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Quarterly Report for the three months ended 30 September 2016
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”)
Quarterly Report
for the three months ended 30 September 2016
Resource Generation Limited (the “Company” or “Resgen”) is developing its Boikarabelo
Coal Mine in the Waterberg region of South Africa. This region accounts for 40% of the
country’s remaining identified coal resources. The Company is currently updating the
Probable Coal Reserves for the Boikarabelo Coal Mine (previously disclosed to the market
in December 2010) as a result of completing a new mine plan and execution strategy.
Project Funding
During the quarter, the Company announced (ASX Announcement 8 August 2016) that its BEE
subsidiary, Ledjadja Coal (Pty) Limited, had agreed commercial terms with entities (Financing
Syndicate) including but not limited to:
. FirstRand Bank Limited, acting through its Rand Merchant Bank division (RMB);
. Industrial Development Corporation of South Africa Limited;
. Public Investment Corporation SOC Limited; and
. Noble Resources International Pte Limited (Noble).
The Financing Syndicate is currently performing due diligence in order to seek the requisite
approvals to secure funding to complete the construction of the Boikarabelo Coal Mine.
Resgen has also held discussions with the Export Finance and Insurance Corporation (Efic)
with a view to Efic joining the Financing Syndicate. Efic has been included in discussions of the
terms and has commenced with its due diligence on the project.
The Independent Technical Experts, commissioned by the Financing Syndicate, have
completed their initial reports and have identified no fatal flaws in relation to the newly
adopted execution strategy and mining plan. The new strategy and mining plan takes
advantage of current market conditions by reducing the capital requirement and reducing risk
by outsourcing construction and operations to external contractors.
As recently announced (ASX Announcement 14 October 2016) the company is working toward
reaching financial close no later than March 2017. This translates into “first coal” by Q1 2019.
Heads of Agreement – Mining Contractor
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Resource Generation Limited
Quarterly Report to 30 September 2016
The Request for Proposal referred to in the Report to Shareholders released to the market on
1 June 2016 has now been determined and the Company’s BEE operating subsidiary, Ledjadja
Coal (Pty) Limited, selected Stefanutti Stocks Mining Services (“SSMS”) as the preferred
mining contractor (ASX Announcement 4 October 2016). The Parties have concluded a Heads
of Agreement containing the following salient terms:
. the parties will negotiate on an exclusive basis a detailed Term Sheet to cover mining
and related services over a period of 40 days;
. thereafter the parties will negotiate the terms and conditions of a Mining Contractor
Agreement (“MCA”) within 15 days; and
. formal appointment of SSMS as mining contractor will be confirmed with the parties’
execution of the MCA.
The Heads of Agreement applies until the MCA comes into force. The MCA will, at a minimum,
be subject to the following conditions precedent:
. board approval by both parties of the formal agreement; and
. project funding being procured by the Company.
Capital structure and cash position
The Company’s summarised capital structure at 30 September 2016 is as follows:
Issued fully paid ordinary shares: 581,380,338
Performance rights: 6,250,000
Cash at bank: $8.2 million
Shareholders and potential investors should also review the Company’s Annual Report and
audited Financial Report for the year ending 30 June 2016 to fully appreciate the Company’s
financial position.
Mining tenements
The coal mining rights and exploration tenements held at the end of the quarter were as
follows:
. 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 JORC resource.
The Mining Right Application for Kubu, adjacent to Boikarabelo, was lodged at the end of
2015. Kubu was previously known as Waterberg No 1 and encompasses the farm Koert Louw
Zyn Pan (PR678/2007).
On behalf of the Board of Directors
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Resource Generation Limited
Quarterly Report to 30 September 2016
Yours faithfully
Mike Meintjes
Company Secretary
RESOURCE GENERATION LIMITED
Corporate information
Directors
Denis Gately Non-Executive Chairman
Lulamile Xate Non-Executive Deputy Chairman
Rob Croll Non-Executive Director
Colin Gilligan Non-Executive Director
Leapeetswe Molotsane Non-Executive Director
Dr Konji Sebati Non-Executive Director
Company secretary
Mike Meintjes
Registered office
Level 1, 17 Station Road
Indooroopilly, QLD 4068, Australia
Telephone: +27 12 345 1057
Facsimile: +27 12 345 5314
Website: www.resgen.com.au
Mailing address
South Africa Australia
PO Box 5384 PO Box 126
Rietvalleirand 0174 Albion
Gauteng, South Africa QLD 4010, Australia
Contacts
Denis Gately
Rob Lowe
Media
South Africa Australia
Russell and Associates (Marion Brower) Citadel MAGNUS (Martin Debelle)
t: +27 11 880 3924 t: +61 2 8234 0100 m: +61 409 911 189
42 Glenhove Rd, Johannesburg 2196, Level 15, 61 York Street, Sydney,
Gauteng, South Africa NSW 2000, Australia
Rule 5.5
Appendix 5B
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Resource Generation Limited
Quarterly Report to 30 September 2016
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 30 September 2016
Current quarter Year to date
Consolidated statement of cash flows
$A’000 (3 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation - -
(b) development (1,529) (1,529)
(c) production - -
(d) staff costs (1,123) (1,123)
(e) administration and corporate costs (273) (273)
1.3 Dividends received (see note 3) - -
1.4 Interest received 35 35
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Research and development refunds - -
1.8 Other (sale of game) 203 203
1.9 Net cash from / (used in) operating (2,687) (2,687)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment (82) (82)
(b) tenements (see item 10) - -
(c) investments - -
(d) other non-current assets - -
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Resource Generation Limited
Quarterly Report to 30 September 2016
Current quarter Year to date
Consolidated statement of cash flows
$A’000 (3 months)
$A’000
2.2 Proceeds from the disposal of:
(a) property, plant and equipment - -
(b) tenements (see item 10) - -
(c) investments - -
(d) 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 (82) (82)
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares - -
3.2 Proceeds from issue of convertible notes - -
3.3 Proceeds from exercise of share options - -
3.4 Transaction costs related to issues of - -
shares, convertible notes or options
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings (695) (695)
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 (695) (695)
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of 11,955 11,955
period
4.2 Net cash from / (used in) operating (2,687) (2,687)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing (82) (82)
activities (item 2.6 above)
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Resource Generation Limited
Quarterly Report to 30 September 2016
Current quarter Year to date
Consolidated statement of cash flows
$A’000 (3 months)
$A’000
4.4 Net cash from / (used in) financing (695) (695)
activities (item 3.10 above)
4.5 Effect of movement in exchange rates on (282) (282)
cash held
4.6 Cash and cash equivalents at end of 8,209 8,209
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 24 25
5.2 Call deposits 8,185 11,860
5.3 Bank overdrafts - -
5.4 Other (contract retentions) - 70
5.5 Cash and cash equivalents at end of 8,209 11,955
quarter (should equal item 4.6 above)
6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in 208
item 1.2
6.2 Aggregate amount of cash flow from loans to these parties -
included in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
Directors’ remuneration and consulting fees
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Resource Generation Limited
Quarterly Report to 30 September 2016
7. Payments to related entities of the entity and their Current quarter
associates $A'000
7.1 Aggregate amount of payments to these parties included in -
item 1.2
7.2 Aggregate amount of cash flow from loans to these parties -
included in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
8. Financing facilities available Total facility amount Amount drawn at
Add notes as necessary for an understanding of the at quarter end quarter end
position $A’000 $A’000
8.1 Loan facilities
. Unsecured loan (note 1) 26,198 26,198
. Unsecured loan (note 2) 5,852 5,852
8.2 Credit standby arrangements - -
8.3 Other (please specify) - -
8.4 Include below a description of each facility above, including the lender, interest rate and
whether it is secured or unsecured. If any additional facilities have been entered into or
are proposed to be entered into after quarter end, include details of those facilities as well.
Note 1 US$20 million was drawn down as an unsecured loan from Noble Group in March 2014. It is
repayable in quarterly instalments of capital and interest over 8 years commencing in February 2017
and has an annual interest rate of 10.75%.
Note 2 EHL Energy (Pty) Limited are building the electricity sub-station at the Boikarabelo Coal
Mine which connects the mine to the grid. The construction is subject to a deferred payment plan,
with interest payable at the ABSA Bank prime lending rate plus 3%. The loan is unsecured and
repayable in 16 quarterly instalments from November 2015. There are 12 quarterly instalments
remaining to be paid as at 30 September 2016.
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation -
9.2 Development (2,677)
9.3 Production -
9.4 Staff costs (1,121)
9.5 Administration and corporate costs (435)
9.6 Other (provide details if material) -
9.7 Total estimated cash outflows (4,233)
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Resource Generation Limited
Quarterly Report to 30 September 2016
10. Changes in Tenement Nature of interest Interest Interest
tenements reference at at end of
(items 2.1(b) and and beginning quarter
2.2(b) above) location of quarter
10.1 Interests in mining - - - -
tenements and
petroleum tenements
lapsed, relinquished
or reduced
10.2 Interests in mining - - - -
tenements and
petroleum tenements
acquired or increased
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.
Sign here: Date: 21 October 2016
(Company secretary)
Print name: MICHAEL MEINTJES
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
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 that wishes to
disclose additional information is encouraged to do so, in a note or notes included in or attached
to this report.
2. If this quarterly 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 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.
Page 8 of 8
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