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Resource Generation Limited - Extension Of Facility Agreement To Enable The Company To Secure Project Funding

Release Date: 14/03/2017 08:34:00      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?)
     14 March 2017
     ASX Announcement

         Extension of Facility Agreement to enable the Company to
                           secure project funding
     The Company has today signed an extension of the Facility Agreement of 3 March 2014
     (Facility), under which Noble Resources International Pte Ltd (Lender) has agreed to make
     available further funds of up to US$8.4M to the Company's subsidiary, Ledjadja Coal Pty Ltd
     (LCL) to fund the operations and development of the Boikarabelo mine project being undertaken
     in South Africa (Project) whilst project funding is secured. Those additional funds are to be
     available in three tranches over the period to 30 September 2017.

     Key terms associated with the extension of the Facility include:
     .       The additional funds together with the existing Facility of US$20m are unsecured and
             subject to a parent company guarantee;
     .       Interest accrues at 10.75% pa and can be capitalised on a six-monthly basis unless the
             borrower elects otherwise to pay such interest;
     .       The right for the Lender to appoint a nominee to the Board of the Company and approve
             one of the Company's nominees to the Board of LCL, subject to regulatory and governance
             requirements; and
      .      The Facility is repayable in instalments commencing from 30 September 2017 with a
             termination date of 10 March 2024, however the additional funds made available under the
             extension of the Facility announced today is repayable from the proceeds of the first
             drawdown of funding secured for the Project.

     As part of negotiating the extension to the Facility, the Company has also agreed to restate the
     existing domestic offtake and coal marketing agreements it has with the Lender and its related
     bodies corporate (Restatement Agreements) with effect from 31 December 2013, including the
     incorporation of a term sheet signed in 2013 (Term Sheet). A summary of the key principles of
     the Restatement Agreements is set out below:


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), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane                                                                   www.resgen.com.au
CEO: Rob Lowe
Company secretary: Mike Meintjies


ME_136500642_13
     1. Offtake Arrangements
        .   Three (3) million tonnes per annum of Boikarabelo domestic thermal coal for a 8 year
            period from first delivery subject to certain quality specifications with two purchase price
            options at the Lender?s election, with the opportunity for LCL to participate in the upside
            in any on-sale;

        .   Inclusion of a fee payable to the Lender of the price paid by the Lender for domestic coal
            but to the extent that any such fee is paid to the Lender, the Lender is not entitled to be
            paid a marketing fee for domestic coal;
        .   First right of refusal for Lender to purchase any additional uncontracted coal to be
            produced from the mine on terms to be agreed by 30 June 2017, failing which on the
            same terms as the Sale and Purchase of Boikarabelo Thermal Coal dated 31 December
            2012 (and restated on 28 March 2013).

2.       Marketing Arrangements

        .   Lender is appointed as exclusive supply chain management and marketing adviser for
            both export and domestic coal for a period of thirty five (35) years under separate
            contractual arrangements;
        .   Lender is entitled to fees depending on whether domestic, export or certain contracts are
            already in place at the time of the agreement.

     Performance of the Restatement           Agreements      is   subject   to   receipt   of   relevant
     regulatory/shareholder approvals.
     The Company continues to pursue project funding options previously advised to the market and
     will keep the market updated on progress.
     Denis Gately
     Chairman
     For and on behalf of the Board


     About Resgen:

     Resource Generation Limited (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. The Coal
     Resources and Reserves for the Boikarabelo Coal Mine, held through the operating subsidiary
     Ledjadja Coal, were recently updated based upon a new mine plan and execution strategy. The
     Boikarabelo Coal Resources total 995Mt and the Coal Reserves total 267Mt applying the JORC
     Code 2012 (ASX Announcement 23 January 2017). Stage 1 of the mine development targets
     saleable coal production of 6 million tonnes per annum. Ledjadja Coal is a Black Economic
     Empowerment subsidiary (BEE) operating under South Africa?s Broad-based Black Economic
     Empowerment Act, Section 9(5): Codes of Good Practice

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


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For further information please contact:
Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143
Media enquiries:
Australia: Martin Debelle on + 61 282 340 102
South Africa: Charmane Russell/Thembisa Kotobe on +27 11 880 3924


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




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