BVI-registered China Natural Resources, Inc. announced in the end of April that its China-based indirect 70%-owned subsidiary Guizhou Yongfu Mining Co., Ltd. had entered into a bank financing arrangement in order to fund construction and development of the Yongsheng Coal Mine – a coal mine located in Huajuexiang, Guizhou Province in the People’s Republic of China.
The subsidiary of the BVI company, Guizhou Yongfu, is the owner of the mining rights to the Yongsheng Coal Mine. The long-term loan in the amount of US$29.30 million is being provided by China Minsheng Banking Corp. Ltd., and is to be paid in annual installments of principal commencing in 2013 and terminating in 2017. Its interest is payable quarterly at an annual rate equal to 30% above the over-5-year official lending rate (currently 5.94% per annum).
The US$14.65 million balance of the loan is expected to be drawn down as needed in accordance with the construction plan for the coal mine, which is currently anticipated to be in December 2009. The Yongsheng Coal Mine is not operating yet. The estimated cost of mine construction and development is approximately US$52.74 million to US$58.61 million, and BVI company’s subsidiary plans to finance the balance of the estimated construction costs through a combination of internally generated funds and additional third-party loans.