PERTH (miningweekly.com) – Dual-listed coal developer Resource Generation (Resgen) has inked a heads of agreement (HoA) and letter of intent with project house Sedgman for the design, procurement and construction of a coal handling and preparations plant (CHPP) at its Boikarabelo mine, in South Africa.
The agreement provided for a fixed lump sum contract of $141-million, subject to exchange rate fluctuation, with Resgen saying the contract price represented a ‘substantial saving’ over previous estimates, as the Sedgman design offered a smaller footprint, while offering an equal production output.
In addition, under provisions in the letter of intent, Resgen indicated an intent to negotiate a three-year CHPP operations contract with Sedgman following the expiry of a 15-month operations contract, to cover the warranty period after the commissioning of the CHPP and to negotiate with Sedgman a contract for the construction of the ancillary infrastructure works.
Resgen CEO Rob Lowe said on Friday that the conclusion of the contract with Sedgman was a major milestone for the Boikarabelo mine, and was a step closer in securing full funding for the completion of the mine.
The agreement was subject to a number of conditions precedent, including board approval and funding.
The Boikarabelo project has a probable reserve of some 744.8-million tonnes, a measured resource of 1.1-billion tonnes, an indicated resource of 551.7-million tonnes and an inferred resource of 1.5-billion tonnes.
The mine would be developed using a two-phased approach, with the first phase delivering about 14-million tonnes of run-of-mine coal a year, which would equate to about six-million tonnes of product coal.
Phase 2, planned for 2022, would involve ramping up production to 20-million tonnes of product thermal coal.