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1 Kaili Resources Limited (formerly Omnitech Holdings Limited) ARBN Suite Liverpool Street SYDNEY, NSW 2000 PO Box World Square, Sydney NSW 2002, Australia T: F: E: contact@kailigroup.com.au Maiden 97 Mt JORC Resource at the Maryvale Coal Project Kaili Resources Limited ( Kaili ) is pleased to announce the maiden In Situ Gasification (ISG) JORC Resource at its Maryvale Coal Project ( Project ) of 97 million tonnes Inferred for the project. The Project is strategically located in the Clarence Moreton Basin, 222km from the Port of Brisbane. The Project is adjacent to the New England Highway which connects the project area with Toowoomba for a distance of 77km. Then by the heavy haulage rail system, transporting coal for export through the Port of Brisbane for 145km (FIGURE 2). The maiden JORC 2012 compliant resource is managed by APEC Coal Pty Ltd, a 100% subsidiary of Kaili. The JORC Resource work was managed by Brisbane consultancy Geoconsult Pty Ltd ( Geoconsult ), primarily incorporating data acquired from the 2010 and 2016 drilling programs. Geoconsult staff has the relevant experience to be the competent person for the preparation of the Resource and Exploration Targets. TABLE 1 and 2 summarise the Resource and Exploration Target Estimates. FIGURE 1: MARYVALE COAL PROJECT LOCATION

2 TABLE 1: INFERRED (ISG) RESOURCE ESTIMATE Resource Polygon Working Section Thickness (m) Inherent Moisture (ad%) Ash (ad%) Volatiles (ad%) Density (RD) Tonnage (Mt) Maryvale ISG Total BU TABLE 2: EXPLORATION TARGET OPEN-CUT AND ISG ESTIMATES Thickness Tonnage Resource Polygon Working Section (m) (Mt) Open-Cut Total BU31-BU ISG Total BU31-BU Nb. packages lacked sufficient Points of Observations spacing to classify as Coal Resources and are expressed in ranges (lower- upper). Targets are conceptual in nature. The potential quantity and quality is conceptual in nature and there has been insufficient exploration to estimate a resource and it is uncertain if further exploration will result in the estimation of a mineral resource FIGURE 2: MARYVALE COAL PROJECT RESOURCE AND EXPLORATION TARGET POLYGONS (BULWER PACKAGE) ` The Maryvale ISG Resource is shown in FIGURE 2 in addition to the Open Cut Exploration Target in light blue and the ISG Exploration target in dark blue. Only exploration targets with <100m of overburden were considered in the open cut Exploration Target and areas with a minimum overburden of 100m were considered in the ISG Exploration Target.

3 The seam and area of interest is the Bulwer Seam (Taroom Coal Measures) within the Maryvale EPC1506 Project Area. This announcement and the resource/exploration target is a summary of the 2016 coal resource estimation project work carried out by Geoconsult. Exploration data for the is constituted of: data previously obtained from public domain records (Buck, 2010); drillhole data derived from various previous exploration programs (Buck, 2010); an exploration program of two partially cored drillholes and six open drillholes conducted by Clean Global Energy in 2010 (Buck, 2010); and an exploration program of one partially cored drillhole and five open drillholes conducted by Kaili in 2016 (this report). The 2010 and 2016 drillholes are the central basis of the geological data used in the resource estimate. These holes specifically targeted the Taroom Coal Measures of the Walloon Sub-Group in a depth range of 100m to 350m and they intersected significant portions of the stratigraphic sequence. Drillholes WK16, WK16C, WK17, WK18 & WK19 are located within the Goomburra area of EPC1506 with the drill hole locations shown in FIGURE 2. FIGURE 3: EXPLORATION DRILLING AT THE MARYVALE COAL PROJECT

4 FIGURE 4: SAMPLING THE BULWER SEAM FROM WK16c AND THE CONVERSION OF WK18 TO A WATER BORE The typical stratigraphy for the Walloon Sub-Group is shown in FIGURE 5. The geological model has been based on correlation of the well-established stratigraphic units of the Taroom Coal Measures. Correlation across the deposit was based on four stratigraphic units; Tangalooma Sandstone, Auburn Seam, Bulwer Seam and Condamine Seam. The coal seam units were correlated based on slimline geophysical log signatures. The lenticular nature of the Surat Basin coal can make correlation difficult, especially, as in this case, where drillholes are widely-spaced. Several validation passes using cross-section and structure models were used to validate the stratigraphic and ply correlations. The nomenclature used to correlate seams and plies is shown in FIGURE 6. Stratigraphic and ply correlations for the underlying Condamine Seam which was not used in the resource estimates is shown as FIGURE 7. The cross-sections shown in FIGURE 8 indicate the general structural trends across the project area as well as the Condamine Package (FIGURE 7) which underlies the Bullwer Package (FIGURE 6) across the project area. The Condamine Package has been intersected by historical drilling however there are not enough drill intersections for it to be included in the Exploration Targets.

5 FIGURE 5: TYPICAL STRATIGRAPHY OF THE WALLOON SUB GROUP WITHIN EPC 1506 MARYVALE COAL PROJECT

6 FIGURE 6: TYPICAL PROFILE OF BULWER PACKAGE

7 FIGURE 7: TYPICAL PROFILE OF CONDAMINE PACKAGE

8 FIGURE 8: MARYVALE COAL PROJECT CROSS SECTIONS-SEE FIGURE 2

9 The primary target within the Bulwer Seam is the BU30 package, which was correlated in detail using a fiveply model, namely BU31-BU35 (FIGURE 6). A ply by ply correlation of a Bulwer package working section from each intersection associated to EPC1506 was completed. FIGURE 6 shows the typical seam profile of the Bulwer package and typical coal quality results for the plies. In 2010, a secondary target, Condamine package (CO70) was also correlated in detail across the area. Correlation of a Condamine package working section using each intersection associated within EPC1506 was completed. FIGURE 7 shows the typical seam profile of the Condamine package along with the typical coal quality results for the seam. The target for exploration drilling in the 2016 program was the Bulwer package and only drillhole WK16 was drilled deep enough to intersect the upper part of the Condamine package. The Condamine package has not been included in the Resource estimation. Additionally, the Auburn package (uppermost package) has not been considered as viable for deriving Resources and is not included in this modelling report. The information in this announcement that relates to in situ coal resources potential is based on information compiled by Wes Nichols, Lynne Banwell and GeoConsult Pty Ltd and reviewed by Warwick Smyth, who is a member of the Australasian Institute of Mining and Metallurgy (CP) Geology; and the Australian Institute of Geoscientists. Wes Nichols is a qualified geoscientist (MAppSc, MASG, FIQA) and member of the Australasian Institute of Mining and Metallurgy (CP) Geology and has over 28 years experience in the mineral resources sector. Lynne Banwell is a qualified geologist (BSc(Hons), MAusIMM, MGSA) and a Consultant Geologist for GeoConsult Pty. Ltd. She has over 30 years experience relevant the style of mineralisation, which allows her to qualify as a Competent Person as defined by the 2012 edition of the Australian Code for Reporting of Resources. Warwick Smyth is a qualified geologist (BSc Geol, Grad Dip AF&I, MAusIMM (CP), MGSA, MAIG), and a Principal Consultant for GeoConsult Pty. Ltd. and has over 25 years experience which is relevant to the style of mineralisation, the type of deposit under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2014 edition of the Australian Code for Reporting of Coal Resources. Neither Warwick Smyth nor GeoConsult Pty Ltd has any material interest or entitlement, direct or indirect, in the securities of Kaili Resources Ltd or the Projects. GeoConsult has been commissioned to provide geological services to Kaili Resources Ltd since early Warwick Smyth and GeoConsult Pty Ltd consent to the use of this statement and references to it and extracts from it, in the form and context in which they are included. Jianzhong Yang Chairman 6 February 2017

10 JORC Table 1 APPENDIX C JORC RESOURCE CHECKLIST (JORC TABLE 1) Section 1 Sampling Techniques and Data Criteria JORC Code explanation Commentary Sampling techniques Drilling techniques Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where industry standard work has been done this would be relatively simple (eg reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay ). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face- Sampling strategy of the Bulwer package through the study area has generally been lithologically based. Samples have been taken at a scale detailed enough to allow compositing into the correlated ply s. Prior to the current exploration program (2016) only one borehole had been cored and sampled, being Clean Global Energy 2010 exploration program hole WK04C. A further core hole (WK16C) has been completed during the Kaili Resources program. In both core holes to date, only the Bulwer seam was sampled with a maximum single sample length of 0.50m of coal. Coal plies were sampled discretely on the basis of lithological characteristics. All non-coal material and partings less than 0.10m have been included with the coal ply and noted in the lithological description. Non-coal interburden material greater than 0.10m has sampled separately. Geophysical corrections are performed to confirm representative core recovery of the seam and samples. The qualified samples were then transported to the laboratory via courier. All Coal Quality samples from the Kaili Resources drilling programs were sent to GeoConsult s Laboratory, Newstead, Queensland. All coal quality samples were prepared and analysed using Australian Standard testing methodologies. All coal and roof and floor dilution samples were double bagged at site and marked with sample number, hole and project. The samples were then transported to the laboratory via GeoConsult s collection service. All coal quality samples were prepared and analysed using Australian testing methodologies at GeoConsult s NATA accredited lab, Newstead, Brisbane Qld. Cored holes WK_04C, WK_13C & WK_16C are HQ3, 61mm diameter diamond cores. Details on the WRD-*C series cores are available in QDEX reports. Page 18

11 Criteria JORC Code explanation Commentary Drill sample recovery Logging Sub-sampling techniques and sample preparation sampling bit or other type, whether core is oriented and if so, by what method, etc). Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all subsampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is An assessment of core recovery was completed by comparing the recovered thickness measured during geological logging and by the driller, with geophysical picked thicknesses from the geophysical logs. All holes were lithologically logged. Brightness logging has been conducted on the cored holes in the Maryvale Area. Geological and geotechnical features were identified and logged in core holes. Holes drilled in the 2010 exploration program were geophysically logged. Typically gamma, density and calliper were run. Holes drilled in the 2016 exploration program were geophysically logged. Typically gamma, density and calliper were run by Geolog Pty Ltd. All chip holes have been geologically logged. The calibration of the geophysical tools was conducted by the geophysical logging company. Sampling for analysis was taken on cored holes WK04C in the 2010 exploration program and WK16C in the 2016 exploration program. Additionally, grab samples were taken from two 2016 rotary open holes. For coal quality analysis, core was sampled in its entirety. The coal quality analytical laboratories used to analyse the Bulwer Seam coal comply with Australian Standards for sample preparation. All core samples to date were double bagged on site and transported to the GeoConsult Laboratory in Newstead for testing. GeoConsult s laboratory complies with Australian Standards for sample preparation and subsampling. Samples were crushed to -4.0mm ¼ of the total original sample mass is utilised for raw sample analysis which includes proximate, Page 19

12 Criteria JORC Code explanation Commentary Quality of assay data and laboratory tests Verification of sampling and assaying Location of data points representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled. The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data. Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Specification of the grid system used. Quality and adequacy of topographic control. total sulphur, relative density, calorific value and moisture in the analysis sample. All coal quality and geotechnical analysis techniques are per Australian Standards and completed at GeoConsult s NATA accredited laboratory. Down-hole geophysical logging tools are per industry accepted standards, with natural gamma, density and caliper types run on all 2010 & 2016 holes, The calibration of the geophysical tools was conducted by the geophysical logging company. GeoConsult s laboratory complies with the Australian Standards for coal quality testing and, as such, conducted the verifications for coal quality analysis outlined in the standards. Data queries are generated through verification software and standard checks. Any result that falls outside expected tolerances is highlighted at the laboratory for follow-up and secondary analysis if required. No adjustments have been made to the coal quality data. Analysis results are presented on an air-dried basis. The database consists of a significant number of pre-2010 holes (previous coal exploration drilling). The locations of the pre-2010 holes are based on the locations reported in relinquishment reports and department reports. Unrecorded and anomalous collar elevations reported for pre drillholes were adjusted to collars calculated from the regional topographic surface grid. Both holes with surveyed and calculated collar elevations are used for modelling resources. Page 20

13 Criteria JORC Code explanation Commentary Data spacing and distribution Orientation of data in relation to geological structure Sample security Audits or reviews Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has been applied. Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. The measures taken to ensure sample security. The results of any audits or reviews of sampling techniques and data. Stage WK series: hole locations have been surveyed. Stage WK series: hole locations have been surveyed. All collar locations are stored in MGA94 co-ordinates. Drillhole spacing across EPC1506 is variable, typically between 2-6km. Two cored coal quality holes are associated with the Bulwer package Inferred Maryvale Area resource polygon. 30 drillholes across the EPC containing BU30 package intersections form the basis of the Maryvale Area model with the resource polygon based 2010 & 2016 drillholes. No sample compositing was carried out. In general, the region appears to be relatively unremarkable in terms of structure. However, a suspected fault was intersected in drillholes WK16 and WK16C. At present, there is insufficient data to define this fault. The orientation and throw on the fault should become evident with further drilling. The deposit area is known to sit within close proximity to the coal subcrop of the Walloon Subgroup. This subcrop trends E to W and plunges N to NE. The general structural regime may change with further drilling as borehole spacing becomes closer allowing finer resolution of structure between drill holes. All drill holes are vertical to intersect the largely flat-lying coal bed stratigraphy. Sample Security was ensured under a chain of custody between GeoConsult exploration site geology personnel and the GeoConsult laboratory for both the 2010 and 2016 exploration programs sampling was undertaken by GeoConsult personnel under the supervision of Clean Global Energy (predecessor to Kaili Resources). For the 2016 exploration program, sampling was undertaken and supervised by GeoConsult personnel with oversight by Kaili Resources. The GeoConsult laboratory undertook internal audits and checks in line with the Australian standards and their NATA certification. Section 2 Reporting of Exploration Results Page 21

14 Criteria JORC Code explanation Commentary Mineral tenement and land tenure status Exploration done by other parties Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. Acknowledgment and appraisal of exploration by other parties. Geology Deposit type, geological setting and style of mineralisation. The Maryvale Project area comprises Exploration Permit Areas Coal EPC 1506 & which are wholly owned by Kaili Resources Ltd. Maryvale is a brownfields exploration area. No mining within the project area has been conducted to date. Exploration data for the prior to the 2010 & 2016 exploration program has been obtained from public domain records and includes drillholes data derived from various exploration programs. The Maryvale dataset comprises two partially cored drillholes and six open drillholes from the Clean Global Energy 2010 exploration program. The 2010 drillholes are the central basis of the geological data used in the resource estimate. These holes specifically targeted the Lower Walloon Coal Measures in depth range 100 to 350m. They intersect significant portions of the stratigraphic sequence. These holes are located widely over the region. The 2016 exploration program comprises five open holes and one cored hole, targeting the Bulwer Seam and drilled by Kaili Resources Ltd. One hole (WK_5) did not intersect the target; all others did. Drillholes from previous exploration by AMAX, Millmerran Coal Pty Ltd, New Hope Collieries Pty Ltd are included in the dataset. The AMAX WRD-series comprises 80 drillholes with wireline density logs drilled between The WRD-series includes 12 cored holes with raw coal quality analyses. The Millmerran Coal K-series drillholes were drilled between and comprises 48 holes of which 25 are directly associated to the EPC1506 project area. New Hope Collieries drilled 13 holes between which comprise the 2000-series. New Hope Collieries drillholes are located immediately to the northeast of the EPC1506 resource area. In addition to the drillholes from previous coal explorers 85 waterbores have been included in the drillhole dataset. The waterbores do not contain wireline density logs therefore the coal intersections are considered unreliable. As such, waterbore coal intersections have been considered for exploration planning but not used in the resource model. The Maryvale Project covers the Walloon Sub-Group, primarily targeting the Taroom Coal Measures. Correlation across the deposit was based on four stratigraphic units; Tangalooma Sandstone, Auburn Seam, Bulwer Seam and Condamine Seam the last three comprising the Taroom Coal Measures. The lenticular nature of the Surat Basin coal can make correlation Page 22

15 Criteria JORC Code explanation Commentary Drill hole Information Data aggregation methods Relationship between mineralisation widths and intercept lengths A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg down hole length, true width not known ). Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any difficult, especially, as in this case, where drillholes are widely-spaced. A detailed list of drill holes used to define the resource in Maryvale exploration tenure can be found in the document Appendix G Maryvale Drillhole Details. All drill holes have been modelled as vertical. All coal plies where multiple coal quality samples were taken were given composite coal quality values. These composite values were calculated using Maptek s Vulcan modelling software (Coal Compositing application). Density values were weighted by thickness; all raw coal parameters were weighted by thickness and density (ad), i.e., mass weighted. Seam thicknesses have been reconciled to geophysics where available to ensure accuracy. Drill holes have been drilled vertically with minor deviations being recorded. Taroom Coal Measures sequence is relatively flat lying (less than 5 degrees dip) with strata dipping to the east. All appropriate diagrams are contained with Appendices E & F of this report. Plans of working section thickness and structure roof plus representative cross sections are included. Page 23

16 Criteria JORC Code explanation Commentary Balanced reporting Other substantive exploration data significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. All available validated data has been included in the geological model and associated resources report. Non-validated historical data does exist in the exploration tenure but has little or no impact on the geological model and resource statement. No 2D Seismic lines are present within the area or surrounding the project. Regional airborne gravity and magnetic images also suggest continuity of the Coal Measures within EPC1506 resource area. An upcoming exploration program is currently being designed, and the outcome of this resource estimate and corresponding geological models will be an important input. More detailed topography information is required. This will allow reconciliation of drillhole collar heights to topography. Further drilling is required to delineate and understand the possible fault which appears to run through the centre of the project area. Gaining additional coal quality data is essential to understanding this resource better and to upgrade the classification of the resource. Section 3 Estimation and Reporting of Mineral Resources Criteria JORC Code explanation Commentary Database integrity Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes. Data validation procedures used. Database automation, validation routines and look up codes were utilized, where possible, to remove human error element. Site visits Comment on any site visits undertaken by the Several site visits were made to the Maryvale project by GeoConsult personnel (including the Page 24

17 Criteria JORC Code explanation Commentary Geological interpretation Competent Person and the outcome of those visits. If no site visits have been undertaken indicate why this is the case. Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit. Nature of the data used and of any assumptions made. The effect, if any, of alternative interpretations on Mineral Resource estimation. The use of geology in guiding and controlling Mineral Resource estimation. The factors affecting continuity both of grade and geology. Dimensions The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource. Estimation and modelling techniques The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used. The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data. The assumptions made regarding recovery of byproducts. Estimation of deleterious elements or other nongrade variables of economic significance (eg sulphur for acid mine drainage characterisation). Competent Person on 18/06/2016) and Kaili Resources personnel. Additionally, several field trips have been made to the Surat Basin in general. A review was conducted by Kaili Resources on the field procedures and sampling practices, as informed by GeoConsult, and they were deemed to be of an acceptable industry standard. Given the geological nature of the deposit and the similarity to other deposits in the Surat Basin, the Competent Persons existing knowledge of the area is deemed sufficient. The drillhole density in the Maryvale project area allows a moderate level of confidence in the nature of package thickness and continuity. Additional work is required to understand the coal quality consistency and interpreted locations of faults. The effect of alternative interpretations in seam correlations would result in a relatively unchanged total tonnage, but the effect on resource categorisation/domaining could possibly give a reduction in inferred resource. Factors affecting continuity in quality and geology would likely be syn-depositional variations such as changes in energy, as well as erosional features, channels etc. Deposit dimensions are approximately 25km along strike and 10 m down dip. Within the lease area the coal seams within the Taroom Coal Measures are present from surface to a depth of approximately300. Maptek Vulcan (Vers 9.1) software was used to generate the resource estimate. The triangulation modelling algorithms were utilized for structural grids. These algorithms are considered the appropriate techniques for modelling coal deposits and are widely used within the industry. Resource classification based on recommendations from the Australian Guidelines for Estimating and Classification of Coal Resources (2014). Working section(s) have been developed based on thickness (of the coal seams and stone partings) and indicative coal quality (predominantly Ash). The relatively uncomplicated nature of the deposit allowed for the generation of resources using simple triangulation algorithms. The validation process prior to geological modelling and resource generation involves the following steps: a) Site geologist validates all drill hole data following data acquisition and entry; b) Project geologist validates all primary data (drill holes, geophysical surveys, ground mapping), coal quality results and external data; and Page 25

18 Criteria JORC Code explanation Commentary In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed. Any assumptions behind modelling of selective mining units. Any assumptions about correlation between variables. Description of how the geological interpretation was used to control the resource estimates. Discussion of basis for using or not using grade cutting or capping. The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available. Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content. Cut-off parameters Mining factors or assumptions Metallurgical factors or assumptions The basis of the adopted cut-off grade(s) or quality parameters applied. Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made. The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment c) Resource geologist validates all primary and coal quality data and any external data. Validation routines include, but are not limited to: a) Comparison of geology and geophysics in drill holes; b) Cross sections of model vs. drill holes and geophysical surveys. All tonnages are calculated on an air dried basis. No moisture adjustment has been made. A cut-off grade of 60% ash has been applied. Possible extraction resources at the Maryvale Project In Situ Gasification (ISG) and open-cut mining. ISG Resources are assumed to have a minimum depth of cover of 100m. A minimum mining thickness of 1.5m is assumed for the Resources. Maryvale Resources have been considered on an In-Situ Gasification (ISG) basis only. The parameters that justify this ISG basis are given in Appendix D. Page 26

19 Criteria JORC Code explanation Commentary Environmental factors or assumptions processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made. Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made. Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples. The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit. Discuss assumptions for bulk density estimates used in the evaluation process of the different materials. Classificat-ion The basis for the classification of the Mineral Resources into varying confidence categories. Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). GeoConsult is unaware of any limiting environmental factors at this stage of the project development. The insitu density of the coal packages has not been determined using the Preston Sanders insitu relative density estimation equation. An average air-dried relative density value has been used in the Resource calculations. Classification of Mineral Resources is based upon spacing between drill holes that can be considered Points of Observation (POB). POBs must have a geological and intersect the entire Bulwer Seam. Resource classification based on recommendations from the Australian Guidelines for Estimating and Classification of Coal Resources (2014). The variation in resource polygons for the working section is appropriate for the deposit in the opinion of the Competent Person Page 27

20 Criteria JORC Code explanation Commentary Audits or reviews Whether the result appropriately reflects the Competent Person s view of the deposit. The results of any audits or reviews of Mineral Resource estimates. An internal company review of the modelling method and associated resource estimate was completed. The process and results were deemed suitable for public release. Discussion of relative accuracy/ confidence Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate. The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used. Statistical analysis of ply and working section thickness was undertaken. This was to ensure consistency within the plies and working section, identification of outliers, and verification of any incorrect coal quality reporting. Due to the sparse nature of the data available, no geostatistical analysis was undertaken. Page 28

21 APPENDIX G DRILLHOLE DETAILS Headers Hole Name Easting Northing Collar RL Total Depth ,360 6,900, ,742 6,892, ,740 6,895, ,976 6,894, ,055 6,894, ,667 6,893, ,667 6,893, ,960 6,894, ,465 6,894, ,722 6,894, ,307 6,895, ,763 6,894, ,331 6,895, ,149 6,892, K44A 399,145 6,899, WK17 408,173 6,892, WK18 406,077 6,896, WK19 406,878 6,897, WK_02 410,365 6,893, WK_04 404,054 6,894, WK_04C 404,044 6,894, WK_06 408,897 6,894, WK_07 411,160 6,895, WK_08 404,668 6,897, WK_13 411,272 6,889, WK_13C 411,259 6,889, WK_16 407,593 6,895, WK_16C 407,595 6,895, WRD ,150 6,901, WRD002C 393,150 6,901, WRD ,400 6,900, WRD003C 396,400 6,900, WRD ,500 6,899, WRD ,800 6,892, WRD ,000 6,890, WRD009C 407,000 6,890, WRD ,950 6,890, WRD ,500 6,890, WRD ,750 6,895, WRD ,400 6,889, WRD ,400 6,886, Page 40

22 Hole Name Easting Northing Collar RL Total Depth WRD014C 413,400 6,886, WRD ,000 6,886, WRD055C 417,000 6,886, WRD ,400 6,886, WRD ,500 6,885, WRD ,800 6,887, WRD ,500 6,888, WRD059C 412,500 6,888, WRD ,000 6,889, WRD ,400 6,894, WRD ,900 6,895, WRD ,300 6,894, WRD ,100 6,892, WRD ,300 6,891, WRD ,600 6,890, WRD069C 404,600 6,890, WRD ,400 6,888, WRD070C 404,400 6,888, WRD ,500 6,888, WRD071C 402,500 6,888, WRD ,700 6,887, WRD072C 404,700 6,887, WRD ,800 6,888, WRD073C 406,800 6,888, WRD ,000 6,887, WRD074C 410,000 6,887, WRD ,200 6,889, WRD ,000 6,897, WRD ,000 6,898, WRD ,300 6,900, WRD ,600 6,891, WRD ,700 6,890, WRD ,400 6,888, WRD ,800 6,886, WRD ,000 6,889, WRD ,400 6,890, WRD ,000 6,887, WRD ,200 6,891, Seam/Ply Intersections Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting BU BU BU Page 41

23 Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting BU BU CO CO BU BU BU BU BU BU BU CO BU BU BU CO CO BU BU BU BU BU BU BU BU BU BU BU BU BU K44A BU K44A BU K44A BU K44A BU K44A BU K44A BU WK17 BU WK17 BU WK17 BU WK17 BU WK17 BU WK17 BU WK17 BU WK18 BU Page 42

24 Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting WK18 BU WK18 BU WK18 BU WK18 BU WK18 BU WK18 BU WK19 BU WK19 BU WK19 BU WK19 BU WK19 BU WK19 BU WK19 BU WK19 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 BU WK_02 CO WK_02 CO WK_02 CO WK_02 CO WK_02 CO WK_02 CO WK_02 CO WK_02 CO WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 BU WK_04 CO WK_04 CO Page 43

25 Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting WK_04 CO WK_04 CO WK_04 CO WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_04C BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 BU WK_06 CO WK_06 CO WK_06 CO WK_06 CO WK_06 CO WK_06 CO WK_06 CO WK_06 CO WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 BU WK_07 CO WK_07 CO WK_07 CO Page 44

26 Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting WK_07 CO WK_07 CO WK_07 CO WK_07 CO WK_07 CO WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 BU WK_08 CO WK_08 CO WK_08 CO WK_08 CO WK_08 CO WK_08 CO WK_13 CO WK_13 CO WK_13 CO WK_13 CO WK_13 CO WK_13 CO WK_13 CO WK_13C CO WK_13C CO WK_13C CO WK_13C CO WK_13C CO WK_13C CO WK_13C CO WK_16 BU WK_16 BU WK_16 BU WK_16 BU WK_16 BU WK_16 BU WK_16 BU WK_16 BU WK_16 BU Page 45

27 Hole Name Seam/Ply Depth to Roof Depth to Floor Thickness Parting WK_16 BU WK_16 CO WK_16 CO WK_16 CO WK_16 CO WK_16C BU WK_16C BU WK_16C BU WK_16C BU WK_16C BU WK_16C BU WK_16C BU WRD002 BU WRD002 BU WRD002 BU WRD002 CO WRD002 CO WRD002 CO WRD002 CO WRD002C BU WRD002C CO WRD002C CO WRD003 BU WRD003 BU WRD003C CO WRD003C CO WRD003C CO WRD003C CO WRD005 BU WRD005 BU WRD005 BU WRD005 BU WRD008 CO WRD008 CO WRD008 CO WRD008 CO WRD008 CO WRD008 CO WRD009 CO WRD009 CO WRD009C CO WRD009C CO WRD010 BU WRD010 CO Page 46