Coking coal company Bathurst Resources Ltd (ASX:BTU) has inked a non-binding supply agreement with CITIC Resources Australia, that will see the subsidiary of China's CITIC Group provide finance of up to $40 million.
Bathurst plans to put the funds into advancing its Buller Coal Project in New Zealand, as well as providing working capital for the company.
CITIC Resources Australia and Bathurst have agreed on a five-year term from the start of coal production that is expected by the end of this year.
Under the deal CITIC will act as principal for sales of 30 per cent of annual production, in addition to providing a $40 million finance facility repayable within 5 years.
At the end of last week Bathurst also announced that it had raised approximately $55 million through an institutional placement to advance exploration, development and acquisitions.
In the six months to 31 December 2010, Bathurst Resources reported a net loss of $15.6 million.
