The company reported a Q1 $2.7 million net operations loss in their results released on Thursday but, through financing from Noble Group in the form of a secured debenture and an equity placement, have also reported cash reserves of $A25.7 million.

ResGen started construction at Boikarabelo in the Waterberg region of South Africa in mid-February.

It expects to produce 6 million tonnes per annum saleable coal from a probable reserve of 744.8Mt on 35% of the company’s tenements.

Boikarabelo is now classified as an “operating mine site” with site infrastructure, roadworks and water and power connection work all underway.

The company is undertaking financing in stages, with an equipment financing facility offer received from Caterpillar Finance with negotiations underway to finalise the terms.

Through an April agreement with Noble, the Asian trading company will acquire a 7.5% shareholding in ResGen for $A8.5 million ($US8.9 million) at 40c a share for a total of 21.35 million shares.

In addition, Noble has agreed to provide ResGen with a secured loan facility of up to $US123 million on normal commercial terms.

Noble was also appointed Boikarabelo’s supply chain manager and exclusive marketing agent.

The Noble funding announcement came after ResGen announced it was considering alternative funding after it received credit-approved offers of project finance from a previous financier that deviated from an agreed term sheet.

Boikarabelo’s expected production of an initial 6Mtpa is to be split equally between export and domestic sales.

The company expects to spend a further $8.1 million on development next quarter, which will make up the majority of the expected $9.2 million cash outflow for 2013 Q2.