Limited (ABN 46 122 417 243) Developing World Class Coal Deposits Ovoot Coking Coal Project - Mongolia December 2009
Disclaimer The purpose of this presentation is to provide general information about the Ovoot Coking Coal Project. Unless otherwise stated herein, the information in this presentation has been based on information provided by the Vendor of the Project. Certain statements in the presentation are or may be forward-looking statements and represent the Company s intentions, projections, expectations or beliefs concerning among other things, future exploration activities. The projections, estimates and beliefs contained in such forward looking statements necessarily involve known and unknown risks and uncertainties which may cause the Company s actual performance in future periods to differ materially from any express or implied estimates or projections. No representation or warranty, express or implied, is made by the Company that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of the Company, its officers, employees and advisers expressly disclaims any responsibility for the accuracy, fairness, sufficiency or completeness of the material contained in this presentation, or any opinions or beliefs contained in this document, and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. Any opinions expressed in the presentation are subject to change without notice. All persons should seek appropriate professional advice in reviewing or considering the presentation and all other information with respect to the Company and evaluating the Ovoot Coking Coal Project. The presentation does not purport to contain all of the information that may be required to evaluate all of the factors that would be relevant in determining whether to deal in the Company s securities, including but not limited to any person s objectives, financial situation or needs. Each person should make, and will be taken to have made, its own investigation, assessment and analysis of the information in this presentation and other matters that may be relevant to it considering whether to deal in the Company s securities. This presentation is not for distribution in, nor does it constitute an offer of securities for sale in, Canada, Japan, or in any jurisdiction where such distribution or offer is unlawful. Neither this presentation nor a copy of the presentation can be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any US person as defined in Regulation S under the US Securities Act 1933, as amended (the Securities Act ). Any failure to comply with this restriction may constitute a violation of United States securities laws. The presentation and any oral statements made in connection with it are not an offer of securities for sale in the United States.
Ovoot Coking Coal Project Executive Summary Indications of a potentially large high quality Coking Coal discovery Existing envelope of 3kms x 1-1.5kms x seam thicknesses of 6 40m Infill drilling required to establish JORC Resources Metallurgical data ranks Ovoot as a quality hard coking coal, ash analysis suggests washing required A large quality coking coal project has strategic significance in the region and will draw rail infrastructure to it Large part of Vendor consideration in shares and options, showing support and belief in future Project and value growth Potential to add value rapidly
Deal Terms WKR agrees to purchase 100% of the shares of KK which owns the Ovoot Coking Coal Project for: US$0.8m and 150 million shares and 50 million options exercisable at 5c within 5yrs from settlement US$ 3m within 12 months Minimum US$1m to be spent on Ovoot in 12 months In the event that a + 200 mt JORC compliant resource is established within 5 years a further 80m options exercisable at 5c within 5 years from settlement In the event that less than 100mt in JORC resources are established within 12months WKR has the option to put back all the shares in KK to the vendors with no further commitments
Associated Funding WKR has agreed to a $2.65m placement to fund the purchase and exploration activities: Fully underwritten placement of 100 million shares at 2.65c with a 1 for 2 free attaching option to interests associated with the incoming Directors Above options have a 5yr life from settlement and are exercisable at 5c In the event that a + 200 mt JORC compliant resource is established within 5 years a further 70m options exercisable at 5c within 5 years from settlement Placement conditional on shareholder approval of the Ovoot Coking Coal Project purchase and the placement
Ovoot Coking Coal Project Strategy Settlement\Shareholders Meeting January 2010 Spend a minimum of US$ 1m in first 12 months Drilling to commence March 2010 Quarter Preparation of JORC Compliant Resources within 12 months of settlement Targeting a potential large scale project to justify large infrastructure investment
Ovoot Location
Ovoot Location Cont d Khuvsgul Province Two Project Areas Ovoot - Three leases 510.4km 2 Three additional leases - 214km 2 in untested coal basins
Regional Geology Potentially Very Large Basin 96.3km 2 173.2km 2
Drilling Results To Date 2008 Exploration Results - 8 holes drilled from 79m to 520m - 4 holes intersected coal seams 6 40m widths in two seams - 28 Samples analysed at SGS Tian Jin
Results Cross Section
Results Total Coal Thickness Contour Of Total Coal Widths From Drill Hole Intersections
Ovoot Site Visit
Ovoot Site Visit Inspection of a nearby Coal Mine
Ovoot Coking Coal Project Coal Quality Comparisons Low moisture, high vitrinite levels and high reflectance levels = high rank HARD Coking Coal Comparisons used are raw drilling results (Ovoot) versus beneficiated product Ash averages at 13.8% from drilling are slightly higher than market specifications Washability to be tested Coal Measures Ovoot Raw Data Moatize German Creek Peak Downs CSN 8-8.5 8.5 8 8.5 Vitrinite Levels (% by vol) 91% 81% RoMax 1.41 1.4 1.52 1.42 Volatile Matter (% ad) Inherent Moisture (%) Sulphur (% ad) 27 21.8 19.8 20.7 0.5% 1.1% 1% 1% 0.88% 0.86% 0.7% 0.6%
Ovoot Coking Coal Project Potentially a large Resource expected to be accessible by open pit Coal seams intersected have widths of 6-40m overlain with unconsolidated sediments Anticipate modest strip ratios Coal seams flat dipping at 3-7 degrees Metallurgical results indicate high quality coal Topography is flat lying Exploration to determine size potential and verify coal quality
Proposed Board Members David McSweeney LLB, MAICD Over 20 years experience in the resources sector ranging from exploration to project management, project finance, commercial and legal structuring and corporate development Past directorships Gindalbie Metals and Execo Resources Limited Chairman Avalon Resources Ltd, Non Executive Director Bauxite Resources Ltd David Paull B.Com, FSIA, MBA (Cornell) Over 20 years experience in resource business development, corporate management and minerals marketing Responsible for corporate and financial management Director Pacific Wildcat Resources Corp
Proposed Board Members Neil Lithgow Msc Geology, FSIA, AusIMM + 20 years experience in resource project development exploration and mine geology preparation and successful execution of feasibility studies foundation member of the teams at Aquila Resources Ltd and Bauxite Resources Ltd (current Non Executive Director) Gan-Ochir Zunduisuren Over 10 years of experience in the resources sector in Mongolia and Canada. Degree in mining engineering from Hong Kong University of Science and Technology and a Masters degree in international finance from New-York University Co founder and director of Altai Gold LLC
Summary Ovoot Coking Coal Project Potentially large hard coking coal project + 2.5km of strike identified to date Two Seams widths 6 40m Large Basin with indications of high rank hard coking coal Multiple additional exploration targets Coking coal in short supply New discovery near a +30 year coal mine Deal Structured to minimize risk Experienced and relevant management
The information pertaining to the technical content of this announcement has been reviewed by Mr. Ian Prentice, who is a member of the Australasian Institute of Mining and Metallurgy. Mr. Prentice is employed by Zephyr Consulting Group Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Prentice consents to the inclusion in the announcement of the technical information in the form and context in which it appears.