RSG - Resource Generation Limited - Resource Generation`s first off-take Release Date: 08/06/2011 09:47:08 Code(s): RSG
RSG - Resource Generation Limited - Resource Generation`s first off-take
contract increased to 139 million tonnes
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")
Resource Generation`s first off-take contract increased to 139 million tonnes
New power station may bring forward stage 2 expansion of Boikarabelo mine
Resource Generation Limited, which is developing one of South Africa`s largest
remaining coal deposits, has today signed an agreement with Integrated Coal
Mining Limited, part of India`s RPG Group, to extend Integrated Coal Mining`s
purchases of thermal coal from Resource Generation`s planned Boikarabelo mine to
139 million tonnes from 37 million tonnes. The purchases will take place over 38
years, up from 20 years in the original contract signed in September 2010.
The initial off-take of 37 million tonnes has increased to 73 million tonnes and
will begin when the Boikarabelo mine commences production, which is currently
scheduled for late 2013. The balance of the additional off-take of 66 million
tonnes will begin after the mine`s stage 2 expansion. The price of each shipment
will be based on the international market price at the time.
Stage 2 of the mine`s development envisages doubling production to around 40
million tonnes per annum of run-of-mine coal. Beneficiating this to maximise
production of export quality coal will also generate an equivalent volume of
CESC, the flagship power company of the RPG Group, is beginning a feasibility
study for construction of a 2x660MW coal-fired power station adjacent to the
Boikarabelo mine to supply power to the South African grid. This proposed power
station would use around half the additional domestic product, thereby
underpinning plans to develop Stage 2 and maximise export coal production.
Additionally, Boikarabelo intends to install its own small-scale fluidised bed
coal-powered power station at the mine site to supply power for mining
operations. CESC has indicated it is prepared to assist with this project.
A wholly-owned subsidiary of CESC, Bantal Singapore Pte Limited, has agreed to
subscribe $10 million for 12,195,122 shares in Resource Generation at $0.82 per
share, representing approximately 4.8% of the company`s issued capital.
Following this issue, RPG Group will have an interest of 11.6% in Resource
Paul Jury, managing director of Resource Generation, said: `At a time when we
are progressing discussions with Transnet for the transport of both stage 1 and
stage 2 product and with Eskom over long-term coal supply, these developments
help underwrite the expansion of our Boikarabelo mine and unlock its potential
as a significant supplier of coal to both export and South African domestic
markets. They represent a further vote of confidence by CESC in Boikarabelo`s
future and position us to expand the mine earlier than otherwise may have been
possible, providing positive returns to shareholders and benefiting the South
Integrated Coal Mining, Bantal Singapore and CESC are part of the RPG Group, one
of India`s most respected industrial groups. CESC is India`s third largest
power utility, with a current installed generating capacity of 1225 MW serving
nearly 2.5 million consumers across the twin cities of Kolkata and Howrah. Its
published growth plan envisages an increase in its installed generating capacity
to 5745 MW. Founded in 1899, the company introduced thermal power to India.
The RPG Group is a diversified industrial group with a market capitalisation of
approximately $US2.0 billion and annual revenue of approximately $US3.5 billion.
8 June 2011
Paul Jury, Managing Director on (02) 9376 9000 or
Steve Matthews, Company Secretary on (02) 9376 9000
Anthony Tregoning, Financial & Corporate Relations on (02) 8264 1000
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
Resource Generation is an energy resource company, primarily with coal interests
in South Africa and Tasmania. Its current priority is to develop its planned
Boikarabelo mine in the Waterberg region of South Africa where there are
probable reserves of 744.8 million tonnes of coal on 35% of the company`s
Date: 08/06/2011 09:47:08 Supplied by www.sharenet.co.za
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