29 April 2011 HIGHLIGHTS QUARTERLY ACTIVITIES REPORT MARCH 2011 Strategic farm-in transaction completed over the Cygnus coking coal project containing an existing JORC-compliant Inferred resource of 95.5Mt. First phase drilling continued at the Berenice/Cygnus coking coal projects, with a 35-40m thick consistently developed coal zone being intersected from sub-outcrop in all twenty four (24) holes completed to the end of the quarter. A further fifteen (15) holes have been completed since the end of the quarter. Washability tests from the first nine (9) slim diameter holes drilled at Berenice/Cygnus confirm favourable coking coal properties. Resource upgrade at the Kangala thermal coal project. The JORC compliant resource was increased by 19.1Mt to a total of 124Mt. The Roodekop final phase of drilling, totalling 25 holes was completed. The Brakfontein first phase drilling progressing well with 62 of a planned 73 hole drill program completed by the end of the quarter. The first draft of the Kangala BFS is due end of May 2011. The Company expects to commence production from Kangala during H2 2011. The March quarter saw the Company make substantial progress in the development of its coking and thermal coal assets. EXPLORATION & DEVELOPMENT Berenice - Coking Coal Following the commencement of drilling in December 2010, the Company continued the planned 46-hole drill program at the Berenice coking coal project, located in the Limpopo region of South Africa. To the end of the quarter, twenty four (24) slim diameter (HQ size) holes had intersected coal sequences. A consistently developed, 35-40m thick, coal zone was intersected at depths ranging from 20-200m below surface. This coal zone consists of inter-bedded bright coal and carbonaceous mudstone, with a number of coal-rich horizons containing between 40% and 50% coal. Washability test results have been received for the first nine (9) holes with the following results: ASX Code UNV Shares on Issue 203.5m Cash (31 Mar 11) $15.57m Share Price $0.425 Market Cap $86.5m Options on Issue 26.9m Chairman: CEO: Director: Director: Director: Dr Tony Harwood Tony Weber Henri Bonsma Shammy Luvhengo John Hopkins Registered Offices: One America Square Crosswall, London EC3N 2SG Tel: : +44 (0) 207 264 444 Fax: +44 (0) 207 264 440 Registered in England and Wales Company Number: 4482856 South Africa: 467 Fehrsen Street Brooklyn 0182 Pretoria Tel: +27 12 460 0805 Fax: +27 12 460 2417 Australia: Level 2, 28 Kings Park Road West Perth WA 6005 Tel: +61 8 6267 0210 Fax: +61 8 9481 1840 ARBN: 143 750 038 ASX Code: UNV www.universalcoal.com At least three consistently developed coal-rich horizons are present with seam widths of 0.5m-1.75m, 2.5m-3.5m and 4.0m-4.5m respectively. At wash densities of less than 1.45 g/cm3, these seams contain coal with coking Quarterly Report March 2011 Page 1
properties, including Free Swelling Indices (an indicator of coking tendency) of 7 to 9. The Roga Indices (an indicator of caking properties) and volatile matter contents are similarly high, ranging from 80 to 90, and 32% to 35%, respectively. The coal has low inherent moisture content (0.9%-2.0%) and moderate sulphur content (0.9%-1.2%). Semi-soft coking properties are also evidenced in the higher density fractions with Free Swelling Indices of between 6 and 2 being observed at densities of between 1.50 g/cm 3 and 1.70 g/cm 3. The coal qualities are extracted from the results obtained to the end of the quarter and may not be representative of the potential resource as a whole. Berenice-Cygnus Project Area Karoo Sequence Holes drilled and analyses received Holes drilled Holes to be drilled Figure 1: Drilling at Berenice/Cygnus Figure 2: Core sample from Berenice/Cygnus drilling Quarterly Report March 2011 Page 2
Figure 3: Core sample from Berenice/Cygnus drilling The Company has now commenced with the large diameter (LD) diamond drilling to produce samples for specialised coal analysis (including Ultimate Analysis, Ash composition, Petrographic analysis and Reflectance, Caking analysis, Gieseler Plasticity and Arnu Dilatation)to further understand the characteristics and ultimately the type of coking coal present. The Company devoted more resources to its drilling on this project area during the quarter, with four (4) rigs now active on site. The company expects to complete the 46-hole drill program by June 2011 and expects to announce a resource upgrade by mid-july 2011. The Company has an exploration target at Berenice of 700-800Mt of JORC compliant Inferred resources. Figure 4: Drill rig operating at Berenice/Cygnus Quarterly Report March 2011 Page 3
Kangala Thermal Coal Internationally recognised engineering company AMEC Minproc was contracted during December 2010, as the lead contractor to complete a Bankable Feasibility Study (BFS) for the Kangala thermal coal project. The first draft of this BFS is due at the end of May 2011. Kangala, one of three thermal coal projects the Company currently holds interests in, is planned to be Universal s first mine to market. The Company remains on target to commence mine development at Kangala in the third quarter of 2011 before a planned ramp-up to a planned 3Mtpa run-of-mine (ROM) during 2012, subject to regulatory approvals and BFS results. The company is diligently following up with the relevant regulatory Government authorities regarding the execution and award of these regulatory approvals and has contracted recognised industry expert consultants to assist where necessary. Further to this ongoing discussions are being held with various off take groups, including Eskom, neighbouring collieries and third party coal traders for the sales of coal from Kangala ahead of production, with these are progressing satisfactorily. Roodekop Thermal Coal The final phase of drilling, totalling 25 holes, at the project area was initiated during December 2010. During the March 2011 quarter this drilling was completed and samples submitted for analyses. The coal seam intersections (thickness and depth) are in line with expectations. The upgrade of the resource over the entire Roodekop project to a JORC Measured category is expected to be completed by end-june 2011. The Company plans to commence a Feasibility Study (BFS) on this project during Q3 2011. The expected update in resource category to Measured will allow for higher levels of confidence required in the completion of the feasibility study. Figure 5: Drilling at Roodekop The Mining Right Application for Roodekop was submitted to the Department of Mineral Resources (DMR) on 5 November 2010, with the letter of acceptance received on the 8 th February 2011. Following this, Universal Coal appointed Digby Wells and Associates to conduct the Environmental Impact Assessment (EIA) phase of the project as well as undertake the National Environmental Management Act Quarterly Report March 2011 Page 4
(NEMA), waste management license, social impact assessment and the compilation for the water licence. The project was announced in the local media and site notice boards were compiled and distributed, with all direct and adjacent landowners being consulted. The scoping report was submitted to the DMR on 8 March 2011, and the Environmental Impact Assessment (EIA) studies have commenced. Wet season studies relating to wetland, aquatics, fauna & flora and hydrology are complete, while other specialist studies regarding noise and dust are in process. Public participation meetings have been held and in parallel, the NEMA processes have been initiated, with the scoping report having been completed for review. The completed EIA will be submitted by end Q2 2011. The water licence application is currently being prepared and the civil engineering designs and water requirements will be undertaken in Q2 2011, being aligned with the feasibility study. Roodekop is planned to be Universal s second mine to market and the acceptance of the mining right application is a very important step required in getting Universal Coal s first export thermal coal mine into production. Brakfontein Thermal Coal The final phase of resource drilling over Brakfontein commenced during January 2011, with the drilling to be completed during the second quarter of this year. To date, 62 holes have been completed on this project, out of a planned 73 holes. The upgrade of the resource over the Brakfontein project to a JORC Measured category is expected to be available in the 3 rd Quarter of this year. Figure 6: Drilling at Brakfontein Brakfontein is planned to be Universal s third mine to market. UNV will lodge a mining right application once provisional evaluation of the current drilling has been undertaken. CORPORATE The Company continued to leverage the substantial experience and broad relationships of the Board and senior management during the quarter, assessing a number of acquisition and expansion opportunities. As at 31 March 2011, the Company had cash at bank of AUD $15.57 million. Quarterly Report March 2011 Page 5
ACTIVITIES SUBSEQUENT TO QUARTER END Exploration and Development Exploration drilling continued at the Berenice and Brakfontein projects. Since the end of March 2011 an additional fifteen (15) holes have been completed at Berenice and one (1) hole at Brakfontein. ACTIVITIES PLANNED FOR THE JUNE QUARTER Complete coking coal drilling at Berenice/Cygnus Release of Kangala BFS Continue negotiations with Eskom for Kangala off-take agreement Complete Drilling at Brakfontein project Commence geological modelling over Roodekop upon receipt of analytical data CONTACT DETAILS For more information, please contact: Dr Tony Harwood (Chairman) Ph: +27 12 460 0805 Mr Dan Robinson (Company Secretary Australia) Ph: +61 8 6267 0210 MEDIA Professional Public Relations Mr James Harris / Mr Colin Hay Ph: +61 8 9388 0944 Quarterly Report March 2011 Page 6
COAL RESOURCES SUMMARY Project Measured Millions of tonnes Indicated Millions of tonnes Inferred Millions of tonnes Total Millions of tonnes Thermal Coal (Witbank) Kangala 1 48.7 4.4 70.9 124.0 Roodekop 2 26.1 50.5 1.6 78.2 Brakfontein 3 96.6 29.0 125.6 Total Thermal coal 4 74.8 151.5 101.5 327.8 Coking Coal (Limpopo) Cygnus 95.5 95.5 Berenice 5 122.0 122.0 Somerville 5 274.0 274.0 Total Coking Coal 6 491.5 491.5 Total 7 74.8 151.5 593.0 819.3 Notes: 1. Universal Coal has an attributable interest of 70.5% of these coal resources. 2. Under the terms of the earn in agreement, Universal Coal is earning up to 50% in the Roodekop Project via the completion of certain milestones (refer to Section 11 of the Replacement Prospectus). Upon completion of these various milestones, Universal Coal s attributable interest increases and when all of the milestones are completed, Universal Coal will have an attributable interest of 50% in these coal resources (with the option to acquire up to a 74% interest). Universal Coal currently has an attributable interest of 25% in these coal resources. 3. Under the terms of the earn in agreement, Universal Coal is earning up to 50% in the Brakfontein Project via the completion of certain milestones (refer to Section of the Replacement Prospectus). Upon completion of these various milestones, Universal Coal s attributable interest increases and when all of the milestones are completed, Universal Coal will have an attributable interest of 50% in these coal resources (with the right to negotiate to acquire up to a 74% interest). Universal Coal currently has an attributable interest of 30% in these coal resources. 4. Witbank coal resources were estimated by Coffey Mining. 5. Under the terms of the earn in agreement, Universal Coal is earning up to 50% in the Berenice and Somerville Projects via the completion of certain milestones (refer to Section 11 of the Replacement Prospectus). Upon completion of these various milestones, Universal Coal s attributable interest increases and when all of the milestones are completed, Universal Coal will have an attributable interest of 50% in these coal resources (with the option to acquire up to a 74% interest). UCEHSA currently holds a 7% interest in UCD II. 6. Limpopo coal resources were estimated by Gemecs. 7. Rounding (conforming to the JORC Code) may cause computational discrepancies. Quarterly Report March 2011 Page 7
PROJECT LOCATIONS ABOUT UNIVERSAL COAL PLC Figure 7: Project Locations Universal Coal is a South African focussed coal company holding interests in three thermal coal projects of between 25% and 70.5%, which currently contain over 327Mt of JORC-compliant resources. The Company is aiming to achieve first coal production from the Kangala Coal Project in 2011, ramping up to full production by the first half of 2012, subject to regulatory approvals. The Kangala Project is located in the Witbank coalfield in South Africa, which supplies more than 50% of South Africa s saleable export and domestic coal. The development of the Kangala Project is planned to be followed by the development of the Roodekop Project and Brakfontein Project subject to positive feasibility studies, financing and other regulatory approvals, with both projects being planned with the object of maximising their export coal potential. In addition to the thermal coal projects, the Company has an earn-in agreement over two coking coal projects (Berenice and Somerville) that together contain 491.5Mt of JORC compliant Inferred resources. The Company has an experienced team of directors, senior managers and geoscientists with extensive expertise in both coal exploration and mining in South Africa and who have a proven track record of project development. Quarterly Report March 2011 Page 8
Competent Person s Statement The information in this update that relates to Exploration Results relating to the Berenice-Soutpansberg Project is based on information reviewed and compiled by Mr Jaco Malan, who is a registered natural scientist and a member of the South African Council for Natural Scientific Professions. Mr Malan is employed by Universal Coal plc and has sufficient experience which is relevant to the style of mineralisation and the 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, Coal Resources and Ore Reserves. Mr Malan consents to the inclusion in this report of this information in the form and context in which it appears. Reporting on Exploration Results The update have been compiled in accordance with the JORC Code, the recommendations and guidelines set out in the revised 2007 South African Code for The Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and the rules and guidelines relating to the independent expert s reports set by ASIC and ASX. Quarterly Report March 2011 Page 9