high-level funding offer from a US-based source was currently being reviewed by Resgen.
The group’s cash reserves were A$12-million as at June 30.
Meanwhile, Resgen said it was investigating the potential of building a 450 MW or 600 MW coal-fired power station following the receipt and review of a concept feasibility study for a 300 MW power station.
While there was a compelling economic case for a 300 MW mouth-of-mine station with sale of the electricity produced to the national utility or a private offtaker, the study indicated that it was not optimal and that a 450 MW or 600 MW coal-fired power station presented a more compelling economic case.