Bathurst, CITIC sign finance deal

Bathurst Resources has signed a $US40 million finance and off-take agreement with CITIC Resources Australia for its Buller coal project in New Zealand.

Under the non-binding agreement, CITIC will act as principal for sales of 30 per cent of annual production, and provide $40 million in a facility repayable within five years to fund construction and development costs at Buller.

CITIC may also act as an agent in some markets.

The agreement is for a five-year term from the commencement of first production.

Bathurst chief executive Hamish Bohannan said the proposal reinforced the belief in the strong underlying fundamentals of the global coking coal market.

"We are particularly pleased to have a group of the stature of CITIC to participate in our Project and their involvement is an endorsement of our Project and our activities in New Zealand," Mr Bohannan said.

"Bathurst looks forward to working closely with CITIC on finalising this agreement and believes it has established an appropriate mix of contracted off-take and spot coal exposure for its shareholders as it has now locked away approximately 67 per cent of its production for the first 5 years, and been able to raise up to US$90m in subordinated debt."

At 12:27PM Bathurst shares had inched upwards nearly one per cent, to trade at $1.11.