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RESOURCE GENERATION LIMITED - ASX Listing Rule 10.1 Waiver - Additional US$2.5m working capital funding announced on 8 October 2019

03 December 2019 - 07:55 AM
RSG
ASX Listing Rule 10.1 Waiver - Additional US$2.5m working capital funding announced on 8 October 2019

    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)


      ASX Listing Rule 10.1 Waiver - Additional US$2.5m working
            capital funding announced on 8 October 2019
    Summary

    .         Resgen secures a waiver from ASX Listing Rule 10.1 in order to grant security
              in respect of the further US$2.5m in conditional funding from Noble
              announced on 8 October 2019;
    .         Resgen complies with the waiver requirement to release a market update
              setting out the waiver conditions;
    .         Resgen to finalise the legal documentation for the further extension of up to
              US$2.5m together with satisfying the remaining drawdown conditions
              precedent; and
    .         Resgen and Noble agree that the extension of additional working capital will
              be available through to 31 March 2020.

    Resource Generation Limited (ASX:RES) (ResGen or Company) announced to the
    market on 8 October 2019 that a conditional agreement had been reached with Noble
    Resources International Pte Ltd (Noble) to provide up to an additional US$2.5m in
    working capital.

    The legal documentation to support this conditional commitment is in the process of
    being drafted as an amendment to the facility agreement originally entered into between
    Noble and Ledjadja Coal (Pty) Ltd (Ledjadja), being the subsidiary holding ResGens
    interest in the Boikarabelo Coal Mine project (Project), in March 2014 (Facility
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, Greg Hunter, Michael Gray                 www.resgen.com.au
Interim CEO: Leapeetswe Molotsane
Company secretary: Mike Meintjes
Agreement). ResGen is the guarantor of Ledjadja's obligations under the Facility
Agreement.

One of the conditions of this further extension to the Facility Agreement is that the
amount provided under the extension be secured by the existing Share Pledge granted
in favour of Noble over ResGen's interest in 74% of the shares in Ledjadja (held through
a wholly owned subsidiary, Resgen Africa Holdings Limited (RAHL)). As Noble is a
substantial shareholder in ResGen, the grant of security to it must comply with ASX
Listing Rule 10.1. The original grant of the Share Pledge to Noble (securing up to
US$41.9m in advances as agreed in October 2018) was approved by Shareholders for
the purposes of ASX Listing Rule 10.1 at the 2018 Annual General Meeting. However,
the extension of any further amounts under the Facility Agreement cannot be secured
under the Share Pledge without first obtaining a waiver of ASX Listing Rule 10.1 from
ASX or obtaining another Shareholder approval.

In mid-October 2019, the Company submitted an application to ASX seeking a waiver
from the application of ASX Listing Rule 10.1 to permit the Company, including its wholly
owned subsidiary RAHL, to increase the amount secured by the Share Pledge provided
to Noble to secure up to a further US$2.5m in advances from Noble under the Facility
Agreement without obtaining Shareholder approval. The Company is now pleased to
advise that the ASX has granted this waiver, subject to certain conditions that are
described below.

Approval of the Listing Rule waiver allows the Company to finalise as soon as possible
a further amendment to the Facility Agreement (Seventh Deed of Amendment) and
increase the amount secured by the Share Pledge to US$46.9m plus accrued interest.
The Seventh Deed of Amendment to allow for the additional funds to be available
through to 31 March 2020 (previously 28 February 2020).

The conditions set out in the waiver granted to the Company by ASX are that:

   .   the Share Pledge include a term that if an event of default occurs and Noble
       exercises its rights under the Share Pledge, neither Noble or any if its associates
       can acquire any legal or beneficial interest in an asset of the Company or RAHL
       in full or part satisfaction of the Companys obligations under the Share Pledge,
       or otherwise deal with the assets of the Company or RAHL without the Company
       first having complied with any applicable listing rules, including listing rule 10.1,
       other than as required by law or through a receiver, or a receiver or manager (or
       analogous person, including without limitation an administrator or liquidator)
       appointed by Noble exercising its power of sale under the Share Pledge and
       selling the asset to an unrelated third party on arms length commercial terms
       and conditions and distributing the cash proceeds to Noble in accordance with
       their legal entitlements. ResGen confirms that it is intended that the Share Pledge
       will contain a term to this effect;

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   .  the Company provide a summary of the material terms of the Facility Agreement
      and Share Pledge in each Annual Report during the term of the Facility
      Agreement;
   . any variation to the terms of the Share Pledge which is not a minor change or
      inconsistent with the terms of the waiver must be subject to Shareholder
      approval;
   . the Company and Noble must seek to discharge the Share Pledge when the
      funds advanced to Ledjadja are either repaid, or if it is not discharged, seek
      Shareholder approval for the continuation of the Share Pledge for any further
      period; and
   . that the Company releases to the Market an announcement which sets out the
      terms of the waiver, including:
     o the Company's plans with respect to the repayment of the funds advanced
         under the Facility Agreement, and discharge of the Share Pledge, including
         the timeframe within which it expects repayment and discharge to occur (as to
         which, see the details regarding repayment terms and release arrangements
         for the Share Pledge set out below); and
     o a statement of the reasons why the Company has chosen to obtain further
         funding and grant security to Noble, a Listing Rule 10.1 party, rather than a
         lender that is not a Listing Rule 10.1 party, and the steps that the Board took
         to satisfy itself that the transaction was being entered into is on arms length
         terms and is fair and reasonable from the perspective of the Companys
         Shareholders.

In relation to the last item listed above, the following is noted:

   .   the Company requires additional working capital to reach financial close for
       funding of the Project (Financial Close) which is targeted for the end of March
       2020 - see ASX Announcement on 3 December 2019 titled Execution of non-
       binding Term Sheets for construction of the Boikarabelo Coal Mine (Term
       Sheets);
   .   the non-binding Term Sheets referred to above first need to be translated into
       binding agreements. Furthermore, a number of conditions precedent are required
       to be satisfied in order to reach Financial Close. Certain of these conditions are
       outside of the direct control of the Company making it difficult for the Company
       to provide any firmer forecast on timing;
   .   repayment of all Facility Agreement advances made by Noble post the original
       US$20m loan (together with accrued interest) is planned to occur out of the first
       drawdown under the proposed Project funding after Financial Close;
   .   the Share Pledge must be released by Noble as one of the conditions precedent
       under the non-binding Term Sheets;
   .   the original Noble US$20m loan, plus accrued interest, is proposed to become
       interest free at Financial Close and will be subordinated with the new shareholder
       loans contemplated under the non-binding Term Sheets;


                                                                                      PAGE 3
   .   the Company determined that, if no further funding was obtained, it would be
       likely to exhaust its current working capital funding sometime in December 2019;
   .   the Company considered the available sources of funding to meet this need and
       identified Noble as the only party that was in a position to make a firm
       commitment within the relevant timeframe; and
   .   the terms proposed by Noble were consistent with those previously negotiated
       and agreed under the Facility Agreement.


Lulamile Xate
Chairman
For and on behalf of the Board


3 December 2019


For further information please contact:

Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au 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


About Resgen:

Resource Generation Limited (Resgen) is an emerging ASX and JSE-listed energy company,
currently developing the Boikarabelo Coal Mine in South Africas Waterberg region. The Waterberg
accounts for around 40% of the countrys 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 Africas Broad-based Black Economic Empowerment Act, Section 9(5):
Codes of Good Practice.

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



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Forward looking statements

This announcement contains certain forward-looking statements. Forward-looking statements
include those containing words such as anticipate, believe, expect, project, forecast,
estimate, likely, intend, should, could, may, target, plan, consider, foresee, aim,
will and other similar expressions. Any forward-looking statements, opinions and estimates
provided in this announcement are based on assumptions and contingencies which are subject to
change without notice and involve known and unknown risks and uncertainties and other factors
which are beyond the control of ResGen. This includes any statements about the terms on which
ResGen might obtain funding from the Lending Syndicate. To the maximum extent permitted by
law, the directors of ResGen, ResGen and any of its related bodies corporate and affiliates, and
their officers, partners, employees, agents, associates and advisers disclaim any obligations or
undertaking to release any updates or revisions to the information in this announcement to reflect
any change in expectations or assumptions, do not make any representation or warranty, express
or implied, as to the accuracy, reliability or completeness of such information, or likelihood of
fulfillment of any forward-looking statement or any event or results expressed or implied in any
forward-looking statement, and disclaim all responsibility and liability for these forward-looking
statements (including, without limitation, liability for negligence).

The term sheets referred to in this ASX announcement are non-binding and indicative in nature.
Negotiations regarding the transactions described in those term sheets are ongoing and
incomplete and there is no certainty that a transaction will be concluded based on the terms set
out in those term sheets (or at all). ResGen makes no representations or warranties whatsoever
as to the outcome of its engagement with the Lending Syndicate.




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Date: 03-12-2019 08:55:00
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