Homeland Receives Rand 150-Million Debt Finance Facility Approval from Nedbank Capital for its South African Subsidiary
Friday, August 22nd 2008
Homeland Energy Group Ltd. announce that Nedbank Capital, the Investment Banking division of Nedbank Limited, one of South Africa’s largest banks, has approved a Debt Finance Facility for Homeland’s Kendal Colliery. Following a thorough due diligence and review of Homeland’s Kendal Colliery, Nedbank Capital has approved the 5 and a half -year facility, which is equal to approximately $20.5-million.
As the Kendal Colliery continues its ramp up to full production over the coming months, including a new box cut and additional pre-stripping and as the Eloff Coal Project continues in the pre-feasibility stage, Homeland Mining & Energy SA will have access to all the necessary financing to complete the move to positive cash flow.
The Kendal Colliery, located near Witbank, South Africa, is currently projected to produce 40,000 to 50,000 run-of-mine tonnes in August. Current domestic market prices in South Africa are up to 640 rand per tonne for sale at the mine (net of transport costs) for the washed sized product from Kendal. The company is currently selling into the spot market and is in discussions for long-term off take agreements for both domestic and export sales.
Homeland Energy Group Ltd. is a producing coal company, traded on the Toronto Stock Exchange under the symbol “HEG”. The company is focused on energy exploration and development in Southern Africa. Homeland owns two producing operations – the Kendal Mine near Witbank, South Africa and the Northfield site reclamation project near Dundee, South Africa; an advanced development stage coal project in South Africa (Eloff Coal Mining Project) as well as a number of early-stage exploration properties in the provinces of Mpumalanga and Kwa-Zulu Natal. Total South African production for 2009 is forecast to be 2.1-million tonnes from Kendal and Northfield.
The Company is currently negotiating to acquire interests in a number of additional coal properties in eastern South Africa and neighbouring countries. Homeland is a significant shareholder in Homeland Uranium Inc., a Canadian uranium exploration and development company focused on projects in Niger and the United States, and has several other global strategic investments. Homeland Energy Group Ltd. began trading on the Toronto Stock Exchange on March 5, 2008 and has 150,079,642 common shares issued and outstanding.