Miranda Mineral Holdings
Coal focused Resource Generation (ResGen) has had to implement an alternative fund raising programme to raise cash for its Boikarabelo mine in the Waterberg.

At a meeting in Johannesburg on 16 August 2017 the ResGen board received an update on all material developments. And although demonstrable progress had been made on the material contracts and funding of the rail link; the proposed coal supply to Eskom remains unconcluded.

Under the circumstances, the board believed it would be reasonable to ask its Debt Club lenders to undertake their credit approval process to a conclusion, but on the basis that any draw down of senior debt be subject to a concluded coal supply agreement being in place.  That request was made on 21 August 2017.

However, on 23 August 2017 some members of the Debt Club formally declined to proceed on that basis and required a greater degree of certainty around the terms of supply to Eskom before proceeding to secure credit approval for funding of the project.

The board therefore believes that this source of project finance is no longer viable.

Mindful of the present difficulties in securing terms of supply with Eskom, management had in parallel been exploring an alternative funding proposal to place before the board. This proposal is not subject to a committed domestic coal supply. The credit approval processes of these lenders, who are familiar with the project, has commenced.

First approvals and a signed term sheet are expected by end September/early October. At that time the board will consider a recommendation from management and make a decision on this alternative funding proposal.

The current status of the project is as follows:

Independent Expert Reports:

All expert reports are supportive of the project with no fatal flaws being identified

  • Technical report to be delivered on 25 August 2017
  • Environmental report completed
  • Marketing report completed
  • Legal due diligence report completed

Material Contracts:

  • CHPP EPC:                                             Ready for execution
  • CHPP Operation & Maintenance:      Ready for execution
  • Ancillary Works EPC:                           Ready for execution
  • Transportation of Coal Agreement:   Commercial terms agreed and largely completed
  • Rail Service Level Agreement:             Ready for execution
  • Mining Contract:                                    Commercial terms agreed and largely completed

Rail Link:

  • First credit approval for full funding of the rail link obtained by Development Bank of South Africa. Second credit approval due imminently
  • Rail link to be constructed by RME, a subsidiary of Transnet Freight Rail, under fixed price, turn key, EPC contract

Richards Bay:

  • Letter of comfort received from Transnet concerning the availability of 3.6 Mt of export capacity at Richards Bay terminals effective 2020


  • With the frequent management changes that have occurred at Eskom over recent months, it has not been possible to have a continuous engagement with management on the terms of an unsolicited bid for the supply of coal outside of Eskom’s scheduled tender process
  • Whilst RegGen was informed in July 2017 that Eskom’s current plans are not to commence a public tender process for the supply of coal from the Waterberg until 2019, it has engaged and will continue to engage with them on the basis of them accepting an unsolicited bid
  • The timeline for any successful conclusion of negotiations cannot presently be predicted

Noble Facility Agreement:

Payment of the third and final draw down under the extended working capital facility will be made in two tranches in August and September respectively.


Good progress is being made with regard to the planned 300 MW IPP. A provisional equity structure under which ResGen and its subsidiary, Ledjadja Coal, will have direct equity interests is under discussion. A joint development agreement is being drafted by the company’s appointed legal counsel and a full technical specification of the IPP is currently being prepared by an independent consulting firm.

It is expected that a selection process to identify and appoint the EPC contractor will commence during Quarter 4 of 2017.