Resource Generation sells its shares on an expanded capital base.
Based on the final structure of the placement of the shortfall shares from the entitlement offer, Blumont is likely to invest between $20m and $25m for the stake acquisition.
Resource Generation managing director Paul Jury said, "We will be detailing our positive recommendation to shareholders in the notice of annual general meeting in due course, but together with the leveraged funding alternatives we are vigorously pursuing, the extended equity placement to Blumont minimises any further equity requirements for the development of the Boikarabelo mine."
The proceeds will be utilized to develop Resource Generation’s Boikarabelo coal mine in Waterberg, South Africa.
Considered to be the main source of coal in the future, the Waterberg coal field comprises approximately 40% of South Africa’s remaining coal resource.
The transaction is subjected to shareholder approval.
