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Quarterly report for the three months ended 30 June 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
("Resource Generation")
Quarterly Report for the three months ended 30 June 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
process in reaching an agreed term sheet has been protracted due to several factors including
the variable nature of the envisaged loan structure and maintaining deliverable outcomes
within prevailing debt and coal markets. It is proposed that if this facility proceeds the
existing loan from Noble Group will become part of the above facility.
Expectations are that the project finance will provide all required remaining funding for the
mine construction. Consequently, if the proposed facility is made available, the Company
does not envisage the need for an associated equity raising.
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:
. power supply infrastructure; and
. 13 kilometres of water pipeline associated with the effluent treatment plant.
EHL Energy (Pty) Limited completed the erection of power poles and transmission lines for
the 132kV power supply. Construction of the substation and switch room commenced and is
scheduled for completion by October 2015. The power supply infrastructure is funded by a
deferred payment facility.
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.
Installation of pipes was completed during the quarter and testing is close to completion.
Photos of Section of 13 km pipeline, Sub-station and Switch Room Construction in Background are on the website.
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.
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.
The company is in the process of relinquishing PR720/2007, over the properties Lisbon and
Zoetfontein, as these are distant from the Boikarabelo site and contain minimal resources that
have not been included in the stated JORC resource.
Corporate
Cash reserves at 30 June 2015 were $28.6 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 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 30 June 2015
Consolidated statement of cash flows
Current quarter Year to date (12 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 (4,852) (28,222)
(c) production - -
(d) administration (535) (2,875)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 73 659
1.5 Interest and other costs of finance paid (2) (8)
1.6 Income taxes paid - -
1.7 Other - -
Net Operating Cash Flows (5,316) (30,608)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects - -
(b) equity investments - -
(subsidiary)
(c) other fixed assets - (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)
- (371)
Net investing cash flows
1.13 Total operating and investing cash flows (carried
(5,316) (30,979)
forward)
Current quarter Year to date (12 mths)
$A’000 $A’000
1.13 Total operating and investing cash flows (brought
(5,316) (30,979)
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) (44) (196)
Net financing cash flows (44) (196)
Net increase (decrease) in cash held (5,360) (31,175)
1.20 Cash at beginning of quarter/year to date 34,167 54,338
1.21 Exchange rate adjustments to item 1.20 (237) 5,407
1.22 Cash at end of quarter 28,570 28,570
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 156,641 22,046
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation -
4.2 Development (5,860)
4.3 Production -
4.4 Administration (1,028)
Total (6,888)
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 $A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank 130 113
5.2 Deposits at call 28,156 33,559
5.3 Bank overdraft - -
5.4 Other (Contract retentions) 284 495
Total: cash at end of quarter (item 1.22) 28,570 34,167
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at Interest at
beginning of end of
quarter quarter
6.1 Interests in N/A N/A N/A N/A
mining tenements
relinquished,
reduced or lapsed
6.2 Interests in N/A N/A N/A N/A
mining tenements
acquired or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number Issue price per Amount paid
quoted security up per security
($) ($)
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: 14 July 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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