The additional funds would be made available in two tranches of R25-million each.

The loan was conditional upon Buffalo securing additional funding arrangements with mining-focused private equity firm Resource Capital Fund (RCF), according to Mining Weekly.

The loan also remained subject to the execution of definitive documentation. RCF, which held 77.4% of Buffalo’s issued and outstanding common shares, had, to date, advanced $29-million to Buffalo by way of a convertible loan.

It was expected to convert $20-million of the convertible loan into common shares over a two-year period at C$0.0469 a share.

This was subject to a minimum conversion of $10-million within the first year and included an initial amount of $2-million on closing of the funding arrangements. RCF was also required to subscribe for a further $2-million of equity in Buffalo through a private placement, where RCF would acquire 72.2-million common shares at a price of C$0.0367 apiece.

Buffalo would use the proceeds of the private placement and the supplemental Investec loan to address its immediate liquidity concerns and for working capital requirements. The second tranche of the Investec loan was, meanwhile, subject to the company demonstrating its plan to sell the majority of its anthracite stockpile, which had built up as a result of depressed markets both domestically and globally.

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