ASX- and JSE-listed Resource Generation (Resgen) on Monday said it had received credit approval from a second member of its proposed lending syndicate for the development of the Boikarabelo coal mine in South Africa’s Waterberg region.
The company said the confirmed participation from the funder should facilitate completion of the project finance for the construction of the mine.
However, Resgen cautioned that there were still a number of hurdles to be overcome before the overall funding, or financial close, could be achieved.
Resgen still needs written approval from the third and final member of the proposed lending syndicate.
Further, the company needs to set up a common term sheet for all lenders, which all participants must approve. Once the term sheet has been approved, the company will then be able to disclose key terms of the mine and rail link funding packages.
Thereafter, the proposed mine funding packages will need to be approved by shareholders during a special meeting.
The Waterberg accounts for about 40% of the country’s known coal resources.
The Boikarabelo coal resources currently total 995-million tonnes, while the coal reserves total 267-million tonnes.
Stage 1 of the Boikarabelo mine will produce about six-million tonnes a year of saleable coal.