Continental Coal closes landmark coal offtake and finance agreement
South African focused coal company Continental Coal (ASX: CCC) has signed an off‐take and funding agreement with EDF Trading.
EDF Trading is a leader in the international wholesale energy markets and a wholly‐owned subsidiary of EDF S.A., a leading player in the energy industry.
Under the terms of the legally binding agreement, EDF Trading has secured all export quality thermal coal produced from the Project X, Vaalbank and Vlakvarkfontein mines for a period of 20 years, at the internationally‐recognised benchmark price for coal exported out of South Africa’s Richards Bay Coal Terminal – API4.
In addition, EDF Trading has agreed to provide Continental with US$20 Million, through an advance purchase of export coal from the Vaalbank, Project X and Vlakvarkfontein coal mines. The first drawing of the “coal loan,” (US$7m) expected later this month, will be used by the Company to fund outstanding and deferred acquisition costs for the Vaalbank and Project X projects.
Subsequent drawings of the “coal loan” will be used by the Company to fund mine optimisation studies, pre development costs and site establishment and capital construction costs.
The forecast combined initial production rates of export quality coal from the Vaalbank and Project X mines, attributable to Continental and subject to the off‐take agreement with EDF Trading, is expected to be at an initial rate of approx 145,000 per month (note this does not include the Company’s attributable production of domestic quality coal which will be in addition to this).
First coal production under the off‐take agreement is expected to occur in the first half of 2011 from the Vaalbank resource, with production from Project X expected to occur some six to nine months later.
________________________
Posts
No comments:
Post a Comment
___________________________________
Commented on The MasterFeeds