An Emerging Coal Company Investor Update October 2012
Cautionary Statement The information contained in this document (Presentation) has been prepared by NuCoal Resources Ltd and Doyles Creek Mining Pty Limited (Company). This Presentation does not constitute an offer or invitation to any person to subscribe for or apply for any securities in the Company. While the information contained in this Presentation has been prepared in good faith, neither the Company or any of its shareholders, directors, officers, agents, employees or advisers give any representations or warranties (express or limited) as to the accuracy, reliability or completeness of the information in this Presentation, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as Information ) and liability therefore is expressly disclaimed. Accordingly, to the full extent permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or limited, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained in this Presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any inaccuracies in, or omissions from, this Presentation which may become apparent. The right is reserved to terminate any discussions or negotiations with any person. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any errors. This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained in this Presentation necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relations to such matters. This Presentation may include certain statements that may be deemed forward looking statements. All statements in this discussion, other than statements of historical facts, that address further activities and events of developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. The Company, its shareholders, directors, officers, agents, employees or advisers, do not represent, warrant or guarantee, expressly or impliedly, that the information in this Presentation is complete or accurate. To the maximum extent permitted by law, the Company disclaims any responsibility to inform any recipient of this Presentation or any matter that subsequently comes to its notice which may affect any of the information contained in this Presentation. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any forward looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward looking statements. ASX Code: NCR Slide 2
Snapshot Prior to Plashett Acquisition Projects: Doyles Creek Underground Mine and Training School (100%) Hunter Valley NSW Dellworth Pty Ltd EL 6594 and EL 6812 (100%) Hunter Valley NSW Coal Resource Reserve (Doyles Creek): Measured 23.1Mt Indicated 119.3 Mt Inferred 369.5 Mt Total 511.9Mt Market cap: A$138.3 million S & P All Ords listed Cash: A$29.9 m (at 30/9/12) Probable Reserve 51Mt Management: Significant operational experience Industry Training Facility: Australia s 1 st industry backed with strong strategic partners Coal Products: Semi soft coking, thermal Port Access (Doyles Creek): PWCS 1Mt initial allocation commencing 2015 Doyles Creek (EL 7270) Exploration: 51 holes completed including a 200mm hole Savoy Hill (EL 6812) Exploration: Initial exploration commenced September 2011 24 cored holes completed to date Dellworth (EL 6594) Exploration: 11 open holes completed to date Initial Concept study completed ASX Code: NCR Slide 3
Strong Board and Management Team Chairman Mr. Gordon Galt G.Eng (Mining, Hons), B.Com, GDip AppFin (Finsia), MAusIMM, MAICD Non Executive Director Mr. James Beecher B.Com, MBA, FCPA, FAICD Non Executive Director Mr. Michael Davies BA Hons, MBA Non Executive Director Mr. Mike Chester B. Com, ACA Commercial General Manager Director Doyles Managing Manager and Operations Creek Mine Director Company Mr. Gary Training School Mr. Glen Lewis Secretary Cambourn Mrs. Maree MAICD Mrs. Megan Etcell B.Eng Mining Roberts B.Com, CA (Hons) Dip T, B Ed St, M Ed Admin, GAICD ASX Code: NCR Slide 4
Corporate Overview Capital Structure Significant Shareholders Shares on issue Share price 768.6 million (as at 9/10/12) A$0.18 Major shareholders Equity % Taurus Funds Management 19.7% Market cap. A$138.3 million HSBC Custody Nominees 6.6% Options on issue Cash (30/9/2012) nil A$29.9 million Sparta Group 6.2% National Nominees Limited 5.5% Citicorp Nominees Limited 5.2% Enterprise Value A$100.6 million Big Ben Holdings (Bloomfield Group) 3.9% ASX Code: NCR Slide 5
Latest Achievements Executed JV documents with Mitsui Matsushima for them to earn up to 10% of the Doyles Creek Project JV by spending $40m Project Overview document submitted to NSW Department of Planning and Infrastructure for the Doyles Creek Project. DGRs were received in May 2012 and EIS underway Successfully raised $29m on 1 March 2012 via placement and a further $6.3m via SPP during April 2012 Plashett acquisition Share Purchase Agreement executed 2 May 2012 Doyles Creek Project PFS study completed on time and within budget Renewal lodged for Dellworth EL 6594 and Initial Concept Study completed Conceptual Mining Study underway for Plashett and drilling to commence Q4 to add to historical 70 hole database ASX Code: NCR Slide 6
Strategic Portfolio Location Hunter Valley NSW o 35 coal mines o 14 producers o 27 loading points Dellworth o 80 different brands of coal Savoy Hill Doyles Creek Project Plashett Coal Project o 34 end buyers o 12 countries Project Status Doyles Creek Dellworth Plashett Savoy Hill BFS commencing Initial Concept Study completed Conceptual Mining Study Exploration Drilling * Plashett purchase subject to Shareholder approval and completion of ASX Code: NCR conditions precedent. Slide 7
Detailed Portfolio Locations Savoy Hill Dellworth Plashett Doyles Creek ASX Code: NCR Slide 8
Doyles Creek EL 7270
PFS Outcomes Detailed Underground mine plans laid out in the first 2 of 5 target seams achieving an initial 21 year mine life Substantial NPV of $523m at 10.0% discount rate IRR 20.8% Project start up capital of $727m Run of Mine (ROM) production of 101Mt for initial 21 years Average pit top ROM costs of $31.44 / tonne Average Project Outputs Units Pit Top ROM Cash Costs A$/t ROM 31.44 CHPP Costs (when required) A$/t ROM 6.99 FOR Cash Costs A$/t Product 45.70 Ex Mine Costs (excl Royalties) A$/t Product 20.07 C1 Cash Costs A$/t Product 65.77 Start Up Capital A$M 727 ROM Tonnes Mt 101.9 Saleable Tonnes Mt 85.7 Average Revenue / Tonne A$/t Product 149.01 Discount Rate % 10.0% NPV A$M 523 ASX Code: NCR Slide 10
Sensitivities and Competiveness ASX Code: NCR Slide 11
Whynot Seam Mine Plan ASX Code: NCR Slide 12
Whybrow Seam Mine Plan Igneous Silling ASX Code: NCR Slide 13
Training School Project A project to establish a Centre of Excellence in: o Mining o Training Doyles Creek Mining Pty Ltd Finance, mine management and operation and coordination of research, training and education Hunter Valley Training Company Vocational education and training resources and employment o Education o Research The University of Newcastle Research & Development, Undergraduate and Post Graduate education and placement of students Westpac Rescue Helicopter Service Paramedic training, OHS training and rescue simulations ASX Code: NCR Slide 14
Doyles Creek Mining Scholarships/Trainees/Apprentices NuCoal supports the Institute of Frontier Geosciences at The University of Newcastle through funding for student scholarships, academic positions and research funds. Internal and external training programs support apprentices and trainees including office staff, drillers, electricians and fitters to support the mining industry. Training programs in first aid and safety related issues support the local community. Students in local schools access funding for mentoring, career planning, health, trade training and industry related programs. ASX Code: NCR Slide 15
Plashett Coal EL 6705
Plashett Acquisition Benefits Plashett adds to the NuCoal portfolio and offers significant synergy between the existing tenements particularly Doyles Creek Open cut proposition with the ability to link to the Doyles Creek Project via an underground corridor Approximately 70 historical boreholes of data available with an exploration target based on past drilling of 89 300Mt of semi soft coking and thermal coal Located near major infrastructure and provides substantial opportunity to develop a concentrated coal handling hub for a number of related projects Conceptual Mining Study commenced and will be modified as required with the newest drilling data as its obtained ASX Code: NCR Slide 17
Plashett Initial Exploration and Synergy ASX Code: NCR Slide 18
Potential Resource Area ASX Code: NCR Slide 19
EL 6705 Seam Cross Sections ASX Code: NCR Slide 20
Dellworth Pty Ltd EL s 6594 & 6812
Dellworth Initial Drilling Draft mining plan laid out over the most prospective area +10 year mine life anticipated for domestic coal sales scenarios Base case as a contract mining opencut providing 500kt 1Mt to local domestic consumer Existing infrastructure providers access to local consumer within 7kms of project site Capital requirements estimated at $24m - $34m to establish an operation with contract mining rates utilised for the Concept Study ASX Code: NCR Slide 22
Draft Mine Plan ASX Code: NCR Slide 23
Savoy Hill Initial Drilling ASX Code: NCR Slide 24
Summary Corporate Company fully funded until end 2013 Experienced and competent management team All Projects located near major infrastructure Doyles Creek Project Good quality resource 0.511 billion tonnes. Pre feasibility completed and EIS underway Potential >30 year mine life via underground longwall mining Australian First Greenfields Underground Coal Training School Sufficient land owned for all necessary infrastructure and access requirements Savoy Hill Project Drilling well advanced and Environmental Studies underway Dellworth Project Stage 1 drilling and Initial Concept Study completed Plashett Project Acquisition underway and Conceptual Mining Study commenced to identify significant synergies with Doyles Creek and Savoy Hill projects ASX Code: NCR Slide 25
Competent Person Statement The information in this report that relates to exploration results and mineral resources is based on information compiled by Dr Ian Stone, who is a Member of the Australasian Institute of Mining and Metallurgy (102087). Dr Stone is Manager, Geology of Palaris Mining Pty Ltd. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity 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. Dr Stone has over 30 years experience in exploration and mining of coal deposits. Dr Stone consents to the inclusion in this report disclosed by the Company, of the matters based on his information, in the form and context in which it appears. The Underground Reserves estimate is based on information compiled by Mr Michael Barker, who is a Member of the Australasian Institute of Mining and Metallurgy (112634). Mr Barker is General Manager, Underground Services for Palaris Mining Pty Ltd. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity 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 Barker has over 16 years experience in the estimation, assessment, evaluation and economic extraction of Coal Reserves. He consents to the inclusion of this Reserve Estimate in reports disclosed by the Company in the form in which it appears. This estimation of Underground Coal Reserves has been undertaken by a team of people in the Palaris Mining office and in co operation with technical staff employed by NuCoal Resources Ltd. Mr Barker is satisfied that the work of the other contributors is acceptable, and Mr Barker accepts responsibility and accountability for the Underground Coal Reserve estimate documentation under the Code. Refer to detailed Doyles Creek JORC Resource Statement in Table A1 and the initial Reserve Statement in Table A2 below.
Appendix
Organisational Structure proven track record Managing Director GLEN LEWIS Personal Assistant(s) KELLY WILLIAMS & HOLLY STEPHENSON Trainee Administration Assistant RACHEL GIBBS Commercial Manager & Company Secretary MEGAN ETCELL General Manager Operations GARY CAMBOURN Director of Training School MAREE ROBERTS Commercial Accountant CASS PHILLPOTT Project Manager LEIGH NICHOLLS Engineering Manager GREG NICHOLLS Environment & Community Manager JEMMA SARGENT ASX Code: NCR Slide 28
Journey to Date ASX Code: NCR Slide 29
Plashett Coal Quality From Borehole Data ASX Code: NCR Slide 30
JORC Resource Statement ASX Code: NCR Slide 31
Reserve Statement Seam Probable Reserves (ROM Mt Mo ROM 8% ) Total Marketable Reserves (Mt various moisture basis ) Total Yield (%) West Borehole 23.3 13.8 59 % Whynot 27.6 26.4 96 % Total 50.9 40.2 79 % Table A2 Underground total probable and marketable reserves ASX Code: NCR Slide 32