JSE- and ASX-listed Resource Generation (Resgen), who is developing the Boikarabelo coal mine in the Waterberg region of South Africa, said in a statement on Thursday that it has been negotiating with various parties and financiers to provide project finance for the construction of the mine.

The parties are FirstRand Bank, acting through its Rand Merchant Bank division; the Johannesburg branch of HSBC Bank; the Industrial Development Corporation of South Africa; the Public Investment Corporation; Noble Resources; and the Export Finance & Insurance Corporation.

It is proposed that if this facility proceeds the existing loans entered into with Noble Resources, it will become part of the above facility.

Resgen says negotiations have reached a mature stage and a term sheet is being finalised on the expectation that it will provide all required remaining funding for the mine construction.

Consequently, if the proposed facility is made available, Resgen does not envisage the need for an associated equity raising. If the proposed facility is not made available, the company will continue to explore alternative funding arrangements.

The Boikarabelo coal mine has a probable mineral reserve of 744.8-million tons of coal on 35% of the tenements under its control. Stage 1 of the mine development targets saleable coal production of 6 Mt/y.

First production was delayed by between three and six months to the first half of 2016, after the sudden shutdown of the project’s earthworks contractor Protech Khuthele, after it went into liquidation last year.

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