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RESOURCE GENERATION LIMITED - Quarterly Report for the three months ended 31 March 2014

Release Date: 03/04/2014 09:21:00      Code(s): RSG     
Resource Generation Limited
Registered in Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 059 950 337
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
("Resgen" or "the Company")

Quarterly Report for the three months ended 31 March 2014

 Resource Generation is developing its Boikarabelo coal mine in the Waterberg region
 of South Africa, which accounts for 40% of the country?s remaining coal resources.
 There are probable reserves of 744.8* million tonnes of coal on 35% of the tenements
 under the company?s control (refer ASX announcement dated 16 December 2010).
 Stage 1 of the mine development targets saleable coal production of 6 million tonnes
 per annum.

Boikarabelo mine construction
Construction of the mine?s infrastructure continued during the quarter, with 260 personnel
already working on the site. The 200-person construction camp is close to completion, and
earthworks to expand the camp to accommodate 1,320 people have been finished.
Earthworks for the 40 kilometre rail link from the mine to the existing Transnet Freight Rail
network have begun and will continue into 2015. Initial rail and sleepers have been
delivered. Other projects in progress are earthworks for the coal handling and preparation
plant, upgrading of the current access road, construction of the main mine access road, a
provincial road bypass and road underpasses for the water pipeline from Marapong.
All regulatory consents have been received, all necessary land has been acquired and rail
haulage and port access contracts sufficient for the mine?s stage 1 production have been
signed. Social and labour plan projects are progressing in local communities.
Construction is expected to take a further 21 months and, subject to finalisation of funding
agreements by June 2014, production is due to begin in December 2015.

Finalising funding
Negotiations on term sheets for project finance to complete the mine are now in their final
stages, and negotiations are also underway with three parties to fund the mobile equipment
that will be required in August 2015.
Binding term sheets are in place with Noble Group for a US$65 million loan for construction
of infrastructure and a US$55.3 million loan for construction of the rail link. US$20 million
was drawn down from the rail link loan during the quarter.
EKF, the Danish state-owned export credit agency is undertaking due diligence regarding a
guarantee for approximately 50% of the cost of constructing the coal handling and
preparation plant, for which a binding term sheet has been received from FLSmidth Roymec
(Pty) Limited.

Offtake contracts
Three long-term export offtake contracts have been entered into with CESC, Valu
Investments and Noble Group. These contracts underwrite most of the forecast revenue from
Boikarabelo?s stage 1 production and a substantial portion of stage 2 production.
A domestic offtake contract for 3.0 million tonnes per annum of middlings coal has been
entered into with Noble Group for the first eight years of production.

Mining tenements
The coal mining rights and exploration tenements held at the end of the quarter were as
South Africa (Waterberg)
-   MPT15/2012 MR (74%)
-   PR720/2007 (74%)
-   PR678/2007 (74%)
The company has no interest in farm-in or farm-out agreements.

Cash reserves at 31 March 2014 were $67.0 million.
Blumont Group Ltd paid a deposit of $2.5 million at the start of the quarter regarding its
commitment to buy Resource Generation shares at $0.22 per share. As Blumont did not
settle for the shares by the agreed date, 26 February 2014, the deposit of $2.5 million was
forfeited and no shares were issued.

3 April 2014

JSE Sponsor
Macquarie First South Capital Proprietary Limited

Corporate information
Brian Warner                        Non-Executive Chairman
Paul Jury                           Managing Director
Steve Matthews                      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

Paul Jury
Steve Matthews

Anthony Tregoning, FCR on (02) 8264 1000

 * This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply
with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
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, 31/9/2001.

  Name of entity
  Resource Generation Limited

  ABN                                                                              Quarter ended (?current quarter?)
  91 059 950 337                                                                               31 March 2014

  Consolidated statement of cash flows
                                                                                  Current quarter      Year to date (9 mths)
Cash flows related to operating activities                                           $A?000                   $A?000

1.1       Receipts from product sales and related debtors                                         -                            -

1.2       Payments for       (a) exploration and evaluation                                   (64)                        (124)
                             (b) development                                               (5,899)                     (12,951)
                             (c) production                                                       -                           -
                             (d) administration                                              (705)                      (5,139)
1.3       Dividends received                                                                      -                           -
1.4       Interest and other items of a similar nature received                                535                        1,272
1.5       Interest and other costs of finance paid                                              (2)                     (1,006)
1.6       Income taxes paid                                                                       -                           -
1.7       Other-forfeited Blumont deposit                                                    2,500                        2,500
          Net Operating Cash Flows                                                         (3,635)                     (15,448)

          Cash flows related to investing activities
1.8       Payment for purchases of: (a) prospects                                                -                           -
                                     (b) equity investments                                    (2)                       (287)
                                     (c) other fixed assets                                       -                      (948)

1.12      Proceeds from sale of:     (a) prospects                                     -                            -
                                     (b) equity investment                             -                            -
                                        (subsidiary)                                  -                            -
                                     (c) other fixed assets                            -                            -

1.10      Loans to other entities                                                                 -                          -
1.11      Loans repaid by other entities                                                          -                          -
1.12      Other- Government charges in relation to land                                           -                        330
          acquisitions and borrowings
                                                                                               (2)                       (905)
          Net investing cash flows

1.13      Total operating and investing cash flows (carried
                                                                                           (3,637)                     (16,353)


                                                                    Current quarter   Year to date (9 mths)
                                                                       $A?000                $A?000
 1.13      Total operating and investing cash flows (brought
                                                                            (3,637)                  (16,353)
           Cash flows related to financing activities
 1.14      Proceeds from issues of shares, options, etc.                          -                    62,912
 1.15      Proceeds from sale of forfeited shares                                 -                         -
 1.16      Proceeds from borrowings                                          22,046                    22,046
 1.17      Repayment of borrowings                                                -                  (20,000)
 1.18      Dividends paid                                                         -                         -
 1.19      Other (BEE Loan)                                                    (59)                   (1,977)

           Net financing cash flows                                          21,987                    62,981

           Net increase (decrease) in cash held                              18,350                    46,628

 1.20      Cash at beginning of quarter/year to date                         49,661                    21,428
 1.21      Exchange rate adjustments to item 1.20                             (992)                   (1,037)
 1.22      Cash at end of quarter                                            67,019                    67,019

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
 1.23       Aggregate amount of payments to the parties included in item 1.2                              271

 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

 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

Financing facilities available
Add notes as necessary for an understanding of the position.
Two binding term sheets have been entered into with the Noble Group. A US$55.3 million loan is available for
the construction of the rail link and a US$65 million loan is available for site infrastructure. US$20 million was
drawn down from the rail link loan.
                                                                  Amount available             Amount used
                                                                       $A?000                    $A?000
 3.1       Loan facilities                                                       129,773               22,046

 3.2       Credit standby arrangements                                                 -                     -

    Estimated cash outflows for next quarter
   4.1    Exploration and evaluation                                                                  (150)

   4.2    Development                                                                              (34,585)
   4.3    Production                                                                                     -
   4.4    Administration                                                                              (476)

          Total                                                                                    (35,211)

Reconciliation of cash
    Reconciliation of cash at the end of the quarter (as       Current quarter          Previous quarter
    shown in the consolidated statement of cash flows) to         $A?000                    $A?000
    the related items in the accounts is as follows.
    5.1   Cash on hand and at bank                                                71                    59

    5.2   Deposits at call                                                  66,790                  49,602

    5.3   Bank overdraft                                                           -                     -

    5.4   Other (Contract retentions)                                            158                     -

          Total: cash at end of quarter (item 1.22)                         67,019                  49,661

Changes in interests in mining tenements

                              Tenement reference       Nature of interest         Interest at    Interest at
                                                                                 beginning of      end of
                                                                                   quarter        quarter
   6.1    Interests in                       N/A                       N/A                 N/A          N/A
          mining tenements
          reduced or lapsed

    6.2   Interests in                       N/A                       N/A               N/A           N/A
          mining tenements
          acquired or

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 price per     Amount paid
                                                              quoted                     security    up per security
                                                                                              ($)                ($)
 7.1       +Preference                                N/A
            securities (description)
 7.2       Changes during quarter                     N/A
           (a) Increases through
           (b) Decreases
               through returns of
               capital, buy-backs,
 7.3       +Ordinary securities              581,380,338         581,380,338             Various           Fully paid

 7.4       Changes during quarter
           (a) Increases                               Nil
               through issues

           (b) Decreases                               Nil
               through returns of
               capital, buy-backs
 7.5       +Convertible   debt                        N/A
           securities (description)
 7.6       Changes during quarter                     N/A
           (a) Increases through
           (b) Decreases through
                securities matured,
  7.7      Options (description                        Nil
           and conversion factor)
  7.8      Issued during quarter                       Nil
  7.9      Exercised during quarter                    Nil
 7.10      Expired during quarter                                                 Exercise price         Expiry date
                                                1,875,000                  Nil           $0.50            13/3/2014
 7.11      Debentures                                N/A
           (totals only)
 7.12      Unsecured notes (totals                    N/A

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.

Sign here:                                            Date: 3 April 2014
                (Company secretary)



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: 03/04/2014 09:21:00 Supplied by www.sharenet.co.za                     
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