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Quarterly Activities Report and Appendix 5B for the three months ended 31 March 2021 (Quarter)
Resource Generation Limited
Registration number ACN 059 950 337
(Incorporated and registered in Australia)
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
(“Resgen” or the “Company”)
30 April 2021
Quarterly Activities Report and Appendix 5B
For the three months ended 31 March 2021 (Quarter)
Resource Generation Limited (the “Company” or “Resgen”) is an emerging ASX and JSE-listed
energy company, currently developing the Boikarabelo Coal Mine (“the mine”) in South Africa’s
Waterberg coalfield. The Waterberg coalfield accounts for around 40% of the country’s currently
known coal resources. The Coal Resources and Coal Reserves for the Boikarabelo Coal Mine, held
through the Company’s operating subsidiary Ledjadja Coal, were updated in 2016 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 (BEE) subsidiary 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.
Project Funding
On 1 March 2021, the Company provided a market update covering (i) the status of the strategic review that
was initiated (see ASX announcement 16 November 2020) to consider alternatives for progressing
development of the Boikarabelo Project; and (ii) the short-term working capital funding position of the
Company.
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 (011) 010 6310 Fax +27 (086) 539 3792
Directors: Lulamile Xate (Chairman), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane, Greg Hunter, Michael Gray www.resgen.com.au
Interim CEO: Leapeetswe Molotsane
Company secretary: Mike Meintjes
The Strategic Review was split into two phases, namely Phase 1 - Market sounding and data-room preparation
and Phase 2 Engagement with interested parties.
Phase 1 has taken longer than first expected but has been recently completed. The Company executed Non-
Disclosure Agreements with a number of interested parties ahead of providing access to the data-room.
Interested parties were subsequently given a period of 4-6 weeks to complete their due diligence ahead of
submitting indicative proposals. This process is still ongoing.
The Company announced on 15 March 2021 that it had executed the legal documentation to reflect the in-
principle additional financial support agreed with Noble Group in the form of a Tenth Deed of Amendment
and Restatement to the Facility Agreement dated 3 March 2014 as amended from time to time. The additional
financial support of US$993,000 was to be made available in three (3) instalments to cover an austerity
operational budget for the period through to 31 May 2021.
Mike Meintjes, Company Secretary resigned effective 12 March 2021 as a result of competing demands on his
time.
The Company appointed Ms Eryl Baron of Boardroom Pty Limited as Company Secretary. Ms Baron is
responsible for communication with the ASX in relation to listing rule matters, pursuant to Listing Rule 12.6.
Subsequent Events
On 8 March 2021, the Company announced that it had reached formal agreement with Noble to provide up
to an additional US$0.993m in working capital. The first tranche of this additional working capital had been
provided by Noble in March 2021. Subsequent advances, for April 2021 and May 2021, would be subject to
Noble Board approval as set out in Clause 3.2 (c) of the Tenth Deed of Agreement i.e. “the Lender obtaining
approval from its board of directors to provide the Subsequent Advance”.
On 9 March 2021 the Company announced the resignation of director Greg Hunter.
On 16 April the Company announced that it had been advised by Noble that the Noble Board had carefully
considered the progress of the ResGen strategic review and Noble’s ability to continue funding the loan to
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Ledjadja, and had confirmed that they would not be providing any further approval (under clause 3.2(c) of the
Agreement) for any further Subsequent Advances.
The Board has entered into urgent discussions and is considering all options including the appointment of
Administrators.
The Appendix 5B attached was prepared on the basis of Company’s position on 31 March 2021 prior to Noble’s
advice that it would not provide Subsequent Advances under Facility Agreement.
Shares in the Company are suspended from trade on both the ASX and JSE and will remain suspended pending
the release of any announcement on Project Funding”.
Capital Structure and Cash Position
The Company’s summarised capital structure at 31 March 2021 is as follows:
Issued fully paid ordinary shares: 581,380,338
Performance share rights: 3,000,000
Cash at bank: A$0.53 million
Noble Facility – undrawn US$0.66 million
Shareholders and potential investors should also review the Company’s 2020 Annual Report and the audit
reviewed Interim Financial Report for the six-month period ending 31 December 2020 to fully appreciate the
Company’s financial position.
As noted above, subsequent to 31 March 2021 Noble advised the Company that the balance of the undrawn
facility would not be made available.
Mining Tenements
The coal mining rights and exploration tenements held at the end of the quarter were as follows:
• MPT 169 MR (74%)
• PR678/2007 (74%)
The Company has no interest in farm-in or farm-out agreements.
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The Mining Right Application for Waterberg #1 was lodged at the end of 2015 and the Company is awaiting
the outcome of this process. Waterberg #1 encompasses the farm Koert Louw Zyn Pan (PR678/2007) and is
adjacent to the Boikarabelo Coal Mine.
Approved for release by the Board.
For further information please contact:
Eryl Baron, Company Secretary on Company.Secretary@boardroom.com.au
Media enquiries:
South Africa: Marion Brower/ Charmane Russell on +27 11 880 3924
JSE Sponsor:
Deloitte & Touche Sponsor Services (Pty) Limited
RESOURCE GENERATION LIMITED
Corporate information
Directors
Lulamile Xate Non-Executive Chairman
Rob Croll Lead Independent Non-Executive Director
Colin Gilligan Independent Non-Executive Director
Michael Gray Independent Non-Executive Director
Leapeetswe Molotsane Interim Managing Director and CEO
Dr Konji Sebati Independent Non-Executive Director
Company Secretary
Eryl Baron
Registered office
Level 1, 17 Station Road
Indooroopilly, QLD 4068, Australia
Telephone: +27 11 010 6310
Facsimile: +27 86 539 3792
Website: www.resgen.com.au
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Mailing address
South Africa Australia
PO Box 5384 PO Box 126
Rietvalleirand 0174 Albion
Gauteng, South Africa QLD 4010, Australia
Company contacts
Lulamile Xate +27 11 010 6310
Leapeetswe Molotsane +27 11 010 6310
Media contacts
South Africa
Russell and Associates (Marion Brower / Charmane Russell)
t: +27 11 880 3924
42 Glenhove Rd, Johannesburg 2196
Gauteng, South Africa
Competent Persons’ Statements
The information contained in this Quarterly Report relates to estimates of Coal Resources and Coal Reserves
and is based on and accurately reflects reports prepared by Competent Persons named beside the respective
information in the table below. Mr Riaan Joubert is the Principal Geologist contracted by Ledjadja Coal. Mr
Ben Bruwer is a Principal Consultant with VBKom (Pty) Ltd (VBKOM).
Summary of Competent Persons responsible for the Coal Resources and Coal Reserves
Competent Person Area of Competency Professional Year of Membership Number
Society Registration
Riaan Joubert Coal Resources SACNASP* 2002 400040/02
Ben Bruwer Coal Reserves SAIMM** 1994 701068
*SACNASP - South African Council for Natural Scientific Professions
**SAIMM - Southern African Institute of Mining and Metallurgy
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The above-named Competent Persons consent to the inclusion of material in the form and context in which it
appears in this Quarterly Report. Both are members of a Recognised Professional Organisation in terms of the
JORC Code 2012 and 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 Mr Joubert, or VBKOM, have material interest or entitlement, direct or indirect, in the
securities of Resource Generation Limited.
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Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly
report
Name of entity
Resource Generation Limited
ABN Quarter ended (“current quarter”)
91 059 950 337 31 March 2021
Consolidated statement of cash flows Current quarter Year to date
$A’000 (9, months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation - -
(b) development (372) (1,899)
(c) production - -
(d) staff costs (405) (1,490)
(e) administration and corporate costs (180) (766)
1.3 Dividends received (see note 3) - -
1.4 Interest received 10 35
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - (72)
1.7 Government grants and tax incentives - -
1.8 Other (provide details if material) - -
1.9 Net cash from / (used in) operating (947) (4,192)
activities
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities - -
(b) tenements - -
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Consolidated statement of cash flows Current quarter Year to date
$A’000 (9, months)
$A’000
(c) property, plant and equipment - -
(d) exploration & evaluation - -
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing - -
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities
(excluding convertible debt securities) - -
3.2 Proceeds from issue of convertible debt - -
securities
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity - -
securities or convertible debt securities
3.5 Proceeds from borrowings 809 4,353
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and - -
borrowings
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing 809 4,353
activities
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Consolidated statement of cash flows Current quarter Year to date
$A’000 (9, months)
$A’000
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of 678 323
period
4.2 Net cash from / (used in) operating (947) (4,192)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities - -
(item 2.6 above)
4.4 Net cash from / (used in) financing activities 809 4,353
(item 3.10 above)
4.5 Effect of movement in exchange rates on -2 54
cash held
4.6 Cash and cash equivalents at end of 538 538
period
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 50 155
5.2 Call deposits 488 523
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of 538 678
quarter (should equal item 4.6 above)
6. Payments to related parties of the entity and their Current quarter
associates $A'000
6.1 Aggregate amount of payments to related parties and their 55
associates included in item 1
6.2 Aggregate amount of payments to related parties and their -
associates included in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an
explanation for, such payments.
Directors’ remuneration
Payments to related parties of the entity and their associates (6.1) includes the remuneration of Directors for the quarter ending
31 March 2021. Note: as a result of the austerity budget adopted effective September 2020 the Board of Directors have agreed
to forgoing fees for the period through to February 2021. As from March 2021 an accrual is recognised for the Directors fees
not paid.
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7. Financing facilities Total facility Amount drawn
Note: the term “facility’ includes all forms of financing amount at quarter at quarter end
arrangements available to the entity.
end $A’000
Add notes as necessary for an understanding of the
sources of finance available to the entity. $A’000
7.1 Loan facilities 67,128 66,258
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities 67,128 66,258
7.5 Unused financing facilities available at quarter end
7.6 Include in the box below a description of each facility above, including the lender, interest
rate, maturity date and whether it is secured or unsecured. If any additional financing
facilities have been entered into or are proposed to be entered into after quarter end,
include a note providing details of those facilities as well.
The Company has a Facility Agreement under which Noble Resources International Pte Ltd
has agreed to make available funds of up to US$51.06 million to the Company's subsidiary,
Ledjadja Coal (Pty) Ltd, to fund the operations and development of the Boikarabelo Coal
Mine whilst funding to complete the project is secured. The Facility is subject to the Resgen
Group performing on a satisfactory basis against the austerity budget and Noble Board
approval. US$50.40 million has been drawn down at 31 March 2021. The loan is repayable
in quarterly instalments over 66 months commencing from 31 May 2021 and has an annual
interest rate of 10.75% on all funds until the Seventh Deed of Amendment Working Capital
Facility. The Eighth, Ninth and Tenth Deed of Amendment Working Capital Facility
advanced to the Group carries an interest rate of 16.00% per annum. The Company has
provided a Parent Company Guarantee for the Facility along with a pledge over Resgen's
interest in 74% of the shares in Ledjadja, which are held by another Resgen subsidiary,
Resgen Africa Holdings Limited. Noble has, subsequent to the end of the Quarter, indicated
that even though the repayment date had been extended to 31 May 2021, it is unable to
provide the Company with access to further working capital under the Facility Agreement.
8. Estimated cash available for future operating activities $A’000
8.1 Net cash from / (used in) operating activities (item 1.9) (947)
8.2 (Payments for exploration & evaluation classified as investing -
activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (947)
8.4 Cash and cash equivalents at quarter end (item 4.6) 538
8.5 Unused finance facilities available at quarter end (item 7.5) 870
8.6 Total available funding (item 8.4 + item 8.5) 1 408
8.7 Estimated quarters of funding available (item 8.6 divided by
1.49
item 8.3)
Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”.
Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7.
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8.8 If item 8.7 is less than 2 quarters, please provide answers to the following questions:
8.8.1 Does the entity expect that it will continue to have the current level of net
operating cash flows for the time being and, if not, why not?
Answer:
Yes, after introducing an austerity budget at the end of October 2020 and placing all
Project development expenditure on hold other than essential expenditure related to care
and maintenance.
8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise
further cash to fund its operations and, if so, what are those steps and how likely
does it believe that they will be successful?
Answer:
The Company has sold non-core assets and is in the process of sourcing access to
additional funds to complete a strategic review of the alternate development
funding opportunities.
8.8.3 Does the entity expect to be able to continue its operations and to meet its
business objectives and, if so, on what basis?
Answer:
Yes, refer to 8.8.2 above.
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: ...........30 April 2021........................................................................
Authorised by: .Resgen Board of Directors..................................................................................
(Name of body or officer authorising release – see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s
activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
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4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has
been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board
committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a disclosure committee, you
can insert here: “By the Disclosure Committee”.
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying
with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations,
the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have
been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the
cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal
control which is operating effectively.
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Date: 30-04-2021 09:02:00
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