Johannesburg- Dual-listed Resource Generation (Resgen) is another step closer to the development of its Boikarabelo coal mine in South Africa’s Waterberg region after signing a heads of agreement with a mining contractor.
Boikarabelo mine operating subsidiary Ledjadja Coal this week selected Stefanutti Stocks Mining Services as the preferred mining contractor.
“The appointment is in line with our execution strategy to appoint contractors with good records and strong balance sheets and thereby reduce the company’s exposure to operating risks inherent in a self-operated mine.
“This appointment is another important step toward validating the base case financial model and the financial close of our debt funding arrangements,” Resgen CEO Rob Lowe said on Wednesday.
The parties will now exclusively negotiate a detailed term sheet to cover mining and related services and the terms and conditions of a mining contractor agreement, which will be subject to conditions precedent such as board approval by both parties of the formal agreement and project funding being procured by the company.
In August, the emerging coal producer entered into a R5.52-billion funding agreement with a financing syndicate and is now working towards fulfilling the conditions precedent.
“The financing syndicate convened a series of due diligence presentations and a visit to the Boikarabelo mine during the week of August 29. The outcome of the presentations and site visit were satisfactory and no serious flaws were identified,” Lowe said in a statement.
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