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RSG
RSG
RSG - Resource Generation Limited - Quarterly Report for the three months ended
30 September 2010
Resource Generation Limited
ACN 059 950 337
(Incorporated and registered in Australia)
(Registration number ACN 059 950 337)
Share code on the JSE Limited: RSG ISIN: AU000000RES1
Share code on the Australian Stock Exchange Limited: RES ISIN: AU000000RES1
(JSE short name: "Resgen" or "the Company")
Quarterly Report for the three months ended 30 September 2010
Resource Generation has coal interests in South Africa and Tasmania. Its
current priority is to develop its planned Boikarabelo coal mine in the
Waterberg region of South Africa, which has one of the country`s largest
remaining coal deposits.
Highlights
- First offtake contract for Boikarabelo signed with a major Indian power
utility.
- Progress with mining rights application.
- Resources and reserves upgraded.
- Progress with planning access to rail network.
- Continued discussions with other potential customers.
- Commenced discussions with banks for funding arrangements for the mine
construction.
South Africa
Offtake contract
Integrated Coal Mining, on behalf of its affiliated company CESC Limited, has
agreed to purchase from Resgen one million tonnes of thermal coal per annum for
three years and two million tonnes per annum for a further 17 years. These
purchases will begin when the Boikarabelo mine commences production, which
currently is scheduled for early 2013. Prices will be agreed at the time based
on international benchmark prices.
In addition, Integrated Coal Mining has subscribed $10.5 million for a 10%
shareholding in Resgen. This involved the placement to Integrated Coal Mining of
18,268,053 Resgen shares at $0.575 per share.
Integrated Coal Mining and CESC are both parts of the RPG Group, one of India`s
most respected industrial groups. CESC is India`s third largest power utility,
with a current installed generating capacity of 1225 MW serving nearly 2.5
million consumers across the twin cities of Kolkata and Howrah. Its published
growth plan envisages an increase in its installed generating capacity to 5745
MW.
Progress with mining rights application
Progress with Resgen`s mining rights application is continuing and initial
public consultation on the environmental management plan has been completed.
The only issue that arose was the environmental impact of the road and rail
siding which were proposed for the first few years of the mine`s operations.
Consequently, the application has been modified to address these concerns, and
construction of the proposed 45 kilometre rail link from the mine site to the
existing rail infrastructure will take place at the commencement of the project
for a total cost estimated at $100 million.
The company has held constructive meetings with the Department of Mineral
Resources and the process is likely to be concluded in early to mid 2011.
Resource and reserve upgrade
An upgrade was announced after the end of the quarter. Boikarabelo`s resources
and reserves are now as follows:
- probable reserves of 636.0 million tonnes, an increase of 32.7 million
tonnes; plus
- a new measured resource of 204.0 million tonnes; plus
- an indicated resource of 551.7 million tonnes; plus
- an inferred resource of 1.5 billion tonnes.
Mine planning is being undertaken which will enable the measured resource to be
upgraded to probable reserve status. This is expected to be completed by the
end of November 2010.
Access to rail network
The company has continued detailed discussions with Transnet regarding access to
its rail network to provide transport to east coast ports. As noted above, the
construction of the proposed 45 kilometre rail link from the mine site to the
existing rail infrastructure is being brought forward to the commencement of the
project. Work has commenced on the approval application which needs to be
submitted under the National Environmental Management Act.
Discussions with potential customers
In addition to the contract with Integrated Coal Mining Limited, the company is
also in discussions with other potential export and domestic customers regarding
purchases of Boikarabelo coal when production begins.
Discussions with banks
Significant progress was made in the quarter towards completion of the bankable
feasibility model and discussions have commenced with potential debt providers
from South Africa and Europe. The company is targeting project finance
facilities for the construction of the mine and hopes to obtain 60% of total
funding from debt providers.
Tasmania
A drilling programme of 25 holes was completed on the Woodbury tenement, where
Resource Generation is exploring for thermal coal. A total of 16 fully cored
drill holes, totalling 910.3 metres, and 9 open holes totalling 839.6 metres
have been completed. All holes were geophysically logged. Laboratory analysis
and geological modelling has commenced, with results expected in early 2011.
Cameroon
There was no activity during the quarter on Resgen`s uranium tenements in
Cameroon.
Corporate Information
Directors
Scott Douglas 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
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
* 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 30 September 2010
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating quarter (3 mths)
activities $A`000 $A`000
1.1 Receipts from product sales - -
and related debtors
1.2 Payments for (a) (469) (469)
exploration and evaluation (1,665) (1,665)
(b) development - -
(c) production (944) (944)
(d) administration
1.3 Dividends received - -
1.4 Interest and other items of a 123 123
similar nature received
1.5 Interest and other costs of (2) (2)
finance paid
1.6 Income taxes paid - -
1.7 Other (provide details if - -
material)
Net Operating Cash Flows (2,957) (2,957)
Cash flows related to
investing activities
1.8 Payment for purchases of: - -
(a) prospects - -
(b) equity investments - -
(c) other fixed assets
(land)
1.9 Proceeds from sale of: (a) - -
prospects - -
(b) equity investments - -
(c) other fixed assets
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other- Government charges in - -
relation to land acquisitions
(refundable)
(0) (0)
Net investing cash flows
1.13 Total operating and investing (2,957) (2,957)
cash flows (carried forward)
Current Year to date
quarter (3 mths)
$A`000 $A`000
1.13 Total operating and investing (2,957) (2,957)
cash flows (brought forward)
Cash flows related to
1.14 financing activities 10,504 10,504
Proceeds from issues of
shares, options, etc.
1.15 Proceeds from sale of - -
forfeited shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (provide details if - -
material)
Net financing cash flows 10,504 10,504
Net increase (decrease) in 7,547 7,547
cash held
1.20 Cash at beginning of 6,088 6,088
quarter/year to date
1.21 Exchange rate adjustments to (50) (50)
item 1.20
1.22 Cash at end of quarter 13,585 13,585
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
Current
quarter
$A`000
1.23 Aggregate amount of payments to the 262
parties included in item 1.2
1.24 Aggregate amount of loans to the parties -
included in item 1.10
1.25 Explanation necessary for an understanding of the
transactions
Executive salaries and directors fees
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which
have had a material effect on consolidated assets and
liabilities but did not involve cash flows
N/A
2.2 Details of outlays made by other entities to
establish or increase their share in projects in
which the reporting entity has an interest
N/A
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount Amount
available used
$A`000 $A`000
3.1 Loan facilities - -
3.2 Credit standby - -
arrangements
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (102)
4.2 Development (1,016)
4.3 Production -
4.4 Administration (555)
Total (1,673)
Reconciliation of cash
Reconciliation of cash at the end Current Previous
of the quarter (as shown in the quarter quarter
consolidated statement of cash $A`000 $A`000
flows) to the related items in the
accounts is as follows.
5.1 Cash on hand and at bank 18 14
5.2 Deposits at call 13,385 5,892
5.3 Bank overdraft - -
5.4 Other (Bank guarantees) 182 182
Total: cash at end of 13,585 6,088
quarter (item 1.22)
Changes in interests in mining tenements
Tenement Nature of Interes Intere
reference interest t at st at
beginni end of
ng of quarte
quarter r
6.1 Interests N/A
in mining
tenements
relinquish
ed,
reduced or
lapsed
6.2 Interests N/A
in mining
tenements
acquired
or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
Total Number Issue Amount
number quoted price paid up
per per
security security
(cents) (cents)
7.1 +Preference N/A
securities
(description)
7.2 Changes during N/A
quarter
Increases
through
issues
Decreases
through
returns of
capital, buy-
backs,
redemptions
7.3 +Ordinary 182,680, 182,680, Various Fully
securities 530 530 paid
7.4 Changes during
quarter 18,268,0 18,268,0 57.5 57.5
Increases 53 53
through issues
Nil Nil
Decreases Nil Nil
through
returns of
capital, buy-
backs
7.5 +Convertible N/A
debt
securities
(description)
7.6 Changes during N/A
quarter
Increases
through
issues
Decreases
through
securities
matured,
converted
7.7 Options Exercise Expiry
(description 450,000 Nil price date
and conversion 1,875,00 Nil 28/11/20
factor) 0 Nil $0.25 12
2,875,00 Nil 31/12/20
0 Nil $0.50 12
250,000 Nil 7/7/2013
450,000 Nil $0.50 17/3/201
250,000 Nil 3
350,000 Nil $0.50 28/11/20
350,000 Nil 12
375,000 Nil $0.60 17/3/201
375,000 3
500,000 $0.70 17/3/201
3
$1.00 17/3/201
3
$1.50 28/5/201
3
$1.55 28/5/201
3
$1.85 28/5/201
3
$2.05
7.8 Issued during Nil
quarter
7.9 Exercised Nil
during quarter
7.10 Expired during Nil
quarter
7.11 Debentures N/A
(totals only)
7.12 Unsecured N/A
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply
with accounting standards as defined in the Corporations Act.
2 This statement does give a true and fair view of the matters disclosed.
3 The information contained in this report has not been reviewed nor
reported on by the company`s auditors.
Date: 26 October 2010
STEPHEN JAMES MATTHEWS
(Company secretary)
Date: 26/10/2010 11:11:17 Produced by the JSE SENS Department.
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