JOHANNESBURG (miningweekly.com) – Aim-listed Strategic Natural Resources’ (SNR’s) 74%-owned subsidiary Elitheni Coal had received a R15-million unsecured loan from Andrew Ruhan, enabling it to repay the amount it owed to Rapidtrade, as well as some of the claims of other legitimate creditors, including those who submitted a liquidation notice for the company in November. 

The repayment to Rapidtrade would release the security held by Rapidtrade over 10% of Elitheni's issued ordinary share capital, which effectively diluted SNR's 74% equity interest.

SNR also stated that Elitheni was working with its legal advisers in South Africa on a submission for the court hearing of the liquidation notice, explaining that this submission would address what the company’s directors believe to be spurious and incorrect claims by certain parties in South Africa, including claims that Elitheni's mining licence was being transferred to a third party.

SNR said that, based on the work done to date, the availability of funds to pay current legitimate creditors and discussion with providers of longer term finance, the board of SNR was confident in its position as regards the liquidation notice and the efficacy of the Elitheni mine going forward.

"Despite the aggressive actions of some parties in South Africa in trying to prejudice the interests of Elitheni and destroy SNR's shareholders’ value, we are confident in our position regarding the liquidation notice,” SNR CEO Gabriel Ruhan commented.

Meanwhile, SNR also said that it had been in discussions with Land Consultants Limited (LCL) about the repayment of the existing short-term bridging loan provided by LCL to the company. 

Following these discussions, LCL had, subject to formal agreement, agreed that SNR could immediately draw down a further £500 000 under the existing bridging loan. In addition, LCL had indicated that it was prepared, subject to LCL receiving further security over SNR's assets, to provide a guarantee on behalf of Elitheni to cover the cost of settling any additional creditor claims determined by the court in South Africa to be legitimate. 

Further, LCL had indicated to SNR that it was prepared to extend the repayment of the bridging loan to June 30, 2014, although this also remained subject to amendment of the loan agreement.

“The proceeds of LCL's bridging loan advance will be used to provide working capital to cover Elitheni and SNR's operating and other costs and will be added to SNR's loan to Elitheni,” the company stated.

Gabriel Ruhan added that the refinancing of the group's short-term debt would allow the SNR and Elitheni boards to progress their ongoing discussions with strategic investors. 

“In recent days, additional credible parties have expressed an interest in investing in [SNR] and Elitheni," he said.