Condor moves ahead with €10 million coal funding

Condor Blanco Mines has announced that it is proceeding to secure €10 million in funding as its nears completion of the full review of the Duel Hard Coking Coal Project (the Duel) in South Africa, and to progress iron or mining at its Marianas Magnetite Tailings Project (Marianas) in Chile.

Condor has entered into an agreement with Signet Coking Coal Limited (Signet) that will see it have the right to acquire a majority stake of up to 50.3% in the Duel and Tshipise 2 projects. The acquisition is subject to several conditions.

Geological coal review

The review of the Duel is being undertaken by an independent third party and will confirm geological information on the project. It is proceeding in parallel with drafting of a definitive agreement that could lead to Condor’s acquisition of a majority position in Signet and its Soutpansberg Coalfield Projects in northern South Africa.

Positive initial exploration

South African geologist, PC Meyers, has provided a positive initial exploration report on the Duel coal project. The report states: “Signet Coking Coal International hold potentially multiple HCC projects within the southern and northern Tshipise sectors of the Soutpansberg Coalfield (Duel and Tshipise 2 Projects). With the confirmation of the coking coal analysis from the Duel project, tied with the addition of the large amount of publicly released information from Coal of Africa Limited […], the presence of premium hard coking coal in this particular sector is at its highest level.”

The report concludes: “The Duel project could easily supply the majority of South Africa’s (current) imported hard coking coal quota (between 3 to 4 million tpa).”

€10 million debt facility

Condor proceeds with required documents to secure a five year limited recourse loan of €10 million to allow completion of undertakings under the Signet agreement, as well as to develop the Marianas project in Chile. The loan documents provide for an approximately 15% average interest rate for the term of the loan with the ability to repay it earlier at Condor’s discretion.

‘Optimal value’

Condor chairman, Paul Crosio, commented: “By funding the Marianas and Signet Hard Coking Coal initiatives through debt we can maintain our company structure as well as preserve the ability to capitalize on the re-evaluation of the Duel and other Signet assets once we have completed DFS. It is our intention to make it a priority to repay this debt through a trade sale or joint venture on the Duel project when we believe the optimal value of the project has been realized. If we went to the equity market at this stage there would inevitably be minimal or now allowance for this future upside potential of Signet.”

Edited from various sources by Katie Woodward

Read the article online at: https://www.worldcoal.com/mining/10032014/condor_secures_coal_funding_602/