Buffalo Coal Corp. Announces Secured Credit Facility

Toronto, 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 and received approval from the South African Reserve Bank regarding a secured credit facility agreement dated November 7, 2022 and addendum to the facility agreement dated December 29, 2022 (as amended, the "Credit Agreement") with Ikwezi Mining FZE (the "Lender"), an affiliate of the Company's majority shareholder, Belvedere Resources DMCC ("Belvedere").

Pursuant to the Credit Agreement, the Lender will make a credit facility available to BCD in the aggregate principal amount of USD$30,000,000, which amount may be drawn in up to ten draws under the Credit Agreement (each such draw, a "Facility Advance"). Interest will accrue on each Facility Advance at a rate based on the base lending rate applicable in the United States of America, as prescribed by the South African Reserve Bank (7.5% as of January 20, 2023), and each Facility Advance will become due and payable three (3) years after the date such Facility Advance was advanced to BCD by the Lender. The Credit Agreement provides for a general charge against BCD's assets as security for the Facility Advances made thereunder, which may be prepaid by BCD on notice to the Lender in whole or in part without any penalties.

Although the Credit Agreement constitutes a "related party transaction" for the purposes 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, as the Company's securities are not listed on a market specified in that section, and from the minority approval requirements pursuant to Section 5.7(1)(f) of MI 61-101, as the credit facility is a non-convertible loan on what the Company and its independent board members have determined are market terms and is not repayable in securities of the Company.

The Company intends to use the initial Facility Advance under the Credit Agreement to repay amounts owing to Belvedere under the Third Amended and Restated Loan Agreement between the Company and Resource Capital Fund V L.P. (which was assumed by Belvedere). The remaining amounts available to BCD under the Credit Agreement will be used for general working capital purposes.

About Buffalo Coal

Buffalo is a coal producer in South Africa. It holds a majority interest in two operating mines through its 100% interest in BCD, a South African company which has a 70% interest in Zinoju Coal Proprietary Limited ("Zinoju"). Zinoju holds a 100% interest in the Magdalena bituminous 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 has a secondary listing on the Alternative Exchange, operated by the JSE Limited.

Forward-Looking Statements

This press release may contain forward looking information within the meaning of applicable securities legislation, which reflects the Company's current expectations regarding 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, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward looking information. The Company does not undertake any obligation to update such forward looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

FOR FURTHER INFORMATION PLEASE CONTACT:

Ms. Emma Oosthuizen
Chief Financial Officer
Email: emma.oosthuizen@buffalocoal.co.za

Registered Office:
Greytown Road
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