Resgen's rail fund term sheet becomes binding
PERTH (miningweekly.com) – Dual listed Resource Generation (Resgen) on Thursday reported that the term sheet for the funding of the rail link to connect is Boikarabelo coal mine, in South Africa, to the Transnet main line, has become binding.
Resgen in May this year inked a term sheet with Pan African Infrastructure Development Fund 2 SA and Pan African Infrastructure Development Fund 2 for a R750-million funding package for the 44-km rail line.
Resgen on Thursday said that all the requisite approvals for the rail link funding term sheet have now been obtained, however, the term sheet remained subject to the fulfilment of various conditions precedent, including the conclusion of definitive transaction agreements.
The parties were hoping to finalise the transaction agreements in August of this year.
The remaining conditions for the financial close of the transaction also include regulatory approvals and the mine funding package being fully funded and all conditions precedent for the start of the mine having been met.
The Boikarabelo project has an estimated reserve of 267.1-million tonnes, and Resgen is considering a two-stage development of the project.
Stage 1 will deliver about 15-million tonnes of run-of-mine coal a year, which will equate to about six-million tonnes of product coal. Of this, about 3.6-million tonnes will be exported and about 2.4-million tonnes will be used domestically.
Stage 2 will involve ramping up production to 12-million tonnes of product thermal coal. It is estimated that fully funded Phase 2 construction and production will not begin before 2025.
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