Wrap Text
2017 AGM – Chairman’s Address
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”)
22 November 2017
2017 AGM – Chairman’s Address
Good morning, ladies and gentlemen – and welcome to this the 2017 Annual General Meeting of
Resource Generation Limited (the Company).
The last Financial Year, and the 5 months since, has not been easy. The Company has been able
to survive financially thanks solely to support provided by Noble, one of its significant shareholders
and a longstanding and committed supporter of the Boikarabelo Project. The Company is currently
engaged in discussions with Noble with a view to extending that support through to April 2018.
Unfortunately, the Debt Club (led by RMB) - with which the Company had been negotiating for
almost 2 years - finally disclosed in August 2017 that it required committed domestic offtake
arrangements with Eskom for 40% of our proposed annual production before it would initiate its
internal credit approval processes. It is a matter of public record that Eskom is currently
experiencing serious turmoil at both executive and board levels; and this, along with its stated
intention not to undertake any coal procurement from the Waterberg until 2019 at the earliest, made
it impossible for the Company to secure the commitment the lenders were looking for within an
acceptable timeframe.
Accordingly, as announced to the market in late August, the Board determined that that Debt Club
was not a viable source of project finance for the Company.
Fortunately, since early 2017, the Company had been exploring an alternative funding option, so we
were able to switch with relative ease to pursue this option. As recently announced, a syndicate of
potential lenders has completed its due diligence investigations of the Company and the
Boikarabelo Project. Those lenders are now undertaking their respective internal credit approval
processes.
When credit approved terms sheets are presented to the Company, the Board will determine
whether or not to proceed with this option. However, any such decision must be subject to
Shareholder approval given the related party nature of the transaction. If the Board determines to
proceed with this option, we will convene an extraordinary general meeting of Shareholders for that
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
purpose. The meeting papers will detail material commercial terms of the proposed funding and will
also include a report from an independent expert.
Australian Shareholders in the Company will be well aware of the current difficulties in financing and
developing thermal coal mines. Socio-economic forces associated with greenhouse emissions
appear to prevail over the need for assured supply of power. The Company has not been immune
from those forces, even with a project being not in Australia but in South Africa.
We have however been able to use our time productively over the past year, by advancing the
contractual arrangements for the construction of the mine and the transport of coal to port. As yet,
arrangements for the funding (estimated to be ZAR650M) and construction of the rail link are not yet
settled, and discussions with Transnet Freight Rail and the Development Bank of South Africa are
ongoing. In addition, funding for ramp-up costs post commissioning of the coal preparation plant
(estimated to be ZAR300M) has not yet been secured; but Management and Board are confident
that funding can be obtained from commercial sources as at that time the project will have been
substantially de-risked.
Our CEO, Rob Lowe, will go into more detail on the current status of project development and
financing in his presentation after this meeting.
Importantly, the coal price has continued to hold up, in particular the price in the international
seaborne thermal coal market.
So, while there has been delay against our stated objective of being under construction by the end
of 2017, that delay has not impacted too adversely on our Project’s economics or prospects.
As you know, it is my intention to resign as a director and chair of the Company with effect the
conclusion of this meeting. I will however be continuing my association with Company as a
shareholder (through a related party). My decision to resign was largely due to the role no longer
being consistent with my personal priorities. In addition, the proposed new lenders indicated that
they would regard favourably the appointment of a HDSA as chair (HDSA means “historically
disadvantaged South Africans” and is a term introduced in South African legislation in1993 to
abolish racial discrimination). Consequently, I believed that now was an appropriate time for me to
stand down, subject only to my first attending this Annual General Meeting to respond to any
shareholder concerns about the Company and its Project.
In closing I want to express my appreciation and thanks for the support and efforts of my Board
colleagues over the past 2 years, and to commend the resilience and persistence of our
management team in the face of very difficult market circumstances.
D. J. Gately
PAGE 2
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
PAGE 3
Date: 22/11/2017 08:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
