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Resource Generation Limited - Consolidated Interim Financial Statements For The Half Year Ended 31 December 2014.

Release Date: 04/02/2015 14:53:00      Code(s): RSG     
Resource Generation Limited
Registration number ACN 059 950 337
(Incorporated and registered in Australia)
Share code on the JSE Limited: RSG
Share code on the Australian Stock Exchange: RES
ISIN Code: AU000000RES1
("Resgen" or "the Company")

4 February 2014
ASX/JSE Release

Consolidated interim financial statements for the half year ended 31 December 2014.

Resource Generation Limited today released its consolidated interim financial
statements for the half year ended 31 December 2014.
The interim financial statements were approved by the Board of Directors and signed
by Paul Jury (Managing Director)
The financial statements have been reviewed by Deloitte and their unmodified audit
opinion is available for inspection at the Company's registered office.
The full set of interim financial statements are available on Resource Generations
Limited's website www.resgen.com.au
Contacts
Paul Jury, Managing Director on 61 2 9376 9000 or
Steve Matthews, Company Secretary on 61 2 9376 9000
JSE Sponsor: Deloitte and Touche Sponsor Services (Pty) Limited

Resource Generation is developing the Boikarabelo coal mine in the Waterberg region
of South Africa where there are probable reserves of 744.8 million tonnes of coal
on 35% of the tenements under its control.
Extracts from the interim financial statements for the half year ended 31 December
2014.
  Review of Operations


  During the half year ended 31 December 2014 the consolidated entity
  recorded a net loss of $3.2 million (2013 loss $0.7 million).



  The Boikarabelo mine's potential continued to be unlocked during the
  half year. The Boikarabelo mine, in the Waterberg region of South
  Africa, has probable reserves of 744.8 million tonnes of coal on 35%
  of the tenements controlled by the Group.

  The net loss for the half year to 31 December 2014 of $3.2 million
  reflects employee expenses of $0.8 million, finance costs of $1.4
  million and expenses relating to performance share rights of $0.8
  million. Revenue has decreased as interest on the loan to the black
  economic empowerment (BEE) partner, Fairy Wing Trading 136 (Pty)
  Limited, has been deferred from 1 January 2014 until commencement of
  coal production at the Boikarabelo mine.



  Management has continued to pursue debt funding of approximately $400
  million required to complete construction of site infrastructure and
  the rail link. Although negotiations have been protracted, their
  continuation indicates that all parties seek to agree a structure
  that provides the funding. Noble Group's loans, USD $55.3 million for
  the construction of the rail link and US$65 million for
  infrastructure, may form part of a consortium's debt finance.


  Key activities during the six months to 31 December 2014 were:-
    In August 2014, a loan facility of up to US$113 million was
    signed with Komatsu Financial Limited Partnership for the mobile
    equipment fleet for the project. The term is 5 years from the
    first utilisation date. In November 2014, a supply agreement was
    signed with Komatsu Southern Africa Pty Limited. The agreements
    will not be activated until the balance of debt required to
    complete project construction has been secured.

    In August 2014, an engineering, procurement and supply contract
    was signed with FLSmidth Roymec (Pty) Limited, the South African
    BEE subsidiary of FLSmidth & Co, the leading supplier of
    complete plants, equipment and services for the global minerals
    industry. A further contract in respect of the construction
    management in respect of on-site mechanical and electrical
    installations of the coal handling and preparation plant was
    signed in October 2014. Commencement of fabrication and supply
    is conditional upon completion of debt funding.

    Construction activity continued at the Boikarabelo mine, while
    debt funding is being finalised, in order to shorten the overall
    construction time. This included:

    construction camp for up to 1,320 persons;
    rail link bridges;
    power supply infrastructure;
    rail network stabilisation facility (NSF);


    earthworks relating to the construction offices, power supply
    and the NSF;


    permanent water supply infrastructure; and


    13 kilometres of water pipeline for the Marapong Boikarabelo
    Effluent Transfer Scheme.

    At the construction camp, services, kitchen and dining
    facilities have been installed for 1,320 people. Accommodation
    units have been installed to allow 400 persons to take up
    immediate occupation.

    Construction of the first three bridges (total of seven) under
    and over the rail line was completed in December 2014.

    In October 2014 EHL Energy (Pty) Limited commenced erecting
    power poles for the 132kv power transmission lines. Earthworks
    for the substation and switch room were completed, and their
    construction, which is funded by a deferred payment facility, is
    scheduled for completion by October 2015.


    The construction offices were completed and site personnel
    moved in in December 2014.


Events Occurring after the Balance Sheet Date


There are no matters of significance up to the date of this report
that have not been included in the interim financial statements.
RESOURCE GENERATION LIMITED




Condensed consolidated statement of profit or loss and other
comprehensive income for the half year ended 31 December 2014


                                                       Half year ended


                                                     31-Dec-14   31-Dec-13
                                                         $'000       $'000




Revenue from continuing operations                         467       1,406




Administrative, rent and corporate                       (418)       (541)
Employee benefits expense                                (817)       (705)


Depreciation of property, plant & equipment              (161)       (118)
Land management                                           (61)       (107)
Share based compensation                                 (779)       (135)
Finance expenditure                                    (1,439)       (521)


Loss before income tax expense                         (3,208)       (721)


Income tax expense                                         (1)           (4)


Loss for the half year                                 (3,209)       (725)


Other comprehensive income


  Items that may be reclassified subsequently to
                  profit or loss


Exchange differences on translation of foreign
operations                                              1,003        (480)



Total comprehensive income for the half year           (2,206)     (1,205)




Loss is attributable to:
   Owners of Resource Generation Limited
                                                       (3,209)       (725)
 Total comprehensive income for the half year is
 attributable to:


    Owners of Resource Generation Limited                  (2,206)      (1,205)



 Earnings per share


 From continuing operations                                Cents        Cents
 Basic earnings per share                                   (0.55)       (0.18)
 Diluted earnings per share                                 (0.55)       (0.18)
Headline earnings per share                          (0.55)                  (0.18)


Diluted earnings per share                           (0.55)                  (0.18)
Add back development expenditure                         (0.0)          (0.0)
Diluted headline earnings per share                 (0.55)             (0.18)



RESOURCE GENERATION LIMITED


Condensed consolidated statement of financial position
As at 31 December 2014
                                   31-Dec-14        30-Jun-14


                                        $'000              $'000


Current assets
   Cash and cash
   equivalents                         37,904             54,337
   Trade and other
   receivables                            810                414
   Deposits and
   prepayments                            123                140
                                       38,837             54,891


Non-current assets
Property, plant
and equipment                          45,388             45,269

Mining tenements and mining development                            133,249   114,913

Deposits and loan
receivables                            18,224             16,923
                                      196,861            177,105


TOTAL ASSETS                          235,698            231,996


Current liabilities
   Trade and other
   payables                             7,922              8,377
   Provisions                               914                  826
                                          8,836              9,203


Non-current liabilities
   Borrowings                            26,582             21,231
   Royalties payable                      2,698              2,553
                                         29,280             23,784


TOTAL LIABILITIES                        38,116             32,987


NET ASSETS                             197,582             199,009


Equity
   Issued Capital                      221,305             221,305
   Reserves                              17,294             15,512
   Accumulated losses                 (41,017)            (37,808)


TOTAL EQUITY                           197,582             199,009

Condensed consolidated statement of changes in equity
For the half year ended 31 December 2014


                            Attributable to owners of Resource Generation
                                               Limited



                           Contributed                  Retained
                           equity          Reserves     earnings       Total equity
                                 $'000        $'000        $'000              $'000

Balance as at 1 July
2013                           157,253       15,030     (36,766)            135,517


Loss for the period               -                 -      (725)             ( 725)
Other comprehensive
income for the period             -           (480)          -               ( 480)
Total comprehensive
income for the period             -          ( 480)       ( 725)           ( 1,205)


Contributions of equity,
net of transaction costs     65,620                 -        -            65,620

Employee share options -
value of employee
services                          -               135        -               135
                             65,620               135        -            65,755



Balance at 31
December 2013                  222,873       14,685     (37,491)            200,067
Balance at 1 July
2014                            221,305    15,512     (37,808)            199,009


Loss for the period                -           -       (3,209)           ( 3,209)

Other comprehensive
income for the period              -       1,003             -           1,003
Total comprehensive
income for the period
                                   -       1,003      ( 3,209)           ( 2,206)


Employee share options -
value of employee
services                           -         779             -             779
                                   -         779             -             779


Balance at 31 December
2014                            221,305    17,294     (41,017)            197,582




RESOURCE GENERATION LIMITED
Condensed consolidated statement of cash flows
For the half year ended 31 December 2014
                                              Half year ended


                                            31-Dec-14      31-Dec-13
                                                   $'000         $'000
Cash flows from operating activities


Payments to suppliers and employees
(inclusive of government charges)             (1,277)        (4,375)
Land management                                  (72)           (59)
Interest received                                    400           737
Interest/finance costs paid                        (104)     (1,004)

Net cash outflow from operating
activities                                    (1,053)        (4,701)
Cash flows from investing activities


Payments for property, plant and
equipment                                          (275)         (948)
Receipts for government charges
associated with land acquisition
(refundable)                                           -           330

Payments for licence deposits                       (64)             -


Payments for acquisition of subsidiaries               -         (285)

Payments for mining tenements and mining
development                                  (18,807)        (7,113)
Net cash outflow from investing
activities                                  (19,146)       (8,016)


Cash flows from financing activities
Proceeds from issue of shares                         -     63,968
Equity raising costs                                  -    (1,056)
Repayment of debt                                     -   (20,000)
Loan to BEE partner                                (98)    (1,918)

Net cash (outflow)/inflow from financing
activities                                         (98)     40,994

Net (decrease)/increase in cash and cash
equivalents                                 (20,297)        28,277
Cash and cash equivalents at the
beginning of the half year                      54,337      21,428

Effects of exchange rate movements on
cash and cash equivalents                         3,864       (44)

Cash and cash equivalents at the end of
the half year                                   37,904      49,661
RESOURCE GENERATION LIMITED


Notes to the   condensed consolidated financial
statements
For the half year ended 31 December 2014


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation of half year financial
report


This general purpose financial report for the interim
half year reporting period 31 December 2014 has been
prepared in accordance with AASB 134 Interim
Financial Reporting and the Corporations Act 2001.
Compliance with AASB 134 ensures compliance with
International Financial Reporting Standard IAS 34
'Interim Financial Reporting'.

This interim financial report does not include all
the notes of the type normally included in an annual
financial report.   Accordingly, this report is to be
read in conjunction with the Annual Report for the
year ended 30 June 2014 and any public announcements
made by Resource Generation Limited during the
interim reporting period in accordance with the
continuous disclosure requirements of the
Corporations Act 2001.
The interim financial report has been prepared on the
basis of historical cost except for the revaluation
of certain financial instruments. Cost is based on
the fair values of consideration given in exchange
for assets. All amounts are presented in Australian
Dollars, unless otherwise noted.




The accounting policies and methods of computation
adopted in the preparation of the half-year financial
report are consistent with those adopted and
disclosed in the company's 2014 annual financial
report for the year ended 30 June 2014, except for
the impact of the Standards and Interpretations
described below in particular the reclassification of
certain balances as set out in Note 10. These
accounting policies are consistent with Australian
Accounting Standards and with International Financial
Reporting Standards.

2. SEGMENT INFORMATION
(a) Description of segments

Management has determined the segments based upon reports
reviewed by the Board that are used to make strategic
decisions. The Board considers the business from both a
business and geographic perspective, with the Board being the
central decision maker.

Business segments
The Group has coal interests in South Africa. The main priority
is to develop its coal resources in the Waterberg region of
South Africa. Management has determined mining tenements and
exploration and corporate to be the critical reportable
segments. Corporate includes equity raisings and administration
costs.



(b) Primary reporting format - business segments
Information regarding these segments is presented below. The
accounting of the reportable segments is the same as the
Group's accounting policies.


Half year                            Mining   Corporate     Total
2014                              tenements

                                     Africa   Australia
                                      $'000        $'000      $'000

Total segment and
consolidated revenue                    313          154        467
Loss before income tax              (1,655)     (1,553)     (3,208)
Income tax expense                      (1)             -       (1)
Loss for the half year              (1,656)     (1,553)     (3,209)

                                     Mining   Corporate     Total
Half year
                                  tenements
2013
                                        Africa    Australia
                                          $'000       $'000    $'000
Total segment and
consolidated revenue                        860         546    1,406
Profit/(Loss) before income
tax                                         464     (1,185)    (721)
Income tax expense                          (4)           -       (4)
Profit/(Loss) for the half
year
                                            460     (1,185)    (725)



8. COMMITMENTS

Capital commitments
The Group has $14.1m in commitments in respect of the
development of the Boikarabelo mine.


10. RECLASSIFICATION OF PRIOR YEAR BALANCES


During the period ended 31 December 2014, the Directors have reassessed
the status of the Boikarabelo project, the nature and timing of fund
raising activities and expenditure incurred in order to determine the
appropriate timing for the transition from evaluation and exploration
activities (accounted for under AASB 6 Exploration for and Evaluation of
Mineral Resources) to mining development and construction activities
(accounted for under AASB 116 Property, Plant and Equipment).




   Whilst noting that such a determination is judgemental, the Directors
   have concluded that the most appropriate timing of the transition was
       during the year ended 30 June 2014. Accordingly, the Condensed
        consolidated statement of financial position and the Condensed
 consolidated statement of cash flows have been restated to reflect this
  position.     Capitalised expenditure which was previously classified as
    ?Mining tenements and exploration? is now being reflected as ?Mining
tenements and mining development? and cash flows previously classified as
?Payments for mining tenements and exploration? is now being reflected as
           ?Payments for mining tenements and mining development?.




The Directors note that this change has no impact on the Condensed
consolidated statement of profit or loss and other comprehensive income,
the Condensed consolidated statement of changes in equity, the amounts
being capitalised nor the net asset position or total non-current asset
line items.   This change had no impact on basic and diluted loss per
share for the year ended 30 June 2014.


                              30-Jun-14            Reclassified     30-Jun-14
                       As previously stated                        As restated
                                $'000                  $'000            $'000


Consolidated statement of financial position
Mining tenements and
exploration            114,913   (114,913)         -

Mining tenements and
mining development           -     114,913   114,913
Total non-current
assets                 177,105           -   177,105
Total Assets           213,996           -   213,996
Consolidated
statement of cash
flows
Payments for mining
tenements and
exploration            (7,113)       7,113         -
Payments for mining
tenements and mining
development                  -     (7,113)   (7,113)
Net cash outflow
from investing
activities             (8,016)           -   (8,016)

Date: 04/02/2015 02:53:00 Supplied by www.sharenet.co.za                     
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