(MENAFN - ProactiveInvestors - Australia) Resource Generation (ASX: RES) has signed a port access contract with Bulk Connections that will allow it to meet its Stage 1 export targets for the Boikarabelo coal mine in South Africa.
Under the take and pay contract, Bulk Connections, which is part of the Bidvest Group, will allocate Boikarabelo sufficient stockpile capacity at its multi-purpose terminal at the Port of Durban to ship coal at least once per week.
This will enable the company to meet its Stage 1 export targets of 6 million tonnes per annum from early 2015.
Resource Generation also noted the financing syndicate's credit approval processes are taking longer than expected due to a substantial backlog of other credit approvals.
Festive season interruptions may also cause delays to the approval process.
The company said it is continuing to work with the financing syndicate to try to obtain binding offers as soon as possible for the project finance of the Boikarabelo mine.
The syndicate is mandated to provide about US400 million through a project finance facility for development of the mine.
The financiers are:
- Absa Capital, a division of Absa Limited, a member of the Barclays Bank Group;
- Caterpillar Financial SARL;
- FirstRand Bank Limited, acting through its Rand Merchant Bank division;
- Hong Kong & Shanghai Banking Corporation (HSBC);
- Nedbank Capital, a division of Nedbank Limited; and
- Standard Chartered Bank.
The Boikarabelo mine has a major 6.4 billion tonne resource " with current probable reserves of 745 million tonnes and two long term export contracts already in place to support the funding initiative.
The reserve represents only 35% of the current resource area, meaning there are many more years of production possible.
Stage one of the mine development targets saleable coal production of 6 million tonnes per annum, with stage two planned to increase to more than 20 million tonnes per annum.