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RESOURCE GENERATION LIMITED - Resource Generation funding update

Release Date: 19/08/2015 11:15:00      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
("Resource Generation")

19 August 2015

ASX Release

Resource Generation funding update

Resource Generation Limited (ASX: RES) has been negotiating with financiers for more than three years to
secure the US$400 million required to complete the mine and related infrastructure. The aim has been to
fund construction through debt in order to avoid issuing additional equity and diluting shareholders?
interest in the project. This has proved to be difficult due to changing macro-economic factors resulting in
changes to the financiers? requirements.

In June 2015 the company believed it was close to an in-principle agreement with a club of financiers on
the term sheet for a multi-layered funding package. Together with other funding commitments, this would
have provided the necessary finance.

Finalising negotiations since have been hampered by a weakened API4 coal price forecast. As a result, in
order to determine if gearing levels can be lowered, the club of financiers have now asked Resource
Generation to investigate whether a contract mining model could reduce the mine?s costs and capital
requirement. Consequently, the company is seeking quotes from mining contractors and this process is
likely to take several months to complete. Meanwhile, other sources of finance are being explored.

Paul Jury, managing director of Resource Generation, said: ?With low production costs, transport
arrangements in place and a number of years? production already underwritten by sales contracts,
Boikarabelo is well placed to benefit from any improved growth in global demand for coal. While weakness
in the coal price forecast has delayed our securing the remaining finance to build the mine, we believe the
asset is valuable and once construction is financed on acceptable terms will provide value to shareholders.
Sufficient cash reserves exist for the company to operate in the medium term whilst pursuing completion
of the project funding.?

Paul Jury, Managing Director on (02) 9376 9000 or
Steve Matthews, Executive Director on (02) 9376 9000

Media enquiries
Anthony Tregoning (02) 8264 1000

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.

* 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.

JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd

Date: 19/08/2015 11:15:00 Supplied by www.sharenet.co.za                     
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