An Emerging Coal Producer Investor Roadshow March 2012
Disclaimer and Competent Persons Statement The information in this presentation does not purport to contain all the information that may be required to evaluate the prospects of Coalworks and in particular only discloses material information within the knowledge of Coalworks. You should seek independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to the information and rely on your own due diligence and analysis accordingly. Other than to the extent required by law (and only to that extent) we disclaim all liability and make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility nor liability for, the information provided. Competent Person s Statement The following statements apply in respect of the information in this presentation that relates to Exploration Results and Mineral Resources for the Ferndale Project: The information is based on, and accurately reflects information compiled by Mr Stephen Hyland, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hyland is a geologist employed as Principal Consultant by Ravensgate, mineral industry consultants. He has the relevant experience in relation to the coal deposits being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Identified Mineral Resources and Ore Reserves. Mr Hyland has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears. The following statements apply in respect of the information in this announcement that relates to Exploration Results and Mineral Resources for the Vickery South and Oaklands North Projects: The information is based on, and accurately reflects information compiled by Mr Matt Morgan, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Morgan is a geologist employed by Coalworks Limited. He has the relevant experience in relation to the coal deposits being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves. Mr Morgan has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears. 2 Investor Presentation - March 2012
Investment Highlights Committed to building an independent Australian coal producer from a high-quality asset base Vickery South: first coal planned 2015 Ferndale: first coal planned 2016 Oaklands: CTL/export coal Strong board and management with international experience in coal sector Experienced exploration, design and operations team Consolidation in the Australian coal sector provides a window of opportunity for Coalworks, which is poised for a share price re-rating 3 Investor Presentation - March 2012
Executive Summary Corporate Summary ASX Ticker CWK Share price ~$0.80 (as of 29 Feb 2012) Market Cap Cash position ~$119 million ~$18.7 million (as of Dec 2011) 4 Investor Presentation - March 2012
Project overview Project Vickery South Highlights 58.5 Mt JORC semi-soft and coking Coal Resource Joint Venture with Itochu Corporation First production planned for 2015 Ferndale 743 Mt JORC Coal Resource, conceptual mine studies underway Binding JV with Boardwalk Resources First production planned for 2016 Oaklands North Orpheus Energy 822 Mt JORC thermal Coal Resource Strategic alliance with Synthesis Energy Systems CTL plant PFS underway 33.3% equity holding in Orpheus Energy (ASX: OEG) Focused on coal production, exploration and development of coking and thermal coal deposits in Indonesia 5 Investor Presentation - March 2012
Coalworks Directors Wayne Mitchell AASA, AAIM (Chairman) Mr Mitchell is a qualified accountant with over 30 years extensive senior management experience in the natural resources sector, both in Australia and in South East Asia. Dr Andrew Firek M. Sc., Ph.D., FAusIMM, FAIE (Managing Director/CEO) Dr Firek has been involved in coal exploration, mining and processing industry at operational and executive levels for over 20 years. Ian Craig B App Sci (Min Eng), FAusIMM (Non-Executive Director) Mr Craig is a mining engineer who recently retired from Peabody as Group Vice President and Managing Director in February 2008. He maintains an active role in the coal industry through his involvement as a director with MISC, Dingo and most recently Boardwalk Resources. 6 Investor Presentation - March 2012
Coalworks Management David Smith B Econ, Dip Mgmt - Executive MBA (Head of Commercial and Development) Mr Smith was previously an investment banker for 15 years, where he advised and raised capital in a range of industries, and particularly for emerging coal and iron ore companies. He was most recently Head of Corporate Finance at BBY Limited and prior to that, he worked at Ord Minnett and then JPMorgan Chase. Geoff Kidd (Chief Operating Officer) Mr Kidd has over 30 years hands-on experience designing and building new coal mines, driving technological and operational efficiencies in new mine development and managing coal projects. Mr Kidd previously was NSW Coal Business Manager at Connell Hatch, and prior to that was Managing Director at Sedgman & Associates. David Oastler B Com, CA (Chief Financial Officer) David is a Chartered Accountant with over 25 years experience with various SMEs, listed and private company groups as well as services to various governmental agencies Nathan Bartrop LLB, B Com, ACIS (Company Secretary) Mr Bartrop is a Chartered Secretary. He previously was Assistant Company Secretary at Mirabela Nickel Limited, and prior to that, he worked at ASX for 2 years as a Listings Adviser. Mr Bartrop also has previous experience in litigation and dispute resolution. 7 Investor Presentation - March 2012
Coalworks Management Chris Hagan BA, LLB, Acc.Spec. (Bus) (Senior Advisor) Mr Hagan has over 25 years experience advising publicly-listed and private companies on legal and corporate affairs, including large scale capital raising strategies, IPOs and restructures. Steve Harper BE, MIEAust, CPEng (Project Manager) Mr Harper has 35 years experience in project management, study management, design management and engineering. His previous experience includes Engineering Manager for BHP's Mount Arthur North Mine Development and Project Manager for CSR's Oberon Sawmill Development, design, in the field of building, infrastructure, mining, petrochemical, heavy industrial and process. Matt Morgan BSc (Geology) (Exploration Manager) Mr Morgan has 15 years experience in mine geology, quality control and mining engineering, and mine management roles in coal, gold, antimony, and iron ore mining & exploration, both Open Cut and Underground. 8 Investor Presentation - March 2012
Coalworks Projects 9 Investor Presentation - March 2012
Vickery South Location 10 Investor Presentation - March 2012
Vickery South Fly-through 11 Investor Presentation - March 2012
Vickery South PFS Key Highlights Vickery South is located in the prime Gunnedah Basin semi-soft coking coal area, is a multi Seam coal deposit suited to truck and shovel open cut extraction 58.5 Mt JORC resource, including 48 Mt Measured, 0.1 Mt Indicated and 10.4 Mt Inferred Resource Project production at 3Mtpa with:16 year mine life; NPV $243M; IRR 23.2% Typical coal product quality: SSCC @ 7.7% ash (a.d.) & Export Thermal Coal @ 5.9% ash (a.d.) through on site Coal Handling and Preparation Plant Average yield is 84% on washing all coal: 83% SSCC / 17% premium thermal coal Capital cost of A$243M Bankable Feasibility Study underway 12 Investor Presentation - March 2012
Vickery South Development Timetable 13 Investor Presentation - March 2012
Ferndale Location 14 Investor Presentation - March 2012
Ferndale Key Highlights Ferndale is located in the prime Hunter Valley coal region 743 Mt JORC Resource, including 443 Mt Open Cut Inferred Resource and 300 Mt Underground Inferred Resource Conceptual mine studies underway Binding JV with Boardwalk Resources (Whitehaven Coal, post current merger): $25M JV Boardwalk to fund the project up to BFS for open cut mine and PFS for the underground mine. First production planned for 2016 Ferndale Coal Project Drilling of stages 1 and 2 complete, with Stage 3 underway 15 Investor Presentation - March 2012
Ferndale Drilling 16 Investor Presentation - March 2012
Ferndale Geological Model 17 Investor Presentation - March 2012
Ferndale Development Timetable 1 Assume the results of the PFS finished end 2012, adequate to submit an EIS 2 Assume EIS is 24 months 3 Assume construction over 12 months sufficient for processing 4 Detail finalised as exploration results confirmed & PFS commences in regard to CHPP and infrastructure 18 Investor Presentation - March 2012
Oaklands North Location 19 Investor Presentation - March 2012
Oaklands North Project and Coal To Liquids Plant Oaklands North is located in southern New South Wales 822Mt JORC thermal coal resource, including 121 Mt Measured, 572 Mt Indicated and 129 Mt Inferred Resource Readily mineable using conventional open cut methods and potentially suitable for unconventional mining methods Coal is ideal for gasification (as tested by GTI Chicago) Preliminary Feasibility Studies assessing a range of CTL plant capacity options (7,000, 14,000 and 21,000 bpd), as well as other value adding options (eg Coal to Plastics) 21,000 bpd will require a multi billion dollar consortium to be formed. First petrol could be available in 5-6 years after securing finance. Oaklands North is better located than any other potential CTL Project in relation to the major Australian population centres. 20 Investor Presentation - March 2012
Coalworks And Synthesis Energy In December 2009, CWK and Synthesis Energy Inc (SES), a NASDAQ listed company, entered into a strategic alliance to utilise the SES proprietary U-GAS gasification technology at Oaklands North The Zao Zhuang Plant in Shandong Province is a commercial example of successful implementation of the SES technology 21 Investor Presentation - March 2012
Summary Committed to building an independent Australian coal producer from a high-quality asset base Vickery South: first coal planned 2015 Ferndale: first coal planned 2016 Oaklands: CTL/export coal Strong board and management with international experience in coal sector Experienced exploration, design and operations team Consolidation in the Australian coal sector provides a window of opportunity for Coalworks, which is poised for a share price re-rating 22 Investor Presentation - March 2012
Drilling at Coalworks Projects Vickery South Ferndale Oaklands North 23 Investor Presentation - March 2012
Enquiry And Contact David Smith Geoff Kidd Coalworks Limited Level 5, 44 Miller Street North Sydney NSW Australia 2060 Ph: +61 2 9922 1344 Fax: +61 2 9922 4288 Email: info@coalworks.com.au Website: www.coalworks.com.au 24 Investor Presentation - March 2012