fin review article

G'day fellow RESonators. Takin a bit of r & r down Bussleton way so just catchin up with the chatter - geez the internet is snail pace down here. Know i've been blowin the trumpet on an Exxaro t/o and making similarities to CZA but the article which I believe was on the 18th March combines my thoughts - maybe an allinance would be a great result - a great read, further confidence in the project and of course we're undervalued. Would explain the recent action...

Resource Generation (Resgen), the South African coal vehicle for former Resource Pacific boss Paul Jury is understood to be poised to follow in the footsteps of Coal of Africa and take out a secondary listing on the Johannesburg Stock Exchange.

Resgen has a market value of only $80 million. In comparison, Coal of Africa and Riversdale Mining are valued at $1.1 billion and $1.65 billion respectively, like those African coal players, Resgen has plenty of promise.

Jury has been an astute project picker having received takeover bids from Xstrata for two of his previous coal companies.

Resgen has already proven up 600 million tonnes of saleable coal reserves (a mix of thermal, semi-soft and pulverised coal injection coal) in its projects in the Waterberg coal field near the Botswana border, with a total inferred resource of 1.9 billion tonnes.

A bit like the Gunedah basin NSW compared with the Hunter Valley, Waterberg is seen as the next frontier in South African coal, with the Witbank fields dominated by BHP Billiton and Xstrata, runing out.

Resgen has to receive a mining license next year to start production of up to 6 million tonnes a year from 2013. Financing for the $700 million project is yet to be arranged and Resgen needs to work out details of rail and port access (one option is a possible alliance with neighbour Exxaro).

It hopes to sell about half the coal to Eskom in the South African domestic market and ship the rest overseas.

It has yet to appoint advisors for financing, but will consider all options such as selling a minority stake in the project or the Company in return for and offtake agreement, as Coal of Africa and Riversdale have done.

Source : Bloomberg