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Resource Generation resgen.com.au/

Resource Generation (ASX: RES) is developing one of South Africa’s largest remaining coal deposits, with the company's focos on the Boikarabelo tenements, in the Waterberg region of South Africa.

 

The strategy for the company is to develop high grade “energy” related resources into viable and competitive mining operations. Accelerated shareholder value will be delivered through the delivery of physical mining activity.

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Resource Generation raises A$30m to progress Boikarabelo Coal Mine rail link

Resource Generation (ASX: RES) has successfully raised A$30 million through 60 million shares at A$0.50 per share to bring forward the construction of the rail link from the Boikarabelo mine to the existing rail network in South Africa.

The proceeds raised under the equity raising will be used primarily for the rail link land acquisitions and access rights as well as other expenditure for the company’s Boikarabelo Mine, and for working capital.

The construction of the rail link will need approval under the National Environmental Management Act. In order to secure approval, the directors believe that it is essential to acquire land and obtain land access rights required for the rail link construction.

The company has recently concluded negotiations for the purchase of land and easement agreements for two-thirds of one of its preferred rail link routes.

Citigroup Global Markets Australia Pty Limited acted as Sole Lead Manager and Bookrunner to the placement and placed the shares with institutional and sophisticated investors.
 
The offering was oversubscribed and received strong interest from Australian and global investors.

The placement will be issued in two tranches, with an initial unconditional tranche of 27.4 million shares to be issued on Wednesday, 10 November 2010 and the balance of 32.6 million shares to be issued conditional on the receipt of shareholder approval.

Resource Generation will seek shareholder approval for the conditional tranche of the placement and ratification of the unconditional tranche at a general meeting to be held on or about 13 December 2010.

Following the share issues in these two tranches, the company will have 242,680,530 ordinary shares on issue.

RES has also decided to invite shareholders to participate in the Resource Generation Share Purchase Plan (SPP).

The SPP entitles shareholders in the company, irrespective of the size of their shareholding, to purchase up to A$15,000 worth of shares in the Company at A$0.50 cents per share, being the same price paid by institutional shareholders in the share placement.

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