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RESOURCE GENERATION LIMITED - Resource Generation Limited (RES) Appendix 5B Query

Release Date: 21/05/2019 11:45
Code(s): RSG     PDF:  
 
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Resource Generation Limited (‘RES’) – Appendix 5B Query

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”)
21 May 2019


Ms Melissa Lim
Adviser, Listings Compliance
ASX Compliance Pty Ltd
20 Bridge Street
Sydney NSW 2000


By email: ListingsComplianceSydney@asx.com.au


Dear Ms Lim


Resource Generation Limited (‘RES’) – Appendix 5B Query


We refer to your letter dated 16 May 2019 titled “Appendix 5B Query” which refers to the RES
Appendix 5B for the period ended 31 March 2019 released to the market on 30 April 2019. This letter
requested a separate response to five questions.
In this letter the ASX notes that RES has reported:
      .     Negative net operating cash flows for the quarter of $2,549,000;
      .     Cash at the end of the quarter of $1,427,000; and
      .     Estimated cash outflows for the next quarter of $3,596,000.


Resource Generation Limited (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (0) 11 010 6310 Fax +27 (0) 86 539 3792


                                                                                      www.resgen.com.au
In this regard, we set out each question below together with our response:
   1. Does RES expect that it will continue to have negative operating cash flows for the time
      being and, if not, why not?

       RES Board and Management presently expects to continue to have negative operating cash
       flows whilst finalising the funding through to completion of the development of the Boikarabelo
       Coal Mine Project in Limpopo Province, South Africa (Project) and into ramp-up to full
       production. RES presently expects the development process to be completed approximately
       24 months after finalising of the funding for the Project (being the development timeframe
       assumed in our Base Case Financial Model and first announced in our ASX release dated 14
       October 2016).

   2. Has RES taken steps, or does it propose to take steps, to raise further cash to fund its
      operations and, if so, what are these steps and how likely does it believe that they will
      be successful?
       Yes, RES is taking steps to raise further cash in the form of working capital to fund its
       operations. The legal documentation underpinning the conditional agreement with Noble
       Group (Noble) to advance up to a further US$2.5m (announced to the ASX releases dated 15
       March 2019) in working capital is in the process of being finalised. The latest position was set
       out in the release to the ASX on 17 May 2019 under the heading ‘ASX Listing Rule 10.1 Waiver
       - Additional US$2.5m working capital funding announced in March 2019’.
   3. Does RES expect to be able to continue its operations and to meet its business
      objectives and, if so, on what basis?
       On the basis of the arrangements referred to in the response to Question 2 being completed
       shortly, RES presently expects to be able to continue its operations and to meet its business
       objective of achieving financial close for funding of the Boikarabelo coal mine in late August
       or September 2019. This timing being the latest target for financial close as advised to the
       market in our ASX release dated 17 May 2019.
       The Company is also taking additional steps to reduce overheads due to the minor slippage
       to the target timeline for financial close of the Project development funding (the revised timeline
       was advised to the market in the 31 March 2019 Quarterly Activities Report).
   4. Please confirm that RES is complying with Listing Rule 3.1 and that there is no
      information about its financial condition that should be given to the ASX in accordance
      with that rule that has not already been released to the market?
       RES confirms compliance with Listing Rule 3.1 and that there is no further information about
       its financial condition that should be given to the ASX in accordance with that rule that has not
       already been released to the market.
   5. Please confirm that RES’s responses to questions above have been authorised and
      approved under its published continuous disclosure policy or otherwise by its board
      or an officer of RES with delegated authority from the board to respond to the ASX on
      disclosure matters?
       Confirmed

                                                                                                    PAGE 2
If you have any queries or concerns, please contact RES' Company Secretary, Mike Meintjes.
On behalf of the Board


Lulamile Xate
Chairman


JSE Sponsor:
Deloitte & Touche Sponsor Services (Pty) Ltd




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