Working capital tight at Elitheni Coal, says Strategic Natural Resources

28th Oct 2013 13:21

Shares in Strategic Natural Resources (SNR) plunged after the South African miner said working capital at its subsidiary Elitheni Coal remains "very tight".The group is in talks with a number of coal mining parties in South Africa for a short-term capital injection into Elitheni by way of debt.SNR said it was confident that the discussions will be concluded successfully by the end of this week. The short-term debt facility will be enable Elitheni to satisfy its outstanding and valid current creditors. A temporary slowdown of mining operations may be required in any event pending a more permanent capital injection."The depressed international coal price has been a real barrier to securing strategic funding in a timely manner but I am encouraged by recent market improvements which are helpful," according to Chief Executive Officer of SNR, Gabriel Ruhan."The board remains focussed on the strategic value of the mine which represents a very large resource, excellent infrastructure access, the real possibility of a coal fired power station in the Eastern Cape and strong support of both the provincial and national governments of South Africa."Shares fell 21.62% to 7.25p at 13:29 on Monday.RD