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In the annual general meeting of Resource Generation Limited (ASX:RES), the chairman of the company assures its investors that the board members and executive members are working very hard to secure the credit approval to fund the project in the upcoming year 2019. In the meantime, he highlights the progress which was made in the FY2018.
To fundamentally secure the license to operate the Boikarabelo Project, the project team has compiled all the necessary documentation related to the projectâs social and labor plans, keeping in mind the environmental conditions. In April, the South African Industrial Development Corporation of South Africa approved a credit worth 540 million Rand as a part of Syndicate loan. South African Industrial Development Corporation is the first amongst the syndicate members.Â
Based on the Independent Expert reports which cover technical, environmental, market and legal examination of the project, the project has a âclean bill of healthâ.
For the construction of 43km mouth of mine to the main line rail link, very soon the board members will consider the funding options. In this regard, the company is working to satisfy all the necessary conditions which are covered in the term sheet. Many of the conditions are already fulfilled, yet there are some are still in progress.
At present, South Africa is suffering from coal crisis. The company believes that it is strategically important to construct new coal mines. In South Africa, Boikarabelo is the most successful coal-mine project.
For the year ended 30 June 2018, the company incurred a net loss of A$10.342 million. The net asset of the company is A$122.488 million which indicates that the company is in a position to clear its long-term obligations. The company holds a total current asset of $1.979 million and a total current liabilities of $26.525 million which indicates that the company is neither in a position to clear its short-term obligations nor able to meet its working capital. There is also an increase in the accumulated loss of the company, which highlights that the shareholderâs wealth got eroded. By the end of FY2018, the total shareholderâs equity is worth $122.488 million.
From the operating activities of the company, the net cash outflow was A$5.841 million. Here, the major source of cash outflow was due to the payment made to the suppliers and the employees.
From the investing activities of the company, the net cash outflow from the investing activities was A$5.056 million. Here the major source of cash outflow was due to the payment made for mining tenements and mining development.
From the financing activities of the company, the net cash inflow from financing activities was A$7.970 million. Here, the major source of cash outflow was due to the repayment of the borrowings. The cash and cash equivalent by the end of FY2018 was A$1.729 million.
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