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Quarterly Report for the three months ended 30 September 2019 (Quarter)
Resource Generation Limited
Registration number ACN 059 950 337
(Incorporated and registered in Australia)
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 30 September 2019 (Quarter)
Resource Generation Limited (the “Company” or “Resgen”) is an emerging ASX and JSE-listed
energy company, currently developing the Boikarabelo Coal Mine (“the mine”) in South Africa’s
Waterberg coalfield. The Waterberg coalfield accounts for around 40% of the country’s currently
known coal resources. The Coal Resources and Coal Reserves for the Boikarabelo Coal Mine, held
through the Company’s operating subsidiary Ledjadja Coal, were updated in 2016 based upon a
new mine plan and execution strategy. The Boikarabelo Coal Resources total 995Mt and the Coal
Reserves total 267Mt applying the JORC Code 2012 (ASX Announcement 23 January 2017 - In
accordance with Listing Rule 5.23.2 the Company confirms that it is not aware of any new
information that would impact on the reported Coal Resources and Coal Reserves). Stage 1 of the
mine development targets saleable coal production of 6 million tonnes per annum. Ledjadja Coal
is a Black Economic Empowerment (BEE) subsidiary operating under South Africa’s Broad-based
Black Economic Empowerment Act, Section 9(5): Codes of Good Practice.
Resgen’s primary shareholders are the Public Investment Corporation of South Africa (PIC), Noble
Group and Altius Investment Holdings.
Project Funding
During the quarter, the Company and members of the proposed Lending Syndicate worked
cooperatively to finalise common terms which include the separate credit approved proposals
received in late June 2019 (ASX Announcement: 24 June 2019). Once the common terms are
agreed and are available for incorporation into the base case financial model, the Board will
be in a position to consider the mine construction funding proposal for approval.
Rail link negotiations for a funding package of R750m (Approx. A$75m) are at an advanced
stage. The funding is required to construct the 44km rail infrastructure linking the mine to the
Transnet main line. Conclusion of a binding funding package for the rail link will be a condition
precedent to first drawdown of funds (Financial Close) under the mine construction funding
proposal.
An approved mine construction funding package will also require tabling for approval by
Shareholders at an EGM called for this purpose. It had been hoped to coordinate the timing
of such meeting with the 2019 AGM to be held in late November, however delays in finalising
common terms have not made this possible. The Company is now targeting this meeting for
late January 2020.
Page 1 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Due to delays in agreeing common terms, and hence the target date for Financial Close, the
Company has secured conditional approval from Noble Group to provide additional working
capital to its partially owned subsidiary, Ledjadja Coal (Pty) Ltd to cover projected needs
through to 28 February 2020. This conditional approval involves the extension of up to an
additional US$2.5 million under the Facility Agreement (Facility) with Noble Group and
amendment of the first repayment date from 30 September 2019 to 28 February 2020. These
terms are now in an advanced stage of being incorporated into a Seventh Deed of
Amendment to the Facility Agreement. A further ASX Listing Rule 10.1 waiver will also be
required for extending the share pledge securing the increase in the Facility as Noble is a
related party.
Assuming that common terms are finalised shortly, the Company envisages that Financial
Close could be achieved by 28 February 2020. In the interim, the Board and Management
remain focused on strategies to conserve cash and/or secure any required additional financial
support.
Capital Structure and Cash Position)
The Company’s summarised capital structure at 30 September 2019 is as follows:
Issued fully paid ordinary shares: 581,380,338
Performance share rights: 3,000,000
Cash at bank: $1.16 million
Noble Facility – undrawn $US0.5 million
Shareholders and potential investors should also review the Company’s 2019 Annual Report
and the audited Financial Report for the year ending 30 June 2019 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:
. MPT 169 MR (74%)
. PR678/2007 (74%)
The Company has no interest in farm-in or farm-out agreements.
The Mining Right Application for Waterberg #1 was lodged at the end of 2015 and the
Company is awaiting the outcome of this process. Waterberg #1 encompasses the farm Koert
Louw Zyn Pan (PR678/2007) and is adjacent to the Boikarabelo Coal Mine.
On behalf of the Board of Directors
Yours faithfully
Mike Meintjes
Company Secretary
RESOURCE GENERATION LIMITED
Page 2 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Corporate information
Directors
Lulamile Xate Non-Executive Chairman
Rob Croll Lead Independent Non-Executive Director
Greg Hunter Non-Executive Director
Colin Gilligan Independent Non-Executive Director
Michael Gray Independent Non-Executive Director
Leapeetswe Molotsane Interim Managing Director and CEO
Dr Konji Sebati Independent Non-Executive Director
Manish Dahiya Alternate Non-Executive Director for G Hunter
Company Secretary
Mike Meintjes
Registered office
Level 1, 17 Station Road
Indooroopilly, QLD 4068, Australia
Telephone: +27 11 010 6310
Facsimile: +27 86 539 3792
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
Company contacts
Lulamile Xate +27 11 010 6310
Leapeetswe Molotsane +27 11 010 6310
Media contacts
South Africa
Russell and Associates (Marion Brower)
t: +27 11 880 3924
42 Glenhove Rd, Johannesburg 2196
Gauteng, South Africa
JSE Sponsor:
Deloitte & Touche Sponsor Services (Pty) Limited
Page 3 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Competent Persons’ Statements
The information contained in this Quarterly Report relates to estimates of Coal Resources and
Coal Reserves and is based on and accurately reflects reports prepared by Competent Persons
named beside the respective information in the table below. Mr Riaan Joubert is the Principal
Geologist engaged by Ledjadja Coal. Mr Ben Bruwer is a Principal Consultant with VBKom (Pty)
Ltd (VBKOM).
Summary of Competent Persons responsible for the Coal Resources and Coal Reserves
Competent Person Area of Competency Professional Year of Membership Number
Society Registration
Riaan Joubert Coal Resources SACNASP* 2002 400040/02
Ben Bruwer Coal Reserves SAIMM** 1994 701068
*SACNASP - South African Council for Natural Scientific Professions
**SAIMM - Southern African Institute of Mining and Metallurgy
The above-named Competent Persons consent to the inclusion of material in the form and
context in which it appears in this Quarterly Report. Both are members of a Recognised
Professional Organisation in terms of the JORC Code 2012 and have a minimum of five years’
relevant experience in relation to the mineralisation and type of deposit being reported on
by them to qualify as Competent Persons as defined in the JORC Code 2012.
Neither Mr Bruwer, nor Mr Joubert, or VBKOM, have material interest or entitlement, direct
or indirect, in the securities of Resource Generation Limited.
Page 4 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Rule 5.5
Appendix 5B
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 2019
Current quarter Year to date
Consolidated statement of cash flows
(3 months)
$A’000 $A’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation - -
(b) development (387) (387)
(c) production - -
(d) staff costs (601) (601)
(e) administration and corporate costs (304) (304)
1.3 Dividends received (see note 3) - -
1.4 Interest received 25 25
1.5 Interest and other costs of finance paid - -
1.6 Income taxes (paid)/refunded - -
1.7 Research and development refunds - -
1.8 Other - -
1.9 Net cash from / (used in) operating (1,267) (1,267)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment - -
(b) tenements (see item 10) - -
(c) investments - -
Page 5 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Current quarter Year to date
Consolidated statement of cash flows
(3 months)
$A’000 $A’000
(d) other non-current assets - -
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 - -
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 1,476 1,476
3.6 Repayment of borrowings (526) (526)
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 950 950
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of 1,474 1,474
period
4.2 Net cash from / (used in) operating (1,267) (1,267)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing - -
activities (item 2.6 above)
Page 6 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
Current quarter Year to date
Consolidated statement of cash flows
(3 months)
$A’000 $A’000
4.4 Net cash from / (used in) financing 950 950
activities (item 3.10 above)
4.5 Effect of movement in exchange rates on 2 2
cash held
4.6 Cash and cash equivalents at end of 1,159 1,159
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 69 69
5.2 Call deposits 1,090 1,090
5.3 Bank overdrafts - -
5.4 Other (contract retentions) - -
5.5 Cash and cash equivalents at end of 1,159 1,159
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 178
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
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Resource Generation Limited
Quarterly Report to 30 September 2019
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
65,013
? Secured loan (note 1) 65,754
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 The Company has a Facility Agreement under which Noble Resources International Pte Ltd
has agreed to make available funds of up to US$44.4 million to the Company's subsidiary, Ledjadja
Coal (Pty) Ltd, to fund the operations and development of the Boikarabelo Coal Mine whilst funding
to complete the project is secured. US$43.9 million has been drawn down as at 30 September 2019.
The loan is repayable in quarterly instalments over 78 months commencing from 28 February 2020
(extended from 30 September 2019 under conditional approval with the Lender) and has an annual
interest rate of 10.75%. The Company has provided a Parent Company Guarantee for the Facility
along with a pledge over Resgen's interest in 74% of the shares in Ledjadja, which are held by
another Resgen subsidiary, Resgen Africa Holdings Limited.
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation -
9.2 Development (1,339)
9.3 Production -
9.4 Staff costs (600)
9.5 Administration and corporate costs (462)
9.6 Other – repayment of borrowings -
9.7 Total estimated cash outflows (prepared on the basis that additional (2,401)
working capital arrangements are finalised as noted in the Quarterly
Activities Report)
Page 8 of 9
Resource Generation Limited
Quarterly Report to 30 September 2019
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: 31 October 2019
(Company secretary)
Print name: MICHAEL MEINTJES
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 9 of 9
Date: 31/10/2019 08:49:00
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