Blumont gives $8m loan to Cokal for Indonesia project
PERTH (miningweekly.com) – Coal developer Cokal on Tuesday signed a term sheet with Singapore-listed Blumont Group for an $8-million loan facility, as the two companies continued to discuss a larger funding package.
Cokal confirmed that it had been in discussions with Blumont regarding a potential A$124-million takeover offer, as well as a $77-million funding package for the Bumi Barito Mineral (BBM) project, in Indonesia.
However, a decline in Blumont’s share price saw the two companies abandon the takeover plan on Friday, with Cokal saying that the parties were still committed to the development of the BBM project.
As such, the $77-million loan facility had been classified as a priority, and Blumont had now extended an $8-million loan facility to continue the development work on the BBM project, while the negotiations to restructure the larger financing package continue.
The first $4-million payment of the smaller loan was due by November, with the balance on mutual agreement. The loan would be repayable within three years, at an interest rate of 5% per year, payable quarterly in arrears.
The BBM project covers about 15 000 ha and has a current Joint Ore Reserves Committee-compliant resource of 77-million tonnes, of which 70-million is classified as inferred and the remaining seven-million tonnes as indicated.
The coal developer has been working to convert the 200-million- to 350-million-tonne exploration target into a resource, and was also working to complete definitive studies and obtain the necessary approvals to start construction in late 2013, with first production set for 2014.
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