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Resource Generation Limited - Heads Of Agreement Of The Coal Handling And Preparation Plant

Release Date: 06/05/2016 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
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
(?Resource Generation? or the ?Company?)

6 May 2016

ASX Announcement


    .   Heads of Agreement for design, procurement and construction of the Coal Handling
        and Preparation Plant for Boikarabelo Mine concluded with CIMIC Group?s Sedgman
    .   Significant step in reducing risk and capital expenditure

Johannesburg: Resource Generation Limited (ResGen or the Company) (ASX: RES/ JSE: RSG)
has announced the conclusion of a Heads of Agreement and Letter of Intent (LOI) for the design,
procurement and construction of the Coal Handling and Preparation Plant (CHPP) for the
Boikarabelo Mine in South Africa?s Waterberg region.

The agreement with Sedgman Limited, a member of the CIMIC Group and a leading Engineering
Procurement and Construction (EPC) contractor in coal and minerals, provides for a fixed lump
sum contract for US$141 million subject to exchange rate fluctuation. The contract price represents
a substantial saving over the previously announced estimate and was achieved as a result of the
Sedgman design offering a smaller footprint with associated capital savings while offering equal, if
not improved, production outputs.

In addition, under the provisions of the LOI the Company has indicated an intent to negotiate a 3
year CHPP operations contract with Sedgman effective following the expiry of a 15 month
operations contract to cover the warranty period post commissioning and to negotiate with
Sedgman a contract for the construction of the ancillary infrastructure works.

Resource Generation Limited (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068                             www.resgen.com.au
GPO Box 126, Albion QLD 4010. Phone +61-2-9376 9000 Fax +27 (012) 345 5314

The agreement follows the conclusion of a technical review of the Boikarabelo Project referred to in
earlier announcements.

Rob Lowe, CEO of ResGen, commented: ?The conclusion of the EPC contract with a leading
contractor based on the significantly reduced capital cost of the project is a major milestone for the
Boikarabelo Mine and ResGen, and is a step closer to securing full funding for its completion. The
board has continued on its stated path of materially reducing risk and capital expenditure.?

?Sedgman has successfully delivered coal projects across southern Africa, and it is our intention to
negotiate a three-year CHPP operations contract and a contract of for the construction of ancillary
infrastructure with Sedgman post commissioning of the Boikarabelo Plant.?

The agreement is subject to several conditions precedent, including board approval and funding.

Sedgman Limited has successfully delivered over 30 major coal projects over the last decade and
170 over the last 35 years

Yours faithfully
For, and on behalf of, the Board of Directors,

Denis Gately

About ResGen:
Resource Generation Limited (ResGen) is an emerging ASX and JSE-listed coal producers,
currently developing the Boikarabelo Coal Mine in South Africa?s Waterberg region. The Waterberg
accounts for around 40% of the country?s current coal resources. The Company has reported
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.

Substantial progress has been made with regard to securing Boikarabelo?s project funding. Rand
Merchant Bank has been appointed lead arranger and work on a new base case financial model
and term sheet has begun based on the recommendations of ResGen?s Technical Committee.

ResGen?s primary shareholders are the Public Investment Corporation of South Africa (PIC), Noble
Group and Altius Investment Holdings.

*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.

For further information please contact:

Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143

Media enquiries:

Australia:       Martin Debelle on + 61 2 8234 0102

South Africa:    Charmane Russell/Thembisa Kotobe on +27 11 880 3924

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


Date: 06/05/2016 07:05:00 Supplied by www.sharenet.co.za                     
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