JOHANNESBURG (miningweekly.com) – Following a successful board spill by three major shareholders last month, dual-listed Resource Generation (Resgen) says its new executive management and board, which included a new chairperson, deputy chairperson, interim CEO and company secretary, have reviewed the project architecture of the Boikarabelo coal mine in a bid to reduce the capital cost of the North West-based project.

Newly appointed chairperson Denis Gately told shareholders on Thursday that several viable alternate operational models – such as an owner/operator or contract mining model – had been investigated following a board visit to the mine this week.

The board, however, maintained that Boikarabelo had a compelling case for development, and offered significant opportunities for all stakeholders.

“We will also examine options to make more efficient use of capital and minimise risk exposure during the execution phase.

“Selecting an appropriate delivery model will impact directly on finance requirements. My aim is to report to you on the outcome of the board's assessment of these project development options early in the new year,” he said in an update report.

He added that a corporate review that had started since the formation of the new board had proved more difficult than expected, owing to the recent retrenchment of all Sydney-based office staff by the former executives, .

“Notwithstanding, with the assistance of the company's major shareholders, the board has now completed a desk-top due diligence of the company's operations,” he said.

Interim CEO Rob Lowe had, meanwhile, begun the task of rebuilding the company's executive team, which Gately had flagged as a priority.

“Capable and respected executives are necessary to ensure the company is able to deliver on the potential of the Boikarabelo project and is effectively a precondition of any project funding agreement,” he remarked.

Lowe had been appointed by the previous board to develop a funding plan for the project, which led to the debt club proposal involving banking groups HSBC, Rand Merchant Bank, the Industrial Development Corporation and major shareholders.

Meetings had also been held with representatives of potential financiers to the project, and the board intended to appoint an independent financial adviser to assist in its assessment of the alternative finance proposals under negotiation.

“The board’s objective is to complete the funding for the project as soon as possible so that the company can start contract tendering during this optimal
period of contractor pricing pressure,” Gately concluded.