New York State In-depth

Buffalo Coal Corp. Announces Secured Credit Facility

TORONTO, ON – (Newsfile Corp. – January 23, 2023) – Buffalo Coal Corp. (TSXV: BUF) (JSE: BUC) (the “Company”) announced today that its wholly owned subsidiary, Buffalo Coal Dundee Proprietary Limited (“BCD”), has entered into a Secured Credit Facility Agreement with the South African Reserve Bank dated November 7, 2022 and entered into and approved an addendum to the Facility Agreement dated December 29, 2022 (as amended, the “Credit Agreement”) Ikwezi Mining FZE (the “Lender”), an affiliate of the Company’s majority shareholder, Belvedere Resources DMCC (“Belvedere”) .

Pursuant to the Credit Agreement, Lender is providing BCD with a principal amount of a credit facility of US$30,000,000, which may be drawn in up to ten drawings under the Credit Agreement (each such drawing, a “Facility Advance”). . Each Facility Advance will accrue interest at a rate based on the base rate applicable in the United States of America as prescribed by the South African Reserve Bank (7.5% from 20 January 2023) and each Facility Advance will accrue and payable three (3) years from the date the Lender granted BCD such Facility Advance. The Loan Agreement provides for a general encumbrance of BCD’s assets as security for the Loan Arrangements, which may be prepaid in whole or in part by BCD upon notice to the Lender without penalty.

Although the Loan Agreement constitutes a Related Party Transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and TSXV Exchange Policy 5.9, it is exempt from the valuation requirements pursuant to Section 5.5(b) of MI 61-101 because the Company’s securities are not listed on a market specified in that section, and the minority approval requirements under Section 5.7(1)(f) of MI 61-101 because the Credit Facility is not a convertible loan at arm’s length of the Company and its independent directors and is not repayable in Company securities.

The Company intends to use the first Facility Advance under the Senior Credit Agreement to repay amounts owed to Belvedere under the third amended and restated Senior Credit Agreement between the Company and Resource Capital Fund V LP (which was acquired by Belvedere). The remaining amounts available to BCD under the Loan Agreement will be used for general working capital purposes.

About buffalo charcoal

Buffalo is a coal producer in South Africa. It holds a controlling interest in two operating mines through its 100% interest in BCD, a South African company which holds a 70% interest in Zinoju Coal Proprietary Limited (“Zinoju”). Zinoju has a 100% interest in the Magdalena bitumen mine, the Aviemore East anthracite mine and the Balgray and North Adit anthracite projects in South Africa. Buffalo Coal has an experienced, coal-focused board and management team.

The Company has its primary listing on the TSX Venture Exchange and a secondary listing on the Alternative Exchange operated by JSE Limited.

Forward-Looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company’s current expectations with respect to future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control and which could cause actual results and events to differ materially from those contained in or implied by the forward-looking information. The Company undertakes no obligation to update any such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

FOR MORE INFORMATION PLEASE CONTACT:

MS. Emma Osthuizen
CFO
Email: [email protected]

Registered seat:
Greytown Street
Industrial area, Dundee
KwaZulu Natal, 3000

January 23, 2023

Designated Advisor: Questco Corporate Advisory Proprietary Limited

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/152111

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