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Quarterly Report for the three months ended 31 March 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”)
Quarterly Report
for the three months ended 31 March 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 March 2019 quarter the Company continued to pursue the remaining credit
approvals from the Lending Syndicate (see credit approval process first outlined in ASX
Announcement: 3 March 2018). This funding alternative was prioritised based on
confirmation received early in the quarter that all due diligence matters had been resolved
and the outstanding credit submissions would be tabled shortly.
To cover projected cashflow needs through to 30 June 2019, the Company reached
conditional agreement with Noble Group (Noble) on 15 March 2019 to provide additional
working capital to its partly owned subsidiary, Ledjadja Coal (Pty) Ltd. The conditional
agreement (for up to a further US$2.5m) is in the process of being formalised through
amendment to the Facility Agreement with Noble. Resgen has also applied to the ASX for a
waiver from the application of Listing Rule 10.1 as this further advance is being provided by a
substantial shareholder without Shareholder approval.
The conditional agreement reached with Noble included the following terms:
1. amending the first date for repayment of the Facility Agreement from 30 June 2019
to 30 September 2019;
2. credit approvals from all members of the Lending Syndicate to be secured by 29 March
2019 and, if not forthcoming, ResGen to facilitate a meeting between itself, Noble, the
Industrial Development Corporation of South Africa (IDC) and the other potential
member of the Lending Syndicate to agree a way forward; and
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Resource Generation Limited
Quarterly Report to 31 March 2019
3. no later than 29 March 2019, Resgen to develop a high-level plan and timetable on
the potential feasibility of executing a small-scale mining operation at the Boikarabelo
Mine;
The current status of conditions 2 and 3 listed above is as follows:
1. the third potential member of the Lending Syndicate did not provide written board
credit approval by 29 March 2019 and advised that it was still finalising internal
administrative requirements. Consequently, the Company arranged a meeting with all
Lending Syndicate Members where assurances of progressing the credit approval
process through April were obtained from the third potential member. This target has
not however been met during April and latest indications are that there will be
approximately a further one-month delay; and
2. a small-scale Boikarabelo Mine feasibility presentation which included a high-level
plan and timetable was prepared and sent to Noble on 29 March 2019. This plan
involves securing revision to certain project permits, design studies on the smaller
processing facility and improving the high-level cost estimations. Discussions with
Noble on the recommended plan are ongoing. In this regard consideration is currently
being given to commence work on the rail link design and environmental studies. Once
agreed by the Board this initiative would commence during May whilst awaiting the
outcome of the credit approval process referred to in 1 above.
The further project funding delay has an impact on the targeted date for financial close which
is now envisaged to be late August/ September 2019. The Board and Management remain
focused on strategies to conserve cash and/or secure any required additional financial
support in order to reach financial close for project funding.
Capital Structure and Cash Position
The Company’s summarised capital structure and cash position at 31 March 2019 is as follows:
Issued fully paid ordinary shares: 581,380,338
Performance share rights: 5,700,000
Cash at bank: $ 1.43 million
Noble Facility – undrawn $US 0.5 million
Noble Facility – conditionally agreed $US 2.5 million
Shareholders and potential investors should also review the Company’s 2018 Annual Report
and the audited Financial Report for the year ending 30 June 2018 and the Interim Financial
Report for the six months ending 31 December 2018 to fully appreciate the Company’s
financial position.
Mining Tenements
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Resource Generation Limited
Quarterly Report to 31 March 2019
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
Corporate information
Directors
Lulamile Xate Non-Executive Chairman
Rob Croll Lead Independent Non-Executive Director
Manish Dahiya 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
Greg Hunter Alternate Non-Executive Director for M. Dahiya
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
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Resource Generation Limited
Quarterly Report to 31 March 2019
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
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 VBKOM, has a material interest or entitlement, direct or indirect, in
the securities of Resource Generation Limited. Mr Joubert holds no shares in Resource
Generation Limited.
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Resource Generation Limited
Quarterly Report to 31 March 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 31 March 2019
Current quarter Year to date
Consolidated statement of cash flows
(9 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 (881) (5,041)
(c) production - -
(d) staff costs (1,363) (3,404)
(e) administration and corporate costs (331) (1,177)
1.3 Dividends received (see note 3) - -
1.4 Interest received 26 101
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 (2,549) (9,521)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment - -
(b) tenements (see item 10) - -
(c) investments - -
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Resource Generation Limited
Quarterly Report to 31 March 2019
Current quarter Year to date
Consolidated statement of cash flows
(9 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 3,345 10,979
3.6 Repayment of borrowings (558) (1,710)
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 2,787 9,269
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of 1,240 1,729
period
4.2 Net cash from / (used in) operating (2,549) (9,521)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing - -
activities (item 2.6 above)
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Resource Generation Limited
Quarterly Report to 31 March 2019
Current quarter Year to date
Consolidated statement of cash flows
(9 months)
$A’000 $A’000
4.4 Net cash from / (used in) financing 2,787 9,269
activities (item 3.10 above)
4.5 Effect of movement in exchange rates on (51) (50)
cash held
4.6 Cash and cash equivalents at end of 1,427 1,427
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 83 212
5.2 Call deposits 1,344 1,028
5.3 Bank overdrafts - -
5.4 Other (contract retentions) - -
5.5 Cash and cash equivalents at end of 1,427 1,240
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 31 March 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
58,331
? Secured loan (note 1) 59,035
1,006 1,006
? Unsecured loan (note 2)
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$41.9 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$41.4 million has been drawn down as at 31 March 2019. The
loan is repayable in quarterly instalments over 78 months commencing from 30 June 2019
(conditionally agreed to extend to 30 September 2019) 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.
Note 2 EHL Energy (Pty) Ltd constructed the electricity sub-station at the Boikarabelo Coal Mine
which connects the mine to the grid. The construction was subject to a deferred payment plan with
interest payable at the ABSA Bank prime lending rate plus 3%. The loan is unsecured and amounted
to ZAR82.5 million. There are 2 quarterly instalments remaining to be paid as at 31 March 2019. The
Company has provided a Parent Company Guarantee for the loan.
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Resource Generation Limited
Quarterly Report to 31 March 2019
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation -
9.2 Development (1,381)
9.3 Production -
9.4 Staff costs (1,103)
9.5 Administration and corporate costs (560)
9.6 Other – repayment of borrowings (552)
9.7 Total estimated cash outflows (prepared on the basis that additional (3,596)
working capital is secured as noted in the Quarterly Activities Report)
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: 30 April 2019
(Company secretary)
Print name: MICHAEL MEINTJES
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
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
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Resource Generation Limited
Quarterly Report to 31 March 2019
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.
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