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Facility extension agreed for the Boikarabelo mine project

Published by
Global Mining Review,

Resgen has signed an extension of the Facility Agreement of 3 March 2014 (facility), under which Noble Resources International Pte Ltd (Lender) has agreed to make available further funds of up to US$8.4 million to the company's subsidiary, Ledjadja Coal Pty Ltd (LCL) to fund the operations and development of the Boikarabelo mine project being undertaken in South Africa (Project) while project funding is secured.

The additional funds are to be available in three tranches over the period to 30 September 2017.

The additional funds together with the existing facility of US$20 million are unsecured and subject to a parent company guarantee.

Interest accrues at 10.75% pa and can be capitalised on a six-monthly basis unless the borrower elects otherwise to pay such interest.

The right for the Lender to appoint a nominee to the board of the company and approve one of the company's nominees to the board of LCL, subject to regulatory and governance requirements.

The facility is repayable in instalments commencing from 30 September 2017 with a termination date of 10 March 2024, however the additional funds made available under the extension of the Facility announced today is repayable from the proceeds of the first drawdown of funding secured for the project.

As part of negotiating the extension to the facility, Resgen has also agreed to restate the existing domestic offtake and coal marketing agreements it has with the Lender and its related bodies corporate (Restatement Agreements) with effect from 31 December 2013, including the incorporation of a term sheet signed in 2013 (Term Sheet).

The offtake arrangements include 3 million tpy of Boikarabelo domestic thermal coal for a eight-year period from first delivery subject to certain quality specifications with two purchase price options at the Lender’s election, with the opportunity for LCL to participate in the upside in any on-sale.

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