INTERNATIONAL COAL LIMITED

Transcription

1 INTERNATIONAL COAL LIMITED Building a pathway from exploration to production 2013 Annual General Meeting

2 Building a pathway to production Introduction Developing a vision for our portfolio of high potential assets Focusing on areas with greatest potential for return for shareholders Clearing the path Building strategic relationships and alliances Leveraging joint venture relationships Maintaining a strong financial position Investing in core business (exploration and development) Moving to production Catch the rising tide in the coal market

3 Consuelo Project EPC 2318, 2327 & 2332 Exploration Target: Mt 1 in Bandanna Formation Nearby Deposits: Rolleston Mine, Arcadia Project Infrastructure: 20 30km to rail, 400km via rail to Gladstone Mine Potential: Combined open cut/underground, semi soft coking and thermal products Timeline to production: The Bandanna Formation has been given an average density of 1.4 g/cc. Mantuan seam excluded; total in situ tonnes with no constraints. Unexpected geological loss mainly due to seam splitting and thinning over large distances between boreholes. It should be noted that the tonnages quoted above are conceptual in nature and there has been insufficient exploration to define a coal resource. No coal quality data within the project area was uncovered in previous reports. Although a preliminary analysis was undertaken, insufficient data exists to confidently correlate coal seams and generate a grid mesh model. It is uncertain whether further exploration may lead to the reporting of a JORC standard resource however there is some evidence to support the current exploration tonnage calculations, and the sufficient coal thicknesses interpreted from historic drilling to warrant further investigation in some areas.

4 Consuelo Project Rail and Port Close to existing Blackwater line (upgrade in progress) Multiple spur line options Current preferred option 20 30km following existing corridors where possible Distance to port via rail 400km Competitive secondary access market Early stage discussion with Rail and Port providers Capacity available and cost competitive

5 Consuelo Project Road Existing Dawson Highway and Carnarvon to Rolleston Road traverses tenements High quality sealed road access for transport of equipment and product Multiple options for location of facilities Not far from well serviced community (Rolleston) Good access for mine development Skilled local workforce with Rolleston Mine operating to northwest

6 For personal use only Consuelo Project Vision for conceptual Mine Plan: O/C production in 2016/17 Longwall production 2020 Expected mine life 30 years Open cut pits developed short term providing access to long wall at extremely low cost Single CHPP and surface operation for entire project Shovel, truck and mobile crushing and conveying plant to increase efficiency (up to 20%)

7 Consuelo Project Timeline

8 Consuelo Project Timeline Large resource potential (Exploration Target) Existing infrastructure Coal producing area with active developments nearby Potential for both open-cut and underground mining Resource potential supported by current data and modelling Low ash, high energy thermal coal and semi-soft coking coal product potential Strong pathway to mine

9 Bundaberg Project EPC 2196 (9 sub blocks) Maryborough Basin (Burrum Coal Measures) 28.5Mt JORC Inferred Resource Mt Exploration Target 3 Hard coking coal comparable with Bowen Basin (German Ck, Peak Downs, Moranbah North, Saraji) CSN between 8 9 maximum Gieseler Fluidity 2500 ddpm average ash of 9.5% average calorific value of 7,450kcal/kg yields of 50% 65%. Less than 150km from Gladstone, easy access in region geared for mining Further drilling aimed at improving JORC resource 2 Constraints on the Inferred Resources are as follows: Coal seams not intruded or not outside the tenure boundaries; coal thicknesses <0.2m excluded; depth range of calculation was from the base of weathering to 450m below natural topography; coal seams where the GL1 and GL2 ash (adb) >50% are excluded from the calculations; discount factor of 12% has been subtracted from the initial calculation for unexpected geological losses. This accounts for unexpected conditions such as seam thinning, splitting, or seams missing in barren zones around faults. The geological modelling package used was Minescape and seam structure and thickness contours were generated using standard modelling algorithms and methodologies. Inferred masks were generated from base circles drawn 2,600m between Points of Observation; Points of Observation were defined as those boreholes that had known surveyed positions, detailed lithological logs and coverage of the target coal seams with a suite of downhole geophysical logs that must include density in units of Kg/m 3. 3 Exploration Target based on an average relative density of 1.45 g/cc, except the F and G seams have been assigned an average density of 1.40, due to their lower raw ash contents. These are to approximate wet, in situ densities as no moisture holding capacity tests exist to calculate the Preston and Sanders corrections. Unexpected geological loss included mainly due to seam splitting and thinning over large distances between boreholes. It should be noted that the tonnages quoted above are conceptual in nature and there has been insufficient exploration to define a coal resource. Although a preliminary analysis was undertaken, insufficient data exists to confidently correlate coal seams. It is uncertain whether further exploration may lead to the reporting of a JORC standard resource however there is some evidence to support the current exploration tonnage calculations, and the sufficient coal thicknesses interpreted from historic drilling to warrant further investigation in some areas.

10 Bundaberg Project Recent drilling demonstrated seams extend to NE BUN013P 4.16m of cumulative coal (including partings) across a 6.87m m to m. BUN012PR 2.44m of cumulative coal across a 4.51m m and m. Some variability in coal character/seam splitting Full results expected in coming weeks

11 Bundaberg Project Envisage small to medium underground mine development Potential mid term development horizon Current joint venture gives access to significant mining and technical expertise Potential to increase size of development in partnership with adjacent tenement holders Early port and rail options being researched

12 Don Juan Project EPC 2286 (43 sub blocks) Surat Basin known to produce high quality, low ash and high yield thermal coal. Exploration Target up to 435Mt 4 in Walloon Coal Measures. Adjacent to 345.1Mt Inferred Resource at Bendoba Deposit. Nearby raw coal quality indicates potential for high quality thermal coal product (5,500 to 6,700kCal/kg(ad) with low ash of 5 20%). In process of engaging with rail/port consortia. Existing rail corridor Injune Roma Miles requires upgrade for combined coal/agricultural haulage. 4 It should be noted that the tonnages quoted above are conceptual in nature and there has been insufficient exploration to define a coal resource. No coal quality data within the project area was uncovered in previous reports. Although a preliminary analysis was undertaken, insufficient data exists to confidently correlate coal seams and generate a grid mesh model. It is uncertain whether further exploration may lead to the reporting of a JORC standard resource however there is some evidence to support the current exploration tonnage calculations, and sufficient coal thicknesses interpreted from historic drilling to warrant further investigation in some areas.

13 Don Juan Project Mid to long term thermal coal play High potential to add to JORC book Nearby Bendoba and Wandoan deposits Good coal quality Moving to secure future rail and port access Requires shift in thinking on Surat Basin

14 South Blackall Project EPC km west of Charleville just north of rail line Thermal coal potential JORC Inferred Resource 1,246Mt 5 Winton Fm Gross Raw CV of 4,360 5,040kcal/kg Part of chain of very large, shallow deposits in emerging coal province (Eromanga Basin) Proposed GVK Hancock Aurizon rail option Potential for rail expansion to Port of Brisbane In discussion with other parties to support development of Eromanga/Galilee Basin as a new coal province of global scale 4 Constraints on the Inferred Resources are as follows: coal seams not intruded or not outside the tenure boundaries; coal thicknesses <0.2m excluded; the depth range of calculation was from the base of weathering to 450m below natural topography; coal seams >50% adb from coal quality or estimated from downhole density logs (in g/cc) excluded from the calculations; a discount factor varying from 10 20% has been subtracted from the initial calculation for unexpected geological losses. (this accounts for unexpected conditions such as seam thinning, splitting, or seams missing in barren zones around faults); the mine planning package used was Minescape and seam structure and thickness contours were generated using standard modelling algorithms and methodologies; inferred masks were generated from base circles drawn 2,600m between Points of Observation; Points of Observation were defined as those boreholes that had known surveyed positions, detailed lithological logs and coverage of the target coal seams with a suite of downhole geophysical logs that must include density in units of Kg/m 3.

15 South Blackall Project Foothold in emerging thermal coal province Eromanga Basin holds billions of tonnes of existing JORC Inferred Resources Potential for large scale mining needs investigation could be 30 billion tonnes of coal Coal to liquids also a potential option Moving to develop consortia to develop province Considering moving to MDL

16 Clearing the pathway Strategies for clearing pathway for project development Building strategic relationships Leveraging joint venture relationships Maintaining a strong financial position Investing in core business activity

17 Clearing the pathway Building strategic relationships Queensland Resources Council the lead industry body for coal industry in Queensland. Queensland Coal Investments (Hancock coal subsidiary) strong coal experience with deep links in Queensland coal industry. Coal Face Resources Pty Ltd owned by Jason Moultrie who also owns the Moultrie Group one of the largest geological and technical service companies in the Queensland coal industry. Balance Resources leaders in infrastructure development involved in a number of consortia to develop the Bowen and Surat coal provinces in Queensland. UTM Global providing expertise in tenement management and mining law. WICET Consortium applying for Category B shareholder status. Port of Brisbane Expansion moving for inclusion in process.

18 Clearing the pathway Leveraging joint venture relationships Over 20 holes drilled at Bundaberg financed by QCI Significant desktop work completed at Consuelo and Don Juan by CFR Injection of strong technical expertise from both joint ventures Results delivered at Bundaberg with hard coking coal discovery Over $2m worth of exploration completed at no cash cost to ICX

19 Clearing the pathway Maintaining a strong financial position Cash and cash equivalents at 30 June 2013 $1.459m note on subsequent tax claim announced to market Cash at bank $1.74m at 30 September 2013 In discussion with strategic international investors (mining and investment houses) to secure longer term funding for vision

20 Clearing the pathway Investing in core business activity $1.5m spent by QCI in on exploration at Bundaberg (providing right to earn in ato 20%) $1.07m spent by ICX in on exploration at South Blackall and Don Juan Focus on Consuelo and Bundaberg (coking projects) Exploration underway at Consuelo in Continued low cost target generation activity

21 Catch the rising tide Coal Forecasts (source: Alpha Securities Report in press citing Woods McKenzie Coal Forecast) Global coal market fundamentals remain strong with demand increasing to 2020 Longer term, forecasts show significant an increase in demand for thermal coal in North, SE and South Asia from 2015 to 2030 Price forecast trending upward from 2015 The next window ( ) the main target for ICX

22 Catch the rising tide For personal use only

23 Moving to production Summary Outlook remains strong for thermal and coking coal Seeking to target market window for Consuelo and Bundaberg projects In discussion with international mining and investment houses Moving on rail and port access Delivering exploration Maintaining a strong financial position On pathway to production

24 Competent Person s Statement The estimates of the Coal Resources presented in this Report are considered to be a true reflection of the Coal Resources as at the various dates listed, and have been carried out in accordance with the principles and guidelines of the Australian Code for Reporting of Coal Resources and Coal Reserves published in December 2004 (JORC Code). If quoted, it should be noted that where Exploration Target tonnages are calculated and documented in the report they are considered non JORC and are conceptual in nature. There has been insufficient exploration to define a Coal Resource and that it is uncertain if further exploration will result in the determination of a Coal Resource.