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ASX-listed Resource Generation, or Resgen, and its subsidiary Ledjadja Coal will aim to meet the conditions precedent for financial close for the mine funding package for development of the Boikarabelo mine by mid-October.

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Resgen and Ledjadja Coal submitted a formal request on 4 September to the lenders it is negotiating with to either defer a limited number of conditions precedent to a date post the financial close on September 30, or submit a viable alternative solutions with respect to those specific conditions precedent, which could be satisfied before financial close. In response to this request, the lenders team advised that they will not be approaching their credit committees until the following key conditions precedent have been met:

  • Execution of a binding ramp-up working capital facility agreement;
  • Execution of a binding ramp-up working capital facility agreement;
  • Execution of a binding ramp-up working capital facility agreement;

Based on significant progress achieved to date in the negotiations, Resgen management are of the view that execution of both a binding ramp-up working capital facility agreement and fully funded mining services contract could be completed by the end of October 2020.

Noble Group have indicated that they expect to have the offtake agreement concluded by then as well.

On the reasonable assumption that these conditions precedent can be met by the end of October 2020, the lenders would then be in a position to approach their various Credit Committees during the month of November 2020.

Meanwhile, Resgen management also plans to approach the lenders on the revised target timeline to seek a further extension of the long stop date.

The group will require additional working capital funding to bridge this delay in achieving financial close along with a deferral of loan repayments under the facility agreement executed with Noble Group on 3 March 2014, as amended, from 30 September 2020 to 30 November 2020.

Management will be commencing dialogue with Noble Group in this regard and is investigating other possible sources of funding.