Infrastructure and service rich jurisdiction Low start up capital FITZROY RESOURCES US based coking coal Exposure to steel industry and tightening coking coal supply Cost competitive environment driving down costs 1
Fitzroy - Coal or Coking Coal Company? Coking Coal is not just coal. It is a premium product required for steel making Uses Coking coal has properties required in steel making furnaces Thermal coal is used to generate electricity and is unsuitable for steel making Market Coking coal demand 1 is correlated with steel demand Thermal coal mines are shutting down due to price pressure from new shale gas generated electricity supply Production methods All coal is mined and processed by the same methods and equipment Labour, infrastructure, equipment and services is becoming more available from thermal coal mine closures Premium product Coking Coal prices higher than thermal Future coking coal price upswing exposure Improving cost environment Not replaceable All positive for Fitzroy: A coking coal company Pure exposure to future coking coal price strength Weaker thermal sector assists a stronger coking sector 1. 0.77 tonnes of coking coal is required to produce 1.0 tonne of steel - http://www.worldcoal.org/coal/uses-of-coal/coal-steel/ 2
Iron Ore vs Coking Coal Price History Since 1996 250 200 150 100 50 Positive signs for coking coal price Until recent years, seaborne coking coal has maintained a price premium over iron ore 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 China import Iron Ore Fines 62% FE spot (CFR Tianjin port), US dollars per metric ton East Coast USA "All quality" Coking Coal Price (USD per short ton on an f.a.s. basis) Seaborne coking coal has also been more expensive than domestically produced, Chinese coking coal The long history of coking coal prices outstripping iron ore prices has been broken recently If this history re-establishes itself, then this could be extremely positive for coking coal 1. Sources Coking coal price EIA; Iron ore price IMF Commodity Prices; Graph 2 Credit Suisse 2. Wood Mackenzie - http://www.platts.com/latest-news/coal/pittsburgh/seabornemetallurgical-coal-market-to-grow-51-21782769 Since 2012, seaborne coking coal has been less expensive than domestically produced for Chinese steel mills More expensive domestic coal and rising Chinese production costs should underpin a return to seaborne coal demand: Despite being the world's biggest producer of metallurgical coal, China will continue to import seaborne material because domestic production is 3 projected to remain flat 2
Fitzroy in West Virginia Favourable jurisdiction for establishing coking coal operations West Virginia is a jurisdiction of choice for coking coal mining High quality premium hard coking coal Easy access hillside mining Low capital costs for mine start up Declining labour costs Extensive rail network with capacity Numerous third party processing options Mining contractors available Readily available power, water and access roads Project location 4
Strategy 2014: A new coking coal producer Aim is for Blackstone and Emmaus to generate revenue by year end Short term strategy Medium term strategy To commence mining in 2014 through low capex, scalable development using existing contract infrastructure Fitzroy aims to become a 500,000 ton per annum producer of hard coking coal per annum during 2015 How? Early cash flow from low cost, auger operated George mine in NW of Emmaus property during second half of 2014 Shallow, hillside mine at Blackstone before year-end: - Complete drilling at Blackstone - Feasibility study and reserve completed during first half of 2014 - Commission mine at location of existing permit Duplicate mine at Emmaus from same mine entrance To re-establish existing site facilities such as rail siding, rail load out and tailings dam Fitzroy aims to become a 2 million ton per annum producer of hard coking coal per annum within three years How? Demonstrate capability via short term strategy. Incrementally acquire new, nearby coking coal properties Explore for deeper coal resources at Emmaus and Blackstone Study viability of: - Recommissioning of rail siding and tailings dam - Construction of processing facility Develop a larger scale, deep mine to compliment production from shallower, hillside operations 5
Strategy 2014: A new coking coal producer A staged approach to growing production capacity Short term strategy George Mine Auger Mine Low capex Short term strategy Blackstone Underground Mine Mining Permit Location Short term strategy Emmaus Underground Mine Scalable coking coal production Medium term strategy Establish resource at depth Medium term strategy Re-establish permitted site facilities Processing Stages 1, 2 & 3 will be by use of existing third party processing facilities in the area New processing facilities can be built on existing permitted areas to prcess future deep resources Continuing to assess and acquire attractive bolt-on properties in the area The company will continue to assess future nearby opportunities. Emmaus permitted facilities will unlock significant value in the area 6
Short Term Strategy - George Mine Aiming for production and positive cash flow in 2014 Extracting the Ben s Creek seam Mining by cheaper auger/highwall methods Permit and design process underway Aiming for coal production in second half of 2014 Mining Permit Location Top Left: Design of the George Mine Top right: The north eastern boundary of the Fitzroy properties Bottom Left: Access track in place at level of target seam. Mining would initially expose the virgin coal in the direction of the arrows. The auger/highwall miner would then sit on the bench and mine the exposed coal Bottom right: Auger machine 7
Short Term Strategy - Blackstone Aiming to commence underground mining by year end Drilling expected to start in February Blackstone Coal Resource expected in April Project is already permitted for mining In discussions with mining contractors and equipment suppliers Initially targeting one production face headed south Upon successful commissioning of first production face, open up second working face headed north Aim is to become a 500,000 ton per annum producer Far right: The eastern boundary of the Fitzroy properties Bottom Left: Area prepared to commence mining at the northern boundary of the Blackstone property Mining Permit Location 8
Medium Term Strategy Leveraging Emmaus infrastructure to grow in the region To demonstrate capability via short term strategy. Incrementally acquire additional, nearby coking coal properties Explore for deeper coal resources at Emmaus and Blackstone Study viability of: Recommissioning of rail siding and tailings dam Construction of processing facility Develop a larger scale, deep mine to compliment production from shallower, hillside operations Mining Permit Location Medium term strategy Establish resource at depth 9 Medium term strategy Re-establish permitted site facilities
Company Summary Pro-forma Capital Structure Ordinary Shares 120,042,862 2 Options (exercise price $0.30) 6,000,000 Performance Shares 1 20,000,000 Pro-forma Cash As at 31 December 2013 Pro-forma Top 20 Shareholders A$1,663,000 3 Top 20 70.1% Management Benjamin Lane Chief Executive Officer Mike Amick Chief Operating Officer Patrick Murphy Land & Permit Manager Mike Casebolt Planning and Survey Officer Mining Engineer with over 17 years experience in a variety of operations, planning and commercial roles within the mining sector both in Australia and overseas Mining engineer with a Masters in Business Administration. Career spanning operational and management roles on underground and surface mining operations in the Appalachia Patrick possesses a B.S. in Civil Engineering Technology, an M.S. in Engineering Environmental and has more than 16 years experience in the mining and environmental industries Mike is a qualified Surveyor and has over 20 years of mine planning, surveying, exploration and permit experience 1. Conditions of performance shares: i. FRY share price over A$0.20 for 30 days; and ii. Either: Decision to mine and attaining a production rate over 15,000 ton per month; or Decision to construct a processing facility on site with a production capacity of greater than 30,000 ton per month 2. Fitzroy will issue a further 10,000,000 ordinary shares to the project vendors in February/March 3. A$1,270,000 was raised through a placement and rights issue completed in January 2014. This has been added to the 31 December 2013 cash position of A$434,000 10
Important Information and Disclaimer Forward Looking Statements Certain statements contained in this presentation, including information as to the future financial or operating performance of Fitzroy Resources Ltd and its projects, are forward-looking statements. Such forward-looking statements: May include, among other things, statements regarding targets, estimates and assumptions in respect of metal production and prices, operating costs and results, capital expenditures, Coal reserves and Coal resources and anticipated grades and recovery rates, and are or may be based onassumptions and estimates related to future technical, economic, market, political, social and other conditions; are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Fitzroy Resources Ltd, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Fitzroy Resources Ltd disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. The words believe, expect, anticipate, indicate, contemplate, target, plan, intends, continue, budget, estimate, may, will, schedule and similar expressions identify forward-looking statements. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Competent Person Statement The information in this report that relates to Exploration Results and the Exploration Target is extracted from the reports entitled Due Diligence Completion & Significant Intercept Emmaus created on 6 December 2013 and Technical Report Completed for Emmaus and Blackstone created on 10 December 2013 and are available to view on www.fitzroyresources.com.au. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements. The company confirms that the form and context in which the Competent Person s findings are presented have not been materially modified from the original market announcement. Exploration Target Note This presentation refers to explorations targets at Fitzroy s projects. The potential quantity and grade of the Exploration Target is conceptual in nature in that there has been insufficient exploration to estimate a Coal Resource and that it is uncertain if further exploration will result in the estimation of a Coal Resource. Further information can be found at www.fitzroyresources.com.au 11
Appendix I Exploration Target 12
Exploration Target 1 - Tonnage Range Seam Type Low High Average Emmaus Property Lower War Eagle Surface and Highwall 400 480 440 Gilbert Underground 1,800 1,910 1,860 Douglas Underground 1,930 2,110 2,020 Beckley (War Creek) Underground 5,580 9,210 7,400 Total Emmaus Property 9,710 13,710 11,720 Blackstone Property Gilbert Surface and Highwall 450 660 560 Gilbert Underground 530 770 650 Douglas Underground 650 1,040 850 Beckley (War Creek) Underground 0 0 0 Total Blackstone Property 1,630 2,470 2,060 Total By Seam Lower War Eagle Varies 400 480 440 Gilbert Varies 2,780 3,340 3,070 Douglas Underground 2,580 3,150 2,870 Beckley (War Creek) Underground 5,580 9,210 7,400 Total By Seam 11,340 16,180 13,780 Total By Mining Type Surface and Highwall Varies 850 1,140 1,000 Underground Varies 10,490 15,040 12,780 Total By Mining Type 11,340 16,180 13,780 Lower War Eagle Coal Above Drainage Target Seam Below Drainage Target Seam 1. The potential quantity and grade of the Exploration Target is conceptual in nature in that there has been insufficient exploration to estimate a Coal Resource and that it is uncertain if further exploration will result in the estimation of a Coal Resource. 2. An ASX release of the technical report and exploration target was announced on 10 December 2013. The full technical report is available on the Fitzroy website 13
Exploration Target 1 Quality Range Typical mid-volatile, coking coal High recovery, free swell and fluidity Low ash and sulphur Mid-volatile matter Highly marketable The quality range is from historic samples within the Emmaus Property No samples for Lower War Eagle, Iaeger, and Beckley seams: These seams have been locally mined successfully and shown potential for a metallurgical grade product Quality results expected soon Proximate Analysis Wash Recovery Ash (%) Sulfur (%) Btu/lb lb SO2 per MBtu Volatile Matter Free Swelling Index Max. Fluidity (DDPM) Gilbert Seam - Processed Coal Proximate Analysis Average 84.1 9.4 0.75 13,949 1.05 25.7 8.7 27,821 Maximum 96.2 12.4 0.87 14,275 1.17 27.3 9.0 29,823 Minimum 50.0 8.1 0.65 13,506 0.94 23.1 8.5 24,487 # Samples 12.0 12 12 7 7 11 12 3 Douglas (Red Ash) Seam - Processed Coal Proximate Analysis Average 84.1 2.6 0.70 15,153 0.88 26.9 9.0 24,910 Maximum 99.0 3.6 1.03 15,362 0.92 28.4 9.0 29,696 Minimum 53.3 1.8 0.58 15,019 0.83 25.8 8.5 19,693 # Samples 14 14 14 8 8 13 14 5 1. The potential quantity and grade of the Exploration Target is conceptual in nature in that there has been insufficient exploration to estimate a Coal Resource and that it is uncertain if further exploration will result in the estimation of a Coal Resource. 2. An ASX release of the technical report and exploration target was announced on 10 December 2013. The full technical report is available on the Fitzroy website 14
Appendix II Mining Methods 15
Appalachian Mining Methods Above drainage coal seams have low gas content and are more readily accessible from the hillside Fitzroy aims to study the viability of a drift mine using Room and Pillar Mining methods. A relatively low capital expense for mine access and much faster access to coal and coal revenue would be anticipated An opportunity exists at the George Mine to establish an auger mine in the Ben s Creek seam 16
Appalachian Mining Methods Underground Coal in the Appalachians is mostly mined utilising thin seam extraction methods Mining to a minimum height (eg 40 inches) is typical Equipment exists, such as that shown below and above, that can clean mine coal to seam thicknesses as low as 26 to 30 inches Coal is typically conveyored to the mine entry where it is either processed on site or transported to third party processing facilities Typical small mine face up into hillside CAT CM210 Thin seam continuous miner GE F330 thin seam continuous miner 17
Appendix III Due Diligence Period 18
Technical Report Highlights Highlighting project potential at Fitzroy s new projects Emmaus and Blackstone The Emmaus and Blackstone Technical Report 1 was commissioned to assist Fitzroy during its due diligence period. Key findings include: Little to no evidence of faulting or folding The above drainage target seams are generally contiguous Based on the available quality data the target seams are characterized as midvolatile, low sulfur bituminous coking coal Can potentially be mined by underground and highwall methods When assessing the Exploration Target 1,2, reasonable prospects of economic extraction were assessed by considering factors such as infrastructure, likely mining methodology transportation and permitting Cardno has endorsed the proposed exploration program to potentially identify and quantify mineral resources 1. An ASX release of the technical report and exploration target was announced on 10 December 2013. The full technical report is available on the homepage of the Fitzroy website 2. See Exploration Target note on page 2 of this presentation 19
Fitzroy Achievements Acquisition of Emmaus and Blackstone 1 has now been approved by shareholders Due diligence drilling has confirmed presence of shallow, hillside coking coal at Emmaus and identified a significant intersection in deeper seams Cardno Independent Technical Report 2 now available on Fitzroy Resources home page Achievable Targets: Short term target to commence low capex, rapid mine start up using third party processing and existing mine permit Medium term target to construct process and rail facility on site Cardno has defined a range of Exploration Target 2,3 for the Emmaus and Blackstone properties: Area Exploration Target Tons Range Low High Average Emmaus Property 9,710 13,710 11,720 Blackstone Property 1,630 2,470 2,060 Total 11,340 16,180 13,780 Note: Detailed target and quality range shown in Appendix of this presentation. 1. Under option to Premier 2. An ASX release of the technical report and exploration target was announced on 10 December 2013. The full technical report is available on the Fitzroy website 3. See Exploration Target note on page 2 of this presentation 20
Due diligence drilling has been completed Drilling has been done in two phases: Phase 1 - test and validate the hillside coal seams 1 Phase 2 test the potential for deeper coal 1 Results have show the following: Phase 1 Confirms previous understanding of above drainage seams Phase 2 Hole 14 has intersected 3.8ft (1.2m) of coal in the Beckley seam A significant intersection was found at depth 2 Only deep hole drilled in program Where no other previous drilling has been confirmed Provides walk up targets in the 2014 Potential upside for future The potential for walk up, early stage mining entries has been confirmed 1. All coals that are above the natural water table and hence not gas prone are referred to as above drainage. These coals typically have lower mining capital expenditure and are simpler technically. Below drainage seams can be mineable but typically require greater capital expenditure to access the coal seams. However these seams are often continuous as they are less prone to being subjected to erosion and weathering. 2. Due Diligence and Historic Drilling results were released in the Fitzroy ASX Announcement dated 6 December 2013 21