JOHANNESBURG (miningweekly.com) – Coal junior Wescoal has secured R200-million in funding from Investec Bank to be used primarily for the commissioning of its Elandspruit colliery.
The financing facility includes a R180-million five-year term loan and a R20-million five-year working capital facility.
Wescoal noted that R70-million would be used to retire the existing Investec term facility, while R110-million would go towards the commissioning of the Elandspruit colliery, including the acquisition of the Muhanga plant, mine operational infrastructure, surface rights and production start-up costs.
The R20-million working capital facility would be used for general purposes.
“This structure will provide funding for capex and development of our flagship Elandspruit operation. Furthermore, we are delighted in the confidence Investec has in our company. The decision to opt for debt as opposed to equity is so that shareholding is not diluted.
“The ability to move forward with secured funding in place is significant for Wescoal. Elandspruit colliery increases our life of mine beyond 15 years and, coupled with the Muhanga coal processing plant, as well as our established trading business, Wescoal is a well-rounded coal operation,” commented Wescoal CEO Andre Boje.