Investor Series:Coal August 2008 1
DISCLAIMER The information in this presentation does not purport to contain all the information that may be required to evaluate the prospects of Coalworks and in particular only discloses material information within the knowledge of Coalworks. You should seek independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to the information and rely on your own due diligence and analysis accordingly. Other than to the extent required by law (and only to that extent) we disclaim all liability and make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility nor liability for, the information provided. 2
COALWORKS OVERVIEW Australian energy company focused on coal Major asset: Oaklands, NSW Other projects: Hodgson Vale Coal, QLD Ashford Lime, NSW Western Collieries Bowen Basin Surat Basin Hunter Valley 3
COALWORKS BOARD AND MANAGEMENT Andrew Firek (CEO) 25 years international experience in coal and minerals industries, current director of $1.2 Bn MKT Cap Coal Group (Gujarat NRE Minerals); former Research and Development Manager with Pancontinental Mining; former executive director of Allegiance Mining NL; former Team Leader with CSIRO allied to clean coal technologies. Graham Coall (COO) - 35 years in the development & construction of mining & mineral processing operations, senior operational positions in BHP, Comalco Aluminium, Griffin Coal and on various coal projects Wayne Mitchell (Chairman) - Past chairman of Central Victorian Gold Mines NL, director of Diversified Mineral Resources NL, led project management of Burton Downs Coal Project and co founded and developed major zinc mine in Thailand Tony Teng (Company Secretary) former consultant in mergers and acquisitions; former senior accountant in manufacturing; former consultant in South East Asian Region in investment and manufacturing sectors Chris Hagan (Senior Consultant) co- founded Allegiance Mining NL; co-founded Zinico Resources NL; consultant Burton Downs Coal Project; principal consultant to securing of Oaklands Coal Project from NSW government; solicitor for over 25 years 4
MACRO COAL STORY Thermal Coal benchmark price - 300% rise Thermal Coal contract price - $150 Newcastle Coal Terminal July 2008 China and India 75% reliance on Coal Emerging economies driving Coal demand Coal to outlast oil by hundreds of years Monthly Thermal Coal Price (Jan06 Aug08) 5
MACRO COAL STORY Total world trade in hard coal (2007) - estimated at 860 Mt 630 Mt of thermal (steaming) coal 230 Mt of metallurgical (coking) coal Australia - the world's largest coal exporter with estimated exports of 250 Mt in 2007, or 29% of the world total. Thermal coal: Australia's has ~19% of total world seaborne trade. Kazakhstan China 4% 5% Vietnam 5% Other 4% USA 4% Indonesia 26% Columbia 10% South Africa 10% Russia 13% Australia 19% Source: ABARE, AME, Australian Coal Association, BBY Estimates 6
OAKLANDS PROJECT JORC Resource of 280 million tonnes inferred coal in southern zone Additional resource potential in northern zone as each recent drill-hole intersected thick coal Large open pit mining potential Disused rail line 17 / 120 Coal / Over Thickness..Burden 14 / 90 10 / 60 7
OAKLANDS DRILLING North South Cross Section of Coal Seam at Oaklands 8
OAKLANDS DRILL SITES 9
OAKLANDS COAL SEAM QUALITY Thermal sub bituminous coal Past production demonstrates commercial quality COAL QUALITY DATA Seam Name Tonnage Ash Content %ad Volatile Matter %ad Fixed Carbon %ad Specific Energy MJ/Kg Total S %ad Coreen Creek 3,537,000 16.75 21.61 35.01 19.92 0.41 U-Lane Shaft 13,810,000 24.54 24.86 42.72 N/A N/A Lanes Shaft 256,675,000 23.58 23.34 40.32 19.82 0.24 L-Lanes Shaft 10,006,000 25.71 21.86 39.53 N/A N/A Source: Oaklands Coal Resource, Geos Mining Project 2159-1, 6 March 2008 10
COMPARISON HV Coal vs COALWORKS Comparison Hunter Valley Std Coal & Coalworks Washed Coal Target COAL QUALITY DATA Mines Ash Content %ad Moisture %ad Total S %ad Specific Energy k/cal/kg HV Standard 14 10-12 <1.0 6,000 Coalworks (Washed) 14 12-15 0.24 5,500 Source: Oaklands Coal Resource, Geos Mining Project 2159-1, 6 March 2008 11
OAKLANDS COAL QUALITY 12
OAKLANDS PROJECT KEY POINTS Lanes Shaft coal seam width 10m average No evidence of igneous intrusion Shallow seam is ideal for open pit mining Soft digging (No drilling or blasting) Flat topography ideal for mine development and infrastructure Existing mines within Oaklands tenement Good Landholder support Power & Water readily available Labour source available in local towns Rail/port access via uncongested Port Kembla Coal Terminal Off-take discussions underway with multiple parties 13
COALWORKS IN NEWS The Border Mail Thursday, June 26, 2008 14
COALWORKS IN NEWS 15
OAKLANDS PROJECT KEY ASSUMPTIONS Base case 3Mt pa, ramping up to 6mt pa in year 4 Three year mine development Company owned wash plant Contract mining Open pit strip mining at an average 6:1 ratio Soft overburden and no drilling or blasting Minimum 25 year mine life 16
OAKLANDS DEVELOPMENT PROCESS Infill drilling to achieve measured resources Bulk sample from test pit Coal optimization studies Environmental Assessment Bankable Feasibility Study Engineering and procurement Mine construction 17
OAKLANDS SITE LAYOUT / TEST PIT TEST PIT 18
OAKLANDS SITE LAYOUT / TEST PIT 19
OAKLANDS SITE LAYOUT / TEST PIT COALWORKS 20
OAKLANDS DEVELOPMENT TIMETABLE Oaklands EL Granted IPO/ Scoping Study Final feasibility Test Pit Sampling Engineering Production Initial Drilling & JORC Resource Established Pre-feasibility/ Prelim EA/ Test Pit Environmental Assessment Mine Approval Construction 2007 2008 2009 2010 2011 21
OAKLANDS INFRASTRUCTURE OPTIONS Existing mines at Oaklands facilitate development Water source available Rail spur on tenement 35m Existing clay mine at Oaklands 22
KEY APPROVALS ON TRACK Development Consent Granting of mining lease Environmental management plan Mine operations plan Mine safety management plan Water management plan Risk assessment study Funding on BFS Government approval required Developed by Coalworks 23
CLEAN COAL PROCESSING Udhe Shedden World experts in coal processing Access to world s best gasification & CTL technology Clean coal starts with gasification as it allows capture of CO2 Gasification is a proven technology with a number of plants operating successfully Oaklands coal is ideal for gasification A clean coal plant at Oaklands would be designed to lower costs, increase profits & lower CO2 emissions 24
HODGSON VALE COAL PROJECT Clarence Morton basin type thermal coal Prior drilling shows shallow thick coal seam Low sulphur, medium rank coal Current drilling to delineate coal zones Close to rail and labour Rail link to Gladstone planned for 2011/12 Up to 8m coal intersection in 5 drill holes 25
HODGSON VALE DRILLING 26
ASHFORD LIME PROJECT High quality limestone deposit Open pittable Potential for high value GCC: GCC sells for up to $520/T GCC now 50% of paper market GCC growth 3% pa 1 st drilling program completed Limestone samples to be sent to potential offtake partners 27
ASHFORD GEOLOGICAL DIAGRAM 28
CAPITAL STRUCTURE SHARES ON ISSUE ~ $103M MARKET CAPITALISATION ~ $ 70M CASH ON HAND ~ $ 24M Management Private Investors 46% Australian Institutions Management 14% Overseas Institutions 10% Australian Institutions 30% Overseas Institutions Private Investors 29
KEY ACHIEVEMENTS - OAKLANDS JORC Resource 280Mt Coal Further thicker coal drilled in north Connell Hatch appointed for mine study Uhde Shedden appointed for clean coal study Minserve appointed for test pit design Shallower coal drilled at Oaklands Three drill rigs booked for second round of drilling at Oaklands Approval process for test pit commenced 30
QUESTIONS & CONTACTS Andrew Firek Chief Executive Officer Graham Coall Chief Operating Officer Wayne Mitchell Chairman Tony Teng Company Secretary / Director Chris Hagan Senior Consultant ************************************************************** COALWORKS LTD LEVEL 5, 44 MILLER STREET NTH SYDNEY NSW 2060 PHONE: +61 2 9922 1344 FAX: +61 2 9929 3098 EMAIL: info@coalworks.com.au www.coalworks.com.au 31