finance update, page-4

THe SP should start to reflect all these points below. We have come a long way...

PRESENT STATUS
? Banks are now undertaking detailed due diligence before offering terms for project
finance to develop the company’s massive open-cut coal mine.
? This follows Resource Generation signing a haulage contract with Transnet in June 2012
– overcoming its last hurdle before raising finance.
? The project’s sovereign risk has been minimised as a result of overcoming all major
regulatory hurdles faced by the company.
? Assuming agreement on project finance is reached, it will underwrite confidence in the
asset’s potential cash flow, which should increase the company’s enterprise value and
will determine the price at which equity is raised for the balance of the Stage 1
development cost and working capital.
? If funding is completed by the end of 2012, construction of the mine and its
infrastructure is expected to take 24 months, with Stage 1 saleable production (6 million
tonnes per annum) beginning at the start of 2015.
? Construction of Stage 2, planned to increase saleable production to more than 20 million
tonnes per annum, is expected to be funded from cash flow and a further equity capital
raising is not envisaged.
? The Waterberg region accounts for 40% of South Africa’s remaining coal resources and
Boikarabelo has probable reserves of 744.8 million tonnes* on 35% of its tenements –
which will make it a world-class mine by any measure.
? A contract to buy 139 million tonnes of coal over 38 years has already been signed with
India’s RPG Group, which owns 11.6% of Resource Generation after buying shares at
$0.575 in September 2010 and $0.82 in June 2011.
? A second contract has been signed with India’s Bhushan Steel to buy 500,000 tonnes per
annum for five years and a minimum of 500,000 tonnes per annum for a further 15 years.
? Negotiations have proceeded further with Eskom, South Africa’s power generation
company, to supply