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ASX-listed Resgen has provided an update on the funding status of its Boikarabelo Coal Mine in the Waterberg, South Africa.

The second member of the proposed lending syndicate has formally confirmed participation (credit approval) for their proposed contribution to
Resgen’s funding application in relation to the construction of the Boikarabelo coal mine.

The second member to the proposed lending syndicate has not provided approval to be named at this point as their offer to participate is not binding on the parties until formally accepted by Resgen.

This acceptance by Resource Generation can only occur in the form of a board approved common term sheet agreed with all members to the proposed lending syndicate.

This is a positive development that should now facilitate completion of the project finance for the construction of the mine.

However, investors are cautioned that there are still a number of hurdles to be overcome before the overall funding is achieved.

These further activities or approvals now include:

  • securing requisite written approvals from the third and final member of the proposed lending syndicate; agreement on a common term sheet for all lenders as referred to above;
  • finalisation of the rail link funding which is now at an advanced stage and will also be assisted by this recent development;
  • Director’s approval of a common term sheet together with the rail link funding terms and recommendation to shareholders. At this time the terms will be binding on all parties and only subject to certain conditions precedent that are specified by the proposed lenders.
    Resource Generation will then be able to disclose the key terms of the mine and rail link funding packages to the market;
  • under the related party approval requirements of the ASX listing rules the proposed mine funding package will need to be put to shareholders at an EGM. The notice of meeting for such an EGM will need to include an independent expert’s report addressed to shareholders;
  • finalisation of remaining key project related contracts and legacy contractual arrangements; – preparation of legal documents in relation to the proposed funding package; and – completion of all conditions precedent as specified by the proposed lenders