Resource Generation : Quarterly Report for the three months ended 31 March 2017

ACN 059 950 337

Resource Generation Limited (the "Company" or "Resgen") is an emerging ASX and JSE-listed energy company, currently developing the Boikarabelo Coal Mine in South Africa's Waterberg region. The Waterberg accounts for around 40% of the country's 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). 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 Africa's Broadbased Black Economic Empowerment Act, Section 9(5): Codes of Good Practice.

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

The Company's primary focus this quarter has been to finalise the key material agreements relating to the mine and logistics. These include the Engineering, Procurement and Construction (EPC) contract for the Coal Handling and Preparation Plant (CHPP), the CHPP Operations & Maintenance contract, the Ancillary Works EPC contract, the Transportation of Coal Agreement, the Port Service Level Agreement and the Mining Contract. A number of these contracts have been concluded and submitted to the Lenders and Independent Technical Expert for review. In parallel good progress has been made towards the funding of the rail link and the rail link EPC construction contract. Activities continue to be undertaken at the mine site preparing for the arrival of the EPC contractors. We are hopeful that this orderly and deliberate process will result in the conclusion of funding arrangements for the project during 2017 (ASX Announcement: 2 March 2017).

In parallel to advancing the development of the mine, the Company has continued to plan to also operate as an Independent Power Producer, providing another option for the domestic sale of coal. We have appointed external consultants, J Maynard and WaterBorne Capital, to assist us with the selection and appointment of the main EPC contractor and preparation of a Joint Development Agreement. At the same time, we are working to be ready to submit our proposal when the Department of Energy opens the next submission window. This is expected to be towards the end of 2017.

The Company signed an extension of the Facility Agreement of 3 March 2014 (ASX Announcement: 14 March 2017), under which Noble Resources International Pte Ltd has agreed to make available further funds of up to US$8.4M to the Company's subsidiary,

Ledjadja Coal Pty Ltd (LCL), to fund the operations and development of the mine whilst project funding is secured. Those additional funds are to be available in three tranches over the period to 30 September 2017.

Key terms associated with the extension of the Facility include:

• The additional funds together with the existing Facility of US$20m are unsecured and subject to a parent company guarantee;

• Interest accrues at 10.75% pa and can be capitalised on a six-monthly basis unless the borrower elects otherwise to pay such interest;

• The right for the Lender to appoint a nominee to the Board of the Company and approve one of the Company's nominees to the Board of LCL, subject to regulatory and governance requirements; and

• The Facility is repayable in instalments commencing from 30 September 2017 with a termination date of 10 March 2024, however the additional funds made available under the extension of the Facility is repayable from the proceeds of the first drawdown of funding secured for the Project.

As part of negotiating the extension to the Facility, the Company has also agreed to restate the existing domestic offtake and coal marketing agreements it has with the Lender and its related bodies corporate with effect from 31 December 2013, including the incorporation of a term sheet signed in 2013.

Subsequent to quarter end the Group received the first drawdown of US$2.4m under the extended Facility Agreement and has commenced the process of appointing the Lender nominee to the Board of the Company and obtain the approval for the appointment of a further director to the Board of LCL.

The Company's summarised capital structure at 31 March 2017 is as follows:

Issued fully paid ordinary shares: 581,380,338

Performance rights: 6,250,000

Cash at bank: $1.2 million

Shareholders and potential investors should also review the Company's Annual Report, audited Financial Report for the year ending 30 June 2016 and Interim Financial Report for the six months ending 31 December 2016 to fully appreciate the Company's financial position.

The coal mining rights and exploration tenements held at the end of the quarter were as follows:

 MPT 169 MR (74%)

 PR678/2007 (74%)

 PR720/2007 (74%)

The Company has no interest in farm-in or farm-out agreements.

The Mining Right Application for Kubu, adjacent to Boikarabelo, was lodged at the end of 2015. Kubu was previously known as Waterberg No 1 and encompasses the farm Koert Louw Zyn Pan (PR678/2007).

The Company is in the process of relinquishing PR720/2007, over the properties Lisbon and Zoetfontein, as these are distant from the Boikarabelo site and contain minimal resources that have not been included in the JORC resource.

On behalf of the Board of Directors Yours faithfully

Mike Meintjes Company Secretary

Denis Gately Non-Executive Chairman

Lulamile Xate Non-Executive Deputy Chairman

Rob Croll Non-Executive Director

Colin Gilligan Non-Executive Director Leapeetswe Molotsane Non-Executive Director Dr Konji Sebati Non-Executive Director

Mike Meintjes

Level 1, 17 Station Road Indooroopilly, QLD 4068, Australia

Telephone: +27 12 345 1057

Facsimile: +27 12 345 5314 Website: www.resgen.com.au

Denis Gately Rob Lowe