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Quarterly Report for the three months ended 31 March 2014
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
("Resgen" or "the Company")
Quarterly Report for the three months ended 31 March 2014
Resource Generation is developing its Boikarabelo coal mine in the Waterberg region
of South Africa, which accounts for 40% of the country’s remaining coal resources.
There are probable reserves of 744.8* million tonnes of coal on 35% of the tenements
under the company’s control (refer ASX announcement dated 16 December 2010).
Stage 1 of the mine development targets saleable coal production of 6 million tonnes
per annum.
Boikarabelo mine construction
Construction of the mine’s infrastructure continued during the quarter, with 260 personnel
already working on the site. The 200-person construction camp is close to completion, and
earthworks to expand the camp to accommodate 1,320 people have been finished.
Earthworks for the 40 kilometre rail link from the mine to the existing Transnet Freight Rail
network have begun and will continue into 2015. Initial rail and sleepers have been
delivered. Other projects in progress are earthworks for the coal handling and preparation
plant, upgrading of the current access road, construction of the main mine access road, a
provincial road bypass and road underpasses for the water pipeline from Marapong.
All regulatory consents have been received, all necessary land has been acquired and rail
haulage and port access contracts sufficient for the mine’s stage 1 production have been
signed. Social and labour plan projects are progressing in local communities.
Construction is expected to take a further 21 months and, subject to finalisation of funding
agreements by June 2014, production is due to begin in December 2015.
Finalising funding
Negotiations on term sheets for project finance to complete the mine are now in their final
stages, and negotiations are also underway with three parties to fund the mobile equipment
that will be required in August 2015.
Binding term sheets are in place with Noble Group for a US$65 million loan for construction
of infrastructure and a US$55.3 million loan for construction of the rail link. US$20 million
was drawn down from the rail link loan during the quarter.
EKF, the Danish state-owned export credit agency is undertaking due diligence regarding a
guarantee for approximately 50% of the cost of constructing the coal handling and
preparation plant, for which a binding term sheet has been received from FLSmidth Roymec
(Pty) Limited.
Offtake contracts
Three long-term export offtake contracts have been entered into with CESC, Valu
Investments and Noble Group. These contracts underwrite most of the forecast revenue from
Boikarabelo’s stage 1 production and a substantial portion of stage 2 production.
A domestic offtake contract for 3.0 million tonnes per annum of middlings coal has been
entered into with Noble Group for the first eight years of production.
Mining tenements
The coal mining rights and exploration tenements held at the end of the quarter were as
follows:
South Africa (Waterberg)
- MPT15/2012 MR (74%)
- PR720/2007 (74%)
- PR678/2007 (74%)
The company has no interest in farm-in or farm-out agreements.
Corporate
Cash reserves at 31 March 2014 were $67.0 million.
Blumont Group Ltd paid a deposit of $2.5 million at the start of the quarter regarding its
commitment to buy Resource Generation shares at $0.22 per share. As Blumont did not
settle for the shares by the agreed date, 26 February 2014, the deposit of $2.5 million was
forfeited and no shares were issued.
Sydney
3 April 2014
JSE Sponsor
Macquarie First South Capital Proprietary Limited
Corporate information
Directors
Brian Warner Non-Executive Chairman
Paul Jury Managing Director
Steve Matthews Executive Director
Geoffrey (Toby) Rose Non-Executive Director
Company secretary
Steve Matthews
Registered office
Level 12, Chifley Tower
2 Chifley Square
Sydney NSW 2000
Telephone: 02 9376 9000
Facsimile: 02 9376 9013
Website: www.resgen.com.au
Mailing address
GPO Box 5490
Sydney NSW 2001
Contacts
Paul Jury
Steve Matthews
Media
Anthony Tregoning, FCR on (02) 8264 1000
* 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.
Information in this report that relates to exploration results, mineral resources or ore reserves is based on information
compiled by Mr Dawie Van Wyk who is a consultant to the Company and is a member of a Recognised Overseas
Professional Organisation. Mr Van Wyk has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the
2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Van
Wyk has given and has not withdrawn consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 31/9/2001.
Name of entity
Resource Generation Limited
ABN Quarter ended (“current quarter”)
91 059 950 337 31 March 2014
Consolidated statement of cash flows
Current quarter Year to date (9 mths)
Cash flows related to operating activities $A’000 $A’000
1.1 Receipts from product sales and related debtors - -
1.2 Payments for (a) exploration and evaluation (64) (124)
(b) development (5,899) (12,951)
(c) production - -
(d) administration (705) (5,139)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 535 1,272
1.5 Interest and other costs of finance paid (2) (1,006)
1.6 Income taxes paid - -
1.7 Other-forfeited Blumont deposit 2,500 2,500
Net Operating Cash Flows (3,635) (15,448)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects - -
(b) equity investments (2) (287)
(subsidiary)
(c) other fixed assets - (948)
1.12 Proceeds from sale of: (a) prospects - -
(b) equity investment - -
(subsidiary) - -
(c) other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other- Government charges in relation to land - 330
acquisitions and borrowings
(2) (905)
Net investing cash flows
1.13 Total operating and investing cash flows (carried
(3,637) (16,353)
forward)
Current quarter Year to date (9 mths)
$A’000 $A’000
1.13 Total operating and investing cash flows (brought
(3,637) (16,353)
forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. - 62,912
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings 22,046 22,046
1.17 Repayment of borrowings - (20,000)
1.18 Dividends paid - -
1.19 Other (BEE Loan) (59) (1,977)
Net financing cash flows 21,987 62,981
Net increase (decrease) in cash held 18,350 46,628
1.20 Cash at beginning of quarter/year to date 49,661 21,428
1.21 Exchange rate adjustments to item 1.20 (992) (1,037)
1.22 Cash at end of quarter 67,019 67,019
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 271
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
Executive salaries and directors fees
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated
assets and liabilities but did not involve cash flows
N/A
2.2 Details of outlays made by other entities to establish or increase their share in projects in which
the reporting entity has an interest
N/A
Financing facilities available
Add notes as necessary for an understanding of the position.
Two binding term sheets have been entered into with the Noble Group. A US$55.3 million loan is available for
the construction of the rail link and a US$65 million loan is available for site infrastructure. US$20 million was
drawn down from the rail link loan.
Amount available Amount used
$A’000 $A’000
3.1 Loan facilities 129,773 22,046
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation (150)
4.2 Development (34,585)
4.3 Production -
4.4 Administration (476)
Total (35,211)
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter
shown in the consolidated statement of cash flows) to $A’000 $A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank 71 59
5.2 Deposits at call 66,790 49,602
5.3 Bank overdraft - -
5.4 Other (Contract retentions) 158 -
Total: cash at end of quarter (item 1.22) 67,019 49,661
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at Interest at
beginning of end of
quarter quarter
6.1 Interests in N/A N/A N/A N/A
mining tenements
relinquished,
reduced or lapsed
6.2 Interests in N/A N/A N/A N/A
mining tenements
acquired or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number Issue price per Amount paid
quoted security up per security
($) ($)
7.1 +Preference N/A
securities (description)
7.2 Changes during quarter N/A
(a) Increases through
issues
(b) Decreases
through returns of
capital, buy-backs,
redemptions
7.3 +Ordinary securities 581,380,338 581,380,338 Various Fully paid
7.4 Changes during quarter
(a) Increases Nil
through issues
(b) Decreases Nil
through returns of
capital, buy-backs
7.5 +Convertible debt N/A
securities (description)
7.6 Changes during quarter N/A
(a) Increases through
issues
(b) Decreases through
securities matured,
converted
7.7 Options (description Nil
and conversion factor)
7.8 Issued during quarter Nil
7.9 Exercised during quarter Nil
7.10 Expired during quarter Exercise price Expiry date
1,875,000 Nil $0.50 13/3/2014
7.11 Debentures N/A
(totals only)
7.12 Unsecured notes (totals N/A
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards acceptable to ASX
(see note 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 3 April 2014
(Company secretary)
Print name: STEPHEN JAMES MATTHEWS
Notes
1 The quarterly report provides a basis for informing the market how the entity’s
activities have been financed for the past quarter and the effect on its cash position. An entity
wanting to disclose additional information is encouraged to do so, in a note or notes attached
to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in
mining tenements acquired, exercised or lapsed during the reporting period. If the entity is
involved in a joint venture agreement and there are conditions precedent which will change
its percentage interest in a mining tenement, it should disclose the change of percentage
interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in
items 7.1 and 7.3 for fully paid securities.
4 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.
5 Accounting Standards ASX will accept, for example, the use of International
Financial Reporting Standards for foreign entities. If the standards used do not address a
topic, the Australian standard on that topic (if any) must be complied with.
Date: 03/04/2014 09:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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