Microsoft Word - ASX Qtr App 5B 15 Sep.docx
Resource Generation Limited
ACN 059 950 337
Quarterly Report
for the three months ended 30 September 2015
Resource Generation is developing its Boikarabelo coal mine in the Waterberg region of South Africa, which accounts for 40% of the country's remaining coal resources.
There are probable reserves of 744.8* million tonnes of coal on 35% of the tenements under the company's control (refer ASX announcement dated 16 December 2010).
Stage 1 of the mine development targets saleable coal production of 6 million tonnes per annum.
Corporate
Negotiations continued during the quarter with various parties to provide project finance for the construction of the Boikarabelo mine.
One of these parties was a club of financiers that included Noble Group Limited (Noble). Together with Altius Investment Holdings (Pty) Limited (Altius), which was the arranger of the potential debt club funding, Noble proposed alternative financial and operating models in which Resource Generation's board identified discrepancies and which the board was not prepared to accept. Noble also tried to persuade the board to engage its nominated mining contractor, Mota Engil, without a competitive tender, and to contract an alternative coal handling and preparation plant designer and builder, despite Resource Generation having previously signed a contract with FLSmidth. The current status of the debt club is uncertain.
Noble sought board representation which was declined and, subsequently, Altius requisitioned a general meeting to remove the current board and replace it with its own nominees.
The general meeting will take place on 26 November 2015. The company has submitted an application to the Takeovers Panel seeking orders that Altius, Noble and Public Investment Corporation SOC Limited be excluded from voting at the meeting. That application is pending.
Resource Generation has continued to explore alternate debt funding arrangements to complete construction of the Boikarabelo mine and, the day before Altius requisitioned the meeting, signed an MOU with a Swiss private company to provide in-principle funding of EUR480 million. Following Altius' actions, the Swiss funder indicated that it reserves the right to cancel the loan facility if there is a change of directors. Clarity on the current status is being sought.
The company's cash reserves at 30 September 2015 were $26.2 million.
Boikarabelo mine construction
Construction of initial stages of the mine's infrastructure continued during the quarter, while project debt funding was being negotiated. Work occurred on:
-
power supply infrastructure;
-
rail installation at the network stabilisation facility (NSF); and
-
13 kilometres of water pipeline associated with the effluent treatment plant.
EHL Energy (Pty) Limited completed the construction of the substation and switch room after the end of the quarter and final testing for completion has also occurred. The power supply infrastructure is funded by a deferred payment facility.
At the NSF, the 26 tonne axle load switch and signalling system was installed and commissioned at the end of the quarter. 400 metres of rail is being installed in the current quarter.
The Marapong effluent treatment facility in Lephalale and the 58 kilometre pipeline to Boikarabelo are an integral part of the mine's social and labour plan. Installation of a 13 kilometre section of the pipeline adjacent to a main road was completed and final testing and handover occurred in October 2015.
As previously announced, all regulatory consents have been received, all necessary land has been acquired and rail haulage and port access contracts sufficient for the mine's stage 1 production have been signed. Sales contracts have been signed that underwrite most of stage 1 production.
The Mining Right Application for Kubu, adjacent to Boikarabelo, was lodged during the quarter. Kubu was previously known as Waterberg No 1 and encompasses the farm Koert Louw Zyn Pan. The owners of Koert Louw Zyn Pan and part of the adjacent Nazarov property signed sales contracts for the properties for ZAR55.2 million after the quarter end. A 10% deposit was paid with the balance being payable post funding completion.
Mining tenements
The coal mining rights and exploration tenements held in the Waterberg region of South Africa 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 stated JORC resource.
Corporate information
Directors
Brian Warner Non-Executive Chairman
Paul Jury Managing Director
Steve Matthews Executive Director Geoffrey (Toby) Rose Non-Executive Director
Company secretary
Steve Matthews
Registered office
Level 12, Chifley Tower 2 Chifley Square
Sydney NSW 2000
Telephone: 02 9376 9000
Facsimile: 02 9376 9013 Website: www.resgen.com.au
Mailing address
GPO Box 5490
Sydney NSW 2001
Contacts
Paul Jury
Steve Matthews
Media
Anthony Tregoning, FCR on (02) 8264 1000
* This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
Information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Dawie Van Wyk who is a consultant to the Company and is a member of a Recognised Overseas Professional Organisation. Mr Van Wyk has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Van Wyk has given and has not withdrawn consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 31/9/2001.
Name of entity
Resource Generation Limited
ABN Quarter ended ('current quarter')
91 059 950 337
30 September 2015
Consolidated statement of cash flows
|
Cash flows related to operating activities
|
Current quarter
$A'000
|
Year to date (3 mths)
$A'000
|
|
1.1
1.2
1.3
1.4
1.5
1.6
1.7
|
Receipts from product sales and related debtors
Payments for (a) exploration and evaluation
-
development
-
production
-
administration Dividends received
Interest and other items of a similar nature received Interest and other costs of finance paid
Income taxes paid Other
Net Operating Cash Flows
|
-
- (3,136)
- (953)
- 78
(2)
-
-
|
-
- (3,136)
- (953)
- 78
(2)
-
-
|
|
(4,013)
|
(4,013)
|
|
1.8
|
Cash flows related to investing activities
Payment for purchases of: (a) prospects
-
equity investments (subsidiary)
-
other fixed assets
Proceeds from sale of: (a) prospects
-
equity investment (subsidiary)
-
other fixed assets
Loans to other entities
Loans repaid by other entities Other- Mining related deposit
Net investing cash flows
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
1.12
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
1.10
|
-
|
-
|
|
1.11
|
-
|
-
|
|
1.12
|
-
|
-
|
|
-
|
-
|
|
1.13
|
Total operating and investing cash flows (carried forward)
|
(4,013)
|
(4,013)
|