Resgen has revealed that talks are underway to secure funding for its Boikarabelo mine in Limpopo Province of South Africa.
When the funding proposals are finalised, they will be referred to shareholders for approval. Separate talks over financing for the necessary rail connection are also underway. The Development Bank of Southern Africa is seen as the most likely source of finance for the 44 km spur railway from the mine to the Lephalale line, which is expected to cost ZAR650M (US$51.5M) to build. Three of the line’s seven bridges have already been completed. In the meantime, the company is also reported to be in talks with Noble Resources International over continuing its interim financial support.
In a statement, the company said: “Those proposed lenders have completed their due diligence investigations of the project and the company, and are currently engaged in their respective internal credit approval processes.
“Although the credit approval processes are ongoing, at this stage, the company is unable to forecast with any certainty when credit approvals and a signed terms sheet will be obtained from all proposed lenders, but a further announcement will be made when that occurs.” The company expects to export 60% of total production from the project.
Before sanctioning any loans, potential backers may require concrete, long term supply agreements with South African power utility Eskom or overseas customers for the expected production of 6 Mt. Once these two financial packages are in place, the company plans to seek loans from commercial banks to finance later expansion of the project, which is located in the Waterberg Basin. Transnet Freight Rail is in the process of expanding the handling capacity of the existing railway that runs from the Waterberg to Richards Bay Coal Terminal.