South Africa-based coal producer Coal of Africa (CoAL) has announced that it has signed a financing agreement worth approximately $58.7 million with South Africa's Investec Bank to fund its Makhado and Vele coking coal projects in South Africa.
The company will use the funds for the key items for the Makhado project, additional funding for the production ramp-up at the Vele Colliery and for general working capital purposes. CoAL also stated that it has the right to require Investec to subscribe for up to a maximum of 81,061,507 CoAL shares in tranches over a year.
Under the agreement, Investec has subscribed for 19.1 million shares and it will subscribe for a further 16.85 million shares. The aggregate consideration for these share purchases will be approximately $8.7 million.
Coal extraction from Vele started in December 2011, with the first shipment destined for the export markets loaded in April.