Resource Generation : Statement of Coal Resources and Coal Reserves for Resource Generation Limited

Resource Generation Limited (Resgen) holds various Coal Mining Tenements in South Africa through its subsidiaries Ledjadja Coal (Proprietary) Limited (Ledjadja), (the owner of the Boikarabelo Coal Mine), and Waterberg One Coal (Proprietary) Limited (Waterberg One). Ledjadja and Waterberg One are ventures between Resgen (74% ownership) and black economic empowerment entity, Fairy Wing Trading 136 (Proprietary) Limited (26% ownership).

Ledjadja holds title to the Mining Right and Tenements listed in the schedule below:

Boikarabelo Coal Mine

Witkopje 238LQ Ledjadja #1 Draai Om 244 LQ Ledjadja #2

Kalkpan 243 LQ Ledjadja #3

Osorno 700 LQ Ledjadja #4

Zeekoevley 241 Ledjadja #5LQ

Vischpan 274 LQ Ledjadja #6

Kruishout 271 LQ Ledjadja #7

9018

Ledjajda Coal (Pty) Ltd

1)

Resource Generation Ltd. 74%

1. Fairy Wing Trading 136 (Pty) Ltd. 26%

   169MR

   (previously identified as MPT15/201 2MR)

   Granted 20 April

   2011

   Expiry 19

   April 2044

   Waterberg One Coal holds title to Prospecting Rights over the farms Koert Louw Zyn Pan 234 LQ (Project Area Waterberg #1) (Prospecting Right number PR678/2007), and the farms Lisbon19 LQ (Project Area Waterberg #2) and Zoetfontein 22 LQ (Project Area Waterberg #3) (Prospecting Right number PR720/2007).

   Resource Generation Australia (ACN 059 950 337)

   c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068

   GPO Box 126, Albion QLD 4010. Phone +27 (012) 345 1057 Fax +27 (012) 345 5314

   Directors: Denis Gately (Chairman), Lulamile Xate (Deputy Chairman), Rob Lowe (CEO), Robert Croll, Dr. Konji Sebati,

   Colin Gilligan, Leapeetswe Molotsane www.resgen.com.au

   The Coal Resources and Coal Reserves estimate for Boikarabelo Coal Mine has been updated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, (The JORC Code, 2012 Edition) (the JORC Code 2012).

   This update of the Coal Resources and Coal Reserves estimates relate specifically to the Ledjadja

   #1 and Ledjadja #3 project areas where an optimised mine design has now been completed. These two project areas make up 27% of Resgen's Coal Resources and 46% of Resgen's Coal Reserves.

   Resgen has previously secured export offtake contracts and has developed a dual export/domestic business model intending to service both export customers and domestic power stations. This model has resulted in a meaningful increase in the Net Present Value (NPV) and Internal Rate of Return (IRR) of the project.

   The previously announced 2010 estimated Coal Resources and Coal Reserves ("the 2010 Release") was based on a single, low quality product for sale to domestic power stations.

   An updated statement of those estimated Coal Resources and Coal Reserves as at 31 December 2016 is included below.

   Statement of Coal Resources and Coal Reserves

   Project Area

   Area (hectares)

   Coal Resources (Mt)

   Coal Reserves (Mt)

   The total Coal Resources base is summarised in the Table below:

   Ledjadja #1 and Ledjadja #3 (*)	830.0	994.81	267.09
   Ledjadja #1 and Ledjadja #2(**)(i)	877.0	1479.6	-
   Waterberg #1 (***) (i)	536.0	426.3	314.2
   Waterberg #1(**)(i)	706.0	551.7	-
   Total	2,949.0	3,711.61	581.29

   (*)- determined by applying the JORC Code 2012

   (**)- determined by applying the JORC Code 2004; and relates to the Inferred Resources of the Project Area

   (***)- determined by applying the JORC Code 2004, and relates to the Measured and Indicated Resources of the Project Area

   Note (i) -This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

   This new business model for the Boikarabelo Coal Mine has resulted in the following variations to the 2010 Release:

   Coal Resources

   The Measured and Indicated Tonnes of 664.2 million tonnes have increased to 994.81 million tonnes. This is attributable to an increase in the Measured Resource Area as a result of additional drilling.

   Coal Reserves

   The Marketable Coal Reserves have reduced from 430.6 million tonnes to 267.09 million tonnes and are now based on:

   • an export quality product with an average of 14% ash and an average 25.73 MJ/kg calorific value determined on an Air Dried (AD) basis; and

   • a domestic power station product with an average 19.5 MJ/kg calorific value and an average 31.43 % ash determined on an AD basis.

     The export quality product has an average yield of 23.68% and the domestic power station product has an average yield of 19.61 %. This equates to an overall average yield of 43.3%.

     The run of mine (ROM) of 616.85 million tonnes equates to a life of mine in excess of 40 years at an annual production rate of 15.12 million tonnes and sales for a similar period at a rate of 6.55 million tonnes per annum (Production Target). The material assumptions on which this Production Target is based are (see Section 2 Coal Reserves below and Section 4 of Appendix 1 for more detail):

   • open pit truck and shovel terrace operation,

   • minimum coal seam/mining height thickness of 0.5m,

   • dual product mine applying a minimum total yield cut off of 24%,

   • appropriate pit slope angles (overall 450),

   • appropriate mining recovery factors, dilution and contamination, and

   • beneficiation of the coal for a dual product in a high density beneficiation plant and applying appropriate plant factors.

     This Production Target is based purely on Probable Coal Reserves and these Coal Reserves have been signed off by the Competent Persons.

     The following information prescribed by the JORC Code 2012 is included in this Release:

   • Section One and Section Two detail the Coal Resources and Coal Reserves as at 31 December 2016 with respect to the Boikarabelo Coal Mine. A comparison to the 2010 Release is also shown.

   • Appendix 1 provides a summary of important assessment and reporting criteria used at the Boikarabelo Coal Mine for reporting of Coal Resources and Coal Reserves in accordance with the Table 1 checklist in the JORC Code 2012.
   • Appendix 2 provides borehole co-ordinates and collar elevations.

The Inferred Coal Resources and Coal Reserves for Ledjadja #1 and Ledjadja #2 and the Coal Resources for Waterberg #1 will be subject to review and update under the JORC Code 2012 during the 2017 calendar year and will be released to the market once this review and update has been completed and approved.

The information contained in this Release which relates to estimates of Coal Resources and Coal Reserves is based on and accurately reflects reports prepared by Competent Persons named beside the respective information in the Table below. Mr Ben Bruwer is a Principal Consultant with VBKom (Pty) Ltd (VBKOM). Mr Riaan Joubert is the Principal Geologist employed by Ledjadja.

*SACNASP - South African Council for Natural Scientific Professions

** SAIMM - Southern African Institute of Mining and Metallurgy

The above-named Competent Persons both consent to the inclusion of material in the form and context in which it appears in this Release. Both individuals are members of a Recognised Professional Organisation in terms of the JORC Code 2012, and both have a minimum of five years' relevant experience in relation to the mineralisation and type of deposit being reported on by them to qualify as Competent Persons as defined in the JORC Code 2012.

Neither Mr Bruwer, nor VBKOM has a material interest or entitlement, direct or indirect, in the securities of Resource Generation Ltd. Mr Joubert holds no shares in Resource Generation Limited.

Resource Generation Ltd. (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. Resgen's primary shareholders are the Public Investment Corporation of South Africa SOC Limited (PIC), Noble Resources International Pte Limited and Altius Investment Holdings (Pty) Limited.

Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143

Australia: Martin Debelle on + 61 282 340 102 or +61 409 911 189

South Africa: Marion Brower/Thembisa Kotobe on +27 11 880 3924