Mongolian coal producer SouthGobi Resources has executed a deferral agreement with China Investment Corporation (CIC) for the deferral of a number of cash interest payments.
The terms of the agreement are:
The cash interest payment originally due on May 22, 2015 and deferred to November 19, 2015, pursuant to the terms of a deferral agreement dated July 22, 2015, shall be due and payable in US$1 million increments on November 19 and December 19 in 2015, and on the 19th day of January, February, March and April in 2016. A US$2 million payment is due on May 18, 2016.
The cash interest payment due on November 19, 2015, shall be due and payable in cash on May 18, 2016.
The deferral fee, as defined in the deferral agreement, payment due on November 19, 2015 shall be due and payable in cash on May 18, 2016.
As consideration for the above deferrals, SouthGobi agrees to pay CIC a deferral fee at a rate of 6.4% per annum on the above deferred payments.
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia’s South Gobi region.
It has a 100% shareholding in SouthGobi Sands LLC, a Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine, which produces and sells coal to customers in China.