Thanks for the info overseerer. "There will be a bunch of...

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Pinnell

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20/01/17

13:14

Post #: 22029083
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Originally posted by TheOverseerer ↑

Typical issues surrounding final credit approvals are usually:

1. Offtake (guaranteed pricing and volumes to support the debt repayment)

Sometimes some banks need price as well as volume contracts, sometimes, particularly with the price of thermal coal at the moment, just volume may be enough. It really depends on the amount of leverage and the expected cash flows the project is supposed to generate. If the gap is really large (i.e. lots of $$ vs. the expected debt repayment) then that shouldn't be too much of a concern.

2. Mining Schedule

This is one to keep an eye on, Remember how new management decided to reshape how they were going to mine the ore body, what that ultimately means is the new mine plan will need to be independently assessed, which is typically done by companies such as SRK or AMC etc. As part of banks DD they rely heavily upon those independents to confirm viability

3. Capital Costs

The same independents who will review the mining schedule will typically do full DD of the costs associated with mining, including an assessment of the mining contractors ability to deliver, the capability of the EPC/EPCM contractor etc, as well as costs associated with haulage, port costs, train etc.

There will be a bunch of conditions precedent ( CP's) before draw down could occur but they are typically pretty straight forward but can be time consuming.

p.s. PussnBoots - I did try to buy a few @ 9.5c the other day but missed the offer.....

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Thanks for the info overseerer.

"There will be a bunch of conditions precedent ( CP's) before draw down could occur but they are typically pretty straight forward but can be time consuming."

Hopefully this is all we are waiting on...

RES Price at posting: 12.0¢ Sentiment: Buy Disclosure: Held
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