For personal use only

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1 Investor Presentation INSERT NEW IMAGE SLIDE INSERT IMAGE GUJARAT NRE MINERALS LIMITED November 2009

2 DISCLAIMER This presentation contains only a brief overview of Gujarat NRE Minerals and its associated entities ( Gujarat") and their respective activities and operations. The contents of this presentation, including matters relating to the geology of Gujarat s projects, may rely on various assumptions and subjective interpretations which it is not possible to detail in this presentation and which have not been subject to any independent verification. This presentation contains a number of forward-looking statements. Known and unknown risks and uncertainties, and factors outside of Gujarat s control, may cause the actual results, performance and achievements of Gujarat to differ materially from those expressed or implied in this presentation. To the maximum extent t permitted by law, Gujarat does not warrant the accuracy, currency or completeness of the information in this presentation, nor the future performance of Gujarat, and will not be responsible for any loss or damage arising from the use of the information. The information contained in this presentation is not a substitute for detailed investigation or analysis of any particular issue. Current and potential investors and shareholders should seek independent advice before making any investment t decision in regard to Gujarat or its activities. COMPETENT PERSON STATEMENT The information in this report that relates to Mineral Resources and Reserves is based on information compiled by Mr. Kris Markowski ki who is a member of the Australian Institute t of Mining i and Metallurgy. Mr. Markowski is employed by Gujarat NRE Minerals Limited. Mr. Markowski 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 Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and ore Resources. Mr. Markowski ki consents to the inclusion i in the report of the matters based on his information in the form and context in which it appears. 2

3 AGENDA 1. GUJARAT OVERVIEW 2. BOARD AND MANAGEMENT TEAM 3. ASSET OVERVIEW 4. GROWTH PLAN 5. REY RESOURCES TAKEOVER UPDATE 6. DEMAND OUTLOOK 7. OFFTAKE PARTNER - GUJARAT COKE 8. INVESTMENT SUMMARY 3

4 GUJARAT OVERVIEW ASX listed hard coking coal producer» Market capitalisation of ~A$530 million 100% owner of two underground d mines in NSW, Australia» NRE No. 1» NRE Wongawilli JORC resources of 573.6Mt All ROM coal sold under contract to major shareholder for captive use (Gujarat Coke)» Commercial terms based on market formula Xstrata Tahmoor NRE WONGAWILLI Southern W. Tahmoor Appin Peabody Metropolita n Westcliff Northclif f Dendrobiu m BHP Illawarra Coal NRE No. 1 Wollongong Port Kembla Port Kembla coal loader 18 Mtpa All product exported through Port Kembla Coal Terminal» Regional rail and port infrastructure capacity of 18Mt Coalfield Kiama Experienced and expert management team Targeting to increase ROM production from 1.3Mtpa to 6.0Mtpa over the next 5 years» Target long term operating cost of ~$39/t 4

5 GUJARAT OVERVIEW (cont.) Capital structure Shareholders Share price (A$) Share o/s (m) Options (m) 27.6 Market cap (A$m) Net debt/(cash) 1 (A$m) Enterprise value (A$m) % 11% 83% Others Gujarat NRE Coke Limited & Associates HSBC Global Asset Management (Singapore) Ltd Share price performance (LTM) Financials FY09A FY08A A$0.80 March Y/E A$m A$m Revenue A$0.60 EBITDA 45.8 (5.6) A$0.40 A$0.20 A$0.00 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Depreciation & (28.2) 2) (3.3) 3) Amortisation EBIT 17.6 (8.9) EBIT margin 8.5% n/a NPAT (9.1) (8.0) Note: 1 As at 31 March

6 EXPERIENCED BOARD Board Arun Jagatramka Chairman B.Com (Hons), FCA, AIMM 25 years of professional and management experience All India 1st rank gold medalist Chartered Accountant Director of Pike River, Port Kembla Coal Terminal, NSW Mineral Council and Australian Coal Research Association Appointed as an honorary NSW Sydney Ambassador to India Maurice Anghie Experienced financially qualified Professional with commercial skills and Director & Chairman of legal/regulatory and governance expertise Audit Committee Audit partner in chartered accounting firms for over 20 years BBus, FCA, FCPA, MAICD Don Carroll Over 30 years experience in the international mineral industries Director Former senior executive with BHP Billiton where he held the positions of Vice B. Mining Engineering President Investor Relations Australia, General Manager Marketing Asia, President BHP Billiton Japan, President BHP Billiton India. Andrew Firek Director M.Sc, Ph D, FAusIMM, FAIE 25 years experience in mining, mineral processing, construction, commissioning and operations of coal, base and precious metals plants in Europe, Africa and Australia Former Group Leader at the CSIRO, Division of Fossil Fuels in Sydney and was engaged in developing technologies to produce liquid fuels from coal Mona Jagatramka Director BS B.Sc. (Hons) 10 years of experience in management and administration Active in the management & human resources for Gujarat NRE Group Also on the board of Gujarat NRE Coke Limitedit 6

7 MANAGEMENT STRUCTURE Arun Kumar Jagatramka Sanjay Loyalka S Murari P R Kannan 7

8 STRONG MANAGEMENT TEAM Senior Management Team Steven Bow Head of Operations BE(Hons), MEngSc Chris Harvey Head of Tech. Services PhD Mining Engineering Steve Coffee Group Engineering Manager Phil Wakeford Operations Manager insert 28 Years Underground Coal experience in coal operations and management with BHP Billiton and its coal operations in the Illawarra Region First class mine managers certificate & qualified competent person in reserves analysis 35 years coal industry experience Former Mining Engineer and Senior Environmental Officer with the NSW Department of Mineral Resources Member of the Australasian Institute of Mining & Metallurgy, the Institution of Engineers Australia, the Australian Institute of Management, the Society of Mining Metallurgy & Exploration (America) 28 years Underground Coal experience at operations in the southern and western coal fields of NSW mainly with BHP Billiton Mechanical Engineers Certificate of Competency 33 years Underground Coal experience having worked in NSW South Coast, NSW Western District and Central Queensland Collieries with Oakdale Collieries Ltd, BHPBIC and NREWW Mine Managers Certificate of Competency Rhys Brett 8 years underground coal mining with Anglo, Centennial and Xstrata Operations Manager NSW 1 st Class Certificate of Competency for Underground Coal Mines and a diploma B. Eng (mining) honours ou. on Ventilation Engineering g 8

9 NRE NO.1 COLLIERY Located in the Southern Coalfields of NSW» ~10km north of Wollongong» ~20km from Port Kembla Coal Terminal Premium quality hard coking coal JORC resources of 315.6Mt Current production of 0.65Mtpa ROM coal transported ~20km via truck to the Port Kembla Coal Terminal Capacity to increase production to 3.2 Mtpa by 2015 Currently using a board and pillar mining method with plans to install longwall equipment in 2 years time Approximately A$160 million invested (to March 2009) with plans to invest a further A$300 million 9

10 NRE NO.1 COLLIERY (cont.) Production forecast (ROM) Future capital expenditure plan (FY10-13) A$m Mine development 70 Mt For personal use only Plant & equipment 210 Others Total FY10 FY11 FY12 FY13 FY14 FY15 Reserves & Resources Resources (Mt) Reserves (Mt) Potential Reserves (Mt)* As per mine plan (Mt)** Seam Measured Indicated Inferred Total Proven Probable Total Total Bulli Balgownie Wongawilli Total *Potential reserve of million is additional to 18.5 million JORC reserves and based on mine plans drawn-up from inferred resources. Hence is not a part of JORC reserves. **Total of Reserves and Potential Reserves. 10

11 NRE WONGAWILLI COLLIERY Located in the Southern Coalfields of NSW» ~14km south-west of Wollongong» ~20km from Port Kembla Coal Terminal Consolidates the Elouera Colliery (previously owned by BHP), Avondale Colliery and part of the Huntley Colliery Premium quality hard coking coal JORC resources of 258Mt ROM coal transported ~20km via rail to the Port Kembla Coal Terminal Approximately A$80 million invested (to March 2009) with plans to invest a further A$200 million Operating a Joy Longwall since Sep,

12 NRE WONGAWILLI COLLIERY (cont.) Production forecast (ROM) Future capital expenditure plan (FY10-13) A$m Mine development 40 Mt Plant & equipment 110 Others 50 Total FY10 FY11 FY12 FY13 FY14 FY15 Reserves & Resources Resources (Mt) Reserves (Mt) Potential Reserves (Mt)* As per mine plan (Mt)** Seam Measured Indicated Inferred Total Proven Probable Total Total Bulli Wongawilli Tongarra Total *Potential reserve of million is additional to 18.5 million JORC reserves and based on mine plans drawn-up from inferred resources. Hence is not a part of JORC reserves. **Total of Reserves and Potential Reserves. 12

13 COAL QUALITY Typical washed coal quality Average Bulli Wongawilli range for coking coal 1 Ash (%) CSN (swell 5.5 > index) Inherent Moisture (%) Volatile Matter (%) Rank (Ro Max) Gujarat hard coking coal compares well against Bowen Basin prime hard coking coal on almost all quality parameters Fluidity (ddpm) 1,800 3, ,000 Sulphur (%) Phosphorous (%) Source: Australian Coal Association, Company reports, Broker reports Note: 1 Based on Bowen Basin coal quality estimates 2 Based on inherent moisture content of Peak Downs coal 13

14 INFRASTRUCTURE POSITIONING Port Kembla Coal Terminal remains an unconstrained coal export port» 13.2Mt throughput in 2008» Ship loading capacity is 18 Mtpa NRE No. 1 ROM coal from NRE No. is transported t via truck haulage to Port Kembla» Proven ability to transport up to 3 Mtpa ROM coal from Wongawilli is transported via rail to Port Kembla» Historically up to 2 Mtpa has been transported using existing infrastructure» The capital program budgets for an infrastructure upgrade that will allow for the transport of 4 Mtpa NRE Wongawilli Wollongong Port Kembla Rail Road 14

15 GROWTH PLAN PRODUCTION FOCUS NRE 1 and Wongawilli to be developed to deliver production growth, cost reduction and operational excellence» Based on in-house studies completed at a level equivalent to a pre-feasibility study» At 6Mtpa operating costs are estimated to be ~$39.0/t FOB Port Kembla Coal Terminal 7 6 Historical Future 5 CAGR: 36.7% MT CAGR: 82.4% NRE 1 Wongawilli 1 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Wongawilli Longwall Introduced NRE 1 Longwall Introduction ti Wongawilli Longwall Upgrade 15

16 REY RESOURCES TAKEOVER UPDATE Announced a takeover offer for Rey Resources (ASX:REY) on 3 June 2009» 100% scrip offer based on 1 for 5 (with implied bid premium of ~41%) Rey Resources owns 100% of a thermal coal exploration project located in the Canning Basin, WA» JORC resource of 511Mt» Well located to WA ports» Feasibility study expected to be completed by end of 2009 Transaction rationale» Exposure to the growing thermal coal market and diversifies Gujarat s asset base and market risks» Ability to unlock the value through financing capabilities and development expertise» Compliments growth strategy as an independent coal company» Attractive location for exporting to the Indian market Status» Gujarat FIRB approval obtained» Gujarat owns 16.9% equity in Rey» Crosby Capital announced rival $0.195 cash takeover offer on 4 September» Gujarat offer extended to 27 November» REY trading at ~A$0.25 with Rey Resources Directors unanimously rejecting both offers» Rey Directors have proposed capital raising i at 20 cents 16

17 GLOBAL CRUDE STEEL GROWTH PATTERN India s long term steel development pattern is similar to most countries, following the same pattern of more than a century old 17

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19 OFFTAKE PARTNER - GUJARAT COKE All ROM coal production sold to Gujarat Coke Sold on commercial terms based on a market formula calculated as follows:» FOB Coking Coal Price based on the JSM BHP Goonyella benchmark» Benchmark price is adjusted for yield, additional transport costs required to ship ROM coal (versus washed coal) to India, estimated coal washing costs and the cost of emplacement of rejects in Australia Since the commencement of production the ROM coal price received has been between 52% and 60% of the benchmark coking coal price Gujarat Coke has guaranteed that the ROM price received will be no less than US$55 per tonne Gujarat Coke is the largest independent producer of Metallurgical Coke in India» Listed on the Bombay and National Stock Exchanges» More than 180,000 shareholders» Market cap of ~US$644 million» Only Indian company to have acquired coking coal mines in Australia 19

20 INVESTMENT SUMMARY 1. ATTRACTIVE HARD COKING COAL EXPOSURE 2. PREMIUM PRODUCT 3. STRONG PRODUCTION GROWTH PROFILE 4. ROBUST LONG TERM OPERATING MARGINS 5. UNCONSTRAINED EXISTING INFRASTRUCTURE CAPACITY 6. WELL SUPPORTED BY MAJOR SHAREHOLDER - GUJARAT NRE COKE LIMITED 7. STRONG AND EXPERIENCED MANAGEMENT TEAM 20

21 OUR GROUP S TRACK RECORD 21 22