ASX-listed coal company Resource Generation, which is looking to develop its Boikarabelo mine in the Waterberg region, will need to consider developing a smaller-scale operation than originally envisioned.
With an extremely large resource, Resource Generation (ResGen) was looking to build a large-scale operation.
However, with funding challenges, the company needs to consider alternatives.
In March the company advised reached a conditional agreement with Noble Group to provide additional working capital requirements to its partly owned subsidiary, Ledjadja Coal.
This amount equates to US$2.5 million in working capital funding and is now in the process of being formalised.
The conditional agreement reached with Noble included the following terms:
By no later than 29 March 2019, ResGen is to develop a high-level plan and timetable on the potential feasibility of executing a small-scale mining operation at the Boikarabelo mine. The company has not confirmed it met the deadline for this.
Credit approvals from all members of the lending syndicate to be secured by 29 March 2019 and, if not forthcoming, ResGen to facilitate a meeting between itself, Noble, the IDC and the other potential member of the lending syndicate to agree a way forward.
Logistics around transporting coal from Boikarabelo is critical to its success, click here to find out more about what Transnet is doing in this regard.