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Quarterly report for the three months ended 31 March 2015
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”)
Resource Generation Limited
ACN 059 950 337
Quarterly Report for the three months ended 31 March 2015
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.
Debt funding
Negotiations with various parties including a club of potential financiers to provide project
finance for the construction of the Boikarabelo mine continued during the quarter. The club
includes two senior lending banks in South Africa, two South African government owned
financial institutions, two export credit agencies and Noble Group. It is proposed that if this
facility proceeds the existing loan from Noble Group will become part of the above facility.
Negotiations on the finalisation of a terms sheet with all financiers in the club have continued
with the expectation that it will provide all required remaining funding for the mine
construction. Consequently, if the proposed facility is made available, an associated equity
raising is not envisaged.
While this protracted process is on-going, the company continues to explore alternate debt
funding arrangements to maximise the chance of finalising the successful development of the
Boikarabelo mine.
Boikarabelo mine construction
Several items of construction of the mine’s infrastructure continued during the quarter, while
project debt funding was being negotiated. Major construction activities can commence after
project funding is finalised. The items that occurred during the quarter were:
. three rail link bridges;
. power supply infrastructure;
. earthworks relating to the rail network stabilisation facility (NSF); and
. 13 kilometres of water pipeline associated with the effluent treatment plant.
Final punch list items for the construction of the first three bridges (total of seven) under and
over the rail line were completed.
EHL Energy (Pty) Limited continued to erect power poles for the 132kV power transmission
lines and this work is substantially complete. Construction of the substation and switch room
commenced and are scheduled for completion by October 2015. The power supply
infrastructure is funded by a deferred payment facility.
Earthworks for the NSF were completed, including final drainage and retaining walls. The
rail turnouts and associated signalling will be installed mid-year.
The Marapong effluent treatment facility in Lephalale and the 58 kilometre pipeline to
Boikarabelo are an integral part of the mine’s social and labour plan. Earthworks were
previously completed for a 13 kilometre section of the pipeline adjacent to a main road. The
majority of the pipes have been installed and testing is underway.
As previously announced, 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. Sales contracts have been signed that underwrite most of
stage 1 production.
Operational Readiness
A detailed plan for operational readiness has been advanced, including the delivery and
commissioning of initial mining equipment, recruitment and training related thereto and
timing of the first box cut for mining operations, which integrate with the commissioning of
the coal handling and preparation plant to generate first saleable product. The plan will be
implemented operation once the funding has been finalised.
Mining tenements
The coal mining rights and exploration tenements held at the end of the quarter were as
follows in 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 2015 were $34.2 million.
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 under the JORC Code 2012. 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 2012 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 2015
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 - (162)
(b) development (4,726) (23,372)
(c) production - -
(d) administration (882) (2,340)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 186 586
1.5 Interest and other costs of finance paid (2) (5)
1.6 Income taxes paid - -
1.7 Other - -
Net Operating Cash Flows (5,424) (25,293)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects - -
(b) equity investments - -
(subsidiary)
(c) other fixed assets 64 (307)
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- Mining related deposit (64) (64)
- (371)
Net investing cash flows
1.13 Total operating and investing cash flows (carried
(5,424) (25,664)
forward)
Current quarter Year to date (9 mths)
$A’000 $A’000
1.13 Total operating and investing cash flows (brought
(5,424) (25,664)
forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. - -
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (BEE Loan) (54) (150)
Net financing cash flows (54) (150)
Net increase (decrease) in cash held (5,478) (25,814)
1.20 Cash at beginning of quarter/year to date 37,864 54,338
1.21 Exchange rate adjustments to item 1.20 1,781 5,643
1.22 Cash at end of quarter 34,167 34,167
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 has
been drawn down from the rail link loan.
Amount available Amount used
$A’000 $A’000
3.1 Loan facilities 157,584 22,046
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation -
4.2 Development (9,459)
4.3 Production -
4.4 Administration (551)
Total (10,010)
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 $A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank 113 86
5.2 Deposits at call 33,559 37,218
5.3 Bank overdraft - -
5.4 Other (Contract retentions) 495 592
Total: cash at end of quarter (item 1.22) 34,167 37,896
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at Interest at
beginning of end of
quarter quarter
6.1 Interests in N/A N/A N/A N/A
mining tenements
relinquished,
reduced or lapsed
6.2 Interests in N/A N/A N/A N/A
mining tenements
acquired or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number Issue price per Amount paid
quoted security up per security
($) ($)
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 Nil
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.
Date: 23 April 2015
(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.
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