The company has received $65m financing from ABSA Capital, a unit of South Africa-based financial service provider ABSA Bank.
The offer of finance includes a secured seven-year term loan facility of $35m to be made available to fund the development of the Penumbra mine, and a secured three-year term loan facility of $15m to refinance existing secured indebtedness under the EDF Trading Coal Prepayment.
It also comprises a secured annually renewable working capital facility of about $15m to fund general corporate working capital requirements.
ABSA will also provide risk management facilities to allow Continental Coal and its subsidiaries to hedge a portion of its exposure to thermal coal prices and interest rate fluctuations.
According to Continental Coal, the run-of-mine production from the Penumbra coal project is forecast to increase to the targeted annual rate of 750,000 tons in the third quarter of 2012.
