The funding update also came on the same day ResGen received a price query from the Australian Securities Exchange – based on the shares falling 25% from a high of 9.4c on Monday to 7c yesterday.
“The company has been subject to steady selling of its shares at low volumes over the past few months as shareholders await the outcome of financing negotiations,” ResGen said.
The funding update in response to these concerns also revealed that a potential financing consortium also included Industrial Development Corporation, Public Investment Corporation SOC Ltd, and Australian export credit agency Export Finance and Insurance Corporation.
“It is proposed that if this facility proceeds, the existing loans entered into with Noble will become part of the facility,” ResGen said.
“Negotiations have reached a mature stage and a term sheet is being finalised on the expectation that it will provide all required remaining funding for the mine construction. Consequently, if the proposed facility is made available, the company does not envisage the need for an associated equity raising.
“If the proposed facility is not made available, the company will continue to explore alternative funding arrangements.”
The Boikarabelo project in the Waterberg coal region is expected to produce an initial 6 million tonnes per annum, split equally between export and domestic thermal coal.
ResGen has been seeking at least $400 million of funding for the project since last year.