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Rsg - Resource Generation Limited - Quarterly Report For The Three Months Ended

Release Date: 14/04/2011 09:28:02      Code(s): RSG
RSG - Resource Generation Limited - Quarterly Report for the three months ended 
31 March 2011                                                                   
Resource Generation Limited                                                     
ACN 059 950 337                                                                 
(Incorporated and registered in Australia)                                      
(Registration number ACN 059 950 337)                                           
Share code on the JSE Limited: RSG ISIN: AU000000RES1                           
Share code on the Australian Stock Exchange Limited: RES ISIN: AU000000RES1     
(JSE short name: "Resgen" or "the Company")                                     
Quarterly Report for the three months ended 31 March 2011                       
Resource Generation is developing its planned Boikarabelo coal mine in the      
Waterberg region of South Africa, which has one of the country`s largest        
remaining coal deposits.                                                        
HIGHLIGHTS                                                                      
*    Boikarabelo mining right approved.                                         
*    New BEE partner arrangements.                                              
*    Rail link route confirmed.                                                 
*    Water security enhanced.                                                   
*    Eskom and Transnet discussions progressing.                                
*    Detailed engineering close to completion.                                  
SOUTH AFRICA                                                                    
Mining right approved                                                           
The Ledjadja joint venture, in which Resource Generation has a 74% shareholding,
received notification during the quarter that it has been granted a 30 year     
mining right for its Boikarabelo mine by the South African Department of Mineral
Resources.  Execution of formal documentation and establishment of a $2 million 
rehabilitation deposit is due to be completed by Easter.                        
BEE partners                                                                    
During the quarter, Fairy Wing Trading 136 (Pty) Limited (FWT), a company owned 
by a group of South African businessmen and women with strong commercial and    
government relationships, agreed to acquire the 26% shareholding in Resource    
Generation`s Ledjadja joint venture that was owned by its original BEE (black   
economic empowerment) partners.                                                 
Resource Generation will facilitate the acquisition through a loan of R80       
million ($11.5 million) to FWT.  The loan, which will be secured over FWT`s     
shares in Ledjadja and repayable out of the first dividends due to FWT from the 
joint venture, will be made available in three tranches.  The first tranche of  
R60 million will be paid during the current quarter following finalisation of   
documentation for the Boikarabelo mining right, which will incorporate FWT as   
the BEE partner; the second tranche of R10 million will be paid on 30 September 
2011 with the final tranche of R10 million on 30 September 2012. The loan will  
be provided from Resource Generation`s existing funds.                          
As part of the transaction, the Ledjadja joint venture will assume Resource     
Generation`s obligation to pay to Apex Resources Inc. a royalty of R2 per tonne 
of coal shipped up to a limit of R30 million.                                   
Access to rail network                                                          
Resource Generation arranged access during the quarter for its proposed 36      
kilometre rail link route from the Boikarabelo mine to the existing Transnet    
rail line.                                                                      
Three farms have been acquired for a total of R67.5 million.  R33.0 million was 
paid in the last quarter and the remaining balance of R13.5 million is expected 
to be settled in the coming quarter.  Agreements were also signed to acquire    
either an additional farm or a servitude across the farm.                       
Agreements were reached for the granting of rail servitudes with the two        
corporate owners of land for the balance of the rail link.  These agreements    
will be formalised after securing necessary regulatory and environmental        
approvals for the entire route, the application for which was lodged in the     
quarter and is expected to be received in July 2011.                            
Discussions continued with Transnet to secure transport facilities to enable the
sale of 6 million tonnes of coal per annum from 2013.                           
Water security                                                                  
During the quarter significant progress was made towards securing the water that
will be needed for the company`s proposed Boikarabelo mine.                     
The company has been chosen as the preferred party to construct, operate and    
maintain a wastewater treatment plant at Marapong, approximately 50 kilometres  
from Boikarabelo. The plant will treat municipal effluent and is expected to    
generate up to 16 megalitres of water per day, which will be pumped to the mine 
site via a new pipeline.                                                        
Resource Generation had been working for 18 months with the Lephalale Local     
Municipality in Limpopo Province on plans for the plant. This is a key          
responsibility that the company has committed to undertake as part of its social
and labour plan, which was submitted with its mining right application for the  
Boikarabelo mine in early 2010.  Before construction begins, Resource Generation
and the municipality are required to obtain government approval and finalise    
contractual arrangements.                                                       
Sufficient water for stage 1 of the mine is available from groundwater boreholes
on the mine properties that the company already owns.  Use is subject to        
receiving an Integrated Water Use Licence which was applied for in January 2011.
Progress with Eskom                                                             
Discussions continued with Eskom regarding the supply of 3mtpa of domestic grade
thermal coal to Eskom`s Mpumalanga power stations.  The receipt of the mining   
right represented a considerable step forward in these discussions.             
Progress with Transnet                                                          
Discussions continued with Transnet Freight Rail regarding the transport of     
6mtpa of export and domestic coal from late 2013.  Once again, receipt of the   
mining right provides a positive catalyst in progressing discussions.           
Detailed engineering                                                            
Considerable progress was made during the quarter on the final engineering      
designs of the mine infrastructure (by RSV Enco) and the coal handling and      
preparation plant (by DRA).  Design work is expected to be completed in the     
current quarter.                                                                
Power supply                                                                    
Arrangements continued to progress with Eskom regarding the power supply        
requirements of the Boikarabelo mine.  The company is also undertaking an       
environmental impact study for a potential independent power supply option at   
the mine site.                                                                  
Discussions with banks                                                          
Potential debt providers from South Africa and Europe have commenced their      
analysis for the project funding.  Distribution of information occurred during  
the quarter.                                                                    
TASMANIA                                                                        
Laboratory analysis and geological modelling continued from the drill programme 
undertaken on the Woodbury tenement, where Resource Generation is exploring for 
thermal coal.  The programme was not sufficient to quantify a JORC resource and 
further drilling is being considered for the current quarter.  The analysis of  
the drill holes confirmed the presence of coal mineralisation with high in situ 
ash content.                                                                    
CAMEROON                                                                        
There was no activity during the quarter on Resource Generation`s uranium       
tenements in Cameroon.                                                          
CORPORATE                                                                       
ADR programme                                                                   
A Level 1 American Depositary Receipt (ADR) programme was established during the
quarter, which will permit investors to invest in the company through a US-     
traded security.                                                                
The Resource Generation ADR is traded on the US over-the-counter market and is  
sponsored by Citi, which acts as the Depositary Bank.  Each ADR has a ratio of  
4:1; ie one ADR is equivalent to 4 shares.                                      
CORPORATE INFORMATION                                                           
Directors                                                                       
Brian Warner             Non-Executive Chairman                                 
Paul Jury           Managing Director                                           
Steve Matthews      Executive Director                                          
Scott Douglas            Non-Executive Director                                 
Geoffrey (Toby) Rose     Non-Executive Director                                 
Company Secretary                                                               
Steve Matthews                                                                  
Registered Office                                                               
Level 12, Chifley Tower                                                         
2 Chifley Square                                                                
Sydney NSW 2000                                                                 
Telephone:     02 9376 9000                                                     
Facsimile:     02 9376 9013                                                     
Website:  www.resgen.com.au                                                     
Mailing Address                                                                 
GPO Box 5490                                                                    
Sydney NSW 2001                                                                 
Contacts                                                                        
Paul Jury                                                                       
Steve Matthews                                                                  
Media                                                                           
Anthony Tregoning, FCR on (02) 8264 1000                                        
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited                   
* Information in this report that relates to exploration results, mineral       
resources or ore reserves is based on information compiled by Mr Dawie Van Wyk  
who is a consultant to the Company and is a member of a Recognised Overseas     
Professional Organisation. Mr Van Wyk has sufficient experience which is        
relevant to the style of mineralisation and type of deposit under consideration 
and to the activity which he is undertaking to qualify as a Competent Person as 
defined in the 2004 Edition of the `Australasian Code for Reporting of          
Exploration Results, Mineral Resources and Ore Reserves`. Mr Van Wyk has given  
and has not withdrawn consents to the inclusion in the report of the matters    
based on his information in the form and context in which it appears.           
Appendix 5B                                                                     
Mining exploration entity quarterly report                                      
Introduced 1/7/96.  Origin:  Appendix 8.  Amended 1/7/97, 1/7/98, 30/9/2001.    
Name of entity                                                                  
Resource Generation Limited                                                     
ABN                                          Quarter ended                      
("current quarter")                   
91 059 950 337                               31 March 2011                      
Consolidated statement of cash flows                                            
                                               Current          Year to date    
Cash flows related to operating activities      quarter          (9 mths)       
                                               $A`000           $A`000          
1.1  Receipts from product sales and related    -                -              
    debtors                                                                     

1.2  Payments for        (a)  exploration and   -                (1,572)        
    evaluation                                 (1,888)          (5,129)         
              (b)  development                 -                -               
(c)  production                  (567)            (1,833)         
              (d)  administration                                               
1.3  Dividends received                         -                -              
1.4  Interest and other items of a similar      374              607            
nature received                                                             
1.5  Interest and other costs of finance paid   (3)              (13)           
1.6  Income taxes paid                          -                -              
1.7  Other (provide details if material)        -                -              
Net Operating Cash Flows                   (2,084)          (7,940)         
                                                                                
    Cash flows related to investing                                             
    activities                                                                  
1.8  Payment for purchases of:     (a)          -                -              
    prospects                                  -                -               
         (b) equity investments                (5,469)          (8,948)         
         (c) other fixed assets (land)                                          
1.9  Proceeds from sale of:   (a) prospects     -                -              
         (b) equity investments                -                -               
         (c) other fixed assets                -                -               
                                                                                

1.1  Loans to other entities                    -                -              
0                                                                               
1.1  Loans repaid by other entities             -                -              
1                                                                               
1.1  Other- Government charges in relation to   482              1,602          
2    land acquisitions (refundable)                                             
                                               (4,987)          (7,346)         
Net investing cash flows                                                    
1.1  Total operating and investing cash flows   (7,071)          (15,286)       
3    (carried forward)                                                          
                                                                                

                                                                                
                                               Current          Year to date    
                                               quarter          (9 mths)        
$A`000           $A`000          
 1.13        Total operating and investing     (7,071)          (15,286)        
             cash flows (brought forward)                                       
             Cash flows related to financing                                    
1.14        activities                        250              39,666          
             Proceeds from issues of shares,                                    
             options, etc.                                                      
 1.15        Proceeds from sale of forfeited   -                -               
shares                                                             
 1.16        Proceeds from borrowings          -                -               
 1.17        Repayment of borrowings           -                -               
 1.18        Dividends paid                    -                -               
1.19        Other (provide details if         -                -               
             material)                                                          
             Net financing cash flows          250              39,666          
             Net increase (decrease) in cash   (6,821)          24,380          
held                                                               
                                                                                
 1.20        Cash at beginning of              37,223           6,088           
             quarter/year to date                                               
1.21        Exchange rate adjustments to      (92)             (158)           
             item 1.20                                                          
 1.22        Cash at end of quarter            30,310           30,310          
Payments to directors of the entity and associates of the directors             
Payments to related entities of the entity and associates of the related        
entities                                                                        
                                                      Current quarter           
                                                      $A`000                    
1.23         Aggregate amount of payments to the       270                      
            parties included in item 1.2                                        
1.24         Aggregate amount of loans to the parties  -                        
            included in item 1.10                                               

1.25         Explanation necessary for an understanding of the                  
            transactions                                                        
            Executive salaries and directors fees                               
Non-cash financing and investing activities                                     
2.1                Details of financing and investing transactions which        
                  have had a material effect on consolidated assets and         
                  liabilities but did not involve cash flows                    
N/A                                                           
2.2  Details of outlays made by other entities to                               
    establish or increase their share in projects in                            
    which the reporting entity has an interest                                  
N/A                                                                         
Financing facilities available                                                  
Add notes as necessary for an understanding of the position.                    
                                          Amount available  Amount used         
$A`000            $A`000              
3.1        Loan facilities                 -                 -                  
3.2        Credit standby arrangements     -                 -                  
Estimated cash outflows for next quarter                                        
$A`000                       
4.1           Exploration and evaluation            -                           
4.2           Development                           (2,148)                     
4.3           Production                            -                           
4.4           Administration                        (457)                       
             Total                                 (2,605)                      
Reconciliation of cash                                                          
Reconciliation of cash at the end of the      Current quarter     Previous      
quarter (as shown in the consolidated         $A`000              quarter       
statement of cash flows) to the related items                     $A`000        
in the accounts is as follows.                                                  
5.  Cash on hand and at bank                  14                  16            
1                                                                               
5.  Deposits at call                          30,114              37,025        
2                                                                               
5.  Bank overdraft                            -                   -             
3                                                                               
5.  Other (Bank guarantees)                   182                 182           
4                                                                               
   Total: cash at end of quarter (item 1.22) 30,310              37,223         
Changes in interests in mining tenements                                        
              Tenement     Nature of       Interest at  Interest at             
              reference    interest        beginning    end of                  
                                           of quarter   quarter                 
6.  Interests  EL64/2007    Exploration     100%         0%                     
1   in mining               licence in                                          
   tenements               Tasmania                                             
   relinquish              relinquished                                         
ed,                                                                          
   reduced or                                                                   
   lapsed                                                                       
                                                                                
6.  Interests  N/A                                                              
2   in mining                                                                   
   tenements                                                                    
   acquired                                                                     
or                                                                           
   increased                                                                    
                                                                                
                                                                                
Issued and quoted securities at end of current quarter                          
Description includes rate of interest and any redemption or conversion rights   
together with prices and dates.                                                 
                         Total number   Number    Issue    Amount paid          
quoted    price    up per               
                                                  per      security ($)         
                                                  security                      
                                                  ($)                           
7.1    +Preference        N/A                                                   
        securities                                                              
      (description)                                                             
7.2    Changes during     N/A                                                   
quarter                                                                   
      Increases through                                                         
      issues                                                                    
      Decreases                                                                 
through returns                                                           
      of capital, buy-                                                          
      backs,                                                                    
      redemptions                                                               
7.3    +Ordinary          244,400,530    244,400,  Various  Fully paid          
      securities                        530                                     
                                                                                
7.4    Changes during                                                           
quarter            500,000        500,000   $0.50    $0.50                
      Increases                                                                 
      through issues                                                            
                         Nil                                                    
Decreases                                                                 
      through returns                                                           
      of capital, buy-                                                          
      backs                                                                     
7.5    +Convertible debt  N/A                                                   
      securities                                                                
      (description)                                                             
7.6    Changes during     N/A                                                   
quarter                                                                   
      Increases through                                                         
             issues                                                             
      Decreases through                                                         
securities                                                               
      matured,                                                                  
       converted                                                                
7.7     Options                                     Exercise Expiry date        
(description and   450,000        Nil       price    28/11/2012          
       conversion         1,875,000      Nil                31/12/2012          
       factor)            2,375,000      Nil       $0.25    7/7/2013            
                          250,000        Nil                17/3/2013           
450,000        Nil       $0.50    28/11/2012          
                          250,000        Nil                17/3/2013           
                          350,000        Nil       $0.50    17/3/2013           
                          350,000        Nil                17/3/2013           
375,000        Nil       $0.50    28/5/2013           
                          375,000        Nil                28/5/2013           
                          500,000        Nil       $0.60    28/5/2013           
                                                                                
$0.70                        
                                                                                
                                                   $1.00                        
                                                                                
$1.50                        
                                                                                
                                                   $1.55                        
                                                                                
$1.85                        
                                                                                
                                                   $2.05                        
                                                                                
7.8     Issued during      Nil                                                  
       quarter                                                                  
7.9     Exercised during   500,000        Nil       $0.50    7/7/2013           
       quarter                                                                  
7.10    Expired during     Nil                                                  
       quarter                                                                  
7.11    Debentures         N/A                                                  
       (totals only)                                                            
7.12    Unsecured notes    N/A                                                  
       (totals only)                                                            
Compliance statement                                                            
1    This statement has been prepared under accounting policies which comply    
with accounting standards as defined in the Corporations Act or other standards 
acceptable to ASX (see note 5).                                                 
2    This statement does give a true and fair view of the matters disclosed.    
3    The information contained in this report has not been reviewed nor reported
on by the company`s auditors.                                                   
Date: 14 April 2011                                                             
(Company secretary)                                                             
STEPHEN JAMES MATTHEWS                                                          
Notes                                                                           
1    The quarterly report provides a basis for informing the market how the     
entity`s activities have been financed for the past quarter and the effect on   
its cash position.  An entity wanting to disclose additional information is     
encouraged to do so, in a note or notes attached to this report.                
2    The "Nature of interest" (items 6.1 and 6.2) includes options in respect of
interests in mining tenements acquired, exercised or lapsed during the reporting
period.  If the entity is involved in a joint venture agreement and there are   
conditions precedent which will change its percentage interest in a mining      
tenement, it should disclose the change of percentage interest and conditions   
precedent in the list required for items 6.1 and 6.2.                           
3    Issued and quoted securities  The issue price and amount paid up is not    
required in items 7.1 and 7.3 for fully paid securities.                        
4    The definitions in, and provisions of, AASB 6: Exploration for and         
Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to  
this report.                                                                    
5    Accounting Standards ASX will accept, for example, the use of International
Financial Reporting Standards for foreign entities.  If the standards used do   
not address a topic, the Australian standard on that topic (if any) must be     
complied with.                                                                  
Date: 14/04/2011 09:28:01 Supplied by www.sharenet.co.za                     
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information disseminated through SENS.                                          



                                        
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