Microsoft Word - 5 ASX_Qtr_App5B_31_Dec_2015_BOR_FINAL RELEASE_27_Jan_2016
Resource Generation Limited
ACN 059 950 337
Quarterly Report
for the three months ended 31 December 2015
Resource Generation Limited (the "Company") is developing its Boikarabelo coal mine in the Waterberg region of South Africa. This region accounts for 40% of the country's remaining identified coal resources. There are probable reserves of 744.8* million tonnes of coal on 35% of the tenements under the Company's control (refer to the ASX announcement dated 16 December 2010). Stage 1 of the mine development targets saleable coal production of 6 million tonnes per annum.
Corporate
Following the Company's receipt of a requisition for a General Meeting from Altius Investment Holdings (Pty) Limited ("Altius") to replace the Company's board, the Company submitted an application to the Takeovers Panel seeking a declaration of unacceptable circumstances in relation to the affairs of the Company with orders that, among other things, the Company's majority shareholders, Shinto Torii Inc. (a subsidiary of Altius), Noble Group Limited and Public Investment Corporation SOC Limited, be excluded from voting at the General Meeting. The Takeovers Panel declined to make such an order and, at the General Meeting held on 26th November 2015, shareholders approved the election of a new board of directors of the Company, comprising Denis Gately (Chairman), Lulamile Xate (Deputy Chairman), Colin Gilligan, Dr Konji Sebati, Leapeetswe Molotsane and Robert Croll. The new board appointed Rob Lowe as the interim Chief Executive Officer effective 26th November 2015.
On 25th November 2015, the day prior to the General Meeting, the former Managing Director of the Company approved the retrenchment of all Sydney office staff. In addition, the former board approved the payment of termination benefits to the two executive directors in their expectation that their position as directors would be terminated at the General Meeting to be held the following day. Termination benefits totalling $2,303,504 were paid to the former board members, executives and staff on the same day. The new board is seeking legal advice in relation to the payment of the termination benefits.
The new board met in South Africa on 14th December 2015 and subsequently the Chairman released a board report to shareholders on 16th December 2015 outlining the board's priorities with respect to rebuilding the executive team, meeting with potential funders, reviewing the Boikarabelo mine architecture and evaluating alternative mine operating models.
Cash reserves as at 31 December 2015 were $18.3 million.
Debt funding
Immediately following the General Meeting, the interim CEO made contact with the various funders with whom the Company had been in negotiations during the preceding quarter. A number of meetings were held with these funders in the period to 31 December 2015 with
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discussions due to recommence in January 2016. The top priority of the board is to secure appropriate funding for the Boikarabelo coal mine project in 2016.
Boikarabelo mine construction
The final stages of the Boikarabelo mine's early works construction continued during the quarter while securing of the funding continued. Construction of the bulk transformer yard and substation that is separately funded by a deferred payment facility was successfully commissioned by EHL Energy (Pty) Limited. Connection into the Eskom power grid is scheduled for July 2016. In addition, all switches and signalling installations, including the construction of the 400 metre permanent way of the Network Stabilisation Facility ("NSF"), was safely and successfully commissioned. The NSF is now in a position to be used as the construction access for the rest of the railway line system to the mine.
As previously announced, the Kubu Mining Right along with the Social and Labour Plan were lodged with the Department of Mineral Resources and the application is currently being reviewed. The development of the environmental impact assessment is underway and will be lodged during the next quarter.
Focus on the mine has now shifted from construction to operational readiness as the early works construction comes to an end.
Mining tenements
The coal mining rights and exploration tenements held 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.
Yours faithfully
RESOURCE GENERATION LIMITED
Mike Meintjes Company Secretary
Corporate information
Directors
Denis Gately Non-Executive Chairman
Lulamile Xate Non-Executive Deputy Chairman
Robert Croll Non-Executive Director
Colin Gilligan Non-Executive Director Leapeetswe Molotsane Non-Executive Director Dr Konji Sebati Non-Executive Director
Company secretary
Mike Meintjes
Registered office
Level 12, Chifley Tower 2 Chifley Square
Sydney NSW 2000
Telephone: +61 2 9376 9000
Facsimile: +61 2 9376 9013 Website: www.resgen.com.au
Mailing address
GPO Box 5490
Sydney NSW 2001
Contacts Denis Gately Rob Lowe
Media
Martin Debelle, Citadel MAGNUS
t: +61 2 8234 0100 d: +61 2 8234 0102 m: +61 409 911 189
Level 15, 61 York Street, Sydney NSW 2000 Australia
* 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, 30/9/2001.
Name of entity
Resource Generation Limited
ABN Quarter ended ("current quarter")
91 059 950 337
31 December 2015
Consolidated statement of cash flows
|
Cash flows related to operating activities
|
Current quarter
$A'000
|
Year to date (6 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
|
-
- (2,034)
- (3,656)
- 53
(2)
-
-
|
-
- (5,170)
- (4,609)
- 130
(3)
-
-
|
|
(5,639)
|
(9,652)
|
|
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
|
-
|
-
|
|
-
|
-
|
|
(650)
|
(650)
|
|
1.9
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
1.10
|
-
|
-
|
|
1.11
|
-
|
-
|
|
1.12
|
-
|
-
|
|
(650)
|
(650)
|
|
1.13
|
Total operating and investing cash flows (carried forward)
|
(6,289)
|
(10,302)
|