South African anthracite miner Buffalo Coal Corp. has secured additional funding from Investec Bank and Resource Capital Fund V L.P. (RCF) to use for working capital and to address its immediate liquidity concerns.

Despite the transactions, the company is still not in a position to meet the continuous listing requirements of the TSX. Consequently, its common shares are expected to be delisted from the TSX on or near 11 December 2015 and moved to the TSX-V. This process remains on-going but there is no guarantee that it will be completed prior to the TSX delisting date or at all.

The company has also applied to the JSE to transfer its listing from the main board to the AltX in order to maintain its JSE listing as a secondary listing to the TSX-V.

Investec loan

Pursuant to an amended and restated credit facility dated 2 December 2015, Investec has agreed to extend Buffalo Coal Dundee Proprietary’s (100% owned by Buffalo Coal Corp.) existing working capital facility from R30 million to R80 million.

Subject to fulfillment of certain conditions precedent, an initial R25 million is expected to be advanced by Investec to Buffalo Coal Dundee no later than 8 December 2015. The balance remains subject to the company demonstrating its plan to sell the majority of its anthracite stockpile (which has built up as a result of depressed markets both domestically and globally).

RCF facility conversion and private placement

RCF has to date advanced US$29 million to Buffalo by way of a convertible loan. As a condition precedent to the supplemental Investec loan, RCF has agreed to convert $20 million of the convertible loan into common shares of the company over a two year period at the agreed conversion price of C$0.0469 per common share, subject to a minimum conversion of $10 million within the first year. An initial amount of $2million was converted on the closing of the transactions described herein.

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