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September 2015
MODERN MINING
15
MINING News
ASX-listed Resource Generation Limited,
which is developing the Boikarabelo coal
mine in the Waterberg coalfield of South
Africa, says it has been negotiating with
financiers for more than three years to secure
the US$400 million required to complete the
mine and related infrastructure. The aim has
been to fund construction through debt in
order to avoid issuing additional equity and
diluting shareholders’ interest in the project.
This – says the company – has proved to be
difficult due to changing macro-economic
factors resulting in changes to the financiers’
requirements.
In June 2015 the company believed it
was close to an in-principle agreement with
a club of financiers on the term sheet for a
multi-layered funding package. Together
with other funding commitments, this
would have provided the necessary finance.
Finalising negotiations since has been
hampered by a weakened API4 coal price
forecast. As a result, in order to deter-
mine if gearing levels can be lowered, the
club of financiers has now asked Resource
Generation to investigate whether a contract
mining model could reduce the mine’s costs
and capital requirement. Consequently,
More big stones recovered at Karowe
Canada’s Lucara Diamond Corp reports
the recovery of a number of exceptional
diamonds at its Karowe mine in Botswana.
It says the resource is continuing to
deliver according to expectations with
the recovery of a spectacular Type IIa,
336-carat diamond. In addition to this, a
further three exceptional diamonds were
recovered recently – a 184-carat stone,
a 94-carat stone and an 86-carat stone.
The mine has also recently produced a
12-carat pale pink diamond, the colour of
which will be confirmed post cleaning.
Over the past three years, since Karowe
produced its first large diamond, Lucara
has recovered 216 diamonds that have
sold for more than US$250 000 each.
Twelve of these diamonds sold for more
than US$5,0 million each.
William Lamb, President and Chief
Executive Officer, commented, “The
ongoing recovery of large exceptional
diamonds from the Karowe mine contin-
ues to support the resource estimates.
This resource has consistently produced
significant value for the company and its
shareholders and the ongoing recovery of
high value stones sets Lucara apart from
most other diamond producers.”
Contract mining for Boikarabelo
coal mine under consideration
Resource Generation is seeking quotes
from mining contractors and this process is
likely to take several months to complete.
Meanwhile, other sources of finance are
being explored.
Nevertheless, development at the mine
continues with construction of the 22 kilo-
metre long, 132 kV power line, electrical
substation and switch room, and MBET pipe-
line either finished or nearing completion.
Paul Jury, MD of Resource Generation,
said: “With low production costs, transport
arrangements in place and a number of
years’ production already underwritten by
sales contracts, Boikarabelo is well placed to
benefit from any improved growth in global
demand for coal. While weakness in the coal
price forecast has delayed our securing the
remaining finance to build the mine, we
believe the asset is valuable and once con-
struction is financed on acceptable terms
will provide value to shareholders. Sufficient
cash reserves exist for the company to oper-
ate in the medium term whilst pursuing
completion of the project funding.”
Stage 1 of the Boikarabelo mine develop-
ment targets saleable coal production of 6
million tonnes per annum.
The Type IIa, 336-carat
diamond recently
recovered at Karowe
(photo: Lucara).