[miningmx.com] – WATERBERG Coal Company (WCC), the Johannesburg- and Sydney-listed coal development firm, said some A$35m (R319m) in finance which fell due today has been rolled over whilst it attempts to finalise third party refinancing.
The company first announced it had run into a funding squeeze in September when it emerged it was in discussions with Standard Bank South Africa (SBSA), to extend the maturity date of a loan with the bank beyond October 9.
Six months after that first repayment deadline it appears as if Standard Bank wants to exit its arrangement with WCC which said it was in discussions with an undisclosed third party. WCC had originally used the proceeds from the loan to buy control of the Waterberg Coal Project, in South Africa’s Limpopo province, in 2013.
WCC said today discussions with the third party was also to finance an export thermal coal mine as well as retire current group indebtedness.
“With respect to the facility with SBSA, the company wishes to advise that it has been in discussions with SBSA in respect of arrangements for a proposed “refinancing’ of the current facility to be funded by a third party,” it said in the announcement.
“The third party discussions are in process and SBSA has advised that they intend to maintain the facility as ‘on demand’, rolling on a daily basis, to give these discussions time to progress,” said WCC.
Shares in WCC, as well as Firestone Energy in which WCC is the controlling shareholder, would remain suspended until further notice.
WCC hatched the idea of an export mine, producing two million tonnes a year of thermal coal, increasing to four million tonnes/year, and costing $140m to develop, in order to generate cash flow in the short-term, and help finance a 10mtpa domestic coal mine supplying Eskom.
According to Stephen Miller, CEO of WCC, a bankable feasibility study showed that the domestic mine would require some $500m for investment. A further $100m would be required for investment in “hardware and infrastructure,’ he said.
Before that, however, WCC has to sign a coal supply agreement with Eskom and satisfy Eskom’s regulatory demand for 50% black economic empowerment (BEE) in WCC and Firestone Energy.
