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Resource Generation Limited - Shareholder Update

Release Date: 25/08/2017 07:53:00      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?)
     25th August 2017
     ASX Announcement


     Shareholder Update

Since the ?all party? meeting of lenders held on 14th June 2017 (see our earlier release of 21st June
2017) management has continued to finalise all material contracts for the development of the
Boikarabelo mine. At its meeting in Johannesburg on 16th August 2017 the board received an update
on all material developments. As the status report below indicates, demonstrable progress had been
made on the material contracts and funding of the rail link; but not on the terms of the proposed coal
supply to Eskom.

In the circumstances, the Board believed it would be reasonable to ask the Debt Club lenders to
undertake their credit approval process to a conclusion, but on the basis that any draw down of senior
debt be subject to a concluded coal supply agreement being in place. That request was made on 21st
August 2017.

However, on 23rd August 2017 some members of the Debt Club formally declined to proceed on that
basis and required a greater degree of certainty around the terms of supply to Eskom before
proceeding to secure credit approval for funding of the project. In the circumstances (see detailed
comments below re Eskom), the Board believes that this source of project finance is no longer viable.

Mindful of the present difficulties in securing terms of supply with Eskom, management had in parallel
been exploring an alternative funding proposal to place before the Board. This proposal is not subject
to a committed domestic coal supply. The credit approval processes of these lenders, who are familiar
with the project, has commenced. First approvals and a signed term sheet are expected by end
September/early October. At that time the Board will consider a recommendation from management
and make a decision on this alternative funding proposal.

The current status of the project is as follows:

Base Case Financial Model: Updated, circulated and supportive of a project finance facility

Independent Expert Reports:

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, Manish Dahiya                                                    www.resgen.com.au
CEO: Rob Lowe
Company secretary: Mike Meintjes
All expert reports are supportive of the project with no fatal flaws being identified

   .   Technical report to be delivered on 25th August 2017
   .   Environmental report completed
   .   Marketing report completed
   .   Legal due diligence report completed

Material Contracts:

   .   CHPP EPC:                               Ready for execution
   .   CHPP Operation & Maintenance:           Ready for execution
   .   Ancillary Works EPC:                    Ready for execution
   .   Transportation of Coal Agreement:       Commercial terms agreed and largely completed
   .   Rail Service Level Agreement:           Ready for execution
   .   Mining Contract:                        Commercial terms agreed and largely completed

Rail Link:

   .   First credit approval for full funding of the rail link obtained by Development Bank of South
       Africa. Second credit approval due imminently
   .   Rail link to be constructed by RME, a subsidiary of Transnet Freight Rail, under fixed price,
       turn key, EPC contract

Richards Bay:

   .   Letter of comfort received from Transnet concerning the availability of 3,6 million tons of export
       capacity at Richards Bay terminals effective 2020

Eskom:

   .   With the frequent management changes that have occurred at Eskom over recent months, it
       has not been possible to have a continuous engagement with management on the terms of
       an unsolicited bid for the supply of coal outside of Eskom?s scheduled tender process
   .   Whilst we were informed in July 2017 that Eskom?s current plans are not to commence a public
       tender process for the supply of coal from the Waterberg until 2019, we have engaged and
       will continue to engage with them on the basis of them accepting an unsolicited bid
   .   The timeline for any successful conclusion of negotiations cannot presently be predicted

Noble Facility Agreement:

Payment of the third and final draw down under the extended working capital facility facility will be
made in two tranches in August and September respectively.

IPP:

Good progress is being made with regard to the planned 300MW IPP. A provisional equity structure
under which the Company and its subsidiary, Ledjadja Coal, will have direct equity interests is under
discussion. A joint development agreement is being drafted by the Company?s appointed legal
counsel and a full technical specification of the IPP is currently being prepared by an independent
consulting firm.


                                                                                                   PAGE 2
It is expected that a selection process to identify and appoint the EPC contractor will commence during
Quarter 4 of 2017.


Mining Charter 2017

The Mining Charter III that was recently published is now the subject of a legal challenge by the
Chamber of Mines and is being held in abeyance. The Company will continue to monitor
developments carefully.

A further update to the market will be released after the next Board Meeting scheduled for end
September 2017.



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- In accordance with Listing Rule 5.23.2 the Company confirms that
it is not aware of any new information that would impact on the Reported Coal Resources and Coal
Reserves). 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.



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: Marion Brower/ Charmane Russell on +27 11 880 3924

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

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