Paringa raises A$9m through royalty deal
PERTH (miningweekly.com) – Coal miner Paringa Resources on Wednesday said that it would raise $9-million through the grant of a royalty over its Buck Creek mining complex, in Kentucky, to SP2 Royalty Co.
Under the terms of the royalty agreement, SP2 would receive 2% of the gross revenue from all coal leases within the Buck Creek mining complex for the life of the mine.
Proceeds from the royalty financing will be used to fund the ramp-up of the Poplar Grove mine to positive cash flow.
The 2.8-million-tonne-a-year Poplar Grove thermal coal mine forms part of Paringa’s 40 000-acre Buck Creek complex, which also contains the 3.8-million-tonne-a-year Cypress mine, where construction is set to begin in 2019.
Meanwhile, Paringa on Wednesday said that it has also executed an amendment to the term loan facility with Tribeca Global Resources Credit to resize the second tranche of the facility from $16-million to $10-million, and to ensure that the decision to terminate a supply agreement with Big Rivers Electric Corporation, and issues arising from a funding gap, did not result in a default on the loan facility.
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