[miningmx.com] — KEATON Energy announced on Monday it has successfully secured a credit-approved offer of R255m in project finance to complete its 74%-held Vanggatfontein coal mining project near Delmas.
It has also dispatched Vanggatfontein Phase 1’s first consignment of No 5 Seam metallurgical coal to a domestic customer.
Keaton Energy managing director Paul Miller says the development of phase 1 has advanced aggressively since accessing the site in June this year.
“Commissioning is continuing; orders are in, the product specification has been well received by domestic customers and production and sales will now build up until January, when full-scale plant operation at a rate of 50,000 run-of-mine tonnes per month is expected,” Miller says.
Capex on phase 1 to date, excluding sunk exploration costs and surface right acquisitions, totals R135m and has been funded from cash reserves.
The project financing debt facility, earmarked for the completion of Vanggatfontein Phase 2, is in the form of a credit approved offer from Nedbank Capital following a due diligence process by the institution and approval by its credit committee.
Nedbank Capital was selected as preferred bidder in a competitive tender process.
The project financing is subject to successful execution of related legal documentation and fulfillment of conditions precedent typical for transactions of this nature.
Phase 2 will see Vanggatfontein delivering No 2 and 4 Seam steam coal into Keaton Energy’s supply contract with power utility Eskom, initially at a rate of 50,000 tonnes per month, rising to 200,000tonnes per month by July 2011.