Resgen’s Boikarabelo mine nears completion as hunt for funding advances

JOHANNESBURG (miningweekly.com) – Coal hopeful Resource Generation (Resgen), which has recently emerged from an extensive board overhaul that saw it lose several senior executives and members of its Sydney-based office, continues to advance the final stages of construction of its flagship Boikarabelo mine, in Limpopo, while concurrently advancing its hunt for additional funding, the company said this week.

Updating the market on events during the quarter ended December 31, the group reported that construction of the bulk transformer yard and substation, which was separately funded by a deferred payment facility, had been successfully commissioned by energy provision specialists EHL Energy, with connection to the Eskom power grid scheduled for July.

In addition, all switches and signalling installations, including the construction of the 400 m permanent way of the network stabilisation facility (NSF), were safely and successfully commissioned.

“The NSF is now in a position to be used as the construction access for the rest of the railway line system to the mine. Focus on the mine has now shifted from construction to operational readiness as the early works construction comes to an end,” it stated.

Stage 1 of the mine development targeted saleable coal production of six-million tons a year.

Resgen had, meanwhile, lodged the mining right application, as well as the social and labour plan, for the Boikarabelo-adjacent Kubu mining right, with the Department of Mineral Resources.

The application was currently being reviewed, while the development of the environmental-impact assessment was under way and would be lodged in the next quarter.

Reiterating the events that led to changes to the company’s board last year, Resgen noted in a statement that, following the company's receipt of a requisition for a general meeting (GM) from Altius Investment Holdings to replace the company's board ahead of the GM, it had submitted an application to the Australian Takeovers Panel seeking a declaration of unacceptable circumstances in relation to the affairs of the company.

The application included orders that, besides other matters, the company's majority shareholders, Shinto Torii, Noble Group and the Public Investment Corporation, be excluded from voting at the GM.

The panel declined to make such an order and, at the GM held on November 26, shareholders approved the election of a new board of directors, comprising chairperson Denis Gately, deputy chairperson Lulamile Xate and board members Colin Gilligan, Konji Sebati, Leapeetswe Molotsane and Robert Croll.

The new board appointed Rob Lowe interim CEO, effective November 26.

However, on November 25, a day prior to the GM, former Resgen MD Paul Jury approved the retrenchment of all Sydney office staff.

In addition, the former board approved the payment of termination benefits to the two executive directors in their expectation that their position as directors would be terminated at the GM to be held the following day.

Termination benefits totalling $2.3-million were paid to the former board members, executives and staff on the same day.

“The new board is seeking legal advice in relation to the payment of the termination benefits. The top priority of the board is to secure
appropriate funding for the Boikarabelo coal mine project this year,” said the group.

Resgen closed the quarter with cash reserves of $18.3-million.