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Release Date: 17/02/2020 08:27
Code(s): RSG     PDF:  
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Market Update

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”)

17 February 2020

                                                            Market Update

Resource Generation Limited (ASX:RES) (Resgen or Company) refers to the market
release on 5 December 2019 ( Execution of binding agreements for the funding of the
construction of the Boikarabelo Coal Mine (Mine Funding Package)) and the Quarterly
Activities Report released on 31 January 2020 and provides the following further status

Shareholder approval

The Company has determined that several aspects of the arrangements contemplated
by the Mine Funding Package will require Shareholder approval. An Independent
Expert’s Report has been commissioned for inclusion in the Notice advising
Shareholders of the meeting being planned for this purpose.

The Company has recently agreed matters of factual accuracy with the Independent
Expert and expects finalisation of the Report within the forthcoming week. Regulatory
clearance is then required before the Notice of Meeting can be finalised, a date for the
meeting fixed and the documents despatched to Shareholders.

Resource Generation Australia (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (011) 010 6310 Fax +27 (086) 539 3792
Directors: Lulamile Xate (Chairman), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane, Michael Gray, Gregory Hunter
Interim CEO: Leapeetswe Molotsane
Company secretary: Mike Meintjes
Rail Link Funding Status

The rail link negotiations for a funding package of R750m (approx. A$75m at current
exchange rates) continue to progress. Current funding negotiations are being conducted
on a non-binding basis (with no guarantee of a binding arrangement being concluded)
and envisage the following structural considerations:

   .    Establishment of a special purpose vehicle (SPV) that will raise the required
        funds, construct, own and operate the rail link in exchange for a commercially
        agreed transport tariff arrangement;
   .    Resgen, through its partly owned subsidiary, Ledjadja Coal (Pty) Ltd (Ledjadja
        Coal), will own a 49.9% interest in the SPV in lieu of the contribution of certain
        assets and licences associated with the rail link; and
   .    Security arrangements associated with the rail link funding will be ring-fenced to
        the SPV i.e. there will be no impact on the security arrangements pertaining to
        the Project Funding Agreements.

Finalisation of a unconditional comprehensive Project Rail Link funding agreement is a
condition precedent attached to the Mine Funding Package and is regarded as being on
the critical path for the transaction to become effective and allow first drawdown of funds
for mine construction (Financial Close) - see further detail below.

Conditions Precedent (CP) to achieve Financial Close

A number of funding conditions require satisfaction, deferral or may be waived by the
Project Lenders before Financial Close. These conditions include those customary for
Lender’s to manage risk exposures in transactions of this nature and include both the
Shareholder approval and rail link funding referred to above.

In addition, the following CP’s are regarded as the key areas for focus by Management
as they have been identified as being on the critical path for achievement of Financial

    . Completion of reports by Independent Technical and Environmental Advisors,
      appointed by and for the benefit of the Project Lenders. These Reports will
      include an assessment of the adequacy of the Company’s capital cost estimate
      and confirm the integrity of the Company’s base case financial model used for
      the purposes of negotiating the Mine Funding Package;
    . Finalising the outstanding coal loading and transportation agreements between
      Ledjadja Coal, the Rail Link SPV and Transnet;
    . Pricing review by Sedgman of the CHPP and AWP contracts as these were
      established more than twelve months ago;

                                                                                         PAGE 2
    .   Conclusion of a back to back domestic coal supply agreement between Noble
        and a third party to the satisfaction of the other Lenders;
    .   Conclusion of a mining equipment funding arrangement linked to the proposed
        mining contract; and
    .   Conclusion of a Ramp-up Working Capital Facility to the satisfaction of the
        Project Lenders.

Target date for Financial Close

The Shareholder Meeting called for the purposes of seeking approval of the Mine
Funding Package is now likely to occur in late March or early April 2020. This will result
in the need to amend the target date for Financial Close to on or before 30 April 2020.

The Company has commenced discussions with Noble Group in relation to the working
capital requirements for bridging the funding gap to the revised target for Financial

The Company will keep the market informed regarding further progress on project
funding in accordance with its continuous disclosure obligations.

Lulamile Xate
For and on behalf of the Board

About Resgen:

Resource Generation Limited (Resgen) is an emerging ASX and JSE-listed energy company, currently
developing the Boikarabelo Coal Mine in South Africa’s Waterberg region. The Waterberg 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 operating subsidiary Ledjadja Coal, were recently updated 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 subsidiary (BEE)
operating under South Africa’s Broad-based Black Economic Empowerment Act, Section 9(5): Codes of Good

ResGen’s primary shareholders are the Public Investment Corporation of South Africa (PIC), Noble Group
and Altius Investment Holdings.

                                                                                                      PAGE 3
For further information please contact:

Mike Meintjes, Company Secretary on or +61 413 706 143

Media enquiries:

South Africa: Marion Brower/ Charmane Russell on +27 11 880 3924

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

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Date: 17-02-2020 08:27:00
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