Blumont finalizes principal terms of US$8m loan for Cokal

By Romel S. Gurky

Singapore-based Blumont Group Ltd said that it has finalized a loan facility agreement worth up to US$8 million to be extended to Australia-listed coking coal company Cokal Ltd.

The company said in a statement that is has entered on Tuesday into agreement with Cokal on the principal terms of the loan facility intended to help finance the development of the latter?s projects. The principal activities of Cokal are in coal exploration and the coking coal business. It holds interests in coal exploration tenements in Indonesia and Tanzania.

The principal terms of the facility are set out below as detailed in the Blumont statement.

(a) Purpose
Cokal may only use the facility for (i) the acquisition of additional coal exploration tenements, or additional interests in such tenements, with the prior written consent of the Company; (ii) general corporate and exploration and development costs; and (iii) any other purpose approved by the Company in writing.

(b) Drawdown schedule
Subject to the terms and conditions set out in the Facility Agreement, the Company shall advance to Cokal:
(i) US$2 million no later than 5pm (Brisbane time) on 7 November 2013 (the ?Initial Advance?); and
(ii) US$2 million within 14 days of the date of the Facility Agreement and no later than 5pm (Brisbane time) on 19 November 2013.

The Company may make subsequent advances to Cokal, provided that the aggregate amount of all advances made shall not exceed US$8 million.

(c) Repayment
The Facility shall be repaid in full on or before the earlier of:
(i) the date on which Cokal is, by written agreement, deemed to have received from the Company subscription monies from the issue and allotment of fully paid ordinary shares in Cokal in an amount which is at least equal to the money owing under the Facility Agreement on the date of receipt;
(ii) the date falling three (3) years from the date of the Initial Advance; or
(iii) any earlier date on which money owed under the Facility Agreement becomes payable.

(d) Interest
Interest is at the rate of 5% per annum, payable quarterly or on any prepayment of an Advance.

(e) Security
As security for Cokal?s obligations under the Facility Agreement, the Company has entered into security deeds dated 5 November 2013 with each of (i) Cokal; and (ii) Jack Doolan Capital Pty Ltd, a subsidiary of Cokal, (each, a ?Grantor?) pursuant to which the Company will have a first ranking charge over:
(i) an aggregate of 25 ordinary shares and 1,226,550 preference shares in Cokal Holdings Pte Ltd (?Cokal Holdings?);
(ii) a further 0.625% (rounded up) of each class of securities in Cokal Holdings, for each US$1 million of Advances exceeding US$4 million;
(iii) not less than 2.5%, plus the percentage amount of any further security provided under paragraph (ii), (rounded up) of securities in Cokal Holdings to which each Grantor becomes legally or beneficially entitled to at any time after the date of the respective security deed; and
(iv) any present and future economic rights of a Grantor in respect of any of the above.

Cokal is developing its 60 percent owned flagship Bumi Barito Mineral Project, located at Upper Barito Coal Basin, Regency of Murung Raya, in Central Kalimantan, which was recently granted a mining production license of 15,000 hectares (the maximum area permitted under Indonesian legislation). The BBM Project has a total of 77.0 million tons of JORC1 compliant coal resources in multiple seams comprising 70.0 million tons of inferred resource and 7.0 million tons of indicated resource (70% of the resources are coking coal and 30% are PCI coal). Cokal has planned an exploration target of 200 million tons to 350 million tons down to a depth of 200 meters in thirteen seams for the BBM Project.

Editing by Reiner Simanjuntak