RESOURCE GENERATION LIMITED - Board report to shareholdersRelease Date: 17/12/2015 07:05:00 Code(s): RSG
Resource Generation Limited
Registered in Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 059 950 337
Share Code on the ASX: RES
Share Code on the JSE: RSG
(?Resource Generation? or the ?Company?)
17 December 2015
Australia Securities Exchange
20 Bridge Street
Sydney NSW 2000
BOARD REPORT TO SHAREHOLDERS
Dear fellow shareholders
I am pleased to take this opportunity to update you on developments since the new Board was elected at
AGM and EGM of 26 November 2015. Over the coming months it is important that shareholders are well-
informed about developments and I intend to make communication with our shareholders one of our most
The Board convened on 26 November 2015 to make the necessary appointments and commence a
process of corporate review. The review has proved more difficult than anticipated due to the
retrenchment of all Sydney office staff by the former executives, including themselves, on the day prior to
the AGM/EGM. Notwithstanding, with the assistance of the company's major shareholders, the Board has
now completed a desk-top due diligence of the company's operations.
A second Board Meeting, and the first ever held in South Africa, occurred on 14 December 2015. All
members of the Board then visited the Boikarabelo Mine on 15 December 2015 and undertook an
inspection of the mine, ahead of our re-assessment of the company's project development and financing
Interim CEO, Rob Lowe, has begun the task of rebuilding the company's executive team. This is a priority
because capable and respected executives are necessary to ensure the company is able to deliver on the
potential of the Boikarabelo project and is effectively a pre-condition of any project funding agreement.
Rob Lowe is also the CEO of Altius, one of our major South African shareholders and has been
instrumental in promoting the project since 2013. Rob was appointed by the previous Board to develop a
funding plan for the project, which led to the debt club proposal involving HSBC, Rand Merchant Bank,
Industrial Development Corporation and major shareholders. He has the benefit of detailed project
knowledge and enjoys easy access to all of the stakeholders on which our project will ultimately rely
including the development funding institutions, rail utility and electricity generator.
Meetings have been held with representatives of potential financiers to the project, including the provider
referred to in the company?s 30 September 2015 ASX release, and whose intermediary addressed the
AGM. The Board intends to appoint an independent financial adviser to assist in its assessment of the
alternative finance proposals under negotiation. The Board?s objective is to complete the funding for the
project as soon as possible so that the company can commence contract tendering during this optimal
period of contractor pricing pressure.
Resource Generation Limited (ACN 059 950 337) www.resgen.com.au
Level 12 Chifley Tower, 2 Chifley Square, Sydney NSW 2000
GPO Box 5490, Sydney NSW 2001. Phone +61 2 9376 9000 Fax +61 2 9376 9013
The Board will review the Boikarabelo project architecture, which is unlikely to change, and evaluate
viable alternate operational models ? such as owner/operator or contract mining ? in order to reduce the
capital cost of the project. We will also examine options to make more efficient use of capital and
minimize risk exposure during the execution phase. Selecting an appropriate delivery model will impact
directly on finance requirements. A qualified and experienced independent director will lead this exercise
on behalf of the board. My aim is to report to you on the outcome of the Board's assessment of these
project development options early in 2016.
Your company's board believes that the Boikarabelo project has a compelling case for development, and
offers significant opportunities for all stakeholders, particularly you, the owners of the company. To
optimize the opportunity our immediate objective is to rigorously review all options and elements of the
project with the objective of standing before you at the 2016 AGM to report that we are funded and that
the balance of construction is under way. The board and management team will be working very hard to
achieve that objective, within that timeframe, and will be reporting regularly to shareholders on progress.
For and on behalf of the Board
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
Date: 17/12/2015 07:05:00 Supplied by www.sharenet.co.za
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