Resgen secures extension of working capital facility keeping it afloat to end-February

RESOURCE Generation (Resgen) said it had secured funds that would provide it with sufficient working capital until end-February after shareholder Noble Resources agreed to an extension of a $920,000 (R14.1m) ‘facility agreement’.

“During this period measures to ensure the continued solvency of the Resgen Group and alternatives for progressing development of the Boikarabelo Project will be considered in co-operation with Noble and its financial advisor,” the company said in an announcement to the Johannesburg Stock Exchange.

In October, the South African government-owned Industrial Development Corporation (IDC) withdrew its support for Resgen’s proposed R4.2bn Boikarabelo thermal coal mine project planned for South Africa’s Limpopo province.

Resgen said it would impose an “austerity budget” in which the firm’s directors had agreed to waive their directors’ fees.

Shares in the company would only trade again following a suspension once it had lodged its 2020 financial year numbers and annual report for the 12 months to end-June. The firm’s shares are principally listed in Australia.

Boikarabelo has been scoped to produce 6.5 million tons a year (Mt/y) of thermal coal with a second phase of 18Mt/y in the offing, pending development of rail infrastructure.

Boikarabelo is situated in the Waterberg coal fields which is estimated to contain about 40% of South Africa’s total thermal coal. It is also an element of the government-backed National Development Plan in terms of unlocking the Northern Mineral Belt.