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Resource Generation Limited - Statement Of Coal Resources And Coal Reserves

Release Date: 23/01/2017 08:56:00      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?)

  Statement of Coal Resources and Coal Reserves for Resource
  Generation Limited
  ASX Release


  23 January 2017
  Introduction
  Resource Generation Limited (Resgen) holds various Coal Mining Tenements in South Africa through
  its subsidiaries Ledjadja Coal (Proprietary) Limited (Ledjadja), (the owner of the Boikarabelo Coal
  Mine), and Waterberg One Coal (Proprietary) Limited (Waterberg One). Ledjadja and Waterberg One
  are ventures between Resgen (74% ownership) and black economic empowerment entity, Fairy Wing
  Trading 136 (Proprietary) Limited (26% ownership).
  Ledjadja holds title to the Mining Right and Tenements listed in the schedule below:



                                                                                                                                          Mining
                                                                                       Size                              Attributable
  Asset                            Farm                     Project Area                               Holder                              Right        Comments
                                                                                       (ha)                                 Share
                                                                                                                                          number

                      Witkopje 238LQ                        Ledjadja #1
                                                                                                                         1)
                      Draai Om 244 LQ                       Ledjadja #2                                                  Resource                       Granted
                                                                                                                                           169MR
                                                                                                                         Generation                     20 April
                      Kalkpan 243 LQ                        Ledjadja #3                            Ledjajda                              (previously
Boikarabelo                                                                                                              Ltd. 74%                        2011
                                                                                      9018         Coal (Pty)                           identified as
 Coal Mine            Osorno 700 LQ                         Ledjadja #4
                                                                                                     Ltd                                MPT15/201
                      Zeekoevley 241                                                                                     2) Fairy                       Expiry 19
                                                            Ledjadja #5                                                                     2MR)
                      LQ                                                                                                 Wing                           April 2044
                                                                                                                         Trading
                      Vischpan 274 LQ                       Ledjadja #6

  Resource Generation Australia (ACN 059 950 337)

  c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068

  GPO Box 126, Albion QLD 4010. Phone +27 (012) 345 1057 Fax +27 (012) 345 5314

  Directors: Denis Gately (Chairman), Lulamile Xate (Deputy Chairman), Rob Lowe (CEO), Robert Croll, Dr. Konji Sebati,

  Colin Gilligan, Leapeetswe Molotsane                                                                                                    www.resgen.com.au
                                                                                           136 (Pty)
               Kruishout 271 LQ             Ledjadja #7
                                                                                           Ltd. 26%


Waterberg One Coal holds title to Prospecting Rights over the farms Koert Louw Zyn Pan 234 LQ
(Project Area Waterberg #1) (Prospecting Right number PR678/2007), and the farms Lisbon19 LQ
(Project Area Waterberg #2) and Zoetfontein 22 LQ (Project Area Waterberg #3) (Prospecting Right
number PR720/2007).
The Coal Resources and Coal Reserves estimate for Boikarabelo Coal Mine has been updated in
accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves, (The JORC Code, 2012 Edition) (the JORC Code 2012).
This update of the Coal Resources and Coal Reserves estimates relate specifically to the Ledjadja
#1 and Ledjadja #3 project areas where an optimised mine design has now been completed. These
two project areas make up 27% of Resgen?s Coal Resources and 46% of Resgen?s Coal Reserves.
Resgen has previously secured export offtake contracts and has developed a dual export/domestic
business model intending to service both export customers and domestic power stations. This model
has resulted in a meaningful increase in the Net Present Value (NPV) and Internal Rate of Return
(IRR) of the project.
The previously announced 2010 estimated Coal Resources and Coal Reserves (?the 2010 Release?)
was based on a single, low quality product for sale to domestic power stations.
An updated statement of those estimated Coal Resources and Coal Reserves as at 31 December
2016 is included below.

Statement of Coal Resources and Coal Reserves
The total Coal Resources base is summarised in the Table below:

                                                                         Coal                  Coal
                                                     Area
               Project Area                                            Resources             Reserves
                                                  (hectares)
                                                                          (Mt)                 (Mt)
  Ledjadja #1 and Ledjadja #3 (*)                        830.0                  994.81           267.09
 Ledjadja #1 and Ledjadja #2(**)(i)                      877.0                  1479.6                -
       Waterberg #1 (***) (i)                            536.0                   426.3            314.2
        Waterberg #1(**)(i)                              706.0                   551.7                -
               Total                                   2,949.0                3,711.61           581.29

(*)- determined by applying the JORC Code 2012

(**)- determined by applying the JORC Code 2004; and relates to the Inferred Resources of the Project Area

(***)- determined by applying the JORC Code 2004, and relates to the Measured and Indicated Resources of the Project Area


Note (i) -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.

This new business model for the Boikarabelo Coal Mine has resulted in the following
variations to the 2010 Release:

                                                                                                                            PAGE 2
Coal Resources
The Measured and Indicated Tonnes of 664.2 million tonnes have increased to 994.81 million tonnes.
This is attributable to an increase in the Measured Resource Area as a result of additional drilling.




Coal Reserves
The Marketable Coal Reserves have reduced from 430.6 million tonnes to 267.09 million tonnes
and are now based on:

       .       an export quality product with an average of 14% ash and an average 25.73 MJ/kg
               calorific value determined on an Air Dried (AD) basis; and

              a domestic power station product with an average 19.5 MJ/kg calorific value and an
               average 31.43 % ash determined on an AD basis.
The export quality product has an average yield of 23.68% and the domestic power station product
has an average yield of 19.61 %. This equates to an overall average yield of 43.3%.
The run of mine (ROM) of 616.85 million tonnes equates to a life of mine in excess of 40 years at an
annual production rate of 15.12 million tonnes and sales for a similar period at a rate of 6.55 million
tonnes per annum (Production Target). The material assumptions on which this Production Target is
based are (see Section 2 Coal Reserves below and Section 4 of Appendix 1 for more detail):
       .       open pit truck and shovel terrace operation,

       .       minimum coal seam/mining height thickness of 0.5m,

       .       dual product mine applying a minimum total yield cut off of 24%,

       .       appropriate pit slope angles (overall 450),

       .       appropriate mining recovery factors, dilution and contamination, and

       .       beneficiation of the coal for a dual product in a high density beneficiation plant and
               applying appropriate plant factors.
This Production Target is based purely on Probable Coal Reserves and these Coal Reserves have
been signed off by the Competent Persons.
The following information prescribed by the JORC Code 2012 is included in this Release:
       .       Section One and Section Two detail the Coal Resources and Coal Reserves as at 31
               December 2016 with respect to the Boikarabelo Coal Mine. A comparison to the 2010
               Release is also shown.

       .       Appendix 1 provides a summary of important assessment and reporting criteria used
               at the Boikarabelo Coal Mine for reporting of Coal Resources and Coal Reserves in
               accordance with the Table 1 checklist in the JORC Code 2012.

       .       Appendix 2 provides borehole co-ordinates and collar elevations.


                                                                                                  PAGE 3
The Inferred Coal Resources and Coal Reserves for Ledjadja #1 and Ledjadja #2 and the Coal
Resources for Waterberg #1 will be subject to review and update under the JORC Code 2012 during
the 2017 calendar year and will be released to the market once this review and update has been
completed and approved.




Competent Persons? Statement
The information contained in this Release which relates to estimates of Coal Resources and Coal
Reserves is based on and accurately reflects reports prepared by Competent Persons named beside
the respective information in the Table below. Mr Ben Bruwer is a Principal Consultant with VBKom
(Pty) Ltd (VBKOM). Mr Riaan Joubert is the Principal Geologist employed by Ledjadja.
Summary of Competent Persons responsible for Coal Resources and Coal Reserves
  Competent          Area of  Professional   Year of Membership
   Person          Competency   Society    Registration Number

R. Joubert         Coal             SACNASP*             2002         400040/02
                   Resources
                                                                      Member

B. Bruwer          Coal             SAIMM**              1994         701068
                   Reserves
                                                                      Member
*SACNASP - South African Council for Natural Scientific Professions

** SAIMM - Southern African Institute of Mining and Metallurgy

The above-named Competent Persons both consent to the inclusion of material in the form and
context in which it appears in this Release. Both individuals are members of a Recognised
Professional Organisation in terms of the JORC Code 2012, and both have a minimum of five years?
relevant experience in relation to the mineralisation and type of deposit being reported on by them to
qualify as Competent Persons as defined in the JORC Code 2012.
Neither Mr Bruwer, nor VBKOM has a material interest or entitlement, direct or indirect, in the
securities of Resource Generation Ltd. Mr Joubert holds no shares in Resource Generation Limited.


About Resource Generation Ltd:
Resource Generation Ltd. (Resgen) is an emerging ASX and JSE-listed energy company, currently
developing the Boikarabelo Coal Mine in South Africa?s Waterberg region. The Waterberg accounts
for around 40% of the country?s currently known coal resources. Resgen?s primary shareholders are
the Public Investment Corporation of South Africa SOC Limited (PIC), Noble Resources International
Pte Limited and Altius Investment Holdings (Pty) Limited.
For further information please contact:


                                                                                                PAGE 4
Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143
Media enquiries:
Australia: Martin Debelle on + 61 282 340 102 or +61 409 911 189
South Africa: Marion Brower/Thembisa Kotobe on +27 11 880 3924
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd




                                                                                 PAGE 5
STATEMENT OF COAL RESOURCES AND COAL RESERVES


Section 1 ? Coal Resources
The Table below is an extract from the 2010 Release containing an estimate of the Coal Resources:


               Farm                                                  Indicated Measured                       Total
                                         Project           Inferred
                                                                               Resources                      Coal
                                        Reference         Resources Resources
                                                                                                            Resources
Witkopje South & Kalkpan            Ledjadja #1,                                                664.2           664.2
                                    Ledjadja # 3
Draai Om                            Ledjadja #2               791.3                                             791.3
Witkopje                            Ledjadja #1               688.3                                             688.3
Waterberg One                       Waterberg #1                                                426.3           426.3
Waterberg One                       Waterberg #1                               551.7                            551.7
Total                                                        1,479.6           551.7           1,090.5         3,121.8
 .   Coal Resources are inclusive of Coal Reserves.
 .   Rounding figures may cause computational discrepancies.
 .   Figures are reported at 100% irrespective of percentage attributable to Resource Generation Limited.
 .   Tonnages are quoted in metric tonnes on an Air Dried Basis (AD) and million tonnes are abbreviated as Mt.


The Table below summarises the revised Coal Resources estimate as at 31 December 2016 applying
the JORC Code 2012:



     Project           Coal                                                                              Mineable
                                      Gross Tonnes In Geological Total Tonnes In
                     Resource                                                                          Tonnes In situ
      Area                            situ (GTIS) (Mt) Losses (%) situ (TTIS) (Mt)
                     Category                                                                           (MTIS) (Mt)

Ledjadja #1,       Measured                1,011.99                 10               910.79                 910.79
Ledjadja # 3
Ledjadja #1,       Indicated                 93.36                  10                84.02                  84.02
Ledjadja # 3
                   Total                   1,105.35                                  994.81                 994.81
 .   Coal Resources are inclusive of Coal Reserves.
 .   Rounding figures may cause computational discrepancies.
 .   Figures are reported at 100% irrespective of percentage attributable to Resource Generation Limited.
 .   Tonnages are quoted in metric tonnes on an Air Dried Basis (AD) and million tonnes are abbreviated as Mt.
 .   MTIS tonnage is equivalent to TTIS as no theoretical height cut offs have been applied as a result of the mining
         method.




                                                                                                                        PAGE 6
In accordance with Listing Rule 5.8.1 and 5.9.1, the following summary is provided of information
material to understanding the reported estimates of Coal Resources at 31 December 2016. Further
detail is included in Appendix 1 ? JORC Code, 2012 Edition- Table 1
Coal Resources
Geology and geological interpretation
The coal deposits of the Waterberg Coalfield occur in the Grootegeluk and Vryheid Formations of the
Karoo Supergroup. These formations and their numerous coal zones vary in thickness from a few
centimetres to several metres.
The interpreted sub-crop of the Boikarabelo Coal Mine specifically consists of the following
formations:

       ?      the Eendragtpan Formation (Triassic ? Beaufort Group) which consists of barren
              sediments and overlies the coal zones,

       ?      the Grootegeluk Formation (Permian ? Upper Ecca Group), which consists of
              intercalated bright coal (zones 5 to 11) and mudstone and contains the majority of the
              Coal Resources in the coalfield, and

       ?      the Goedgedacht or Vryheid Formation (Permian ? Middle Ecca Group), which consists
              predominantly of dull coal (zones 1 to 4) with minor carbonaceous mudstone and
              sandstone intercalations.
The Grootegeluk Formation consists of cyclical repetitions of mudstone and coal with the coal seams
named from the base upwards. Individual plies are named and correlated according to the
Grootegeluk Coal Mine (located in the Waterberg Coalfield) nomenclature. Faure et al. (1996)
describe divisions applied to the Ecca Group coals in the Ellisras (Waterberg) Basin by staff of the
Grootegeluk Coal Mine. The predominantly dull coal seams (1, 2, 3, 4 and 4A) of the Goedgedacht
Formation retained the original numbering. The remaining seams were re-classified by the
Grootegeluk Coal mine staff into zones 5 to 11. (Faure K, Willis J.P, Dreyer J.C. 1996. The
Grootegeluk Formation of the Waterberg Coalfield, South Africa: facies, paleo-environment and
thermal history- evidence from organic and clastic matter. International Journal of Coal Geology, 29,
147-186.).
These Zones are further divided into coal seam plies which constitute the coal samples within each
zone. This comprises of a sequence of sample names that group plies together in each classic
Waterberg Zone. These samples can be correlated across the entire Waterberg Coalfield. A typical
Waterberg borehole has 11 coal zones from Zone 1 at the base to Zone 11 at the top. The lower three
zones do not comprise of alternating plies but are more typical uniform coal seams.
The Eendragtpan Formation provides a thin covering of 25-35m thickness over the majority of the
area and thus preserves the Grootegeluk and Goedgedacht Formations.
The Grootegeluk Formation was intersected during the drilling programme and varying thicknesses
for the coal zones 1 to 11 have been reported.
Drilling techniques
The drilling and drilling techniques that were employed during the drilling programme included the
following:


                                                                                                PAGE 7
       .       Diamond Cored (DC) boreholes were drilled and it was conventional TNW size
              (60.5mm). The boreholes were drilled vertically,

       .      Reverse Circulation (RC) drilling was done in between the DC holes.            The RC
              boreholes were drilled vertically,

       .      T6-146 (123mm) boreholes were drilled for bulk sample purposes,

       .      the boreholes were logged down the hole geophysically, and

       .      the geophysical borehole log was used in the logging of the boreholes and to
              determine the sample depth intervals.
Sampling and sub-sampling techniques
The sampling methods and sampling techniques employed at Ledjadja were as follows:

       .      the whole core was transported to an onsite core storage facility,

       .      the geophysical borehole logs were used in the logging of the boreholes and the
              determination of the sample depth intervals,

       .      all coal seams and intra seam stone partings intersected were sampled separately,

       .      the whole core was sampled as per South African Industry standard, and

       .       sample intervals and the unique sample numbers were included in the borehole log.
Sample analysis method
The sampling was done according to the litho-stratigraphy utilizing the geophysical log and the whole
coal core was sampled. The sample analyses and methods used at Ledjadja can be summarized as
follows:

       .      the samples were bagged in double bags, the borehole number, sample number and
              sample width were recorded on the sample tags,

       .      all samples received at the laboratories were entered into a Laboratory Integrated
              Management System (LIMS) by means of a code,

       .      the samples were air dried, weighed and automatically recorded in the LIMS. Relative
              densities of each sample were determined and entered into LIMS,

       .      the samples were crushed to 25mm top size (size deemed appropriate for the type and
              nature of the coal deposit). The crushed samples were screened and divided into -
              0.5mm and +0.5-25mm fractions,

       .      proximate analyses (raw) were done on the fractions and analyses done include:
              inherent moisture, ash content, volatile matter content, fixed carbon by difference, raw
              gross calorific value (MJ/kg) and total sulphur content, and

       .      washability tests (Float and Sink) were done on all diamond cored borehole samples.
              Wash fractions were set at relative densities from 1.35, 1.4, 1.45, 1.5, 1.55, 1.6, 1.7,
              1.8, 1.9, 2.0, 2.1, 2.2 and Sink2.2. After the washing process, all wash fractions were



                                                                                                PAGE 8
              submitted for gross calorific value, inherent moisture, volatile matter, total sulphur and
              ash content.
Criteria used for classification (including drill spacing)
The geological model (structural and quality models) was created in Geovia MinexTM software and
used to estimate the Coal Resources. Sections were drawn across the Coal Resources area to
ensure that all correlations were consistent. The sections were correlated and verified using the
geophysical log and lithological log. The following were modelled:

       .      coal ply thickness, roof and floor depths, roof and floor elevations, the topography and
              the limit of weathering,

       .      the limit of weathering was used as a limiting horizon and no Coal Resources were
              estimated above the limit of weathering, and

       .      the modelling was done on a 50mX50m grid and extrapolation was limited to 500m
              from the last borehole and terminated against known areas of no coal development.
The Coal Resources were classified into Measured Coal Resources and Indicated Coal Resources
utilising the following:

       .      the Coal Resources were estimated using geostatistical analyses and variograms were
              constructed,

       .      the variograms indicated that there is little change in the raw ash variability within the
              Coal Resources,

       .      a borehole spacing of 500m was used for Measured Coal Resources and a 1000m for
              Indicated Coal Resources, and

       .      a 0.5m seam thickness cut-off and a cut-off of > 65% ash was applied on the coal
              zones to establish the overall Coal Resources.
Estimation methodology
The Competent Person applied the principles of the JORC Code 2012 in estimating the Coal
Resources at Boikarabelo Coal Mine as follows:

       .      the Coal Resources were estimated using geostatistical analyses,

       .      the distance of interpolation between boreholes was determined by plotting variograms
              which indicated that there is little change in the raw ash variability within the Coal
              Resources, and

       .       a borehole spacing of 500m was used for Measured Coal Resources and a 1000m
              spacing was used for Indicated Coal Resources.
Cut-off grades, including the basis for selected cut of grades
The cut-off grades applied in the Coal Resources estimation were:

       .      a 0.5m seam thickness cut-off was applied to all coal zones,

       .      a cut-off of > 65% ash was applied on the coal zones to establish the overall Coal
              Resources, and

                                                                                                  PAGE 9
       .        a geological loss of 10% was applied.


Mining and metallurgical methods and parameters and other material modifying factors
considered to date
Consideration was given to a number of mining methods, including open pit and underground. The
optimal mine design has been based on an open pit terrace mine. In addition, consideration was given
to the following:

       .        a minimum coal ply thickness of 0.5m was applied to the Coal Resource estimate,

       .        the extent of the Mining Right,

       .        geological constraints, and

       .        environmental constraints.
Various metallurgical studies were carried out to establish the beneficiation characteristics of the coal
plies and their combined reaction in the coal beneficiation process.



Section 2 ? Coal Reserves
The 2010 Coal Reserves estimate was based on a single product for domestic power station
consumption of 19.5 MJ/kg calorific value (AD).
The Table below is an extract from the 2010 Release summarising the Coal Reserves:

        Coal
                     Product
      Reserves
                       (Mt)
      Category

    Probable             430.6



The Table below summarises the revised Coal Reserves estimate, based on a dual export/domestic
business model as at 31 December 2016 and applying the JORC Code 2012:

        Coal                   MTIS (Yield &      Mining      ROM         Primary      Secondary
                     MTIS
      Reserve                  plant cut-offs)     Loss      Tonnes       Product       Product
                     (Mt)
      Category                      (Mt)            (%)       (Mt)          (Mt)          (Mt)

     Probable         994.81           649.32           5%      616.85        146.00        121.09



In accordance with Listing Rule 5.8.1 and 5.9.1, the following summary is provided of information
material to understanding the reported estimates of Coal Reserves at 31 December 2016. Further
detail is included in Appendix 1 below, as set out in the JORC Code, 2012 Edition




                                                                                                   PAGE 10
Coal Reserves
Material assumptions and outcomes from an optimised mine design and technical studies that
have been completed
The material assumptions applied in the Coal Reserve estimation process include the following:

       .      a detailed mine design was done and the mining method selected is a truck and shovel
              open pit terrace mine,

       .      a mining recovery factor of 95% was applied and was considered to be appropriate for
              the mining method and the large band of multiple coal seams considered,

       .      minimum mining widths of 0.5m were applied in the geological model and subsequently
              in the mine modelling which was deemed appropriate for the mining equipment
              employed,

       .      no Inferred Coal Resources were included in the mine plan,

       .      all relevant infrastructure required to execute the life of mine plan relevant for the type
              and size of the mine was considered,

       .      a mine schedule, based and constrained by the throughput rate of the mine equipment
              selected, was developed, and

       .      appropriate factors, including dilution and losses, were applied with the agglomeration
              of mining horizons.
Criteria used for classification (including the classification of the mineral resources on which
the ore reserves are based and the confidence in the modifying factors applied
The principles of the JORC Code 2012 was used in estimating the Coal Resources. The criteria and
classification are listed below:

       .      the Coal Resources were estimated using geostatistical analyses and the distance of
              interpolation to be used between boreholes was determined by plotting variograms of
              the raw ash content of the coal zones, and

       .      the Coal Resources were classified into Measured and Indicated Coal Resources.
Mining method selected and other mining assumptions, including mining recovery factors and
dilution factors
An optimised mine design exercise was completed which indicated that an open pit terrace truck and
shovel mine was the preferred option. The main principals of this mining design are:

       .     the establishment of a box-cut,

       .      pre-stripping of the overburden, and

       .      once steady-state mining operations have been established, roll-over backfill of the
              overburden will be carried out.

                                                                                                   PAGE 11
The key mining Modifying Factors, based on the results of the various studies conducted by Resgen
are:

       .      a cut-off of > 65% ash content,

       .      a minimum coal ply thickness of 0.5m,

       .      a geological loss of 10%, applied to the tonnage of the Coal Resources,

       .      a mining extraction factor of 10%,

       .      a practical plant yield of 90% was applied on the export quality product,

       .      a yield cut-off of 24%,

       .      a mining recovery factor of 95%,

       .      a mining dilution factor of 5%,

       .      a contamination factor of 0.1m of both the roof and floor of the mining horizons,

       .      an overall pit slope angle of 450,

       .      a minimum bench width of 60m,

       .      all seams will be mined together, and no stop-start operation or separate stockpiles
              will be required, and

       .      the inclusion of two 75kt blending stockpiles.
No Inferred Coal Resources have been included in the mine plan.
Processing method selected and other processing assumptions, including recovery factors
and allowances made for deleterious elements
The processing design and assumptions considered included the following:

       .      a coal handling and processing plant that has been based on a dense medium
              separation process to produce two different quality products. Density separation is a
              well-known and widely used method to upgrade ROM coal to saleable clean coal
              products,

       .      the discarded material will be placed in the mining void in accordance with the mine
              design, and

       .      a practical plant yield (plant recovery) of 90% was applied on the export quality product.
Basis of cut-off grades or quality parameters applied
The quality parameters that were applied were based on a dual export/domestic business model and
are:

       .      an export quality product with an average of 14% ash and an average 25.73 MJ/kg
              calorific value determined on an AD basis, and

       .      a domestic power station product with an average 19.5 MJ/kg calorific value and an
              average 31.43 % ash determined on an AD basis.

                                                                                                  PAGE 12
Economic assumptions
The key economic factors and parameters that were considered (using both internal and externally
sourced information) in determining the financial viability of the Boikarabelo Coal Mine Project and
associated Production Target are listed below:

       .      the forecast costs of bulk services, water and electricity,

       .      the forecast costs of consumables, magnetite and flocculants,

       .      the costs associated with logistics, including rail and port transport and handling costs,

       .      the potential sales price achieved for the products produced,

       .      the estimated capital costs of the project itself; and

       .      the forecast mining costs and beneficiation costs.




                                                                                                  PAGE 13
Appendix 1- JORC Code, 2012 Edition ? Table 1
Section 1 Sampling Techniques and Data

     Criteria                   JORC Code explanation                                                                    Commentary
     Sampling
                                       Nature and quality of sampling (e.g. cut channels, random chips, or                   Diamond Cored (TNW 60.5mm) boreholes were drilled to below the last
     techniques
                                       specific specialised industry standard measurement tools appropriate                  coal intersection using conventional drilling equipment. The boreholes
                                       to the minerals under investigation, such as down hole gamma                          were drilled vertically. Coal recoveries were in excess of 95%. The core
                                       sounds, or handheld XRF instruments, etc.). These examples should                     was packed in steel core trays. The boreholes were logged geophysically.
                                       not be taken as limiting the broad meaning of sampling.
                                                                                                                             The drilling programme was overseen by qualified geologists.
                                       Include reference to measures taken to ensure sample representation
                                                                                                                             The whole core was transported to an onsite core storage facility.
                                       and the appropriate calibration of any measurement tools or systems
                                       used.                                                                                 Care was taken during transport of the core to retain the integrity of the
                                                                                                                             core in the boxes.
                                       Aspects of the determination of mineralisation that are Material to the
                                       Public Report.                                                                        The boreholes were logged in detail and the geophysical borehole log was
                                                                                                                             used in the logging of the boreholes and to determine the sample depth
                                       In cases where ?industry standard? work has been done this would be
                                                                                                                             intervals.
                                       relatively simple (e.g. ?reverse circulation drilling was used to obtain 1
                                       m samples from which 3 kg was pulverised to produce a 30 g charge                     The logging and sampling were done by qualified geologists. Standard
                                       for fire assay?). In other cases more explanation may be required, such               measuring tapes were used.
                                       as where there is coarse gold that has inherent sampling problems.
                                                                                                                             All coal seams and intra seam stone partings intersected were sampled
                                       Unusual commodities or mineralisation types (e.g. submarine
                                                                                                                             separately.
                                       nodules) may warrant disclosure of detailed information.
                                                                                                                             The whole core was sampled as per South African Industry standard.
                                                                                                                             Sample intervals and the unique sample numbers were included in the
                                                                                                                             borehole log.

Resource Generation Australia (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (012) 345 1057 Fax +27 (012) 345 5314
Directors: Denis Gately (Chairman), Lulamile Xate (Deputy Chairman), Rob Lowe (CEO), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane                                                                                   www.resgen.com.au
Criteria       JORC Code explanation                                                           Commentary
                                                                                                  The samples were bagged, marked and sent to laboratories for analyses.
                                                                                                 Reverse Circulation (RC) drilling was done between diamond cored
                                                                                                 boreholes. The RC boreholes were geophysically logged.
                                                                                                  All the Boreholes were drilled vertically.
Drilling
                  Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air       The Diamond Cored boreholes that were drilled were done using
techniques
                  blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple     conventional TNW size (60.5mm). They were drilled vertically and not
                  or standard tube, depth of diamond tails, face-sampling bit or other           orientated.
                  type, whether core is oriented and if so, by what method, etc.).
                                                                                                 The RC drilling that was done was conventional RC drilling.
                                                                                                 T6-146 (123mm) boreholes were drilled for bulk sample purposes.
Drill sample
                  Method of recording and assessing core and chip sample recoveries              Borehole core depths were measured at the end of each core run and
recovery
                  and results assessed.                                                          recorded.
                  Measures taken to maximise sample               recovery and ensure            Core recovery was assessed by the geologist when logging. The
                  representative nature of the samples.                                          recovered core thickness was compared with the thickness from the
                                                                                                 geophysical log.
                  Whether a relationship exists between sample recovery and grade
                  and whether sample bias may have occurred due to preferential                  A borehole was re-drilled if the coal recovery was below 95%.
                  loss/gain of fine/coarse material.
                                                                                                 The borehole core was transported to a central core store where it was
                                                                                                 logged and sampled from the core trays.
                                                                                                 Core losses were recorded in the field log.
Logging
                  Whether core and chip samples have been geologically and                       Boreholes were logged by independent qualified geologists.
                  geotechnically logged to a level of detail to support appropriate
                                                                                                 Total lengths of boreholes were logged according to industry accepted
                  Mineral Resource estimation, mining studies and metallurgical
                                                                                                 lithological descriptions, protocols and methods.
                  studies.
                                                                                                 Logging of the core was done down to 1cm scale.
                  Whether logging is qualitative or quantitative in nature. Core (or,
                  channel, etc.) photography.                                                    Logging is qualitative in nature.
                  The total length and percentage of the relevant intersections logged.          All boreholes were geophysically logged. A standard suite of geophysical
                                                                                                 sounds were done namely: Long Spaced Density, Short Spaced Density,
                                                                                                 Gamma and Caliper. The geophysical logging was done by independent
Criteria       JORC Code explanation                                                          Commentary
                                                                                                 contractors and the geophysical tools were calibrated on a regular basis
                                                                                                 before being deployed on site.
                                                                                                 Borehole chip samples from the RC drilling were logged by qualified
                                                                                                 geologists.
                                                                                                 Boreholes were not geotechnically logged as a standard.
                                                                                                 Specific boreholes were drilled where geotechnical data is required i.e. the
                                                                                                 box-cut position.
Sub-sampling
                  If core, whether cut or sawn and whether quarter, half or all core taken.      Sampling was done according the litho-stratigraphy utilizing the
techniques
                                                                                                 geophysical log.
and sample        If non-core, whether riffled, tube sampled, rotary split, etc. and
preparation       whether sampled wet or dry.                                                    The whole coal core was sampled.
                  For all sample types, the nature, quality and appropriateness of the           The samples were not dried and the boreholes were sampled as received
                  sample preparation technique.                                                  as soon as possible after drilling.
                  Quality control procedures adopted for all sub-sampling stages to              Care was taken to ensure that all the material including the fine coal for a
                  maximise representation of samples.                                            particular interval was sampled.
                  Measures taken to ensure that the sampling is representative of the in         The samples were bagged on site.
                  situ material collected, including for instance results for field
                                                                                                 The samples were bagged in double bags, the borehole number, sample
                  duplicate/second-half sampling.
                                                                                                 number and sample width were written on the sample tags.
                  Whether sample sizes are appropriate to the grain size of the material
                                                                                                 One sample tag was placed inside the bag with the coal sample, a second
                  being sampled.
                                                                                                 sample tag was secured to the outside of the sample bags. The borehole
                                                                                                 number, sample number and sample width were written on the sample
                                                                                                 bags with paint markers.
                                                                                                 The samples were delivered to the laboratories by road transport by the
                                                                                                 responsible geologist overseeing the drilling programme.
                                                                                                 Duplicate sampling was not undertaken.
                                                                                                 The sample size was appropriate to the grain size of the material being
                                                                                                 sampled.
Quality of
                  The nature, quality and appropriateness of the assaying and                    The majority of the core samples were sent to ALS Limited - ALS Energy
assay data
                  laboratory procedures used and whether the technique is considered             Division, Coal Services South Africa Laboratory (ALS Witlab), previously
and
                  partial or total.                                                              known as Witlab. ALS Witlab is accredited with the South African National
Criteria     JORC Code explanation                                                      Commentary
laboratory                                                                                 Accreditation body (SANAS), accreditation number T0478. SANAS is the
                For geophysical tools, spectrometers, handheld XRF instruments,
tests                                                                                      national body responsible for carrying out accreditations in respect of
                etc., the parameters used in determining the analysis including
                                                                                           conformity assessment, as mandated through the Accreditation for
                instrument make and model, reading times, calibrations factors
                                                                                           Conformity Assessment, Calibration and Good Laboratory Practice Act
                applied and their derivation, etc.
                                                                                           (Act 19 of 2006).
                Nature of quality control procedures adopted (e.g. standards, blanks,
                                                                                           Some samples were sent to Advanced Coal Technology Laboratory
                duplicates, external laboratory checks) and whether acceptable levels
                                                                                           (ACT). ACT was subsequently purchased by Bureau Veritas. Bureau
                of accuracy (i.e. lack of bias) and precision have been established.
                                                                                           Veritas is accredited with the South African National Accreditation body
                                                                                           (SANAS), accreditation number T0313. SANAS is the national body
                                                                                           responsible for carrying out accreditations in respect of conformity
                                                                                           assessment, as mandated through the Accreditation for Conformity
                                                                                           Assessment, Calibration and Good Laboratory Practice Act (Act 19 of
                                                                                           2006).
                                                                                           Some samples were sent to South African Bureau of Standards Laboratory
                                                                                           Coalspec (SABS Coalspec). SABS Coalspec is accredited with the South
                                                                                           African National Accreditation body (SANAS), accreditation number T0230.
                                                                                           SANAS is the national body responsible for carrying out accreditations in
                                                                                           respect of conformity assessment, as mandated through the Accreditation
                                                                                           for Conformity Assessment, Calibration and Good Laboratory Practice Act
                                                                                           (Act 19 of 2006).
                                                                                           At the time of analyses of the bulk of the samples both ACT and ALS Witlab
                                                                                           were not accredited. These laboratories are now SANAS accredited and
                                                                                           they are accredited according to professional laboratory standard ? ISO
                                                                                           17025.
                                                                                           For each core sample the following analyses were performed:
                                                                                             .   all samples received at ALS Witlab, ACT and SABS were entered
                                                                                                 into a Laboratory Integrated Management System (LIMS) by means
                                                                                                 of a code,
                                                                                             .   samples were air dried, weighed and automatically recorded in the
                                                                                                 LIMS. Relative densities of each sample were determined and
                                                                                                 entered into LIMS. Samples were bagged in encoded bags,
Criteria   JORC Code explanation   Commentary
                                       .   samples were crushed to 25mm top size (size deemed appropriate
                                           for the type and nature of the coal deposit). The crushed samples
                                           were screened and divided into -0.5mm and +0.5-25mm fractions,
                                       .   proximate analyses (raw) were done on the fractions as follows:
                                           inherent moisture content according to ISO 331, ash content based
                                           on ISO1171:97, volatile matter content based on ISO562:98 and
                                           fixed carbon by difference. Raw gross calorific value (MJ/kg) was
                                           based on ISO1928:95 and total sulphur content was based on
                                           ASTM: D4239-04a,
                                       .   washability tests (Float and Sink) were done on all diamond cored
                                           borehole samples. Wash fractions were set at relative densities from
                                           1.35, 1.4, 1.45, 1.5, 1.55, 1.6, 1.7, 1.8, 1.9, 2.0, 2.1, 2.2 and Sink2.2.
                                           All fractions were weighed, checked, verified and captured in the
                                           LIMS. All float and sink fractions were dried and weighed and all
                                           weights were recorded on LIMS. After the washing process all wash
                                           fractions were submitted for gross calorific value, inherent moisture,
                                           volatile matter, total sulphur and ash content,
                                       .   the calculation of cumulative values for each cut-point density and of
                                           reconstituted raw coal values for each washability test sample was
                                           carried out, and
                                       .   ultimate analyses, ash analyses were done on selective samples
                                           only.
                                     All crushing and splitting equipment was thoroughly cleaned and inspected
                                     after each sample. Crushing equipment was selected so as to not generate
                                     excess fines. Internal audits were carried out monthly in accordance with
                                     the ALS Witlab audit schedule. Random checks by independent
                                     consultants were carried out on an ad-hoc basis to check crusher and mill
                                     product compliance and washing density accuracy.
                                     The three laboratories are recognised as leading coal laboratories in South
                                     Africa and abroad. The laboratories carry out all analytical procedures in
                                     accordance with international standards. A detailed analytical programme
                                     designed by Resgen and followed by the laboratories ensured that all
Criteria          JORC Code explanation                                                       Commentary
                                                                                                 necessary analytical elements of the Coal Resources were covered. All
                                                                                                 routine analyses were carried out in accordance with their respective ISO
                                                                                                 international standards, for ash content ISO 1171:97, for inherent moisture
                                                                                                 content ISO 331, for volatile matter content ISO 562:98, for total sulphur
                                                                                                 content ASTM-D 4239-04a and for calorific value ISO 1928:98.
                                                                                                  Further special analyses in accordance with ISO standards were carried
                                                                                                  out on composite samples which allowed for the total nature of the Coal
                                                                                                  Resources to be established. This detailed analysis programme affords
                                                                                                  Resgen a wide field of insight as to how to best utilise the Coal Reserves
                                                                                                  or Coal Resources economically and environmentally.
                                                                                                  Samples were analysed by twin stream duplicate analysis, results were
                                                                                                  automatically entered into LIMS and any abnormalities were flagged. The
                                                                                                  equipment and sampling processes were regularly checked using certified
                                                                                                  standards and reference material. Any analytical discrepancies were
                                                                                                  scheduled for re-analysis. The laboratories also participated in proficiency
                                                                                                  testing (Round Robins) with other laboratories such as ALS Limited Group
                                                                                                  ? Global Services, Yanka Laboratories (Pty) Ltd. and SABS Coalspec
                                                                                                  Laboratory. Control charts for each specific area were used, and accepted
                                                                                                  levels of repeatability were sustained. All reports were generated
                                                                                                  automatically by LIMS. These reports were vetted by a Competent
                                                                                                  Person.
Verification of
                     The verification of significant intersections by either independent or       All coal intersections were verified against the geophysical logs.
sampling and
                     alternative company personnel.
assaying                                                                                          An independent Competent Person reviewed the results and validated the
                     The use of twinned holes.                                                    coal sampling.
                     Documentation of primary data, data entry procedures, data                   The laboratories made use of a custom designed LIMS with traceability to
                     verification, data storage (physical and electronic) protocols.              all raw data. Data calculations were done automatically, checked by
                                                                                                  laboratory supervisors for duplicate results and repeatability. Out of
                     Discuss any adjustment to assay data.
                                                                                                  tolerance results were repeated.
                                                                                                  Data was extracted to Microsoft Excel spreadsheets where it was
                                                                                                  displayed in graphs with pre-set limits using calorific value/ash correlation
                                                                                                  with upper and lower tolerance levels. Results were evaluated by
                                                                                                  experienced personnel and results that deviated from the pre-set tolerance
                                                                                                  values were repeated.
Criteria       JORC Code explanation                                                         Commentary
                                                                                               Sample results were both reported and received in electronic and hard
                                                                                               copy formats.
                                                                                               All data was electronically imported and stored in an electronic geological
                                                                                               database ? Micro Mine (Pty) Ltd. Geobank (Geobank) geological data
                                                                                               base software was used as the database.
                                                                                               Coal quality data was checked and verified in the geological database.
                                                                                               Unreliable data was flagged and removed from the database.
                                                                                               Lithology interval, coal seam intervals, borehole survey data and sample
                                                                                               intervals with sample numbers were recorded on the field log sheets in
                                                                                               hardcopy format.
                                                                                               All borehole data was transferred to the Geobank geological database.
                                                                                               Checks were carried out to ensure that sample intervals and lithology
                                                                                               intervals corresponded.
Location of
                  Accuracy and quality of surveys used to locate drill holes (collar and       All boreholes were initially positioned by geologists using a hand-held GPS
data points
                  down-hole surveys), trenches, mine workings and other locations              with accuracies of +/- 10m. At the completion of each drilling programme
                  used in Mineral Resource estimation.                                         final collar positions of the boreholes were surveyed using a high-accuracy
                                                                                               differential GPS (Leica 1200 Dual Frequency GPS with Base Station),
                  Specification of the grid system used.
                                                                                               operated by professional, qualified surveyors at X-Y accuracies of less
                  Quality and adequacy of topographic control.                                 than 10mm and Z accuracies of less than 1 metre.
                                                                                               Grid used: South Africa LO27 grid system, Hartbeeshoek 94 (WGS84)
                                                                                               datum.
                                                                                               A detailed surface survey was also conducted by professional, qualified
                                                                                               surveyors using a differential GPS system, and used to validate and verify
                                                                                               hole collar elevations, and for detailed mine and surface infrastructure
                                                                                               planning (1m contour intervals). Relevant surface features (e.g. roads)
                                                                                               were surveyed for accuracy.
Data spacing
                  Data spacing for reporting of Exploration Results.                           Exploration drilling was conducted on a grid, spaced at approximately
and
                                                                                               500mX500m. The data spacing and distribution were sufficient to meet the
distribution      Whether the data spacing and distribution is sufficient to establish the
                                                                                               JORC Code 2012 limits for classification of Measured, Indicated and
                  degree of geological and grade continuity appropriate for the Mineral
Criteria         JORC Code explanation                                                          Commentary
                    Resource and Ore           Reserve     estimation   procedure(s)     and       Inferred Coal Resources, and were appropriate for the structural and
                    classifications applied.                                                       quality modelling.
                     Whether sample compositing has been applied.                                  No sample compositing was applied.
Orientation of
                     Whether the orientation of sampling achieves unbiased sampling of             No major structures are present that have an influence on the coal
data in
                     possible structures and the extent to which this is known, considering        quantities.
relation to
                     the deposit type.
geological                                                                                         Coal seams are near horizontal, and an even-spaced drilling grid was
structure            If the relationship between the drilling orientation and the orientation      applied across the area.
                     of key mineralised structures is considered to have introduced a
                                                                                                   The orientation of the sampling achieved unbiased sampling of the
                     sampling bias, this should be assessed and reported if material.
                                                                                                   deposit.
Sample
                     The measures taken to ensure sample security.                                 The samples were bagged in double bags, with the borehole number,
security
                                                                                                   sample number and sample width being written on the sample tags.
                                                                                                   One sample tag was placed inside the bag with the coal sample, and a
                                                                                                   second sample tag was secured to the outside of the sample bags. The
                                                                                                   borehole number, sample number and sample width was written on the
                                                                                                   sample bags with paint markers.
                                                                                                   The samples were delivered to the laboratories by road transport by the
                                                                                                   responsible geologist overseeing the drilling programme.
                                                                                                   Sample security was ensured under a chain of custody between Resgen
                                                                                                   contractor geologists and the laboratories.
Audits or
                     The results of any audits or reviews of sampling techniques and data.         Regular site inspections, verification of exploration procedures and
reviews
                                                                                                   activities were undertaken by the Competent Person.
                                                                                                   The laboratories undertook internal audits and ?Round Robin? checks
                                                                                                   between laboratories, in line with international standards, were undertaken
                                                                                                   to ensure their analysis results were consistent and reporting was correct.
                                                                                                   Venmyn Deloitte conducted an audit of all the Geological drilling, Logging
                                                                                                   and Modelling and an independent validation of the Geobank database.
Section 2 Reporting of Exploration Results

  Criteria       JORC Code explanation                                                              Commentary
  Mineral
                    Type, reference name/number, location and ownership including                      Resgen holds various Coal Mining Tenements in South Africa through its
  tenement and
                    agreements or material issues with third parties such as joint ventures,           subsidiaries Ledjadja, (the owner of the Boikarabelo Coal Mine), and
  land tenure
                    partnerships, overriding royalties, native title interests, historical sites,      Waterberg One. Ledjadja and Waterberg One are ventures between
  status
                    wilderness or national park and environmental settings.                            Resgen (74% ownership) and black economic empowerment entity, Fairy
                                                                                                       Wing Trading 136 (Proprietary) Limited (26% ownership).
                    The security of the tenure held at the time of reporting along with any
                    known impediments to obtaining a license to operate in the area.                   Ledjadja holds title to the Mining Right and Tenements listed in the
                                                                                                       schedule below:

                                                                                                                                                                     Mining
                                                                                                                          Project    Size   Applica     Attributab               Comment
                                                                                                     Asset      Farm                                                  Right
                                                                                                                           Area      (ha)     nt         le Share                   s
                                                                                                                                                                     number


                                                                                                               Witkopje   Ledjadja
                                                                                                               238LQ      #1
                                                                                                               Draai
                                                                                                                          Ledjadja
                                                                                                               Om 244                                   1)
                                                                                                                          #2
                                                                                                               LQ                                       Resource
                                                                                                                                                                      169MR
                                                                                                               Kalkpan    Ledjadja                      Generati
                                                                                                                                                                     (previou    Granted
                                                                                                               243 LQ     #3                            on Ltd.
                                                                                                                                                                        sly      20 April
                                                                                                    Boikarab   Osorno     Ledjadja          Ledjajda    74%
                                                                                                                                     901                             identifie    2011
                                                                                                    leo Coal   700 LQ     #4                  Coal
                                                                                                                                      8                                d as
                                                                                                      Mine     Zeekoev                      (Pty) Ltd   2) Fairy
                                                                                                                          Ledjadja                                   MPT15/      Expiry 19
                                                                                                               ley 241                                  Wing
                                                                                                                          #5                                         2012MR      April 2044
                                                                                                               LQ                                       Trading
                                                                                                                                                                         )
                                                                                                               Vischpa                                  136 (Pty)
                                                                                                                          Ledjadja                      Ltd. 26%
                                                                                                               n 274
                                                                                                                          #6
                                                                                                               LQ
                                                                                                               Kruishou   Ledjadja
                                                                                                               t 271 LQ   #7

                                                                                                      Waterberg One Coal holds title to Prospecting Rights over the farms Koert
                                                                                                      Louw Zyn Pan 234 LQ (Project Area Waterberg #1) (Prospecting Right
                                                                                                      number PR678/2007 expiring 21 May 2016; Mining Right application
                                                                                                      submitted November 2015) and the farms Lisbon19 LQ (Project Area
Criteria        JORC Code explanation                                              Commentary
                                                                                     Waterberg #2) and Zoetfontein 22 LQ (Project Area Waterberg #3)
                                                                                     (Prospecting Right number PR720/2007).

Exploration
                   Acknowledgment and appraisal of exploration by other parties.     No historic exploration data has been used by Resgen in the Coal
done by other
                                                                                     Resources estimations.
parties
Geology
                   Deposit type, geological setting and style of mineralisation.     The coal deposits of South Africa are hosted in sedimentary rocks of the
                                                                                     Karoo Supergroup. The Karoo sedimentary rocks were deposited in a
                                                                                     large retro-foreland basin which developed on the Kaapvaal Craton and
                                                                                     filled between the Late Carboniferous and Middle Jurassic periods. The
                                                                                     Karoo Supergroup is subdivided into the Dwyka, Ecca and Beaufort
                                                                                     Groups, succeeded by the Molteno, Elliot, Clarens and Drakensburg
                                                                                     Formation (as per the South African Committee for Stratigraphy (SACS),
                                                                                     1st edition published in 1980 as Handbook 8 of the Geological Survey).
                                                                                     The coals range in age from Early Permian (Ecca Group) through to Late
                                                                                     Triassic (Molteno Formation) and are predominantly bituminous to
                                                                                     anthracitic in rank.
                                                                                      The coal deposits of the Waterberg Coalfield occur in the Grootegeluk and
                                                                                      Vryheid Formations of the Karoo Supergroup. These formations and their
                                                                                      numerous coal zones vary in thickness from a few centimetres to several
                                                                                      metres.
                                                                                      The interpreted sub-crop of the Boikarabelo Coal Mine specifically
                                                                                      consists of the following formations:
                                                                                       .   the Eendragtpan Formation (Triassic ? Beaufort Group) which
                                                                                           consists of barren sediments and overlies the coal zones,
                                                                                       .   the Grootegeluk Formation (Permian ? Upper Ecca Group), which
                                                                                           consists of intercalated bright coal (zones 5 to 11) and mudstone
                                                                                           and contains the majority of the Coal Resources in the coalfield, and
                                                                                       .   the Goedgedacht or Vryheid Formation (Permian ? Middle Ecca
                                                                                           Group), which consists predominantly of dull coal (zones 1 to 4) with
                                                                                           minor carbonaceous mudstone and sandstone intercalations.
Criteria   JORC Code explanation   Commentary
                                     The regional Geology of the Waterberg Coalfield is shown in the figure
                                     below, which is an extract of the 2326 Ellisras 1:250 000 Geological Map
                                     Sheet: Republic of South Africa. 1:250 000 Geological Series, sheet 2326
                                     Ellisras; Authors: Brandl G., Van Reenen D.D., Van Wyk J.P., et al.; Geol.
                                     Survey of South Africa; 1993.




                                     The general stratigraphy of the Waterberg Coalfield is shown in the figure
                                     below.
Criteria   JORC Code explanation   Commentary




                                     The Local Geology of the Waterberg Coalfield is as follows:
                                       .   the Grootegeluk Formation consists of cyclical repetitions of
                                           mudstone and coal with the coal seams named from the base
                                           upwards. Individual plies are named and correlated according to the
                                           Grootegeluk Coal Mine (located in the Waterberg Coalfield)
                                           nomenclature. Faure et al. (1996) describe divisions applied to the
                                           Ecca Group coals in the Ellisras (Waterberg) Basin by staff of the
                                           Grootegeluk Coal Mine. The predominantly dull coal seams (1, 2, 3,
                                           4 and 4A) of the Vryheid Formation retained the original numbering.
                                           The remaining seams were re-classified by the Grootegeluk Coal
                                           mine staff into zones 5 to 11. (Faure K, Willis J.P, Dreyer J.C. 1996.
                                           The Grootegeluk Formation of the Waterberg Coalfield, South
Criteria   JORC Code explanation   Commentary
                                         Africa: facies, paleo-environment and thermal history- evidence from
                                         organic and clastic matter. International Journal of Coal Geology,
                                         29, 147-186.).
                                      These Zones are further divided into coal seam plies which constitute the
                                      coal samples within each zone. This comprises of a sequence of sample
                                      names that group plies together in each classic Waterberg Zone. These
                                      samples can be correlated across the entire Waterberg Coalfield. A
                                      typical Waterberg borehole has 11 coal zones from Zone 1 at the base to
                                      Zone 11 at the top. The lower three zones do not comprise of alternating
                                      plies but are more typical uniform coal seams.
                                      The Eendragtpan Formation provides a thin covering of 25-35m thickness
                                      over the majority of the area and thus preserves the Grootegeluk and
                                      Goedgedacht Formations.
                                      The Grootegeluk Formation was intersected during the drilling programme
                                      and varying thicknesses for the coal zones 1 to 11 have been reported.
                                      Intra-basin faults affect the coal bearing formations further to the south
                                      and north of the Boikarabelo Coal Mine area, so that the upper zones are
                                      either preserved or destroyed through up-lift and erosion.
                                      The boreholes drilled were geo-physically logged and sampled according
                                      to the South African National Standard - South African Guide to the
                                      Systematic Evaluation of Coal Resources and Coal Reserves (SANS
                                      10320:2004) and correlated with the Grootegeluk Coal Mine coal zones
                                      and sample nomenclature.
                                      The Grootegeluk Formation comprising the top zones (Zones 5 to 11)
                                      consists of various coal and mudstone seams. These zones are well
                                      defined and can be correlated across the coalfield. This formation, from
                                      the top of Zone 4 through to Zone 11, is characterised by an increasing
                                      ratio of bright coal to dull coal. Each zone typically starts with
                                      predominantly bright coal at the base, with the proportion of dull coal
                                      increasing towards the top of each zone. The ratio of coal to shale
                                      decreases from the base of each zone in an upward direction. The ash
                                      content of these zones increases upwards and generally the ?better
Criteria   JORC Code explanation   Commentary
                                      quality? coals are present in Zones 9 to Zone 11 over the majority of the
                                      coalfield.
                                       The Grootegeluk Formation is underlain by the Goedgedacht Formation
                                       of the Middle Ecca Group. This formation consists predominantly of dull
                                       coal with minor carbonaceous mudstone and sandstone intercalations.
                                       The zones occur within a stratigraphic interval of some 40m and have
                                       thicknesses ranging from 1.5 metres to 9 metres. Zones 2 and 3 are the
                                       best developed coal zones. Zone 1 has not been developed throughout
                                       the Boikarabelo Coal Mine area and occurs only in a few isolated
                                       intersections.
                                       A Typical Stratigraphic sequence is illustrated below:
Criteria      JORC Code explanation                                                        Commentary




Drill hole
                 A summary of all information material to the understanding of the           A full list of drill holes used in the Coal Resource estimate can be found in
Information
                 exploration results including a tabulation of the following information     Appendix 2.
                 for all Material drill holes:
                                                                                             All drill holes have been used and modelled as vertical.
                 easting and northing of the drill hole collar
Criteria         JORC Code explanation                                                           Commentary
                    elevation or RL (Reduced Level ? elevation above sea level in metres)
                    of the drill hole collar
                    dip and azimuth of the hole
                    down hole length and interception depth
                    hole length.
                    If the exclusion of this information is justified on the basis that the
                    information is not Material and this exclusion does not detract from the
                    understanding of the report, the Competent Person should clearly
                    explain why this is the case.
Data
                    In reporting Exploration Results, weighting averaging techniques,              All seams where multiple coal quantity samples are taken were given a
aggregation
                    maximum and/or minimum grade truncations (e.g. cutting of high                 composite value (generated within the Geovia MinexTM 6.4.2 software
methods
                    grades) and cut-off grades are usually Material and should be stated.          (Minex)) weighting each quality by thickness and relative density, with the
                                                                                                   exception of relative density which is weighted on thickness.
                    Where aggregate intercepts incorporate short lengths of high grade
                    results and longer lengths of low grade results, the procedure used for
                    such aggregation should be stated and some typical examples of such
                    aggregations should be shown in detail.
                    The assumptions used for any reporting of metal equivalent values
                    should be clearly stated.
Relationship
                    These relationships are particularly important in the reporting of             The coal seams are horizontal to sub-horizontal and the apparent
between
                    Exploration Results.                                                           thickness (width) of the intersected coal seams does not always
mineralisation
                                                                                                   approximate the true thickness. The difference is however small, and does
widths and          If the geometry of the mineralisation with respect to the drill hole angle
                                                                                                   not have a material impact on the Coal Resources estimate. Undulating
intercept           is known, its nature should be reported.
                                                                                                   contacts are honoured in the geological model.
lengths
                    If it is not known and only the down hole lengths are reported, there
                    should be a clear statement to this effect (e.g. ?down hole length, true
                    width not known?).
Diagrams
                    Appropriate maps and sections (with scales) and tabulations of                 A plan of the Boikarabelo Coal Mine Area with drill hole collar positions
                    intercepts should be included for any significant discovery being              and appropriate sectional views is presented below:
                    reported. These should include, but not be limited to a plan view of
                                                                                                   Borehole distribution is shown in the figure below:
                    drill hole collar locations and appropriate sectional views.
Criteria   JORC Code explanation   Commentary
Criteria   JORC Code explanation   Commentary


                                     In the figures below a plan view and a section, along the section line
                                     indicated in the plan view, is shown.
                                       .   Plan and North-west South-east section.




                                            Plan and North-west South-east section
Criteria   JORC Code explanation   Commentary


                                       .   Plan and South-west North-east Section




                                             Plan and South-west North-east Section
  Criteria       JORC Code explanation                                                         Commentary


  Balanced
                    Where comprehensive reporting of all Exploration Results is not              All exploration results within the Boikarabelo Coal Mine have been
  reporting
                    practicable, representative reporting of both low and high grades            reported on and no intersections were excluded.
                    and/or widths should be practiced to avoid misleading reporting of
                    Exploration Results.
  Other
                    Other exploration data, if meaningful and material, should be reported       A geotechnical (pit slope stability) investigation was carried out in
  substantive
                    including (but not limited to): geological observations; geophysical         November 2016, entitled:
  exploration
                    survey results; geochemical survey results; bulk samples ? size and
  data
                    method of treatment; metallurgical test results; bulk density,                 .   Technical Report ? Geotechnical Investigation and High Wall Design
                    groundwater, geotechnical and rock characteristics; potential                      for the Box-cut Area at Boikarabelo Coal Mine 6 November 2016,
                    deleterious or contaminating substances.                                           Geomech Consulting.
  Further work
                    The nature and scale of planned further work (e.g. tests for lateral         Infill drilling to investigate the planned position of the box-cut for mine
                    extensions or depth extensions or large-scale step-out drilling).            planning purposes is in progress. The borehole information gleaned from
                                                                                                 this programme will be used for geological modelling and Coal Resources
                    Diagrams clearly highlighting the areas of possible extensions,
                                                                                                 estimations, as well as to determine if suitable construction material for
                    including the main geological interpretations and future drilling areas,
                                                                                                 road building, and laydown areas exists in the box-cut area.
                    provided this information is not commercially sensitive.


Section 3: Estimation and reporting of Mineral Resources

  Criteria       JORC Code explanation                                                         Commentary
  Database
                    Measures taken to ensure that data has not been corrupted by, for            All the exploration data and analytical results were imported into the
  integrity
                    example, transcription or keying errors, between its initial collection      Geobank database and subjected to independent validation routines.
                    and its use for Mineral Resource estimation purposes.
                                                                                                 Lithological descriptions were verified and checked against the downhole
                    Data validation procedures used.                                             geophysical log.
                                                                                                 The coal seam correlations were validated within the Geobank database
                                                                                                 software. The coal seam intersections start and end depths were checked
                                                                                                 for no overlaps or negative seam thicknesses. Sections were drawn in the
                                                                                                 software and comparisons between boreholes were made.
Criteria         JORC Code explanation                                                        Commentary
                                                                                                Coal sample positions were verified against the coal seams and correlated
                                                                                                with the geophysical log. The coal samples were compared with the raw
                                                                                                coal analyses.
                                                                                                The raw and washability data received from the laboratory was validated
                                                                                                by various routines including ash/cv correlations.
                                                                                                Anomalies were identified, queried and corrected before             being
                                                                                                incorporating into the final quality database.
Site visits
                    Comment on any site visits undertaken by the Competent Person and           The site was, frequently visited by the Competent Person, who is familiar
                    the outcome of those visits.                                                with the project area and its geology.
                    If no site visits have been undertaken indicate why this is the case.       The Competent Person reviewed the geological logging, the sampling and
                                                                                                laboratory and analyses and was satisfied with the data collection
                                                                                                procedures and protocols.
Geological
                    Confidence in (or conversely, the uncertainty of) the geological            The confidence in the geological interpretation is high.
interpretation
                    interpretation of the mineral deposit.
                                                                                                The boreholes confirmed the nature, continuity of the seams and the
                    Nature of the data used and of any assumptions made.                        quality.
                    The effect, if any, of alternative interpretations on Mineral Resource      The boreholes were logged in detail, and all coal intersections and
                    estimation.                                                                 interburden were sampled and analysed. The data generated was
                                                                                                independently validated.
                    The use of geology in guiding and controlling Mineral Resource
                    estimation.                                                                 Mineral Resource estimation was done by geological interpretation and
                                                                                                modelling.
                    The factors affecting continuity both of grade and geology.
                                                                                                The continuity of the geology and the coal sample intersection is affected
                                                                                                by the basement rocks.
Dimensions
                    The extent and variability of the Mineral Resource expressed as length      The Coal Resources extend beyond the boundary of the defined Open Pit
                    (along strike or otherwise), plan width, and depth below surface to the     Boundary.
                    upper and lower limits of the Mineral Resource.
                                                                                                The dimension of the Open Pit was determined by the Mineral Right
                                                                                                boundary, environmental factors and data point distribution.
Criteria   JORC Code explanation   Commentary




                                     The planned extent of the Open Pit is given below:




                                     The first coal intersection, when all the coal zones are present, is on
                                     average 19.4 m below surface.
                                     The Coal Resource extends to a depth of 140 m.
                                     A typical cross section is shown below:
Criteria        JORC Code explanation                                                     Commentary




Estimation
                   The nature and appropriateness of the estimation technique(s)            The geological model (structural and quality models) was created in
and modelling
                   applied and key assumptions, including treatment of extreme grade        Geovia MinexTM software.
techniques
                   values, domaining, interpolation parameters and maximum distance
                                                                                            Coal Resources estimation was performed using Geovia MinexTM
                   of extrapolation from data points. If a computer assisted estimation
                                                                                            Software.
                   method was chosen include a description of computer software and
                   parameters used.
Criteria     JORC Code explanation                                                        Commentary
                The availability of check estimates, previous estimates and/or mine         Sections were drawn across the Coal Resource area to ensure that all
                production records and whether the Mineral Resource estimate takes          correlations were consistent. The sections were correlated and verified
                appropriate account of such data.                                           using the geophysical log and lithological log.
                The assumptions made regarding recovery of by-products.                     The sections were drawn utilising Geobank and Minex software and
                                                                                            compared.
                Estimation of deleterious elements or other non-grade variables of
                economic significance (e.g. Sulphur for acid mine drainage                  Structural models were created for all the coal sample plies. The
                characterisation).                                                          thickness, roof and floor depths and elevations of all the coal sample plies
                                                                                            were modelled. The topography, as well as a limit of weathering, was
                In the case of block model interpolation, the block size in relation to
                                                                                            modelled.
                the average sample spacing and the search employed.
                                                                                            The limit of weathering was used as a limiting horizon and no Coal
                Any assumptions behind modelling of selective mining units.
                                                                                            Resources were estimated above the limit of weathering.
                Any assumptions about correlation between variables.
                                                                                            The modelled topography was generated from a detailed surveyed digital
                Description of how the geological interpretation was used to control        terrain model (DTM).
                the resource estimates.
                                                                                            The DTM was used to verify the borehole collar elevation.
                Discussion of basis for using or not using grade cutting or capping.
                                                                                            The stratigraphic sequence was verified in Geobank as well as Minex.
                The process of validation, the checking process used, the comparison
                                                                                            The modelling was done on a 50mX50m grid.
                of model data to drill hole data, and use of reconciliation data if
                available.                                                                  Coal extrapolation was limited to 500m from the last borehole and
                                                                                            terminated against known areas of no coal development.
Moisture
                Whether the tonnages are estimated on a dry basis or with natural           Tonnages were estimated using the in situ density estimation method
                moisture, and the method of determination of the moisture content.          using the air dried moisture and relative density as determined in the
                                                                                            laboratories.
Cut-off
                The basis of the adopted cut-off grade(s) or quality parameters             A cut-off of > 65% ash was applied on the coal zones to establish the
parameters
                applied.                                                                    overall Coal Resources.
                                                                                            No cut off values were applied but the individual coal and inter-burden/bed
                                                                                            ply thickness and qualities were used in the mine design.
                                                                                            This was done to optimize the design of practical mining horizons. The
                                                                                            optimized design was based on dual export/domestic business model:
Criteria         JORC Code explanation                                                         Commentary
                                                                                                 ? an export quality product with an average of 14% ash and an average
                                                                                                   25.73 MJ/kg calorific value determined on an Air Dried (AD) basis, and
                                                                                                 ? a domestic power station product with an average 19.5 MJ/kg calorific
                                                                                                   value and an average 31.43 % ash determined on an AD basis.
Mining factors
                    Assumptions made regarding possible mining methods, minimum                  Consideration was given was given to a number of mining methods,
or
                    mining dimensions and internal (or, if applicable, external) mining          including open pit and underground. The optimal mine design has been
assumptions
                    dilution. It is always necessary as part of the process of determining       based on an open pit terrace mine. In addition, consideration was given to
                    reasonable prospects for eventual economic extraction to consider            the following:
                    potential mining methods, but the assumptions made regarding mining
                    methods and parameters when estimating Mineral Resources may not               .   a minimum coal ply thickness of 0.5m was applied to the Coal
                    always be rigorous. Where this is the case, this should be reported                Resource estimate,
                    with an explanation of the basis of the mining assumptions made.               .   the extent of the Mining Right,
                                                                                                   .   geological constraints, and
                                                                                                   .   environmental constraints.
Metallurgical
                    The basis for assumptions or predictions regarding metallurgical             Various metallurgical studies were carried out to establish the
factors or
                    amenability. It is always necessary as part of the process of                beneficiation characteristics of the coal plies and their combined reaction
assumptions
                    determining reasonable prospects for eventual economic extraction to         in the coal beneficiation process.
                    consider potential metallurgical methods, but the assumptions
                    regarding metallurgical treatment processes and parameters made
                    when reporting Mineral Resources may not always be rigorous. Where
                    this is the case, this should be reported with an explanation of the
                    basis of the metallurgical assumptions made.
Environmenta
                    Assumptions made regarding possible waste and process residue                There are no limiting environmental factors other than Regulations relating
l factors or
                    disposal options. It is always necessary as part of the process of           to mining adjacent to wetlands and the 1:100 year floodline.
assumptions
                    determining reasonable prospects for eventual economic extraction to
                                                                                                 These areas fall outside the Open Pit area and therefore have been
                    consider the potential environmental impacts of the mining and
                                                                                                 excluded from the Coal Resources estimate.
                    processing operation. While at this stage the determination of potential
                    environmental impacts, particularly for a greenfields project, may not       The relevant regulatory permissions for waste and process residue
                    always be well advanced, the status of early consideration of these          disposal have been obtained.
                    potential environmental impacts should be reported. Where these
                    aspects have not been considered this should be reported with an
                    explanation of the environmental assumptions made.
Criteria         JORC Code explanation                                                         Commentary
Bulk density
                    Whether assumed or determined. If assumed, the basis for the                 The density used in the tonnage calculations is the relative density as
                    assumptions. If determined, the method used, whether wet or dry, the         determined from borehole core samples in the laboratory. The relative
                    frequency of the measurements, the nature, size and                          density was determined according to ISO 5072:1997. The density was
                    representativeness of the samples.                                           determined by weighing a sample suspended in water, then allowing the
                                                                                                 sample to drain and the surface water removed and then reweighing the
                    The bulk density for bulk material must have been measured by
                                                                                                 sample in air.
                    methods that adequately account for void spaces (vugs, porosity,
                    etc.), moisture and differences between rock and alteration zones            Relative densities were determined for all borehole cores submitted to the
                    within the deposit.                                                          laboratories.
                    Discuss assumptions for bulk density estimates used in the evaluation        No bulk densities were determined.
                    process of the different materials.
Classification
                    The basis for the classification of the Mineral Resources into varying       Coal Resources classification has been done according to the JORC 2012
                    confidence categories.                                                       Code.
                    Whether appropriate account has been taken of all relevant factors           It is the view of the Competent Person that the current classification is
                    (i.e. relative confidence in tonnage/grade estimations, reliability of       acceptable for the type of deposit, drilling density and coal quality data.
                    input data, confidence in continuity of geology and metal values,
                                                                                                 The estimations have been classified into Measured and Indicated Coal
                    quality, quantity and distribution of the data).
                                                                                                 Resources.
                    Whether the result appropriately reflects the Competent Person?s view
                                                                                                 The estimation results appropriately reflect the confidence in tonnage
                    of the deposit.
                                                                                                 estimation, reliability of coal intersection data and quality data.
                                                                                                 The result appropriately reflect the CP?s view of the Coal Resources.
Audits or
                    The results of any audits or reviews of Mineral Resource estimates.          Various independent third party audits and reviews have been conducted
reviews
                                                                                                 on the Coal Resources estimate and no material issues with either the
                                                                                                 methodology applied and the Coal Resources estimate were identified.
Discussion of
                    Where appropriate a statement of the relative accuracy and                   The Competent Person applied the principles of the JORC Code 2012 in
relative
                    confidence level in the Mineral Resource estimate using an approach          estimating the Coal Resources at Boikarabelo Coal Mine.
accuracy/
                    or procedure deemed appropriate by the Competent Person. For
confidence                                                                                       The Coal Resources were estimated using geostatistical analyses and
                    example, the application of statistical or geostatistical procedures to
                                                                                                 variograms of the raw ash content of the coal zones. The variograms
                    quantify the relative accuracy of the resource within stated confidence
                                                                                                 indicate that there is little change in the raw ash variability within the Coal
                    limits, or, if such an approach is not deemed appropriate, a qualitative
                                                                                                 Resources.
                    discussion of the factors that could affect the relative accuracy and
                    confidence of the estimate.                                                  There is a high level of confidence in the coal zone continuity as is
                                                                                                 depicted in the south-west north-east sections shown above (along strike).
  Criteria        JORC Code explanation                                                        Commentary
                     The statement should specify whether it relates to global or local
                     estimates, and, if local, state the relevant tonnages, which should be
                     relevant to technical and economic evaluation. Documentation should
                     include assumptions made and the procedures used.
                     These statements of relative accuracy and confidence of the estimate
                     should be compared with production data, where available.


Section 4 Estimation and Reporting of Ore Reserves

  Criteria         JORC Code explanation                                                      Commentary
  Mineral                 Description of the Mineral Resource estimate used as a basis          Measured & Indicated Coal Resources were considered for conversion to
  Resource                                                                                      Probable Coal Reserves. All Measured and Indicated Coal Resources
                          for the conversion to an Ore Reserve.
  estimate for                                                                                  were converted after applying appropriate modifying factors.
  conversion to           Clear statement as to whether the Mineral Resources are
                                                                                                The Coal Resources were defined and compiled by the Competent
  Ore Reserves            reported additional to, or inclusive of, the Ore Reserves.
                                                                                                Person.
                                                                                                The Coal Resources above have been reported separately from other Coal
                                                                                                Resources in Resgen?s tenure for the purpose of this Coal Resources and
                                                                                                Coal Reserves Statement.
                                                                                                The Coal Resources are reported inclusive of the Coal Reserves.
  Site visits             Comment on any site visits undertaken by the Competent                The Competent Persons have visited the site.
                          Person and the outcome of those visits.
                                                                                                The site visit confirmed the existing infrastructure and services, which were
                          If no site visits have been undertaken indicate why this is the       taken into consideration as part of the modifying factors used to convert
                          case.                                                                 the Coal Resources to Coal Reserves.


  Study status            The type and level of study undertaken to enable Mineral              The studies carried out to date, including the optimised mine design,
                          Resources to be converted to Ore Reserves.                            equate to a Feasibility Study. These studies confirm that the mine plan is
                                                                                                technically achievable and economically viable.
Criteria         JORC Code explanation                                                    Commentary
                       The Code requires that a study to at least Pre-Feasibility
                       Study level has been undertaken to convert Mineral
                       Resources to Ore Reserves. Such studies will have been
                       carried out and will have determined a mine plan that is
                       technically achievable and economically viable, and that
                       material Modifying Factors have been considered.
Cut-off                The basis of the cut-off grade(s) or quality parameters applied.     The quality parameters applied, based on a dual export/domestic business
parameters                                                                                  model, are:
                                                                                                .   an export quality product with an average of 14% ash and an
                                                                                                    average 25.73 MJ/kg calorific value determined on an AD basis,
                                                                                                    and
                                                                                                .   a domestic power station product with an average 19.5 MJ/kg
                                                                                                    calorific value and an average 31.43 % ash determined on an AD
                                                                                                    basis.
Mining factors         The method and assumptions used as reported in the Pre-              The optimised mine design exercise indicated that an open pit terrace
or
                       Feasibility or Feasibility Study to convert the Mineral Resource     truck and shovel mine was the preferred option. The mining methods are
assumptions
                       to an Ore Reserve (i.e. either by application of appropriate         appropriate and have been well proven over time and are comparable with
                       factors by optimisation or by preliminary or detailed design).       the practices and parameters at Grootegeluk.
                       The choice, nature and appropriateness of the selected               The main principals of this mining design are:
                       mining method(s) and other mining parameters including
                                                                                                .   the establishment of a box-cut,
                       associated design issues such as pre-strip, access, etc.
                                                                                                .   pre-stripping of the overburden, and
                       The assumptions made regarding geotechnical parameters
                       (e.g. pit slopes, stope sizes, etc.), grade control and pre-             .   once steady-state mining operations have been established, roll-
                       production drilling.                                                         over backfill of the overburden will be carried out.
                       The major assumptions made and Mineral Resource model                 The key mining Modifying Factors, based on the results of the various
                       used for pit and stope optimisation (if appropriate).                studies conducted by Resgen are:
                       The mining dilution factors used.                                        ?   a cut-off of > 65% ash content,
Criteria   JORC Code explanation                                                 Commentary
                 The mining recovery factors used.                                     .   a yield cut-off of 24%,
                 Any minimum mining widths used.                                       .   a minimum coal ply thickness of 0.5m,
                 The manner in which Inferred Mineral Resources are utilised           .   a mining recovery factor of 95%,
                 in mining studies and the sensitivity of the outcome to their         .   a mining dilution factor of 5%,
                 inclusion.
                                                                                       .   a contamination factor of 0.1m of both the roof and floor of the
                 The infrastructure requirements of the selected mining                    mining horizons,
                 methods.
                                                                                       .   an overall pit slope angle of 450,
                                                                                       .   a minimum bench width of 60m,
                                                                                       .   all seams will be mined together, and no stop-start operation or
                                                                                           separate stockpiles will be required, and
                                                                                       .   the inclusion of two 75kt blending stockpiles.


                                                                                   The factors are considered to be appropriate for the level of geological
                                                                                   confidence and the type of mining considered.
                                                                                   No Inferred Coal Resources are included in the mine plan.
                                                                                   All relevant infrastructure required to execute the life-of-mine plan has
                                                                                   been considered. The infrastructure to facilitate the open pit terrace mining
                                                                                   will include berms, service stations, workshops and fuel stations.
                                                                                   The access and pre strip requirements were addressed and haul roads
                                                                                   catered for in the waste stripping requirements.
                                                                                   The coal handling and process plant design caters for an appropriate
                                                                                   amount of gangue material to be rejected (i.e. low yield) by the primary
                                                                                   cyclone.
Criteria        JORC Code explanation                                                   Commentary
Metallurgical         The metallurgical process proposed and the appropriateness          The coal handling and processing plant has been based on a dense
factors or
                      of that process to the style of mineralisation.                     medium separation process to produce two different quality products. The
assumptions
                                                                                          design also incorporates a fines beneficiation circuit. The coarse material
                      Whether the metallurgical process is well-tested technology or
                                                                                          will be beneficiated through a primary and secondary dense medium
                      novel in nature.
                                                                                          cyclone. The fines circuit comprises of a fine- and ultra-fine reflux
                      The nature, amount and representativeness of metallurgical          classifier.
                      test work undertaken, the nature of the metallurgical
                                                                                          Density separation is a well-known and widely used method to upgrade
                      domaining applied and the corresponding metallurgical
                                                                                          ROM coal to saleable clean coal products.
                      recovery factors applied.
                                                                                          The discarded material will be placed in the mining void in accordance with
                      Any assumptions or allowances made for deleterious
                                                                                          the mine design.
                      elements.
                                                                                          The plant design with regards to sizing and yield envelope is based on slim
                      The existence of any bulk sample or pilot scale test work and
                                                                                          core information (wash data) which was tested against results obtained
                      the degree to which such samples are considered
                                                                                          from large diameter core. The tests were conducted by accredited
                      representative of the orebody as a whole.
                                                                                          laboratories. The slim core data is representative of the deposit. The
                      For minerals that are defined by a specification, has the ore       correlation between large diameter core samples and the slim cores is
                      reserve estimation been based on the appropriate mineralogy         deemed sufficient to base the plant design and operating criteria on. No
                      to meet the specifications?                                         bulk samples other than the large diameter core samples have been taken.
                                                                                          The large diameter core samples were deemed sufficient for the mine
                                                                                          design process.
                                                                                          The Coal Reserves estimation is based on ROM tonnes and the amount
                                                                                          of saleable product with typical qualities for the product is reported.
Environmental
                      The status of studies of potential environmental impacts of the     Ledjadja has an approved environmental management plan, water-use
                      mining and processing operation. Details of waste rock              license and waste management license, which are required to operate a
                      characterisation and the consideration of potential sites,          mine in South Africa.
                      status of design options considered and, where applicable, the
                                                                                          The proposed discard and waste dumps have been designed to the
                      status of approvals for process residue storage and waste
                                                                                          standards required by the National Waste Management Act and form part
                      dumps should be reported.
                                                                                          of the above-mentioned approvals. The designs include insulation layers
Criteria         JORC Code explanation                                                     Commentary
                                                                                             at the base and water recovery. Water recovered will be treated before
                                                                                             reuse.
Infrastructure         The existence of appropriate infrastructure: availability of land     Lephalale is the main source for skilled labour and accommodation for the
                       for plant development, power, water, transportation                   project. Travel time from Lephalale to the mine by bus is expected to be 1
                       (particularly for bulk commodities), labour, accommodation; or        hour 30 minutes maximum.
                       the ease with which the infrastructure can be provided, or
                                                                                             Sufficient commercial, industrial and mining support services are located
                       accessed.
                                                                                             in Lephalale, including fuel, telecommunications and security.
                                                                                             Expert studies confirm sufficient water is available through identified water
                                                                                             sources. A water use license is in place for sourcing water from these
                                                                                             water sources, as well as the approval of the required water storage
                                                                                             facilities.
                                                                                             A power supply agreement has been signed with the National Power
                                                                                             Supplier (Eskom). An 80MW power supply substation has already been
                                                                                             erected and equipped. Final connection to the national grid and
                                                                                             commissioning is still outstanding. The construction power is being
                                                                                             supplied to the mine through two 22kV rural lines which have already been
                                                                                             installed and commissioned.
                                                                                             To ensure road access to the mine and the farms in the immediate
                                                                                             surrounding area Ledjadja will assist the relevant Authorities to upgrade
                                                                                             the regional road network. .
                                                                                             Transnet Freight Rail (TFR) will be used for the transportation by rail of
                                                                                             both the export and domestic coal products. A railway link between
                                                                                             Ledjadja and the TFR main line is to be constructed and will be operated
                                                                                             by TFR. A rapid load-out facility and railway siding will be constructed on
                                                                                             the mine.
                                                                                             All infrastructure required for mining and coal production, including the coal
                                                                                             handling and processing plant, all mine buildings, heavy machinery
                                                                                             equipment support infrastructure, fuel supply, power supply, water supply,
Criteria   JORC Code explanation                                                 Commentary
                                                                                   sanitation services, information and communication services and security
                                                                                   will be constructed as part of the project.

Costs            The derivation of, or assumptions made, regarding projected       Capital Costs for the project include:
                 capital costs in the study.
                                                                                       .   the capital cost for the construction of the rail siding,
                 The methodology used to estimate operating costs.
                                                                                       .   Ledjadja?s capital contribution towards the upgrades to the
                 Allowances made for the content of deleterious elements.                  regional road network,

                 The source of exchange rates used in the study.                       .   the capital cost for the construction of the coal handling and
                                                                                           processing plant,
                 Derivation of transportation charges.
                                                                                       .   the capital costs for the establishment of the On Mine
                 The basis for forecasting or source of treatment and refining             Infrastructure,
                 charges, penalties for failure to meet specification, etc.            .   the capital costs for Overburden and Discard dumps, and
                 The allowances made for royalties payable, both Government            .   the capital cost for electricity, equipment & vehicles, staff &
                 and private.                                                              ancillaries based on actual costs incurred on the project to date.
                                                                                   Mining costs are based on a Contractor Mining price quotation.
                                                                                   Processing costs are based on a lump-sum turnkey pricing structure and
                                                                                   quotation.
                                                                                   Distribution costs for the export Coal product are based on indicative rates
                                                                                   for rail and port charges received from Trans Freight Rail (TFR).
                                                                                   Marketing costs are based on a contract for Supply Chain Management
                                                                                   and Marketing services with Noble Resources International Pte Ltd.
                                                                                   The USD/ZAR exchange rate assumed is based on actual historical
                                                                                   average exchange rates.
                                                                                   Allowances have been made for taxes and royalties payable based on
                                                                                   South African legislative requirements.
Criteria     JORC Code explanation                                                   Commentary
                                                                                       Operational costs for staff, electricity, water, engineering, safety and
                                                                                       environmental management, security, vehicles, specialist services,
                                                                                       information and communication services and consumables are based on
                                                                                       estimate quantities and benchmark rates.
Revenue            The derivation of, or assumptions made regarding revenue            A price forecast for Ledjadja?s export coal was prepared by an independent
factors
                   factors including head grade, metal or commodity price(s)           third party. The economic evaluation for the project has, however, been
                   exchange rates, transportation and treatment charges,               based on a long term price forecast by Resgen?s Management.
                   penalties, net smelter returns, etc.
                                                                                       The pricing assumed for the domestic coal sales has been based on a
                   The derivation of assumptions made of metal or commodity            conservative assumption of the typical margin on costs typically paid on
                   price(s), for the principal metals, minerals and co-products.       cost-plus supply agreements within South Africa.
Market             The demand, supply and stock situation for the particular           An independent market analysis predicts a gradual depletion of the current
assessment
                   commodity, consumption trends and factors likely to affect          oversupply of export thermal coal over the next 6 years which will lead to
                   supply and demand into the future.                                  a slow increase in thermal seaborne coal prices from the low US$50/tonne
                                                                                       to mid US$60/tonne. Thereafter, a further increase in prices, to nearly
                   A customer and competitor analysis along with the
                                                                                       $90/tonne for exports out of Richards Bay is expected, as new projects will
                   identification of likely market windows for the product.
                                                                                       need to be developed to meet demand.
                   Price and volume forecasts and the basis for these forecasts.
                                                                                       An independent market analysis by a third party predicts a decline in
                   For industrial minerals the customer specification, testing and     domestic supply due to declining Coal Reserves and mine closures. An
                   acceptance requirements prior to a supply contract.                 independent assessment of Ledjadja?s project against comparable
                                                                                       probable projects, indicates that based on indicative costs, Ledjadja would
                                                                                       be in the top half of the cost curve of competing projects when at maximum
                                                                                       production.
Economic           The inputs to the economic analysis to produce the net              An economic analysis (financial valuation) was conducted to determine the
                   present value (NPV) in the study, the source and confidence         net present value (NPV) of the project. The economic analysis confirms
                   of these economic inputs including estimated inflation,             the economic viability of the project.
                   discount rate, etc.
                                                                                       Key inputs and assumptions to the economic analyses include:
                   NPV ranges and sensitivity to variations in the significant
                   assumptions and inputs.
Criteria   JORC Code explanation                                              Commentary
                                                                                    .   the financial model has been based on a ROM production of 304
                                                                                        million tonnes, for a 21 year period at an average annual ROM
                                                                                        production rate of 14.5 million tonnes,
                                                                                    .   based on the above, a total of 132 million tonnes coal product will
                                                                                        be produced at an estimated 6.3 million tonnes average annual
                                                                                        coal production rate,
                                                                                    .   a discount rate of 10% has been applied, and
                                                                                    .   an estimated annual inflation rate, based on an actual historical
                                                                                        average rate, has been applied.
                                                                                The financial model has been based on inputs from a combination of offer
                                                                                price and estimates provided by potential suppliers based on designs and
                                                                                study work at Feasibility Study level. Owner?s cost inputs were based on
                                                                                actual costs experienced on the project thus far and factored estimates
                                                                                from previous projects. An independent market analysis was conducted
                                                                                on the domestic and export product which produced consensus pricing for
                                                                                the export product and a prediction of supply and demand in both markets.
                                                                                The inputs to the financial model meet the requirements of the JORC
                                                                                Code 2012 .
                                                                                The financial model was analysed to test the sensitivity of the NPV on
                                                                                different cost and revenue input variables. The sensitivity analyses
                                                                                indicates that the project is extremely sensitive to price, the ZAR/US$
                                                                                exchange rate and coal quality.
                                                                                An independent evaluation of the financial model carried out a Monte Carlo
                                                                                simulation, with sensitivities based on economic parameters as well as
                                                                                production volumes and product quality. This evaluation has indicated that
                                                                                the Project is financially sound.
Social           The status of agreements with key stakeholders and matters     Ledjadja has a social and labour plan, which has been approved by the
                 leading to social licence to operate.                          Department of Mineral Resources.
Criteria         JORC Code explanation                                                     Commentary
Other                  To the extent relevant, the impact of the following on the            An approved Mining Right, together with all of the legal permits and
                       project and/or on the estimation and classification of the Ore        licences required to operate a mine in South Africa, has been received.
                       Reserves:
                                                                                             Floods in excess of the magnitude of a 1 in 100 year of the Limpopo River
                       Any identified material naturally occurring risks.                    and other smaller streams that are crossed by means of railway bridges
                                                                                             towards Lephalale have been considered.
                       The status of material legal agreements and marketing
                       arrangements.
                       The status of governmental agreements and approvals critical
                       to the viability of the project, such as mineral tenement status,
                       and government and statutory approvals. There must be
                       reasonable grounds to expect that all necessary Government
                       approvals will be received within the timeframes anticipated in
                       the Pre-Feasibility or Feasibility study. Highlight and discuss
                       the materiality of any unresolved matter that is dependent on
                       a third party on which extraction of the reserve is contingent.
Classification         The basis for the classification of the Ore Reserves into             At this stage Resgen has converted its Coal Resources to Probable Coal
                       varying confidence categories.                                        Reserves. No Proved Coal Reserves have been declared based on the
                                                                                             level of confidence associated with the potential domestic off-take prices.
                       Whether the result appropriately reflects the Competent
                       Person?s view of the deposit.                                         All Measured Coal Resources have been converted into Probable Coal
                                                                                             Reserves.
                       The proportion of Probable Ore Reserves that have been
                       derived from Measured Mineral Resources (if any).                     The classification of the Coal Reserves appropriately reflects the view of
                                                                                             the Competent Person.
Audits or              The results of any audits or reviews of Ore Reserve estimates.        No independent third party review and audit of the Coal Reserves has
reviews
                                                                                             been conducted.
Discussion of          Where appropriate a statement of the relative accuracy and            The Coal Reserves are based on global estimates and appropriate
relative
                       confidence level in the Ore Reserve estimate using an                 Modifying Factors. The Competent Person is of the opinion that the
accuracy/
                       approach or procedure deemed appropriate by the Competent             approach and procedure used to quantify the relative accuracy of the Coal
confidence
                       Person. For example, the application of statistical or                Reserve is appropriate, to a high level of confidence.
Criteria   JORC Code explanation                                                    Commentary
                 geostatistical procedures to quantify the relative accuracy of
                 the reserve within stated confidence limits, or, if such an
                 approach is not deemed appropriate, a qualitative discussion
                 of the factors which could affect the relative accuracy and
                 confidence of the estimate.
                 The statement should specify whether it relates to global or
                 local estimates, and, if local, state the relevant tonnages,
                 which should be relevant to technical and economic
                 evaluation. Documentation should include assumptions made
                 and the procedures used.
                 Accuracy and confidence discussions should extend to
                 specific discussions of any applied Modifying Factors that may
                 have a material impact on Ore Reserve viability, or for which
                 there are remaining areas of uncertainty at the current study
                 stage.
                 It is recognised that this may not be possible or appropriate in
                 all circumstances. These statements of relative accuracy and
                 confidence of the estimate should be compared with
                 production data, where available.
Appendix 2 Borehole Coordinates and Collar elevation




Resource Generation Australia (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (012) 345 1057 Fax +27 (012) 345 5314
Directors: Denis Gately (Chairman), Lulamile Xate (Deputy Chairman), Rob Lowe (CEO), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane                                                                                   www.resgen.com.au
BOREID   EASTING    NORTHING      COLLAR ELEVATION    FINAL DEPTH   AZIMUTH   DIP   TYPE    COORDSYS
DO01     17854.79   -2609505.27              838.46           160         0   -90   PDH     LO27_WGS84
DO02      18883.5   -2610442.86              838.16           150         0   -90   PDH     LO27_WGS84
DO03     20126.64   -2610170.13               840.5           156         0   -90   PDH     LO27_WGS84
DO04     21815.37   -2609997.69              841.06           162         0   -90   PDH     LO27_WGS84
DO05     20139.97   -2609353.93              838.89           162         0   -90   PDH     LO27_WGS84
DO06     21502.57   -2608954.88              839.04           162         0   -90   PDH     LO27_WGS84
K01      16987.89   -2611445.52              838.79           138         0   -90   PDH     LO27_WGS84
K02      17313.82   -2611964.34               845.1           132         0   -90   PDH     LO27_WGS84
K03      17630.51   -2612413.89              845.82           108         0   -90   PDH     LO27_WGS84
K04       17879.6   -2612780.97               847.6            90         0   -90   PDH     LO27_WGS84
K05       15371.7   -2611512.76              840.33           130         0   -90   PDH     LO27_WGS84
K06      15751.75   -2611872.22              842.83           108         0   -90   PDH     LO27_WGS84
K07      16077.12   -2612235.04              845.25           108         0   -90   PDH     LO27_WGS84
K08       16392.4   -2612614.84              848.16           168         0   -90   PDH     LO27_WGS84
K09      16694.63   -2612975.23              850.41           168         0   -90   PDH     LO27_WGS84
K10      18127.68   -2613149.45              850.36            90         0   -90   PDH     LO27_WGS84
K12      17239.24   -2613350.24              854.93           108         0   -90   PDH     LO27_WGS84
KALK07   17937.83   -2612828.78              847.79           145         0   -90   PDH     LO27_WGS84
KD01     14833.11   -2611688.19              842.32         131.2         0   -90   DDH     LO27_WGS84
KD02      15454.9   -2611769.61              842.49        125.27         0   -90   DDH     LO27_WGS84
KD03     15915.42   -2611410.71              838.78        124.81         0   -90   DDH     LO27_WGS84
KD04     16261.47   -2611789.98              842.25        138.02         0   -90   DDH     LO27_WGS84
KD05     16386.34   -2611251.64               838.3        146.65         0   -90   DDH     LO27_WGS84
KD06     16814.88   -2611099.52              838.75        149.32         0   -90   DDH     LO27_WGS84
KD07     16600.23   -2611566.39               839.7         137.6         0   -90   DDH     LO27_WGS84
KD08     16949.81   -2611839.47              842.54        130.55         0   -90   DDH     LO27_WGS84
KD09     17332.62   -2611108.91              838.96           150         0   -90   PDH     LO27_WGS84
KD10     17437.64   -2611549.42              840.92        116.46         0   -90   DDH     LO27_WGS84
KD11     17621.41   -2610887.36               839.8        152.53         0   -90   DDH     LO27_WGS84
KD12     17835.69   -2611349.34              840.04        141.91         0   -90   DDH     LO27_WGS84
KD13     17892.96   -2611726.73              842.59        122.67         0   -90   DDH     LO27_WGS84
KD14     18163.72   -2612054.74              844.71        119.85         0   -90   DDH     LO27_WGS84
KD15     18074.96   -2610786.83              840.01        146.63         0   -90   DDH     LO27_WGS84
KD16      18333.5   -2611200.49              840.07        139.78         0   -90   DDH     LO27_WGS84
KD17     18474.01   -2611554.92              842.54        121.08         0   -90   DDH     LO27_WGS84
KD18     18686.29   -2611927.12              844.89        151.76         0   -90   PDH     LO27_WGS84
KD19     19022.11   -2612231.94              846.44           108         0   -90   PDH     LO27_WGS84
KD20     17695.31   -2613466.73               852.9            70         0   -90   PDH     LO27_WGS84
KD22A      16250      -2611723                 841          128.7         0   -90   LCDDH   LO27_WGS84
KD22B      16251      -2611720                 841          128.7         0   -90   LCDDH   LO27_WGS84
KD25       16189      -2611391                 840         134.62         0   -90   DDH     LO27_WGS84
KD26     16169.22   -2611514.56              839.68         128.3         0   -90   DDH     LO27_WGS84
KD27     16155.06   -2611660.11              840.92        124.18         0   -90   DDH     LO27_WGS84
KD28     16139.28   -2611778.06              842.13        122.45         0   -90   DDH     LO27_WGS84


                                                                                                    PAGE 51
KD29     16123.43   -2611897.63   843.11     113    0   -90   DDH     LO27_WGS84
W01      13813.52   -2609102.38   826.41   383.91   0   -90   PDH     LO27_WGS84
W02      13882.96   -2610321.52   831.03     148    0   -90   PDH     LO27_WGS84
W03      14960.11   -2610001.44   831.83     168    0   -90   PDH     LO27_WGS84
W04      16472.47   -2609382.33   839.84     180    0   -90   PDH     LO27_WGS84
W05      13723.99   -2611591.54    843.8     144    0   -90   PDH     LO27_WGS84
W06      16327.63   -2610947.57   838.23     162    0   -90   PDH     LO27_WGS84
WDN01    14062.97   -2611546.93   841.83   141.74   0   -90   DDH     LO27_WGS84
WDN02    14730.72   -2611368.37   839.52   152.63   0   -90   DDH     LO27_WGS84
WDN03    15460.85   -2611184.17   837.87   176.92   0   -90   DDH     LO27_WGS84
WDN04    13716.51   -2611246.25   839.72   152.59   0   -90   DDH     LO27_WGS84
WDN05    14423.03    -2611057.8   836.78     162    0   -90   DDH     LO27_WGS84
WDN06      15124    -2610864.69   836.19   144.68   0   -90   DDH     LO27_WGS84
WDN07    15828.07   -2610689.85   837.57   161.92   0   -90   DDH     LO27_WGS84
WDN08    16500.12   -2610817.58    838.5    146.3   0   -90   DDH     LO27_WGS84
WDN09    17801.74   -2610496.17   840.09   164.92   0   -90   DDH     LO27_WGS84
WDN10    17084.11   -2609996.06   838.59   149.44   0   -90   DDH     LO27_WGS84
WDN11    14717.83   -2610607.96   833.44   141.23   0   -90   DDH     LO27_WGS84
WDN12    16619.25   -2610068.81   838.82   155.92   0   -90   DDH     LO27_WGS84
WDN13     15316.6   -2610471.88   834.94   215.85   0   -90   DDH     LO27_WGS84
WDN14    16537.59   -2610413.69   838.47   167.92   0   -90   DDH     LO27_WGS84
WDN15    16062.24   -2611024.66   837.74   144.23   0   -90   DDH     LO27_WGS84
WDN16    16192.61   -2610520.25   838.05    155.9   0   -90   DDH     LO27_WGS84
WDN17    16953.93   -2610393.56   838.66   161.58   0   -90   DDH     LO27_WGS84
WDN18    17338.32   -2610278.14   838.69   155.64   0   -90   DDH     LO27_WGS84
WDN19    17827.97   -2610135.43   838.94    158.6   0   -90   DDH     LO27_WGS84
WDN20    17510.33   -2610658.72   839.05   160.12   0   -90   DDH     LO27_WGS84
WDN21A     15447      -2611122      840    146.74   0   -90   LCDDH   LO27_WGS84
WDN21B     15442      -2611125      840     147.2   0   -90   LCDDH   LO27_WGS84
WDN22A     16195      -2610461      840    162.37   0   -90   LCDDH   LO27_WGS84
WDN22B     16191      -2610457      840     145.1   0   -90   LCDDH   LO27_WGS84
WPN01     17156.4   -2610713.42     839      168    0   -90   PDH     LO27_WGS84
WPN03    17738.61   -2609820.86    838.5     168    0   -90   PDH     LO27_WGS84
WPN04    14060.98   -2610828.39    834.7     168    0   -90   PDH     LO27_WGS84
WPN06    15945.17   -2610194.46    837.5     142    0   -90   PDH     LO27_WGS84
WPN07    14419.35   -2611459.18    840.3     150    0   -90   PDH     LO27_WGS84
WPN08    15131.87   -2611270.07   838.46     150    0   -90   PDH     LO27_WGS84
WPN09    15869.59   -2611054.56   837.42     168    0   -90   PDH     LO27_WGS84
WPN10    14060.52   -2611139.42   837.65     168    0   -90   PDH     LO27_WGS84
WPN11    14738.74   -2610977.14   836.01     168    0   -90   PDH     LO27_WGS84
WPN12    15464.31   -2610785.76   836.44     162    0   -90   PDH     LO27_WGS84




                                                                              PAGE 52

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