JSE and ASX-listed Resource Generation, or ResGen, who has yet to develop its Boikarabelo coal mine in the Limpopo province’s Waterberg coalfield in South Africa has been hit by another funding delay.
This comes after ResGen announced its intention in August to seek alternative funding for Boikarabelo after being hit by unexpected delays in securing credit approval from one of its lenders.
The company announced on 5 December that it has become apparent that it would not finalise funding before the Christmas break, which will in turn have an impact on the targeted date for financial close and would mean that the company would now have to focus on strategies to conserve cash and/or secure any required additional financial support.
In its last market update covering the status of Boikarabelo project funding in November, Resgen advised that discussions with the lender’s deal team (a member of the proposed lending syndicate) had confirmed that this lender remained committed to the project from a technical, commercial and strategic perspective, however a short delay had arisen in scheduling a credit committee meeting.
Since providing the abovementioned update, management has been in regular contact with the lender’s deal team in anticipation that credit committee and subsequent board approval could be finalised before the Christmas break in South Africa.
Resgen believes that this further delay highlights the imperative of progressing (in tandem) an alternative funding option with a party or parties as a substitute in the current proposed lending syndicate and to explore interest expressed by third parties as a substitute funder in the syndicate or as a complementary participant in the syndicate.
Moreover, ResGen CFO and joint company secretary Brendan O’Regan, has tendered his resignation effective 31 January 2019.
ResGen’s primary shareholders are the Public Investment Corporation of South Africa (PIC), Noble Group and Altius Investment Holdings.