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c/- Mitchell & Partners

Level 7, 10 Barrack Street, SYDNEY NSW 2000

GPO Box 5460 SYDNEY NSW 2001

Phone: +61 (0)2 9392 8686

Fax: +61 (0)2 9299 8195

Email: [email protected]

Website: www.bowenenergy.com.au

14 December 2012

Market Announcements Platform

Australian Securities Exchange

By electronic transmission

COMPULSORY ACQUISITION OF BOWEN ENERGY SHARES BY BHUSHAN STEEL (AUSTRALIA)

PTY LIMITED

The Company has now received the following documents from Bhushan Steel (Australia) Pty

Limited in relation to the compulsory acquisition process:-

1. Letter to the directors of Bowen Energy Limited;

2. Compulsory Acquisition Notice Form 6024 for the Ordinary Shares which includes that the

acquisition price is $0.05 per Ordinary Share;

3. Objection Form; and

4. Independent Expert’s Report of DMR Corporate Pty Ltd dated 13 December 2012, which

concludes that $0.05 per Ordinary Share gives a fair value for the Ordinary Shares.

Copies of the letter and documents received from Bhushan Steel (Australia) Pty Limited are

attached herewith.

Glenn Merchant

Company Secretary

Bowen Energy Limited Phone: +61 (0)2 9392 8686

Fax: +61 (0)2 9299 8195

Email: [email protected]

Website: www.bowenenergy.com.au For

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DMR CORPORATE ________________________ ____________________________________ DMR Corporate Pty Ltd A.C.N. 063 564 045 470 Collins Street Melbourne Telephone (03) 9629 4277 Victoria 3000 Facsimile (03) 9629 4598 Australia Web www.dmrcorporate.com.au

13 December 2012 The Directors Bhushan Steel (Australia) Pty Ltd Level 7 10 Barrack Street Sydney, NSW 2000 Dear Sirs, Re: Compulsory Acquisition of Shares Issued by Bowen Energy Limited 1. Background

You have requested DMR Corporate Pty Ltd (“DMR Corporate”) to prepare an independent expert’s report so as to comply with Section 667A of the Corporations Act 2001 (the “Act”) in respect of a proposed compulsory acquisition of securities by a 90% holder pursuant to Section 664A of the Act. Section 664C(2)(b) of the Act requires you to send a copy of this report to each person whose securities are to be compulsorily acquired. Bowen Energy Limited (“BWN”) has currently 234,327,968 shares on issue. Bhushan Steel (Australia) Pty Ltd (“BSA”) has acquired 210,901,412 of these shares (90.00266%) and the remaining 23,426,556 shares are held by 576 shareholders. BSA now seeks to acquire the shares it does not presently control pursuant to Section 664A of the Act. Section 664A of the Act provides that a person who holds at least 90% of the securities by number in a class, may compulsorily acquire the remainder of the securities in that class. Section 664C provides that a compulsory acquisition notice must be accompanied by a copy of an expert’s report. The expert’s report must be made out in accordance with the provisions of Part 6A.4 of the Act. The primary purpose of this report is to state whether, in our opinion, the terms proposed in the compulsory acquisition notice give a fair value for the shares concerned, including our reasons for forming that opinion.

2. Proposed Terms BSA is offering to acquire each BWN share that it does not presently own for $0.05 per share. Shareholders are to receive payment as soon as practicable after they have provided instructions to BWN as to how their entitlement is to be dealt with.

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3. Summary Opinion

As the cash consideration offered for each share ($0.05) exceeds the value that we have placed on the shares ($0.0312 to $0.0468), we have concluded that the terms proposed in the compulsory acquisition notice give a fair value for the securities concerned.

4. Structure of this Report The remainder of this report is divided into the following sections:

Section Page 5 Purpose of the Report 2 6 BWN - Key Information 3 7 Assessment of the Value of BWN 9 8 Assessment of Fair Value 16 9 Financial Services Guide 16

Appendix

A Sources of Information 19 B Declarations and Qualifications 20

Attachment 1 Mining One Pty Ltd – Valuation of The Mineral and Coal Assets of Bowen Energy Limited

21

5. Purpose of the Report

This report has been prepared to meet the following regulatory requirements: 5.1 Corporations Act 2001 5.1.1 Compulsory Acquisition

Section 664A(3) provides that a 90% holder in relation to a particular class of securities of a company may compulsorily acquire all the remaining securities in that class. Section 664A(1) specifies that a “90% holder” in relation to a class of securities is a person who holds full beneficial interests in at least 90% of the securities in that class either alone or with a related body corporate.

Section 664C prescribes that the 90% holder must prepare a compulsory acquisition notice and forward this notice, together with a copy of the expert’s report prepared in accordance with Section 667A to every holder of securities that are to be compulsorily acquired.

5.1.2 Expert’s Report in Respect of the Compulsory Acquisition

Sections 667A and 667B of the Act prescribe the matters to be dealt with in the expert’s report. The key requirement is to state whether, in the expert’s opinion, the terms proposed in the notice give a fair value for the securities concerned. Section 667C of the Act sets out the methodology to be followed in determining the fair value of the securities concerned. This Section requires that the value of the company be assessed as a whole, this assessed value be divided among the classes of issued securities and the value allocated to each class be then allocated on a pro rata basis among the securities in that class. The Section also provides that in allocating the total value of the

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company into classes, the relative financial risk, voting and distribution rights be taken into account. The total value allocated to each class is to be allocated among the securities within that class on a pro rata basis, without allowing a premium or applying a discount for particular securities in that class. The Section stipulates that the consideration paid for securities in that class within the previous six months must be taken into account in determining the fair value of the securities.

5.2 General Whilst the Act prescribes the steps to be followed in valuing the securities to be acquired, it does not define the term “fair value”. We have defined fair value for the purpose of this report as follows:

the terms proposed in the compulsory acquisition notice give a fair value if the value of the cash consideration offered for the shares is equal to or greater than the value of the shares to be acquired.

The methodology that we have used to satisfy the requirements of Section 667C in forming an opinion as to whether the terms proposed in the compulsory acquisition notice give a fair value, consisted of: (i) an assessment of the value of BWN as a whole; (ii) a valuation of the issued shares in BWN; and (iii) comparing the value of one BWN share with the acquisition price of $0.05 (value

offered) per share set out in the compulsory acquisition notice. 6. BWN – Key Information

6.1 Corporate

BWN was listed on the ASX in February 2007 with the objective of engaging in the exploration and development of coal and mineral resource projects in Australia and the Asia-Pacific region. The current corporate structure of BWN and its subsidiaries is as follows:

Bowen Energy Limited

100%

Golden Country Kondor Holdings Bowen Coal Bowen Consolidated Resources (Australia) Pty Ltd Pty Ltd Pty Ltd

Pty Ltd

"BWN"

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6.2 Coal and Mineral interests BWN is the holding company in the Bowen Energy Limited group of companies and it holds all of BWN’s non-coal tenements. BWN’s subsidiaries with operations or assets are: * Golden Country Resources (Australia) Pty Limited, which holds three coal

tenements (EPC 1001, EPC 1002 and EPC 1014) * Bowen Coal Pty Limited, which has a 40% interest in the coal tenement EPC 930

through a joint venture arrangement with Rocklands * Kondor Holdings Pty Limited, which was acquired in November 2007 and holds one

coal tenement (EPC 1045) at South Blackwater.

6.2.1 Coal Exploration Projects BWN’s coal exploration projects are as follows:

Each of the 5 coal tenements in which BWN has less than a 100% interest, are held in Joint Ventures. The key terms of the Joint Venture Agreements are as follows:

South Blackwater • BSA holds a 85% joint venture interest in BWN’s South Blackwater project. • BWN have been appointed to be the Project Manager of the Joint Venture. • BWN has a put option and BSA a call option over the joint venture interest

held by BWN, which may be exercised after any one of the following periods:

(a) the 30 day period commencing on the commissioning of the mine for the project;

(b) the 30 day period commencing on the anniversary date of the

commissioning of the mine for the project; (c) the 30 day period commencing on the date that BSA notifies BWN in

writing and provides evidence to BWN’s reasonable satisfaction, that BSA intends to invest $10 million or more in upgrading or expanding the project.

Project Property Tenement Interest Held Sub-BlocksJoint Venture

Partner Minerals

Shotover EPC 1045 15% 222 BhushanPlanet Downs EPC 1206 15% 43 Bhushan

Mt Cheops EPC 1001 10% 28 BhushanKia Ora EPC 1002 10% 50 BhushanSpringsure South EPC 1084 100% 20 -Buckland EPC 1187 100% 300 -

Richfield EPC 930 40% 240 RocklandsCockatoo EPC 1014 100% 22 -North Middlemount EPC 1085 100% 3 -

Open-cut thermalWest Rolleston

Underground coking, PCI, thermal

Underground PCI, thermal

South Blackwater

East Middlemount

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The exercise price of the options will be:

- indicated and measured JORC resources less the value already mined and extracted x 15% x ($1.00 per tonne if the resource is of coking coal quality, or otherwise $0.50 per tonne).

• BWN and BSA are restricted from dealing their respective interests in the joint

venture without the other’s consent or subject to pre-emptive rights. West Rollestan • BSA holds a 90% joint venture interest in two of Bowen’s four tenements at

the West Rollestan project. • BWN have been appointed to be the Project Manager of the Joint Venture. • BWN has a put option and BSA a call option over the joint venture interest

held by BWN, which may be exercised after any one of the following periods:

(a) the 30 day period commencing on the commissioning of the mine for the project;

(b) the 30 day period commencing on the anniversary date of the commissioning of the mine for the project;

(c) the 30 day period commencing on the date that BSA notifies BWN in writing and provides evidence to BWN’s reasonable satisfaction, that BSA intends to invest $10 million or more in upgrading or expanding the project.

The exercise price of the options will be:

- indicated and measured JORC resources less the value already mined and extracted x 10% x ($1.00 per tonne if the resource is of coking coal quality, or otherwise $0.50 per tonne).

• BWN and BSA are restricted from dealing their respective interests in the joint

venture without the other’s consent or subject to pre-emptive rights. South Blackwater and West Rollestan In March 2010 BWN announced it had met its initial expenditure

commitments for the South Blackwater and West Rollestan joint ventures and that BSA would be responsible for funding all joint venture exploration activities going forward on these tenements to the point that a mine is commissioned.

After commissioning of the mine, the production, revenue and costs of

operation will be shared by the parties in proportion of their respective interests in the joint venture.

East Middlemount EPC 930 is held 60% by Rocklands and 40% by BWN. Under the joint venture agreement, Rocklands has the responsibility to undertake development of the tenement. • Under the terms of the investment agreement BWN is obliged to offer BSA

the first right to participate in the development of its three East Middlemount tenements (40% interest in EPC 930 and 100% interests in EPC 1014 and EPC

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1085) should it seek to develop these tenements with a third party involvement.

• BSA has no participation rights if BWN seeks to self-fund development of the

East Middlemount project. However, should BWN seek to develop the East Middlemount tenements as joint ventures, it will be required to first offer BSA the right to participate on the following terms:

* BWN will transfer to BSA a 90% interest in the project tenement

* BSA will fund all capital and other expenses to the point that a mine is

commissioned on the project.

* After a mine is commissioned, the production, revenue and costs of operation will be shared by the parties in proportion to their respective interests in the joint venture.

* BWN has a put option and BSA a call option over the interest held by

BWN, which may be exercised after commissioning of a mine. The exercise price of the options will be: - $1.00 per tonne of BWN’s 10% share of the JORC compliant

indicated and measured resource of coking coal, which has not yet been mined and extracted (i.e. $0.10 per tonne of total indicated and measured resources).

- $0.50 per tonne of BWN’s 10% share of JORC compliant

indicated and measured resource of any other type of coal (such as thermal coal), which has not yet been mined and extracted (i.e. $0.05 per tonne of total indicated and measured resources).

* BWN and BSA are restricted from dealing their respective interests in

the joint venture without the other’s consent or subject to pre-emptive rights.

6.2.2 Other Projects

The company primarily explores for coking and thermal coal deposits however it also explores for uranium, iron oxide, copper, gold, silver, tin, rare earth metals, diamonds, fluorite, barite, and platinum group element deposits. BWN’s non-coal exploration leases are as follows:

Project Tenement Interest Held Minerals

EPM 16267 100% 100EPM 16272 100% 100EPM 16274 100% 98EPM 17364 100% 26

EPMA 16269 100% 98EPMA 16270 100% 99

Archie Creek (1) EL 80/3537 100% 24EL 80/3898 100% 106

Note:(1) Currently being relinquished

Uranium, copper, gold, fluorite and potential for vanadium and platinum group elements

Copper, uranium, nickel and platinum group elementsCroydon

Uranium, gold-silverBullseye Creek

Sub-Blocks

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6.3 Share Capital ASIC records show that as at 10 November 2012, BWN had on issue 234,327,968 fully paid ordinary shares.

6.4 Operating Performance

BWN's Statement of Comprehensive Income for the financial years ended 30 June 2011 and 2012 are as follows:

Statements of Comprehensive Income Audited Audited Year Ended Year Ended 30/6/2011 30/6/2012 $ $ Revenue Interest income 9,019 69,631 Option fee received 10,000 - Sundry income 10,427 - Legal settlement – at fair value - 540,975 29,446 610,606 Expenses Professional fees (676,902) (353,098) Salaries and directors’ remuneration (169,794) 12,616 Travel and related expenses (9,402) (11,653) Insurance (57,934) (63,204) Operating lease rentals (40,945) (45,448) Depreciation - (16,622) Communications (17,535) (9,514) Finance costs (439,981) (560,609) Other (84,576) (42,882) Tenements written off - (1,207,811) Loss on deregistration of subsidiaries (152) - Loss before income tax (1,467,775) (1,687,619) Income tax benefit - - Loss for the year (1,467,775) (1,687,619) Other comprehensive income

Changes in fair value of available-for-sale financial assets, net of tax

52,583

(40,450)

Total comprehensive income for the year (1,415,192) (1,728,069)

Source: BWN Annual Report – 2012

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6.5 Net Assets BWN's Statement of Financial Position disclosed the following net assets as at 30 June 2011 and 2012 are as follows:

Statements of Financial Position Audited Audited 30/6/2011 30/6/2012 $ $ Current Assets Cash and cash equivalents 602,105 3,298,204 Trade and other receivables 57,084 1,498,261 Other current assets 5,355 5,355 Total current assets 664,544 4,801,820 Non-Current Assets Available for sale financial assets 108,850 68,400 Plant & equipment - 1,189,508 Exploration expenditure 3,257,276 3,773,527 Total non-current assets 3,366,126 5,031,425 Total Assets 4,030,670 9,833,255 Current Liabilities Trade and other payables 501,564 2,768,318 Borrowings 7,572,230 8,230,531 Total current liabilities 8,073,794 10,998,849 Net Assets (4,043,124) (1,165,594)

Source: BWN Annual Report – 2012 6.6 Cash Flow Statements

BWN's Statements of Cash Flows for the financial years ended 30 June 2011 and 2012 are as follows:

Statements of Cash Flows Audited Audited Year Ended Year Ended 30/6/2011 30/6/2012 $ $ Cash flows from operating activities Interest received 9,019 69,631 Other income received 20,067 - Payments to suppliers and employees (784,139) (469,630) Net cash outflows from operating activities (755,053) (399,999) Cash flows from investing activities Purchase of plant and equipment - (665,155) Exploration and evaluation expenditure (1,034,777) (943,083) Net cash outflow from investing activities (1,034,777) (1,608,238) Cash flows from financing activities Loans from BSA 2,091,519 98,737 Net proceeds from issued shares - 4,605,599 Net cash inflow from financing activities 2,091,519 4,704,336 Net increase in cash and cash equivalents 301,689 2,696,099 Cash and cash equivalents at beginning of year 300,416 602,105 Cash and cash equivalents at end of year 602,105 3,298,204

Source: BWN Annual Report – 2012

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7. Assessment of the Value of BWN

7.1 Value Definition DMR Corporate’s valuation of BWN has been made on the basis of fair market value, defined as the price that could be realized in an open market over a reasonable period of time given the current market conditions and currently available information, assuming that potential buyers have full information, in a transaction between a willing but not anxious seller and a willing but not anxious buyer acting at arm’s length.

7.2 Valuation Methodologies In selecting appropriate valuation methodologies, we considered the applicability of a range of generally accepted valuation methodologies. These included:

• share price history;

• capitalisation of future maintainable earnings;

• net present value of future cash flows;

• asset based methods; and

• comparable market transactions. Each of the above methodologies is described and where possible applied in the balance of this Section 7.

7.3 Share Price History

7.3.1 The share price history valuation methodology values a company based on the past trading in its shares. We normally analyse the share prices up to a date immediately prior to the date when a takeover, merger or other significant transaction is announced to remove any price speculation or price escalations that may have occurred subsequent to the announcement of the proposed transaction.

7.3.2 In this instance BWN advised its shareholders on 12 October 2012 that a compulsory

acquisition would occur and on 2 November 2012 BWN announced that the acquisition would be at a price of $0.05 per share.

7.3.3 A table of the volumes and values of the BWN shares traded in the period from 1

November 2011 to 30 November 2012 is as follows:

Source: Commonwealth Securities, Capital IQ and DMR Corporate analysis

Month High Low Average Volume Value$ $ $ $

2011November 0.033 0.032 0.032 80,581 2,597 December 0.028 0.026 0.028 150,000 4,200

2012January 0.032 0.030 0.032 10,314 327 February 0.031 0.031 0.031 80,000 2,480 March 0.041 0.034 0.037 335,630 12,352 April 0.041 0.041 0.041 38,000 1,558 May 0.041 0.035 0.035 18,634 652 June 0.035 0.025 0.032 177,966 5,651 July 0.000 0.000 0.000 - - August 0.025 0.023 0.023 103,966 2,391 September 0.031 0.022 0.024 426,215 10,099 October 0.044 0.035 0.040 297,009 12,027 November 0.049 0.044 0.045 567,725 25,759

2,286,040 80,093

Share Price

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7.3.4 On 10 October 2012 the share price increased to $0.04, which was the first time it had achieved this level since early May 2012. Since 10 October the shares have been trading in a range of $0.038 to $0.049.

7.3.5 Based on the above data we determined that we should calculate the volume weighted average price (“VWAP”) up to the close of trading on 9 October 2012. The VWAP’s were:

Source: DMR Corporate analysis

7.3.6 There are currently 576 shareholders holding 23,426,556 shares so the liquidity of the

BWN shares over the last 9 months has been extremely low and in our opinion the stock is illiquid. Based on the VWAP calculations in Section 7.3.5 above, we have determined that the BWN shares had a current market value in a range of $0.026 to $0.036 per share prior to the compulsory acquisition announcement.

7.3.7 A graph of the closing daily share prices and daily volumes from 1 December 2011 to 9

October 2012 is as follows:

Source: DMR Corporate analysis

7.3.8 Historical Share Prices BWN was listed in February 2007 following a public offering of 25,000,000 shares at $0.20 per share. A chart of the Monthly Share Prices since listing is as follows:

Period Volume Value VWAP

30 day VWAP 137,605 5,000 0.03660 Day VWAP 641,071 16,704 0.02690 Day VWAP 641,071 16,704 0.026Jan 1 to 9 Oct 1,301,615 39,724 0.031

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Source: Capital IQ and ASX announcements

The legend to the key factors identified in the graph above that may have impacted on the share prices are as follows:

1. 19/02/08 – BSA requests that its remaining 2 tranches totalling 5 million shares at $0.32 be paid immediately rather than on 31/03/08 and 30/06/08.

2. February 2008 to July 2008 – Various ASX announcements regarding the commencement of drilling, additional drilling rigs being employed, drilling updates, coal seam intersections and exploration updates.

3. 27/08/08 – BSA subscribes to a placement of 1,750,000 shares at $0.32 per share. 4. 10/07/09 – BSA announces an on-market takeover bid at a price of $0.14 per share. 5. 22/09/10 – BSA announces an on-market takeover bid at a price of $0.10 per share. 6. 18/10/11 – renounceable entitlement offer of 2.5 new shares for every 1 share currently held at a

price of $0.033 per share. 7. 12/10/12 - Compulsory acquisition notice.

7.3.9 Since the 18 October 2011 renounceable share offering of 2.5 new shares for every 1 share held at $0.033 per share, the VWAP of the shares to 9 October 2012 is $0.031 per share.

7.3.10 Based on the above analysis, we consider that the share price valuation methodology values the BWN shares in a range of $0.026 to $0.036 per share. These values represent the value of minority interests as they arise from the sale of small parcels of shares on the ASX.

7.3.11 A recent study has indicated that control premiums are generally in a range of 20% to 30%1

above the value of a minority share. If these levels of control premium were added to the maximum and minimum minority values of $0.026 to $0.036 per share, the share price values on a control basis would be:

1 Control premiums are normally in a range of 20% to 30% above the value of a minority share – RSM Bird Cameron Control

Premium Study – September 2010.

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Bowen Energy Ltd. (ASX:BWN) - Monthly Share Pricing!

Bowen Energy Ltd. (ASX:BWN) - Monthly Share Pricing!

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7.3.12 After applying a typical level of control premium, the share price history values on a control

basis will be in a range of $0.0312 to $0.0468 per BWN share. 7.4 Capitalisation of Future Maintainable Earnings

This methodology involves capitalizing the estimated future maintainable earnings of a business at a multiple which reflects the risks of the business and its ability to earn future profits. There are different definitions of earnings to which a multiple can be applied. The traditional method is to use net profit after tax – Price Earnings or PE. Another common method is to use Earnings Before Interest and Tax, or EBIT. One advantage of using EBIT is that it enables a valuation to be determined which is independent of the financing and tax structure of the business. Different owners of the same business may have different funding strategies and these strategies should not alter the fundamental value of the business. Another variation to EBIT includes ‘Earnings Before Interest, Tax, Depreciation and Amortization’ – EBITDA. This measure of earnings often approximates operating cash flows. As can be seen from Section 6.3 above and the following table, BWN has had a series of losses over the last 6 years:

2007 2008 2009 2010 2011 2012 $ $ $ $ $ $

Loss before tax (521,090) (1,105,019) (5,126,759) ((11,235,887) (1,467,775) (1,687,619)

Source: BWN Annual Reports – 2007 to 2012 EBIT and EBITDA were also negative figures in each of the above years. As the BWN operations do not generate positive earnings, we have concluded that the capitalisation of future maintainable EBIT or EBITDA methodology cannot be applied to value BWN.

7.5 Net Present Value of Projected Cash Flows An analysis of the net present value of the projected cash flows of a business (or discounted cash flow technique) is based on the premise that the value of the business is the net present value of its future cash flows. This methodology requires an analysis of future cash flows, the capital structure, the costs of capital and an assessment of the residual value of the business remaining at the end of the forecast period.

20% Control 30% ControlMinority Value Premium Premium

0.026 0.0312 0.0338

0.036 0.0432 0.0468

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BWN has not prepared cash flow forecasts beyond the current financial year and as we have not obtained any financial forecasts or assumptions upon which forecasts could be based we have been unable to complete a valuation based on this methodology.

7.6 Asset Based Methods

7.6.1 This methodology is based on the realisable value of a company’s identifiable net assets.

Asset based valuation methodologies include:

(a) Net Assets The net asset valuation methodology involves deriving the value of a company or business by

reference to the value of its assets. This methodology is likely to be appropriate for a business whose value derives mainly from the underlying value of its assets rather than its earnings, such as property holding companies and investment businesses that periodically revalue their assets to market. The net assets on a going concern basis method estimates the market values of the net assets of a company but does not take account of realization costs.

(b) Orderly Realisation of Assets The orderly realisation of assets method estimates the fair market value by determining the amount

that would be distributed to shareholders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner.

(c) Liquidation of Assets The liquidation method is similar to the orderly realisation of assets method except the liquidation

method assumes that the assets are sold in a short time frame.

7.6.2 Net Assets BWN’s balance sheet as at 30 June 2012 (Section 6.4 above) discloses a deficiency of net

assets of $1,165,594. This deficiency would have been larger had BWN not raised an additional $5,036,930 (before costs) of capital during the 2011-2012 financial year. Based on the net assets recorded in the financial statements BWN has a nil value.

7.6.3 Orderly Realization The value achievable in an orderly realisation of assets is estimated by determining the net realisable value of the assets or business segments on the basis of an assumed orderly realisation. BWN’s main assets are its mineral exploration rights. Given that these assets are at the exploration stage we appointed Mining One Pty Ltd (“Mining One”) to independently conduct a technical review and to prepare a valuation of all tenements in which BWN has an interest.

We have reviewed the valuation report prepared by Mining One and discussed the

valuation with Messrs. Stuart Hutchin and Tim Summons as they are responsible for preparation of the report.

As a result of our review and discussions, we have used the Fair Market Values as

determined by Mining One as a basis of our assessment of the value that an alternate acquirer may be prepared to pay to acquire BWN’s mineral assets.

A copy of the Mining One report dated December 2012 is set out as Attachment 1 to this

report and the Executive Summary contains the following commentary:

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“Bowen Energy Ltd has varying equity in 9 coal exploration permits in Queensland, and full equity in 6 mineral exploration permits in Queensland. The Shotover coal project containing the Katrina Prospect is classed as an Advanced Exploration Project, while the remaining coal projects are classed as Exploration Areas. All the mineral projects are classed as Exploration Areas. Technical valuations of the coal projects were undertaken using the following methods: Ø Geoscientific (Modified Kilburn) rating: an average value of $3.25M

Ø Comparable Transactions: an average value of $0.82M

Ø Multiple of Exploration Expenditure: an average value of $1.67M

After consideration of relevant adjustment factors the coal properties are considered to have a Fair Market Value in the range $1.12M - $2.71M, with a Preferred Fair Market Value of $1.91M. Technical valuations of the mineral projects were undertaken using the following methods: Ø Geoscientific (Modified Kilburn) rating: an average value of $1.20M

Ø Comparable Transactions: an average value of $1.03M

After consideration of relevant adjustment factors the mineral properties are considered to have a Fair Market Value in the range $0.39M - $2.00M, with a Preferred Fair Market Value of $1.2M.”

We reviewed BWN’s assets as recorded in the 30 June 2012 Statement of Financial Position and based on the following assumptions, we determined the net realizable value of BWN’s net assets in the table below: Note 1 the Cash and cash equivalent figure at 30 June 2012 has been accepted as a realisable asset at its full

value. Note 2 Trade and other receivables relate to GST receivable ($526,825) and exploration and evaluation

expenditure ($971,436) recoverable from BSA pursuant to the terms of their Joint Venture Agreement. The GST has been recovered since 30 June 2012 and DMR Corporate considers that the BSA sum is fully recoverable. Alternatively, it could be offset against the sum of $8,230,531 due to BSA at 30 June 2012 in an orderly realisation process.

Note 3 Prepayments ($5,355) - DMR Corporate has estimated the recoverable values following discussions

with the Company Secretary. Note 4 Available for sale financial assets ($68,400) – Represents shares in Vector Resources Limited and

DMR Corporate has reviewed recent trading in the Vector shares and noted that liquidity is low and has assessed the recoverable values at 50% (low) and 75% (high) of the recent share prices.

Note 5 Plant and equipment – valuation by Absolute Certified Equipment Appraisers dated 6 April 2009 was

reviewed and DMR and the appraised values were used to record values in the accounting records. We have accepted the book values as the high recoverable values and taken a 10% discount to establish the low recoverable values.

Note 6 Exploration expenditure - $3,773,527 – DMR Corporate had the exploration interests valued by

Mining One as stated in Section 7.6.3 above. Note 7 In an orderly realisation shareholders would normally be left with cash and a listed corporate shell,

which could be used to acquire a new business. In our experience listed shells in the current market have a value between $300,000 to $400,000 and we have added these values to the net asset values below.

Note 8 The costs of realisation are estimates made by DMR Corporate.

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Statements of Financial Position Audited Estimated Realizable Values Note 30/6/2012 Low High $ $ $ Current Assets Cash and cash equivalents 1 3,298,204 3,298,204 3,298,204 Trade and other receivables 2 1,498,261 1,498,261 1,498,261 Other current assets 3 5,355 1,000 2,500 Total current assets 4,801,820 4,797,465 4,798,965 Non-Current Assets Available for sale financial assets 4 68,400 30,000 43,000 Plant & equipment 5 1,189,508 1,070,000 1,189,500 Exploration expenditure 6 3,773,527 Mining One Valuations – Coal assets 1,200,000 2,710,000 Mining One Valuations – Mineral properties 390,000 2,000,000 Total non-current assets 5,031,425 2,690,000 5,942,500 Total Assets 9,833,255 7,487,465 10,741,465 Current Liabilities Trade and other payables 2,768,318 2,768,318 2,768,318 Borrowings 8,230,531 8,230,531 8,230,531 Total current liabilities 10,998,849 10,998,849 10,998,849 Net Assets (1,165,594) (3,511,384) (257,384) DMR Corporate adjustments: Value of listed shell 7 300,000 400,000

Less: Realisation costs 8 (150,000) (100,000) Net realizable values (3,361,384) 42,616 Shares on issue – 7 November 2012 234,327,968 Value per share Nil $0.00018

Source: BWN Annual Report – 2012 and DMR analysis of the figures.

Accumulated taxation losses As at 30 June 2012 BWN has approximately $21.2 million of carry forward tax losses.

Realization of any value from these carry forward losses is dependent on the ability of BWN to generate future profits. BWN has not recognized the potential tax benefits from these losses in its accounting records as it is not probable that future taxable profits will be available against which BWN can utilise the temporary differences and losses.

As BWN has no assets that are currently generating cash flows or are likely to generate

cash flows for the next 4 + years, we have not ascribed any value to the accumulated taxation losses as we cannot, with any degree of certainty, ascertain that the losses will be recovered or the time period in which the losses may be utilised.

7.7 Comparable Market Transactions

BWN is basically an exploration and development company with a focus on coal and mineral resource projects including coal deposits, uranium, iron oxide, copper, gold, silver, tin, rare earth metals, diamonds, fluorite, barite, and platinum group element deposits.

We do not consider that this valuation methodology can be directly applied in valuing the

BWN shares, however Mining One has used comparable tenement and lease information in determining their valuation of BWN’s mineral interests.

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7.8 Conclusion The valuation methodologies that we consider as being applicable valuation methodologies are:

Low High Valuation Methodology Section $ $ Share price history 7.3.12 0.0312 0.0468 Orderly realisation of assets 7.6.3 Nil 0.0002

Based on the valuation methodologies applied above we have valued the control values of the BWN shares in a range of $0.0312 to $0.0468 per share.

8. Assessment of Fair Value

The valuation process set out in Section 667C(1) consists of several steps. We comment on these in turn. Section 667C(1)(a) requires us to value the company as a whole. We completed a valuation of the ordinary shares in Section 7 and in Section 7.8 we concluded that the value of the BWN shares is in a range of $0.0312 to $0.0468 per share. Based on 234,327,968 shares on issue this equates to a value in a range of $7,311,033 to $10,966,549 for the Company as a whole. Section 667C(1)(b) requires us to then allocate that value among the classes of issued securities in the company (taking into account the relative financial risk, voting and distribution rights, of the classes). BWN has only one class of shares on issue, namely ordinary shares. There are no other classes of securities on issue. This means that the value of the ordinary share class is valued in a range of $7,311,033 to $10,966,549. Section 667C(1)(c) requires us to then to allocate the value of each class pro rata among the securities in that class (without allowing a premium or applying a discount for particular securities in that class). BWN has 234,327,968 shares on issue so the value of each share is in a range of $0.0312 to $0.0468 per share. As the cash consideration offered for each share ($0.05) exceeds the value that we have placed on the shares ($0.0312 to $0.0468), we have concluded that the terms proposed in the compulsory acquisition notice give a fair value for the securities concerned.

9. Financial Services Guide 9.1 Financial Services Guide

This Financial Services Guide provides information to assist retail and wholesale investors in making a decision as to their use of the general financial product advice included in the above report.

9.2 DMR Corporate

DMR Corporate holds Australian Financial Services Licence No. 222050, authorizing it to provide general financial product advice in respect of securities to retail and wholesale investors.

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9.3 Financial Services Offered by DMR Corporate DMR Corporate prepares reports commissioned by a company or other entity (“Entity”). The reports prepared by DMR Corporate are provided by the Entity to its members.

All reports prepared by DMR Corporate include a description of the circumstances of the engagement and of DMR Corporate’s independence of the Entity commissioning the report and other parties to the transactions.

DMR Corporate does not accept instructions from retail investors. DMR Corporate provides no financial services directly to retail investors and receives no remuneration from retail investors for financial services. DMR Corporate does not provide any personal retail financial product advice directly to retail investors nor does it provide market-related advice to retail investors.

9.4 General Financial Product Advice

In the reports, DMR Corporate provides general financial product advice. This advice does not take into account the personal objectives, financial situation or needs of individual retail investors.

Investors should consider the appropriateness of a report having regard to their own objectives, financial situation and needs before acting on the advice in a report. Where the advice relates to the acquisition or possible acquisition of a financial product, an investor should also obtain a product disclosure statement relating to the financial product and consider that statement before making any decision about whether to acquire the financial product.

9.5 Independence

At the date of this report, none of DMR Corporate, Derek M Ryan nor Mr Paul Lom has any interest in the outcome of the Proposed Transaction, nor any relationship with BWN, BSA or their associates. Drafts of this report were provided to and discussed with one of the Director and the Company Secretary of BWN and its advisers. Certain changes were made to factual statements in this report as a result of the reviews of the draft reports. There were no alterations to the methodology, valuations or conclusions that have been formed by DMR Corporate. DMR Corporate and its related entities do not have any shareholdings in or other relationships with BWN, BSA or their associates that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Proposed Transaction.

DMR Corporate had no part in the formulation of the Proposed Transaction. Its only role has been the preparation of this report.

DMR Corporate considers itself to be independent in terms of Regulatory Guide 112 issued by ASIC on 30 March 2011.

9.6 Remuneration

DMR Corporate is entitled to receive a fee of approximately $22,500 for the preparation of this report.

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With the exception of the above, none of DMR Corporate, its directors, employees or associated entities will receive any other benefits, whether directly or indirectly, for or in connection with the making of this report.

9.7 Complaints Process

As the holder of an Australian Financial Services Licence, DMR Corporate is required to have suitable compensation arrangements in place. In order to satisfy this requirement DMR Corporate holds a professional indemnity insurance policy that is compliant with the requirements of Section 912B of the Act.

DMR Corporate is also required to have a system for handling complaints from persons to whom DMR Corporate provides financial services. All complaints must be in writing and sent to DMR Corporate at the above address. DMR Corporate will make every effort to resolve a complaint within 30 days of receiving the complaint. If the complaint has not been satisfactorily dealt with, the complaint can be referred to the Financial Ombudsman Service Limited – GPO Box 3, Melbourne Vic 3000.

Yours faithfully DMR Corporate Pty Ltd

Derek Ryan Paul Lom Director Director

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Appendix A

Sources of Information • The compulsory acquisition notice; • Loan Facility Agreement dated 31 March 2009 ($4 million) together with extension

confirmations dated 27 January 2010 ($8 million) and 20 September 2010 ($10 million);

• The following joint venture agreements:

* EPC 1045 and EPCA 1206 between Kondor Holdings Pty Ltd, Bhushan Steel Limited, BSA and BWN dated 3 March 2008

* EPC 930 - Richfield Joint Venture Agreement between Rocklands Richfield Limited,

Micona Mining Pty Ltd and Fairpark Pty Ltd dated 12 July 2006 * EPC 1001 and EPC 1002 between Golden Country Resources (Australia) Pty Ltd, Bhushan

Steel Limited, BSA and BWN dated 3 March 2008

• Investment Agreement dated 20 December 2007 between BWN, Bhushan Steel Limited and BSA;

• BWN annual reports for the 2007 to 2012 financial years; • BWB share register dated 2 November 2012; • Background information on the BWN web site; • ASX announcements from 1 July 2011; • Share information from the Capital IQ database; • Absolute Certified Equipment Appraisers dated 6 April 2009; • Mining One Pty Ltd valuation dated December 2012; • ASIC historical extract dated 10 November 2012 for BWN; and • Discussions with Mr. N Stuart, a director, Mr. G. Merchant, the Company

Secretary and other senior executives and BWN advisers.

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Appendix B

Declarations and Qualifications 1. Declarations

This report has been prepared at the request of the Directors of BSA pursuant to Section 667A of the Act to accompany a notice of compulsory acquisition to be given to holders of shares issued by BWN that are not presently owned by BSA. It is not intended that this report should serve any purpose other than as an expression of our opinion as to whether or not the terms proposed in the notices of compulsory acquisition give a fair value for the securities concerned. The recipients of this report should be aware that this report has been prepared without taking account of their individual objectives, financial situation or needs.

This report has also been prepared in accordance with the Accounting Professional and Ethical Standards Board professional standard APES 225 – Valuation Services.

The procedures that we performed and the enquiries that we made in the course of the preparation of this report do not include verification work nor constitute an audit in accordance with Australian Auditing Standards. Mining One is to be paid a fee of $23,000 for the preparation of its specialist technical report. Mining One has consented to the inclusion of statements made by it, or based on statements made by it, or statements or information extracted or derived from its report titled “Valuation of the Mineral and Coal Assets of Bowen Energy Limited” dated 29 November 2012:

(a) in the form and context in which they are included; and (b) to all references to that information in the form and context in which it appears.

2. Qualifications

Mr Derek M Ryan and Mr Paul Lom, directors of DMR Corporate prepared this report. They have been responsible for the preparation of many expert reports and are involved in the provision of advice in respect of valuations, takeovers and capital reconstructions and reporting on all aspects thereof. Mr Ryan has had over 40 years experience in the accounting profession and he is a Fellow of the Institute of Chartered Accountants in Australia. He has been responsible for the preparation of many expert reports and is involved in the provision of advice in respect of valuations, takeovers and capital reconstructions and reporting on all aspects thereof. Mr Lom is a Chartered Accountant and a Registered Company Auditor with more than 35 years experience in the accounting profession. He was a partner of KPMG and Touche Ross between 1989 and 1996, specialising in audit. He has extensive experience in business acquisitions, business valuations and privatisations in Australia and Europe.

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ATTACHMENT 1

FINAL REPORT

VALUATION

THE MINERAL AND COAL ASSETS

OF

BOWEN ENERGY LTD

Job No. 1822_G Mining One Pty Ltd Level 9, 50 Market Street

Melbourne VIC 3000 Ph: 03 9600 3588

Fax: 03 9600 3944

Doc No. 3418v2 Date: December 2012 Prepared by: T G Summons

R Gaulton B Williams

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TABLE OF CONTENTS

EXECUTIVE SUMMARY .............................................................................................................................. v

1 INTRODUCTION ................................................................................................................................ 1

1.1 Commission and Scope ............................................................................................................ 1

1.2 Applicability of the VALMIN Code ............................................................................................. 1

1.2.1 Background ........................................................................................................................... 1

1.2.2 Relevant Extracts.................................................................................................................. 1

1.2.3 Classification of Mineral Assets ............................................................................................ 2

1.3 Independence, Qualifications and Experience ......................................................................... 2

1.4 Disclaimer ................................................................................................................................. 3

2 EXPLORATION PERMITS FOR COAL ............................................................................................ 4

2.1 Introduction ............................................................................................................................... 4

2.2 EPC 930 Cosmos Project Summary Information ..................................................................... 5

2.2.1 Overview ............................................................................................................................... 5

2.2.2 Geological Setting................................................................................................................. 5

2.2.3 Prior Exploration/Information ................................................................................................ 6

2.2.4 Recent Activities ................................................................................................................... 6

2.2.5 Apparent Coal Quality .......................................................................................................... 6

2.2.6 Actual Expenditure and Previous Valuation ......................................................................... 6

2.2.7 Estimated Technical Value of Allocation .............................................................................. 7

2.3 EPC 1001 - Mt Cheops Project Summary Information ............................................................. 7

2.3.1 Overview ............................................................................................................................... 7

2.3.2 Geological Setting................................................................................................................. 7

2.3.3 Prior Exploration/Information ................................................................................................ 8

2.3.4 Recent Activities ................................................................................................................... 8

2.3.5 Apparent Coal Quality .......................................................................................................... 8

2.3.6 Actual Expenditure and Previous Valuation ......................................................................... 9

2.3.7 Estimated Technical Value of Allocation .............................................................................. 9

2.4 EPC 1002 - Kia Ora Project Summary Information ................................................................ 10

2.4.1 Overview ............................................................................................................................. 10

2.4.2 Geological Setting............................................................................................................... 10

2.4.3 Previous Exploration/Information ........................................................................................ 11

2.4.4 Recent Activities ................................................................................................................. 11

2.4.5 Apparent Coal Quality ........................................................................................................ 11

2.4.6 Actual Expenditure and Previous Valuation ....................................................................... 11

2.4.7 Estimated Technical Value of Allocation ............................................................................ 12

2.5 EPC 1014 – Cockatoo Project Summary Information ............................................................ 13

2.5.1 Overview ............................................................................................................................. 13




2.5.5 Apparent Coal Quantity and Quality ................................................................................... 15



2.6 EPC 1045 – Shotover Project Summary Information ............................................................. 16

2.6.1 Overview ............................................................................................................................. 16




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2.7 EPC 1084 Springsure South Project Summary Information .................................................. 20

2.7.1 Overview ............................................................................................................................. 20







2.8 EPC 1085 - Middlemount North Project Summary Information .............................................. 21

2.8.1 Overview ............................................................................................................................. 21







2.9 EPC 1187 - Buckland Coal Project Summary Information ..................................................... 25

2.9.1 Overview ............................................................................................................................. 25


2.9.3 Prior Exploration/Information .............................................................................................. 25





2.10 EPC 1206 - Planet Downs Project Summary Information .................................................. 29

2.10.1 Overview ......................................................................................................................... 29

2.10.2 Geological Setting........................................................................................................... 29

2.10.3 Previous Exploration/Information .................................................................................... 30

2.10.4 Recent Activities ............................................................................................................. 30

2.10.5 Apparent Coal Quantity and Quality ............................................................................... 30

2.10.6 Actual Expenditure and Previous Valuation ................................................................... 30

2.10.7 Estimated Technical Value of Allocation ........................................................................ 31

3 COAL TECHNICAL VALUATIONS ................................................................................................. 32

3.1 Valuation Methodology ........................................................................................................... 32

3.2 Conclusions ............................................................................................................................ 33

3.2.1 Modified Kilburn Ratings ..................................................................................................... 33

3.2.2 Comparable Transactions .................................................................................................. 35

3.2.3 Multiple of Exploration Expenditure .................................................................................... 35

3.2.4 Fair Market Value ............................................................................................................... 35

4 EXPLORATION PERMITS FOR MINERALS .................................................................................. 36

4.1 EPM 16269 and EPM 16270 - Bullseye Creek Project .......................................................... 37

4.1.1 Overview ............................................................................................................................. 37

4.1.2 Mineral Asset Status ........................................................................................................... 37

4.1.3 Target Mineralisation .......................................................................................................... 37



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4.1.6 Recent Activities/Work Complete ....................................................................................... 38

4.2 EPM 16267, EPM 16272, EPM 16274 and EPM 17364 - Croydon Project ........................... 40

4.2.1 Overview ............................................................................................................................. 40

4.2.2 Mineral Asset Status ........................................................................................................... 40

4.2.3 Target Mineralisation .......................................................................................................... 40



4.2.6 Recent Activities/Work Complete ....................................................................................... 41

4.3 Glen Isla Project ..................................................................................................................... 41

4.3.1 Overview ............................................................................................................................. 41

5 MINERAL TECHNICAL VALUATIONS ........................................................................................... 42

5.1 Valuation Methodology ........................................................................................................... 42

5.2 Croydon Project Valuation Rationale...................................................................................... 42

5.3 Bullseye Creek Project Valuation Rationale ........................................................................... 43

5.4 Conclusions ............................................................................................................................ 44

5.4.1 Modified Kilburn Ratings ..................................................................................................... 44

5.4.2 Comparable Transactions .................................................................................................. 44

5.4.3 Fair Market Valuation ......................................................................................................... 44

6 APPENDIX 1 .................................................................................................................................... 46

7 APPENDIX 2 .................................................................................................................................... 49

TABLE INDEX

Table 1: Listing of Exploration Tenements held fully or in part by Bowen Energy Ltd as at October

2012 .................................................................................................................................................. 4

Table 2: Tenement Valuation October 2010 (Xstract 2010) ................................................................... 6

Table 3: Summary of Quality parameters, Freitag Coal ......................................................................... 9

Table 4: Actual Expenditure on Tenement (Hetherington Pty Ltd 2012) ................................................ 9

Table 5: Tenement Valuation October 2010 (Xstract 2010) ................................................................... 9

Table 6: Actual Expenditure on Tenement (Hetherington Pty Ltd 2012) .............................................. 11

Table 7: Tenement Valuation October 2010 (Xstract 2010) ................................................................. 12









Table 16: Summary of Historic Bore Data .............................................................................................. 26

Table 17: Summary of Bore Data 2010 .................................................................................................. 26

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Table 18: Summary of Bore Data 2011-2012 ......................................................................................... 27

Table 19: Summary of Coal Quality Parameters, Freitag Creek Deposit ............................................... 27





Table 24: Summary of Technical Valuations, Exploration Tenements held fully or in part by Bowen

Energy as at October 2012......................................................................................................................... 33

Table 25: Valuation of Minerals Exploration Permits .............................................................................. 44

Table 26: Summary of Valuations of Coal Exploration ........................................................................... 46

Table 27: Technical Valuation for Coal Exploration Permits .................................................................. 47

FIGURE INDEX

Figure 1: Bowen Energy mineral exploration permits (Qld IRTM)

Figure 2: Bullseye Creek Project. TMI RTP image of tenements with current exploration targets. 1:

Reversely polarised Permian volcanic complexes. 2: Intersection between the Robertson Lineation and

the Croydon Fault. Smaller circles represent additional possible targets (image modified from Gregory,

2012).

Figure 3: Croydon Project. Main layered mafic/ultramafic magnetic complex and proposed 2012

drillhole locations over regional TMI (image modified from Bowen Energy Activities Report, July-Sept,

2012).

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EXECUTIVE SUMMARY

Bowen Energy Ltd has varying equity in 9 coal exploration permits in Queensland, and full

equity in 6 mineral exploration permits in Queensland.

The Shotover coal project containing the Katrina Prospect is classed as an Advanced

Exploration Project, while the remaining coal projects are classed as Exploration Areas. All the

mineral projects are classed as Exploration Areas.

Technical valuations of the coal projects were undertaken using the following methods:

� Geoscientific (Modified Kilburn) rating: an average value of $3.25M

� Comparable Transactions: an average value of $0.82M

� Multiple of Exploration Expenditure: an average value of $1.67M

After consideration of relevant adjustment factors the coal properties are considered to have a

Fair Market Value in the range $1.12M - $2.71M, with a Preferred Fair Market Value of

$1.91M.

Technical valuations of the mineral projects were undertaken using the following methods:

� Geoscientific (Modified Kilburn) rating: an average value of $1.20M

� Comparable Transactions: an average value of $1.03M

After consideration of relevant adjustment factors the mineral properties are considered to have

a Fair Market Value in the range $0.39M - $2.00M, with a Preferred Fair Market Value of

$1.2M.

T G Summons R Gaulton Senior Resource Geologist Consulting Coal Geologist

Mining One Pty Ltd Mining One Pty Ltd

B Williams

Project Geologist Mining One Pty Ltd

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1 INTRODUCTION

1.1 Commission and Scope

DMR Corporate Pty (DMR Corporate) has commissioned Mining One Pty Ltd (Mining One) to

prepare a Technical Assessment Report containing a Fair Market Valuation of the mineral

assets of Bowen Energy Ltd (Bowen), as part of a move by Bhushan Steel (Australia) Pty Ltd

(Bhushan) to acquire the 10% of Bowen shares not currently held by Bhushan.

The VALMIN Code (2005) defines a Technical Value as “an assessment of a Mineral or

Petroleum Asset’s future net economic benefit at the Valuation Date under a set of assumptions

deemed most appropriate by an Expert or Specialist, excluding any premium or discount to

account for such factors as market or strategic considerations”

A “Fair Market Value” is defined within the VALMIN Code (2005) as the “value of a Mineral or

Petroleum Asset or Security. It is the amount of money determined by the Expert in accordance

with the provisions of the VALMIN Code for which the Mineral or Petroleum Asset or Security

should change hands on the Valuation Date in an open and unrestricted market between a

willing buyer and a willing seller in an ““arm’s length”” transaction, with each party acting

knowledgeably, prudently and without compulsion. Value is usually comprised of two

components, the underlying or “Technical Value” of the Mineral or Petroleum Asset or Security,

as defined by the Technical Value, and a premium or discount relating to market, strategic or

other considerations”

This report is a Technical Assessment Report as defined in the VALMIN Code, and has also

been prepared in accordance with the requirements of the Australian Securities and

Investments Commission Regulatory Guides 111 and 112 (ASIC, 2011).

1.2 Applicability of the VALMIN Code

1.2.1 Background

This valuation report has been prepared in accordance with the Code for the Technical

Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent

Expert Reports, also referred to as the VALMIN Code (2005).

The VALMIN Code is a code written for the Technical Assessment and Valuation of Mineral and

Petroleum Assets and Securities for Independent Expert Reports prepared by the VALMIN

Committee, a joint committee of the AusIMM (Australasian Institute Of Mining and Metallurgy)

and AIG (Australian Institute of Geoscientists) and MICA (Mineral Industry Consultants

Association).

DMR Corporate, as both the Commissioning Entity and Independent Expert, has obtained from

Bhushan written confirmation that it will comply with the requirements of Clauses 27-29 of the

VALMIN Code. These clauses relate to independence of the Commissioning Entity from the

Independent Expert and the Specialist (ie Mining One), and the transparency of all reporting by

DMR Corporate and Mining One.

1.2.2 Relevant Extracts

Other relevant sections of the VALMIN Code are as follows:

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VALMIN Clause 12: this applies to the “Technical Assessment and/or Valuation of Mineral

….assets …for any independent Expert Report intended for public release …..”

VALMIN Clause 41 (a): The Commissioning Entity has confirmed in writing that “full, accurate

and true disclosure of all Material information will be made to the Expert.”

VALMIN Clause 42: The Expert and/or Specialists “must enter in to a written agreement with the

Commissioning Entity,…..”.

VALMIN Clause 49: Time and cost constraints “must not be permitted to compromise

fundamental compliance with the requirements of the Code. Any restrictions so caused to the

depth of analysis or the extent of detail required must be recorded in the report.”

Regarding Clause 41 (a), Mining One has received from the Commissioning Entity (DMR

Corporate) confirmation in writing that full, accurate and true disclosure of all Material

information relating to the Exploration Permits for coal and minerals has been made to the

Specialist (Mining One).

Regarding Clause 42, Bhushan has a written agreement with the Independent Expert (DMR

Corporate), who in turn have a written agreement with the Specialist (Mining One).

1.2.3 Classification of Mineral Assets

VALMIN Code clauses D20 and D21, refer respectively to Mineral Assets, and to Mineral

Resources and Ore Reserves.

Clause D20 of the VALMIN Code can be summarised to state that most Mineral Assets can be

classified as one of the following:

� Exploration Areas – properties where mineralisation may or may not have been identified,

but where a Mineral Resource has not been identified.

� Advanced Exploration Areas – properties where sufficient exploration has occurred to

enable a good understanding of the type of mineralisation present, and for which the

untested potential still warrants extra work. A Mineral Resource may or may not have

been identified.

� Pre-Development Projects – properties where Mineral Resources have been identified,

but where a decision to proceed with development has not been made.

� Development Projects – properties for which a decision to proceed with production has

been made, but have not yet been commissioned.

� Operating Mines – properties with fully commissioned and operating mine.

Clause D21 of the VALMIN Code is a reference to Mineral Resources and Ore Reserves as

defined by the JORC Code, and is one of several links between the JORC and VALMIN Codes.

1.3 Independence, Qualifications and Experience

Mining One Pty Ltd is an independent private consulting company which has been providing

consulting services to the international and local mining industry since 2005.

This valuation report has been prepared by messrs TG Summons, R Gaulton and B Williams.

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Tim Summons is a geologist BSc, MSc with over 40 years of experience in the mining industry,

and is a Member of the Australian Institute of Geoscientists. Mr Summons is appropriately

qualified and experienced to act in the following capacities:

� A Competent Person as defined in the JORC Code (2004).

� An Independent Expert as defined in the VALMIN Code & ASIC Regulatory Guide 111.

Dr. Rob Gaulton is a Coal Geologist with more than 30 years of industry experience in mining.

He holds a Masters Degree with Honours in Coal Geology and is a member of the Australasian

Institute of Mining and Metallurgy. As such, he is appropriately qualified and experienced to act

as:

� A Competent Person as defined in the JORC Code (2004).

� An Independent Expert as defined in the VALMIN Code & ASIC Regulatory Guide 111.

Ben Williams is a geologist with over 10 years of experience in the geoscientific industry.

Messrs Summons, Gaulton and Williams do not have any significant pecuniary or beneficial

interest in Bowen, or in the outcome of the valuation.

1.4 Disclaimer

This report was prepared using data and information which were available to Mining One at the

time of writing. It is based on data provided (refer VALMIN Cl 41(a) as discussed in Sec 1.2.2.

above).

This report is not based on any Mineral Resources estimated in accordance with the JORC

Code (2004) and is provided for the use of DMR Corporate and Bhushan. Mining One consents

to this report being reproduced as part of the DMR Corporate report and being sent by Bhushan

to Bowen shareholders. This report should not be reproduced for any other purpose except with

the prior written consent of Mining One.

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2 EXPLORATION PERMITS FOR COAL

2.1 Introduction

As of October 2012, Bowen maintains 10 Coal Exploration Permits (EPC’s) in Queensland.

These are listed in Table 1:

Table 1: Listing of Exploration Tenements held fully or in part by Bowen Energy Ltd as at October 2012

Tenement Project ID

No. of

Sub-

blocks

Ownership Initial

Allocation Expiry Due

Current

Status

EPC 930 Cosmos Field 240 40% 7/4/05 6/4/14 Granted

EPC 1001 Mt Cheops 22 10% 12/1/06 11/1/15 Granted

EPC 1002 Kia Ora 32 10% 25/9/07 24/9/13 Granted

EPC 1014 Cockatoo 18 100% 20/3/06 19/3/17 Granted

EPC 1045 Shotover 201 15% 23/5/07 22/5/17 Granted

EPC 1084 Springsure South 20 100% 23/1/07 22/1/13 Granted

EPC 1085 Middlemount

North

3 100%

23/1/07 22/1/13 Granted

EPC 1187 Buckland Coal 270 100%

4/8/10 3/8/12 Renewal

lodged

EPC 1206 Planet Downs Coal 27 15% 19/6/08 18/6/13 Granted

Mining One was contracted to provide expert valuation services in order to calculate a monetary

value for each of these permits.

Arriving at realistic value for exploration permits can be elusive and, of necessity, vulnerable to

a range of assumptions. This challenge was addressed by Xstract Mining Consultants Pty Ltd

who were contracted during late 2010 to undertake an independent valuation of Bowen Energy

Ltd coal and mineral assets (Xstract 2010).

Mining One agrees with the contention by Xstract (2010) that in the absence of known values

for directly comparable tenements for exploration permit areas, techniques known ‘geoscientific

rating’ techniques are the most suitable. This technique involves taking the Base Acquisition

Cost (BAC) of the tenement in question and updating this value using a series of pertinent

multipliers. As explained by the Australian Taxation office under “Determining the market value

of the mining right asset” at

http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00296449.htm&page=

9&H9.

“The geoscience factor method attempts to convert a series of scientific opinions about a

subject property into a numeric evaluation system. The success of this method relies on

the selection of multiplying factors that reflect the tenement's prospectivity in relation to

the following factors:

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location of property to be valued with respect to:

� known off-property mineral occurrences or geological and/or geochemical targets

grade of mineralisation on the property to be valued

� geophysical and/or geochemical targets on the property to be valued

� geological patterns on the property to be valued.

The ATO recognises that application of this method can be highly subjective, and that it

relies almost exclusively on the geoscience ratings adopted by the valuer. As such, the

ATO considers it to be good practice for valuers using this method to provide sufficient

discussion supporting their selection of the various multiplying factors to allow another

suitably qualified geoscientist to assess the appropriateness of the factors selected”.

2.2 EPC 930 Cosmos Project Summary Information

2.2.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation

Expiry Due Current Status

East Middlemount - Cosmos Field 240 7/4/05 6/4/14 Granted

EPC 930, located around 200km southwest of Mackay, is approximately 64 km long and up to

32 km wide and is oriented north-south. It was acquired with the objective of exploring for the

following:

� Underground, semi anthracite resources of the Rangal Coal Measures, located at depths

of 300m to 600m to the west of the Foxleigh Fault in an area of gentle dips and simple

structure

� Opencut anthracite resources of the German Creek Formation to the east of the Foxleigh

Fault, in a zone of strong deformation, characterised by anticlines and synclines.

2.2.2 Geological Setting

Coal measures within EPC 930 are overlain by a cover of Recent alluvium, Tertiary sediments

and basalts that ranges from less than 1m to more than 125m in the north-eastern parts of the

permit area (Bowen Energy 2, undated).

Permo-Triassic sediments in EPC 930 comprise the Sagittarius Sandstone of the Triassic

Rewan Group, the Rangal and Fort Cooper Coal Measures along with the German Creek

Formation of the Late Permian Blackwater Group. The Rangal Coal Measures occur within a

Hail Creek type sub-basin concealed beneath Cainozoic cover in the eastern part of EPC 930.

They appear to be confined to an area west of the Foxleigh Fault and occur at depths ranging

from 200 to 600m. The formation contains two potentially economic coal seams, the 3 to 6m

thick Leichhardt seam and the 2 to 3m thick Vermont seam.

Sediments of the German Creek Formation feature a series of tightly folded anticlines and

synclines containing widely spaced sub 2 metre thick coal seams that appear to be relatively

clean. Although the Fort Cooper Coal Measures, which have a vertical thickness of

approximately 400m, are present east of the Foxleigh Fault in a series of relatively flat lying

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structural blocks, coal seams so far intersected in this formation have been thin and high ash

and are considered to have little economic potential.

2.2.3 Prior Exploration/Information

Griffin Coal conducted limited exploration near the eastern boundary of EPC 930 during the late

1960’s but no records of these activities have been located. Some exploration activities have

also been carried out in old permits located wholly or partially within EPC 930. The Department

of Mines and Energy also drilled several holes west of EPC 930 between 1972 and 1986 and a

number of registered water bores drilled within or just outside the allocation have been useful

for stratigraphic correlations (Bowen Energy 1 undated).

Bellambi Coal drilled 16 open holes between May and July 1968 near the northeast part of EPC

930, but only two of these intersected coal.

2.2.4 Recent Activities

Seventeen holes were drilled in EPC 930 during 2006 and early 2007 to test each of the targets.

The depth of these holes ranged from 97m to 415m. Three holes (two pilot holes and one core

hole) were drilled at two sites close to the western boundary of the EPC to determine the depth

and the quality of the Leichhardt seam in the area.

2.2.5 Apparent Coal Quality

Preliminary quality data suggests the presence of a 4.6m thick seam of semi anthracite

featuring relatively low ash (10.4%), low sulphur (0.3%) with around 10.5% Volatile Matter. The

coal returned a Crucible Swelling Number of 0, making it unsuited to coking.

Early indications are that the raw coal is similar to the Yarrabee PCI product (around 10.5% ash

and 10% Volatile Matter). However, at 0.3% sulphur, EPC 930 coal is significantly lower than

the Yarrabee PCI coal with around 0.65% sulphur. The 2 open holes drilled by Bellambi Coal

that intersected coal indicate that:

� The coal is likely to be anthracitic, with volatile matter around 6% to 8%

� It could be similar to the Fort Cooper Coal Measures

� Some of the coal intersected may be more typical of the Moranbah Coal

Measures/German Creek Formation than the Rangal Coal Measures.

2.2.6 Actual Expenditure and Previous Valuation

No significant or reliable information regarding previous expenditure by Bowen was located.

Table 2: Tenement Valuation October 2010 (Xstract 2010)

EPC 930 Basis of Valuation Value in $Aus

Technical 264,000 – 1, 480,000

Technical with Market

Component (+50%)

396,000 – 2,220,000

Xstracts Preferred Valuation of EPC 930 as at October 2010 - $1,000,000

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2.2.7 Estimated Technical Value of Allocation

The two main targets within EPC 930 have been (Bowen Energy 1 undated):

� Underground, semi anthracite resources of the RCM, located at depths of 200m to 600m

to the west of the Foxleigh Fault, in an area of gentle dips and simple structure suitable for

the production of Pulverised Coal Injection (PCI).

� Open cut anthracite resources of the GCF to the east of the Foxleigh Fault, in a zone of

strong deformation, characterised by anticlines and synclines.

The eastern and north-eastern parts of EPC 930 hold little promise due to a thick cover of

alluvium and the likely presence of marine sediments at depth. It is considered that the only

possibility of this area could having coal potential is if a Hail Creek type sub-basin happens to

lie beneath the recent cover. EPC 930 has little prospect of hosting any resources of coking

coal.

Assessment of Technical Value of EPC 930 by Mining One is summarised as follows:

Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting

Mining One Technical

Valuation

low high low high low high low high $ low $ high

EPC 930 -

Cosmos 240 527,376 0.4 1.5 0.6 0.9 1 1.3 1 1.4 1 1.2 189,855 621,966

Fair Market Valuation of EPC 930 by Mining One - $405,911

2.3 EPC 1001 - Mt Cheops Project Summary Information

2.3.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


West Rolleston, Mt Cheops 22 12/1/06 11/1/15 Granted

EPC 1001 is located around 50 km southwest of Springsure and was acquired with the primary

objective of exploring for economic coal in the Late Permian Bandanna Formation at depths

ranging from 20m to 150m. The region is largely undulating grazing country with a higher range

associated with the Springsure Anticline and escarpments of the Buckland Tableland.

Numerous seasonal creeks drain the region northerly to the Nogoa River, the most prominent of

these being the Spring and Van Dyke Creeks.

The Dawson Development Road provides all weather access to the north of the area while

unsealed rural roads and property tracks provide access within the EPC.


The surface geology has been extensively mapped with outcrops of the Rewan Group and

Bandanna Formation located and recorded. A series of coal seams with an apparent thickness

of up to 2m have been located in a tributary of Spring Creek. Extensive occurrences of extrusive

igneous rocks occur across the permit area (Dowd 2012).

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The basic stratigraphic sequence in EPC1001 is, in descending order:

� Tertiary volcanics and sediments

� Rewan Group

� Bandanna Formation

� Black Alley Shale

� Peawaddy Formation

The Tertiary sediments and Triassic Rewan Group contain no coal. There are some indications

that there may be up to 4 coal seams In the Bandanna Formation, one of these being high in

ash while the other 3 are relatively clean.

Shallow, thermal coal seams are interpreted to lie close to the surface on the eastern limb of a

structure known as the Nogoa Anticline, but there is little clear evidence of this. The Permian

Black Alley Shale contains a number of thin, high ash coal seams but these have little economic

potential. The Peawaddy Formation is considered unlikely to contain any economic coal

deposits.


EPC 1001 in part overlaps EPC 510 but no records of prior exploration in this area have been

located (Dowd 2012).. The Department of Mines and Geoscience Australia drilled a series of

reconnaissance holes between 1963 and 1974, but in the vicinity of EPC 1001 only three of

these have any relevance to EPC 1001.

In 2002 Macarthur Exploration Pty Ltd was granted in adjacent EPC 786 for a period of 3 years,

leading to the Freitag Creek Coal Deposit being identified and announced to measured,

indicated and inferred status during 2005.


During 2007 and 2008 a review and re-interpretation of existing data was undertaken, including

the collation of all regional borehole data (Dowd 2012). More recent work undertaken in EPC

1001 appears to have been limited to:

� a review of existing data,

� the determination of exploration targets,

� field mapping and preparation of a nominal drilling plan to commence in late 2011

Drilling during 2012 was delayed due to a shortage of drilling contractors and landholder

concerns about a bad wet season. Exploration activities were also frustrated by negotiations

with aboriginal native title claimants. Reconnaissance mapping continued during the year and a

number of potential drill locations were identified.


Two samples of relatively fresh coal were collected during 2007 from outcrops in the upper

reaches of Spring Creek. Analysis of these samples suggests that this coal is high in vitrinite

with a reflectance of around 0.46.

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Preliminary analytical data from the nearby Freitag Creek Coal Deposit indicate that the local

coals are sub-bituminous A in rank. It has been speculated that a blend of the A, B, C and D

seams could yield suitable thermal coals while a BCD blend may be suitable for export.

Table D below provides an indication of expected Proximate and Ultimate Analysis values

based on the Freitag coal:

Table 3: Summary of Quality parameters, Freitag Coal

Seam Moist Ash VM S Cl Romax

A 9.3 25.3 26.3 0.35 0.01 0.44

BCD 10.8 10.9 30.6 0.4 0.02 0.43


Table 4: Actual Expenditure on Tenement (Hetherington Pty Ltd 2012)

EPC 1001 Expenditure

2006-07 4 148

2007-08 66 797

2008-09 102 738

2009-10 147 963

2010-11 30 546

2011-12 57 513

2012-13

Tenement Total 409 704



Technical 5,000 – 28,000


Component (+50%) 7,500 – 42,000


The incidence of an adjacent viable coal deposit and location of coal seams at outcrop indicates

that the Bandanna Formation could comprise a viable target within EPC 1001. Knowledge of the

geology and likely coal seam characteristics within the permit area appears reasonable, if not

overly clear, but the tenement is located in a relatively isolated area in terms of mining

operations and key infrastructure. The primary determinant of value, however, is that the Bowen

Energy has only a 10% share in this project (Deloitte 2010).

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Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1001 - Mt

Cheops 22 48,343 0.1 1 0.9 1.3 0.8 1 1 1.2 0.85 1.15 2,959 8,673


2.4 EPC 1002 - Kia Ora Project Summary Information

2.4.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


West Rolleston, Kia Ora 32 25/9/07 24/9/13 Granted

EPC 1002 is located approximately 70 km southwest of the town of Springsure in Central

Queensland. It was initially granted to Golden Country Resources (Australia) Pty Ltd (a

subsidiary of Bowen Energy Limited) with Bhushan Steel (Australia) Pty Ltd entering the

arrangement as a joint venture holder during August 2008.

The initial objective of acquiring this permit was to explore for economic coal resources in the

Late Permian Bandanna Formation and the permit was renewed in 2010 for a further 3 years.


The permit area lies within a transition zone between the Bowen and Galilee Basins with the

Surat Basin to the south. Cainozoic sediments (mainly alluvium) range in thickness from 1m to

more than 10m across the EPC with a variable depth of weathering. Tertiary basalt flows,

mainly located toward the east and south of the permit area, infill numerous valleys and cover

large areas of the region while there are indications of minor igneous intrusive rocks at depth

(Raphael 2011).

The basic stratigraphic sequence in EPC1002 is, in descending order:

� Tertiary volcanics and sediments

� Rewan Group

� Bandanna Formation



The Rewan Group comprises interbedded green-grey sandstones, siltstones and red-green

mudstones. The Bandanna Formation is around 130 m thick and interpreted as an equivalent of

the Rangal Coal Measures.

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In the region occupied by EPC 1002, the Rangal Coal Measures are known to contain 4 seams,

nominated A,B,C and D. The A seam is thought to be around 3m thick, the B seam 4 m thick

and the C and D seams 1 and 1.5 m thick respectively.

The Black Alley Shale consists of interbedded dark shale, labile sandstone, tuffaceous

bentonitic claystone and occasional fine gypsum bands and is not thought to host significant

coal seams. In the Southern Bowen Basin, tuffaceous coals are present. The Peawaddy

Formation consists of interbedded lithic sandstone, carbonaceous siltstone and shale.

2.4.3 Previous Exploration/Information

Limited exploration in the region limited has been carried within a few older Authorities to

Prospect in the general area, while Department of Mines and Geoscience Australia drilled a

series of reconnaissance holes between 1963 and 1974 (Raphael 2011).

Magnum Resources and undertook an extensive drilling program between 1991 and 1992 in

nearby EPC 510, but these boreholes either did not intersect the Bandanna Formation or

intersected only carbonaceous shales. In 2005, however, Macarthur Exploration Pty Ltd

announced discovery of the Freitag Creek Coal Deposit with resources reported under

measured, indicated and inferred status, within EPC 786, just south of EPC1084, some 50 km

east of EPC1002.


Drilling between 2008 and 2010 confirmed existence of the Bandanna Formation within the

tenement, but with a reduced thickness and a corresponding reduction in the amount of coal

likely to be present (Raphael 2011).

During 2009 and 2010, literature survey work continued on EPC1002 and 12 open holes were

drilled. A more extensive drilling program was then planned and prioritised for West Rolleston,

but was delayed due to landholder and traditional owner negotiations, environmentally sensitive

land issues, wet weather and the need to reassess proposed drill locations in line with new

Strategic Cropping Lands legislation.

An open hole drilling program of up to 8 holes with geophysical logging was proposed for 2011-

2012 to determine the location, depth and continuity of coal bearing strata.


No significant or reliable information located.




2007-08 74 109

2008-09 306 387

2009-10 152 927

2010-11 26 200

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2011-12

2012-13




Technical 4,000 – 20,000


Component (+50%)

6,000 – 30,000


Although existence of the Bandanna Formation within the tenement area has been confirmed, it

appears to have thinned materially, with a corresponding reduction in the number of coal seams

over this region of the Springsure Shelf. As with EPC 1001, knowledge of the geology and likely

coal seam characteristics within the permit area appears reasonable, if not overly clear, but the

tenement is located in a relatively isolated area in terms of mining operations and key

infrastructure. The primary determinant of value, however, is that the Bowen Energy has only a

10% share in this project (Deloitte 2010).

Proposed drilling programs have hole spacings ranging from around 1500m to more than

2000m due to limitations imposed by environmentally sensitive areas. Access problems have

also been experienced with land to the north and access and subsequent delays in reaching

compensation agreements.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1002 - Kia

Ora 32 70,317 0.1 1 0.8 1.1 0.7 1 0.7 0.9 0.8 1 2,2o5 6,961


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2.5 EPC 1014 – Cockatoo Project Summary Information

2.5.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


East Middlemount, Cockatoo 18 20/3/06 19/3/13 Granted

EPC 1014 is located around 15km north east of Middlemount. It was granted to Golden Country

Resources, a fully owned subsidiary of Bowen Energy Limited, primarily to explore for economic

coal resources in the Late Permian Rangal Coal Measures and the German Creek Formation at

depths ranging from 200 to 300 metres. The permit was renewed in March 2009 for three years

and an application for renewal has been submitted for a further 3 years of tenure commencing

in March 2012.

The permit area comprises for the most part gently undulating grazing country, the major

topographic feature being Middle Mountain near the town of Middlemount. Seasonal creeks

drain the region easterly to the Isaac River, the most prominent of these being Rolf Creek. The

sealed Fitzroy Development Road and Dysart-Middlemount Road provide all weather access to

the area while unsealed property tracks provide access within the EPC.


EPC 1014 lies mainly predominantly within in a sinuous structure between the regional Jellinbah

and Foxleigh Thrusts. The northern portion of the EPC features a number of smaller thrusts,

some of which bring the Rangal Coal Measures closer to the surface. In the southeast of the

permit area, the German Creek Formation is uplifted by the Foxleigh Thrust, while seismic

interpretation indicates a series of folds in strata east of the Foxleigh Thrust (Ray & Perry,

March 2012).

The stratigraphic sequence in the Middlemount region in descending order:

� Quaternary alluvium and colluvium

� Tertiary intrusive rocks

� Cretaceous intrusive rocks

� Triassic Rewan Group

� Permian Rangal Coal Measures

� Fort Cooper Coal Measures

� German Creek Formation

The Rangal Coal Measures and Fort Cooper Coal Measures are part of the Blackwater Group.

The German Creek Formation and Permian marine sediments of the Back Creek Group are

inferred to underlie theses coal measures in the region.

In nearby EPC 1085, undifferentiated Cainozoic sediments range in thickness from 1m to 3m

with the depth of weathering apparent between 20m and 60m. Previous drilling indicates

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igneous intrusions are generally located within the Rangal Coal Measures, and that these

intrusions may affect this unit within the northern section of the permit area (Ray & Perry, March

2012).

In the general area of EPC 1014, the Rangal Coal Measures comprise interbedded light grey

labile sandstone, grey siltstone, dark grey mudstone and coal seams. Coal seams in

descending order are Roper, Middlemount, Tralee and Pisces. Literature reviews also suggest

that the Leichhardt and Upper Vermont Coal seams of the Rangal Coal Measures exist at

depths of between 200m and 400m in EPC1085 and that this may be replicated in EPC1014.

The Fort Cooper Coal Measures comprise a sequence of light grey-green, labile/lithic

sandstone interbedded with tuffaceous siltstone and mudstone. The unit is characterized by

thin, high-ash coal seams that are collectively called the Girrah Coal.

The German Creek Formation occurs at depth in the region of EPC 1014 as quartzose, sub-

labile sandstone interbedded with siltstone, mudstone and widely spaced coal seams. Known

coal seams in the formation are, in descending order, the Pleiades, Aquila, Tieri, Corvus and

German Creek seams. The extent of these seams has not been tested in the Middlemount

region.

East of the Foxleigh Fault, a previously drilled hole, EM008, has confirmed a number of seams

from 120m which are thought to be equivalent to the German Creek Coal Measures. The

existence of geological complexity and faulting is apparent from both recent and older drilling.

Moderately detailed borehole and seismic data indicate that the Rangal Coal Measures are a

viable target within the permit area. Semi-anthracite resources of the Rangal Coal Measures

occur between the Jellinbah and Foxleigh Thrust Faults at depths of between 200m and 550m.


Exploration has been carried out in the region by Griffin Coal, BHP and Anglo-American. The

Queensland Department of Mines also drilled a series of reconnaissance holes between 1972

and 1986, the majority of which encountered multiple coal seams at depth. More importantly,

some were fully cored stratigraphic boreholes (Ray & Perry 2012).

Between 1980 and 1988 Capricorn Coal Management held the nearby A-P 315C while in 2000

BMA was granted EPC 918 in the area for a period of 5 years. During this time, some 50

boreholes were drilled and 15 seismic lines established. In addition to the coal exploration

activities, a number of registered water bores have been drilled in the region.


During 2007 to 2009, historical data was reviewed, field mapping was undertaken, drill targets

identified and a drilling program commenced. Five open chip holes were completed in 2009 for

710 m of drilling with two of these holes successfully intersecting minor coal seams. A program

of involving an additional seven holes was conducted between late 2009 and early 2010 with a

further 1218m of chip sample drilling.

Results from the drilling of a further 11 open holes drilled in EPC 1014 for a total of 4213m

confirm that the potentially economic Leichardt and Vermont seams extend under much of the

EPC1014. These seams range in depth from around 200m in the west to more than 400m in the

eastern part of the EPC. East of the Foxleigh Fault, a number of seams commencing at 120m

depth have been encountered. These are likely to be equivalents of the German Creek Coal

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measures. Geological complexity and faulting is, however, apparent in both recent and historical

drilling results.

No field work was undertaken on EPC 1014 in 2011 and early 2012, although some targeting of

future borehole locations and assessment of prospectivity was undertaken. Landholder liaison

and compensation agreement arrangements are at an early stage. Eight in-fill rotary open

holes are proposed for 2012-2013 to refine the geological structural model. In addition a wire-

line core drilling program of 5 holes involving selected 50mm diameter coring of target coal

seam intersections will provide samples for a range of laboratory testing. A seismic survey is

also planned with a further programme of nine holes envisaged for 2013-2014.

2.5.5 Apparent Coal Quantity and Quality

Coal chip samples collected during the drilling indicate that in this area coal is of an anthracite

grade with vitrinite reflectance of 4.2 to 4.7 and with characteristics of the low volatile PCI coals.

It has been postulated that a blend of the A, B, C and D seams could be suitable for local

thermal use, while coals and a BCD blend may be suitable for export.

Analytical data from some of the boreholes suggests that the Middlemount seam may comprise

a low ash, semi-anthracite coal. Rocklands-Richfield Ltd holds tenure of EPC 930, east of and

adjacent to EPC 1014. Analysis of a borehole sample taken from near the boundary between

EPC 1014S and EPC 930 suggests that the Middlemount seam is a high quality, high yield

semi-anthracite coal that may be suitable as a premium PCI product (Ray & Perry, March 2012).

No local coal quality data is available for the German Creek Formation.




2006-07 12 383

2007-08 82 541

2008-09 416 948

2009-10 11 369

2010-11 18 320

2011-12 72 737

2012-13


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Technical 135,000 – 818,000


Component (+50%) 203,000 – 1, 227,000

Xstract Preferred Valuation of EPC 1014 as at October 2010 - $600,000


There appears to be a reasonable understanding of the geology of this permit area, although

again much of it remains speculative. One key attribute is that EPC 1014 is located close to

existing mining operations and established transport and other infrastructure in the Middlemount

area, justifying the use of a relatively high Mine Vicinity Factor in the valuation.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1014 -

Cockatoo 18 39,553 1 2 1 1.5 1.8 2.3 1.2 1.5 1 1.2 170,870 491,251


2.6 EPC 1045 – Shotover Project Summary Information

2.6.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


South Blackwater, Shotover 201 23/5/07 22/5/17 Renewal Granted

EPC 1045 comprises 2 parts (1045N and 1045S) and is located in around 30 km east of

Rolleston. The Dawson Highway provides all weather access to the area while unsealed local

roads and property tracks provide access within the EPC.

EPC 1045 was granted to Kondor Holdings primarily to explore for economic coal in the Late

Permian Bandanna Formation, which occurs at depths ranging from 200m to 1000m in the area

but during November 2007 was acquired by Bowen Energy Ltd as part of a takeover

arrangement.

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In the Rolleston region the stratigraphic sequence in descending order comprises:

� Cainozoic Quaternary alluvium and colluvium

� Tertiary extrusives


� Permian Bandanna Formation



The Bandanna Formation, Black Alley Shale and Peawaddy Formation are equivalents of the

Blackwater Group (Sheppard, October 2011).

Undifferentiated Cainozoic sediments range in thickness to 3m, while the depth of weathering

ranges up to 30m. Significant areas of the permit exhibit a basalt cover up to 100m thick.

The Rewan Group comprises an upper red-bed sequence and a lower portion of greenish-grey

siltstone and mudstone interbedded with grey-green, fine grained labile sandstone. It has a

gradational contact with the underlying Bandanna Formation, which comprises interbedded light

grey labile sandstone, grey siltstone, dark grey mudstone and coal seams.

Coal seams known to occur in the Bandanna Formation are known in descending order, as the

A, B, C, D, E, F, G, and H seams (Sheppard, October 2011). No tuff has been reported in the

Bandanna Formation although localised intrusions are known to occur elsewhere. These have

to date not been detected within EPC 1045.

The Black Alley Shale consists of black shale and siltstone, minor sandstone and interbedded

tuff. Drilling within the permit area intersected a number of minor aquifers at depths ranging

from 90 to 150m.


Exploration in the general area of EPC 1045 has been carried out since the early 1960s. In

particular, regional seismic surveys have been conducted over parts of the EPC by Planet Oil

Co. Geophysical Service International, CSI/SSL, the Bureau Mineral Resources and Santos Ltd

and have enhanced knowledge of the local geology (Sheppard, October 2011).


In 2007 Kondor Holdings undertook a limited data review of the EPC 1045 area. This was

extended by the Bowen Energy team and included a collation of all regional borehole data,

analysis and re-interpretation of pre-existing seismic data and interpretation of airborne

geophysical data. A subsurface exploration plan was developed with drill sites located and

cultural heritage clearance obtained for the Stage 1 drilling program.

During 2008 Bowen energy completed 32 open chip holes on a nominal 5km x5km grid pattern

with some infill drilling for a total of 19000m This as designed to determine the distribution,

thickness and rank of Bandana Formation coals and help focus exploration activities toward

finding coals with optimum coking properties. (i.e. coal with a vitrinite reflectance of 1% or better

and a crucible swelling number of 5 or more). It was anticipated that chip samples could provide

the basic analytical characteristics to determine areas for more detailed drilling, including core

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drilling to evaluate detailed coal quality properties. Only 12 out of the 32 holes completed were

able to be fully or partially geophysically logged due to hole stability problems.

The overall result of these investigations showed that a number of coal seams exist within the

permit area at depths ranging from 300m to more than 600m. An in-house review conducted at

the end of this drilling program highlighted an area of approximately 68km2 within EPC1045 that

contains the most promising indicators of potentially economic coking coal (SRK Consulting

2012).

The Stage 2 drilling program of 5 open and 9 cored holes on a nominal 2km x 2km grid pattern

with some infill drilling was carried out in 2009 in order to further investigate the distribution,

thickness and coal rank of Bandana Formation in the area of the Katrina prospect. After these

were completed, a further 10 borehole sites on a smaller grid of 1km to 2 km spacing were

located in a new, more concentrated target area directly to the south-east of Stage 2 boreholes.

Drilling of the Stage 3 program commenced in 2010 and incorporated the geophysical logging of

all holes, through the rods where necessary, along with a number of surface seismic surveys

(Sheppard, October 2011; RPS Australia Pty Ltd, 2011; Velseis 2012).

During December 2011 nine seismic survey lines totalling more than 80 kilometres were shot

across the Katrina prospect (SRK Consulting 2012). The information gained from these

activities enhanced the geological understanding of the geology of the deposit and of the seam

aspects. In particular, data collected from the seismic lines was combined with existing regional

geophysical and structural information to provide a basis for a more refined evaluation of the

resource in terms of reviewing underground mining methods likely to be suitable. It also

confirmed that the Bandanna and other target seams appear to be well developed within and

laterally extensive across the area covered by the seismic surveys (SRK Consulting 2012). The

data collected has also been used to plan future drilling and other exploration activities as well

as the development of preliminary plans for mining.


Limited data from the region indicates that Bandanna Formation coal increases in vitrinite from

around 40% to 70% and reflectance from 0.68 to 1.26 from northwest to southeast in EPC

1045. This indicates the rank grades from high volatile bituminous to medium volatile

bituminous coal.

Downhole geophysics helped to identify two coal seams of major interest, these being the Aries

and the Castor seams which are each generally 1.5m to 4m thick. These seams occur at depths

ranging from 364m to 641m and apparently exhibit pronounced seam thickening towards the

southeast (RPS Australia Pty Ltd, 2011). This seam thickening is also accompanied by an

increase in grade accompanied by commensurate increases in Vitrinite Reflectance and

Crucible Swelling Number. These results indicate the presence of soft to hard coking coal

located in the Aries and Castor seams at potentially mineable depths (SRK Consulting 2012).

The 2008 to 2009 drilling indicates that locally some coal seams may be of suitable thickness

for underground mining, while analytical results from both 2009 and 2010 indicate that coking

properties may be present in some of the seams. In particular, the Katrina prospect appears to

contain the most promising results for the presence of coking coal with a reflectance of 0.86 to

1.0.

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2007-08 205 578

2008-09 2 449 898

2009-10 1 918 741

2010-11 1 302 922

2011-12

Tenement Total 5 877 140



Technical 688,000 – 2,934,000


Component (+50%) 1,032,000 – 4,593,000

Xstract Preferred Valuation of EPC 1045 as at October 2010 - $2,400,000


Because other regions within EPC1045 generally display a lower reflectance or with coal seams

at significantly greater depth, exploration in these areas has been allocated a lower priority than

the Katrina prospect. Overall, the now extensive volume of exploration data collected by

Bowen Energy suggests that two coals seams (possibly the Aries and Castor Seams), both

generally greater than 2m thick, occur below 480 to 640 meters from surface in the south east

of the prospect area, although both seams appear to include shale partings.

This project is now considered by Bowen Energy to be at an advanced exploration stage and to

assist in the evaluation of this project tenders for a scoping study were submitted from five

mining consultancy groups. Bowen Energy awarded the study to Snowden Mining Industry

Consultants Pty Ltd (Snowden Consultants 2010). The study was completed in June 2011 and

concluded that based on the current level of exploration and subsequent geological modelling, a

coal resource exists within EPC1045 that is probably of sufficient size to be converted to a coal

reserve that will sustain and support the large capital investment required to develop an

underground longwall mining operation (Minarco Mineconsult, August 2011).

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Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1045 -

Shotover 201 441,677 0.15 2 2 2.5 2 2.5 1.5 2 0.95 1.2 755,268 1,987,548

Fair Market Valuation of EPC 1045 by Mining One - $1,371,408

2.7 EPC 1084 Springsure South Project Summary Information

2.7.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


Springsure South 20 23/1/07 22/1/13 Granted












2007-08 33 977

2008-09 53 321

2009-10 65 252

2010-11 89 440

2011-12 33 217

2012-13

Total 275 207

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Technical 20,000 – 129,000


Component (+50%) 30,000 – 193,500


Because so little meaningful information has been located within the data supplied to Mining

One, most the various multipliers used in the evaluation have been arbitrarily assigned a value

of 1 (neutral) for this project.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1084 -

Springsure

South

20 43,948 1 1 1 1 1 1 1 1 1 1.3 43,948 57,132


2.8 EPC 1085 - Middlemount North Project Summary Information

2.8.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


Middlemount North 3 23/1/07 22/1/13 Granted

EPC 1085 comprises three sub-blocks in two parts (1085N and 1085S) that are located 10km

north and 5 km east respectively of Middlemount. It forms part of Bowen Energy’s East

Middlemount project along with the adjoining EPC 930, a joint venture with Rocklands Richfield

Limited, and EPC 1014.

The region is generally gently undulating grazing country. The major topographic feature is

Middle Mountain located adjacent to the town of Middlemount. Seasonal creeks drain the

region easterly to the Isaac River, the most prominent being Rolf Creek. The sealed Fitzroy

Development Road and Dysart-Middlemount Road provide all weather access to the area.

Unsealed property tracks provide access within the EPC.


Regional structure in the area of EPC 1085 is controlled by three northwest-trending thrust

faults, the Jellinbah, Foxleigh and Bombandy thrusts, with smaller divergent thrusts and normal

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faults seismically indicated between the major systems. In the north, these small thrusts appear

to bring the target Rangal Coal Measures closer to the surface while in southeast of the permit

area the German Creek Formation is also uplifted closer to the surface by the Foxleigh Thrust.

Seismic interpretation indicates a series of folds in the strata east of the Foxleigh Thrust (Dowd,

February 2012).

In the Middlemount region the stratigraphic sequence in descending order comprises:


� Tertiary Intrusive igneous rocks

� Cretaceous Intrusive igneous rocks


� Permian Rangal Coal Measures

Fort Cooper Coal Measures

German Creek Formation

Undifferentiated Cainozoic sediments range in thickness from 1m to 3m within EPC 1085.

Depth of weathering is relatively deep, ranging from 20m to 60m. The intrusions are generally

located within the Rangal Coal Measures with indications that EPC 1085N may be more

affected.

The Rewan Group has a gradational contact with the underlying Rangal Coal Measures and

comprises an upper red-bed sequence and a lower portion of greenish-grey siltstone and

mudstone interbedded with grey-green, fine grained labile sandstone.

The Rangal and Fort Cooper Coal Measures are part of the Blackwater Group and occur at

depths ranging from 200m to 400m within the permit area. The Rangal Coal Measures comprise

interbedded light grey labile sandstone, grey siltstone, dark grey mudstone and coal seams.

Possible coal seams in descending order are Roper, Middlemount, Tralee and Pisces seams

(Dowd, February 2012).

The Fort Cooper Coal Measures consist of light grey-green, labile/lithic sandstone interbedded

with tuffaceous siltstone and mudstone. The unit is characterized by thin, high-ash coal seams

which are collectively termed the Girrah Coal.

The German Creek Formation occurs at depth in the region of EPC 1085. It comprises

quartzose and sublabile sandstone interbedded with siltstone, mudstone and widely spaced

coal seams. Coal seams in descending order are Pleaides, Aquila, Tieri, Corvus and German

Creek. The extent of these seams has not been tested in the Middlemount region.

The underlying Late Permian Fort Cooper Coal Measures contain thin, high ash coal bands with

little economic potential, while the German Creek Coal Measures occur at sub-economic depth

in the area of the EPC.


Exploration in the area has been carried out under several previous Authorities to Prospect by

Griffin Coal, BHP and Anglo-American during the 1960s while the Department of Mines drilled a

series of reconnaissance holes between 1972 and 1986. Between 1980 and 1988 Capricorn

Coal Management also carried out limited exploration activities in the area.

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In 2000 BMA was granted EPC 918 and drilled over over 50 boreholes during a 5 year period.

Some 15 seismic lines were also shot. A number of registered water bores have been drilled in

the region, some of which have relevance to EPC 1085.


During 2007 a review and re-interpretation of existing data pertinent to EPC 1085 was

undertaken. This review included collation of all regional borehole data, analysis and

interpretation of pre-existing seismic data and interpretation of regional airborne geophysical

data and helped identify potential exploration targets. A subsurface exploration plan was

developed in 2008 with Stage 1 borehole sites located and cultural heritage clearance obtained,

and Bowen Energy Limited commenced drilling operations in late June 2008 (Dowd, February

2012). This program was intended to sample the occurrence of coal through chip and core

drilling of widely-spaced drill holes, and was designed to acquire coal quality data and

stratigraphic control for subsequent infill drilling programs.

The remaining proposed borehole sites in the Stage 1 drilling campaign were scheduled to be

completed in the 2009 drilling season, but this did not eventuate due to a number of factors

such as inclement weather, a lack of drilling rigs available and budget cuts within Bowen

Energy. In fact, only one hole was drilled at this time within EPC1085, this during July 2008

near the western boundary of the permit area. This hole, however, intersected seven seams

ranging from 0.4m to 4.6m in thickness at depths of between 140m and 278m.

Due to factors similar to those encountered in the Stage 1 drilling, the Stage 2 drilling campaign

was also not completed and very little field work was carried out on EPC1085 during 2010

(Dowd, February 2012).

A two-stage drilling proposal for up to 204 open hole and cored holes on EPCs 1085 and 1014

was prepared to target areas with potential to host small PCI quality targets. The

announcement of the Middlemount UBA reduced this to 20 holes. Drilling was scheduled to

commence late 2011 but protracted land access negotiations delayed this until well into 2012.

One hole drilled by Bowen Energy intersected shallow coal seams believed to be part of the

German Creek Formation.


Geochemical analyses on samples from EPC 1085 indicate that coals from this allocation are

typically low volatile thermal. Coal chip samples collected during the drilling of EM008 and

EM012 indicate an anthracite grade with Vitrinite reflectance of 4.2-4.7.

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2007-08 41 380

2008-09 78 904

2009-10 13 189

2010-11 17 104

2011-12 24 289

2012-13




Technical 18,000 – 112,000


Component (+50%) 27,000 – 168,500

Xstract Preferred Valuation of EPC 1085 as at October 2010 - $70,000


Moderately detailed borehole and seismic data indicates that underground, semi-anthracite

resources of the Rangal Coal Measures, located at depths from 200m to 550m within EPC

1085, remain a viable target between the Jellinbah and Foxleigh Thrust Faults. Hanging wall

anticlines may in some locations bring the coal seams closer to the surface, although recent

drilling and historical data does reveal a level of structural complexity, particularly within EPC

1085N. Although the southern portion of EPC1085 appears to be geologically less complex

than the northern part, it is likely that potentially economic seams will occur at depths greater

than 400-500m below the surface, thus lowering the geological and seam weighting factors.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1085 -

Middlemount

North

3 6,592 1 2 1 1.5 1.4 1.8 0.8 1 1 1.3 14,767 46,277


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2.9 EPC 1187 - Buckland Coal Project Summary Information

2.9.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


Buckland Coal 270 4/8/10 3/8/12 Renewal lodged

EPC 1187 is located approximately 80 km southwest of Springsure. Orientated roughly

northwest – southeast it along with EPCs 1101, 1102 and 1084 comprises part of Bowen

Energy’s West Rolleston project and was acquired primarily to explore for shallow Rolleston-

type coal in the Late Permian Bandanna Formation at depths ranging from 20m to 150m.


EPC 1187 lies just west of the Bowen Basin and overlaps parts of both the Palaeozoic

Drummond Basin and the Mesozoic Galilee Basin while the Eromanga Basin lies immediately to

the south of the tenement area (Kamalpreet, August 2012). The stratigraphic sequence for the

Springsure-Rolleston area is shown in increasing order of age as follows:


� Tertiary Intrusives and extrusive igneous rocks


� Late Permian Bandanna Formation, Black Alley Shale, Peawaddy Formation

� Early- Late Permian Back Creek Group, Reids Dome beds

The Cainozoic sediments range in thickness from 1m to over 10m within EPC 1187 with the

depth of weathering variable. The Tertiary extrusive rocks are mainly basalt flows that cover

large areas of the permit area, particularly in the south and east. Minor intrusive rocks are

thought to occur at depth.

The Rewan Group comprises interbedded green-grey sandstones, siltstones and red-green

mudstones while the Bandanna Formation, which is around 130m thick in the area, correlates

with the Rangal Coal Measures and potentially contains a number of coal seams. These, it is

thought, include a 3 m thick A seam, a 4m thick B seam, a 1m thick C seam and a 1.5m thick D

seam. These occur predominantly in the top 20m of the Bandanna Formation (Kamalpreet,

August 2012).

The Black Alley Shale consists of interbedded dark shale, labile sandstone, tuffaceous

bentonitic claystone and occasional fine gypsum bands and, possibly, some tuffaceous coals

while the Peawaddy Formation consists of interbedded lithic sandstone, carbonaceous siltstone

and shale.


Limited exploration has been carried out in the area within a number of older Authorities to

Prospect while the Department of Mines and Geoscience Australia drilled a series of

reconnaissance holes between 1963 and 1974. Between 1991 and 1992 Magnum Resources

and undertook an extensive drilling program held nearby EPC 510 (Kamalpreet, August 2012).

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Macarthur Exploration Pty Ltd was granted EPC 786 (Freitag Creek) in 2002 and in 2005 the

Freitag Creek Coal Deposit, approximately 12 km to the east of EPC1187 was announced to

measured, indicated and inferred status. EPC 1002, which adjoins EPC 1187, was granted to

Bowen Energy in 2007.

Historic bore data pertinent to EPC1187 is tabulated in summary Table 18:

Table 16: Summary of Historic Bore Data

Hole Depth

total (m)

Coal intersections Total seam

thickness m

Seam Id Comments

Claude NS1 180.68 16.30 -16.60m 0.3 Seam D

Claude NS2 174.55 54.00 - 54.15m 0.15 Seam C

63.00 - 64.80m 0.80 Seam D Geophysical log interpretation

Buckland NS1 177.13 19.50 - 21.30m 1.80 Seam C

23.50 - 23.90m 0.40 Seam D

Buckland NS2 177.52 No coal intersected

Buckland NS3 158.68 25.50 - 26.50m 1.00 Seam C Estimated based on bore logs

32.00 – 32.30m 0.30 Seam D Carbonaceous mudstone and

coal


Seven boreholes were apparently drilled within EPC 1187 during 2010 with some indications of

coal. The results of this drilling are summarised in Table 19:

Table 17: Summary of Bore Data 2010

Hole Depth

total (m) Coal intersections

Coal total

thickness (m)

Total seam

thickness (m) Comments

WR05-C06 204 11.00-11.10m 0.1 0.1

WR06-C05 204 No coal intersected


WR08-C03 252

26.00-26.50m 0.5 0.5

32.00-32.50m 0.5 0.5

33.00-34.00m 1.0 1.0

WR09-C08 150

37.00-38.00m 1.0 1.0 Seams very hard to pick from

Geophysics, mainly going on chip

samples 43.00-44.00m 1.0 1.0

WR11-C07 204 20.64-21.54m

2.22 2.66 0.44m stone band 21.98-23.30m


Between August 2010 and August 2011 activities conducted pertinent to EPC1187 included a

literature survey, landholder negotiations, traditional owner negotiations and planning for future

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drilling. No drilling was undertaken as a result of a combination adverse weather, negotiation

with Bidjara people and access to environmentally sensitive land.

Five bores were, however, completed during late 2011 and 2012 targeting shallow Rolleston-

type coal in the Late Permian Bandanna Formation. These were drilled to a total depth of 150m

and intersected two thin coal seams at depths of between 75m and 135m. The holes were also

geophysically logged and the resultant is summarised in Table 20:

Table 18: Summary of Bore Data 2011-2012

Hole Depth

total (m)

Coal intersections Coal total

thickness m

Total seam

thickness m

Seam Id Comments

BC027 150 6.55 - 7.0m 0.45 0.45 Seam D highly weathered

BB036 150 74.83 - 75.22m

75.37 - 75.54m

0.56 0.71 Seam C 0.15m stone band

- Seam D equivalent coaly carbonaceous

mudstone

BB037 150 99.84 - 100.8m 0.96 0.96 Seam C

105.08 - 105.29m

105.47 - 105.76m

0.5 0.68 Seam D 0.18m stone band

BB040 150 126.7 - 127.54m 0.84 0.84 Seam C

133.91 - 134.36m

134.53 - 135.00m

0.92m 1.09 Seam D 0.17m stone band


Preliminary analytical data sourced from the Freitag Creek Coal Deposit suggest that coals

within EPC 1187 are likely to be sub-bituminous A in rank. It has been speculated that a blend

of the A, B, C and D seams are suitable thermal coals and a BCD blend may be suitable for

export, but this apparently pertains to Freitag Creek.

Table 19: Summary of Coal Quality Parameters, Freitag Creek Deposit

Seam Moist Ash Volatile

Matter

Sulphur Chlorine Max

vitrinite

reflectance

A 9.3 25.3 26.3 0.35 0.01 0.44

BCD 10.8 10.9 30.6 0.4 0.02 0.43

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2010-11 23 330

2011-12 641 181

2012-13



EPC 1187 Value in $Aus

Technical 208,000 – 991,000


Component (+50%) 355,500 – 1,752,000


Based on the 2011/2012 drilling results, there is as yet little in the way of hard evidence

pertaining to the presence of potentially economic coal within EPC 1187. It is, however,

considered by Bowen Energy that the allocation has not yet been fully tested and additional

holes are proposed to fill existing gaps. EPC 1187 is also a large tenement and this has

functioned to elevate the valuation.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1187 -

Buckland Coal 270 593,298 1 1.5 1 1.5 0.8 1.2 0.8 1 0.8 1 455,653 1,601,905

Fair Market Valuation of EPC 1187 by Mining One - $1,028,779

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2.10 EPC 1206 - Planet Downs Project Summary Information

2.10.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


Planet Downs Coal 27 19/6/08 18/6/13 Granted

EPC 1206 extends from near Rolleston to approximately 35 km east of the town. It was

acquired with the primary objective of exploring for economic coal resources in the Late

Permian Bandanna Formation, which occurs within the allocation at depths ranging from 200 to

1000 meters.

The permit area comprises undulating grazing country, the major topographic feature being the

Expedition and Planet Downs Ranges located to the east. Numerous seasonal creeks such as

Humboldt and Planet Creeks drain the region into the Comet River. The sealed Dawson

Highway provides all weather access to the area with unsealed local roads and tracks providing

access within the EPC.


The stratigraphic sequence within EPC 1206 is, in descending order (Sheppard, February

2011):

� Quaternary alluvium and colluvium

� Tertiary extrusive rocks (mainly basalts)


� Permian Bandanna Formation

� Permian Black Alley Shale

� Permian Peawaddy Formation

Major structures in the area include the Denison and Taroom Troughs and the north-west

trending Springsure, Rolleston and Purbrook Anticlines. The latter features appear to host

extensive faulting on their eastern margins, giving rise to questions about seam continuity.

The Cainozoic cover within EPC1206 is typically less than 3 metres thick, but weathering is

relatively deep, ranging up to 30m. Substantial areas of the EPC are also covered by basalt

flows up to 100m thick.

Data from local wells and boreholes suggests the target Late Permian Bandanna Formation

may contain up to four potentially commercial seams. Seismic interpretation indicates that these

are relatively continuous and dip from west to east (Sheppard, January 2012).

The Black Alley Shale is a marine shale and siltstone unit and contains no coal. The Peawaddy

Formation is of shallow marine to deltaic origin, with coal potential thought to be limited to the

northern margin of the EPC 1206.

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A number of phases of exploration, including seismic reflection lines and drilling, have

previously been undertaken in tenements close to and within EPC1206. The majority of these

investigations revealed multiple coal seams at depth within the Bandanna Formation (Sheppard,

February 2011).


In 2008 Bowen Energy sited one with one 631m deep open hole within EPC1206 as part of a

more extensive program of investigations centred largely within neighbouring EPC 1045.

During 2010, one cored hole was completed within EPC1206 to a total depth of 510m with the

result that one 4m thick seam was located at a depth of around 490 metres, along with some

minor seams below it. Geophysical logging was also carried out down this hole.

During the 2011-2012 seasons, a review of the project was undertaken and a proposal for a 2D

seismic line extending from the Katrina prospect in the adjacent EPC1045 was made. This

survey was intended to investigate whether significant potential coal resources identified within

EPC1045 continued into EPC1206.


Limited data from earlier wells indicate that within EPC1206 Bandanna Formation coal

increases in vitrinite content from around 40% to 70% from northwest to southeast, along with a

commensurate increase in reflectance 0.68 to 1.26. This suggests that there is a gradation in

rank from high volatile bituminous to medium volatile bituminous coal and that there may be

some potential for soft coking product. No CSN data, however, is available.




2008-09 123 144

2009-10 13 972

2010-11 210 120

2011-12 23 480

2012-13




Technical 27,000 – 128,000


Component (+50%) 41,000 – 192,000

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Within EPC1206 it is thought that some potential for coking coal exists along the boundary with

EPC1045. Because other areas within EPC1206 have a lower reflectance or the coal is

significantly deeper than 400m, exploration, these areas are considered to be of lower

immediate priority. There appears to be a reasonable appreciation of geology and coal seam

disposition within the tenement, but it remains relatively isolated from other mining operations

and developed support infrastructure.


Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1206 -

Planet Downs 27 59,330 0.15 1 1 1.5 1 1.4 1 1.5 0.95 1.2 8,454 33,640


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3 COAL TECHNICAL VALUATIONS

3.1 Valuation Methodology

Mining One has carried out the valuations here reported in accord with the AusIMM Code for

the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for

Independent Expert Reports (the VALMIN Code). In particular, it is noted that Definition 43 of

the Valmin Code (2005) defines the Fair Market Value of a Mineral or Petroleum Asset or

Security as described in Section 1.1.

Moreover, Mining One has adhered to the stipulation under section 43 of the Valmin Code

(2005) that:

“The intention of a Report is to gather, summarise and interpret the Material information

related to the Mineral or Petroleum Assets or Securities under consideration and to

present clearly and accurately that information along with the opinions of the Expert D10

who is responsible for the Report and the Specialists D10 who contribute to it. The

outcome of a Valuation Report will usuallybe the Fair Market Value D43 of a Mineral or

Petroleum Asset or Security comprising a Technical Value D36 plus or minus, in some

cases, a premium or discount to account for such factors as market, strategic

considerations or special circumstances. However, it should be recognised that some

assets, such as Exploration Areas, may not have a Technical Value”.

Mining One has, partly because of the intrinsic suitability of the geoscientifc method to valuing

exploration tenements and partly to retain a level of consistency with the previous work by

Xstract, applied a modified version of the geoscientific method, also known as the ‘Kilburn

method’ to valuing the 10 EPC’s held by Bowen Energy. Mining One agrees with Xstract

(2010) that the geoscientific rating method is prone to assigning higher values to large

exploration permits due to use of the BAC as a starting point, irrespective of inherent

prospectivity. As with the previous work undertaken by Xstract in 2010, Mining One has

attempted to mitigate this issue to some degree by selecting appropriate multipliers. Although

the basic methodology used by Mining One is similar to that employed by Xstract in 2010, a

number of the multipliers have been adjusted to reflect:

� Increased knowledge of the deposits since 2010

� The surrender of exploration sub blocks and consequent reductions in size of the permits

� Changes in coal mineral economics and marketability

The basic technique applied by Mining One has been to derive the BAC for each sub block.

This was achieved by cumulating the following costs:

� Application fee - $1066

� Annual rent - $131.4

� Commitment to minimum expenditure $800-$1000 (taking the figure of $1000)

This totals $2,197.40 per sub block and as the BAC has been used in deriving the valuations.

The multiplier values used by Mining One range from 0.1 (negligible knowledge, highly adverse

situation) to 4.0 (numerous thick, high quality shallow seams in a world class setting). The

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adoption of a range representing low and high multipliers by Xstract (2010) is endorsed by

Mining One and has been applied in the current study.

The particular multipliers used in this report to update the BAC and thus derive a value for the

permit are:

� Percentage ownership of the tenement (Joint Venture factor)

� Proximity of other mining operations/established prospects are to the tenement (Mine

Vicinity Factor)

� Knowledge and attractiveness of tenement geology (Geology Weighting)

� Seam geometry, continuity and structure (Seam Aspect Rating)

� Quality of coal present (Coal Quality Rating)

� Proximity to existing transport/infrastructure or likelihood of development (Location

Weighting)

These multipliers are listed as headings in Table 26 below. All valuations have been rounded off

to the nearest hundred dollars.

One technique that Xstract used in the 2010 evaluation was to enhance the value of the

tenement with regard to marketability. In the case of the EPC’s, this was up to and commonly a

50% premium on the technical value derived. Given that coal prices in Queensland appear to

have since this time fallen by up to 30% for coking coal, and 10% to 15% for thermal coal with

a commensurate reduction in market potential, Mining One have decided not to include this

particular surcharge in its valuation methodology.

3.2 Conclusions

3.2.1 Modified Kilburn Ratings

Table 24: Summary of Technical Valuations, Exploration Tenements held fully or in part by Bowen Energy as at October 2012

Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 930 -

Cosmos 240 527,376 0.4 1.5 0.6 0.9 1 1.3 1 1.4 1 1.2 190,000 622,000

EPC 1001 - Mt

Cheops 22 48,343 0.1 1 0.9 1.3 0.8 1 1 1.2 0.85 1.15 3,000 8,700

EPC 1002 - Kia

Ora 32 70,317 0.1 1 0.8 1.1 0.7 1 0.7 0.9 0.8 1 2,200 7,000

EPC 1014 -

Cockatoo 18 39,553 1 2 1 1.5 1.8 2.3 1.2 1.5 1 1.2 171,000 491,000

EPC 1045 -

Shotover 201 441,677 0.15 2 2 2.5 2 2.5 1.5 2 0.95 1.2 755,000 1,988,000

EPC 1084 -

Springsure

South

20 57,132 1 1 1 1 1 1 1 1 1 1.3 44,000 57,000

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Tenement

No of

Sub

Block

$BAC

Joint

Vent.

Factor

Mine

vicinity

Factor

Geology

weighting

Seam aspect

weighting

Coal quality

weighting

Location

weighting


Valuation


EPC 1085 -

Middlemount

North

3 6,592 1 2 1 1.5 1.4 1.8 0.8 1 1 1.3 15,000 46,000

EPC 1187 -

Buckland Coal 270 593,298 1 1.5 1 1.5 0.8 1.2 0.8 1 0.8 1 456,000 1,602,000

EPC 1206 -

Planet Downs 27 59,330 0.15 1 1 1.5 1 1.4 1 1.5 0.95 1.2 8,000 34,000

From the computations summarised in Table 26, an average value for each of the tenements

has been derived as follows:

Tenement Ave Modified Kilburn Valuation

EPC 930 Cosmos Field $406,000

EPC 1001 Mt Cheops $5,800

EPC 1002 Kia Ora $4,600

EPC 1014 Cockatoo $331,000

EPC 1045 Shotover $1,370,000

EPC 1084 Springsure South $50,000

EPC 1085 Middlemount North $30,500

EPC 1187 Buckland Coal $1,029,000

EPC 1206 Planet Downs Coal $21,000

Total average Modified Kilburn valuation: $3,250,000

The above figures comprise, in essence, a summary of Mining One valuations for the 9

Exploration Permit Coal areas held by Bowen Energy.

The coal properties occur in three groups as follows:

� Group 1 – the flagship project premised on the Katrina Prospect (EPC 1045), which has

the potential for both PCI and metallurgical coal. Mining One understands that a pre-

feasibility study is planned for the Katrina Prospect. This group has an average value of

$17,768/sqr km.

� Group 2 – those properties close to existing infrastructure and operating coal mines

(EPC’s Cockatoo 1014, and Middlemount North 1085). This group has an average value

of $5,579/sqr km.

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� Group 3 – the remaining properties, with an average value of $1,292/sqr km.

Further details are shown Appendix 1.

3.2.2 Comparable Transactions

Recent (2011-12) comparable transactions of thermal coal properties in Queensland have taken

place in the range $250/sqr km - $1,190/sqr km. The upper end of this range is similar to Group

3 in the Modified Kilburn ratings, and implies that some of these ratings may have assigned

elevated values to Groups 1 and 2 properties. Assuming the $250 - $1,190/sqr km range is

representative, the various EPC’s were also valued using these figures, and gave a range of

$0.29M - $1.36M, with a mean value of $0.82M.

Further details are shown in Appendix 1.

3.2.3 Multiple of Exploration Expenditure

A further estimate of value was done using the Multiple of Exploration Expenditure (MEE),

whereby recent (2010-2012) expenditure on the various properties has been adjusted in

accordance with “Prospectivity Enhancement Multipliers” which reflect the results of recent

exploration. The MEE range derived was $1.42M - $1.92M, with an average of $1.67M. Further

details are shown Appendix 1.

3.2.4 Fair Market Value

Mining One considers the coal properties to have a Fair Market Value of $1.91M.

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4 EXPLORATION PERMITS FOR MINERALS

Figure 1: Bowen Energy mineral exploration permits (Qld IRTM)

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4.1 EPM 16269 and EPM 16270 - Bullseye Creek Project

4.1.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


EPM 16269 Bullseye Creek 1 98 16/12/11 15/12/14 Granted

EPM 16270 Bullseye Creek 2 99 29/11/11 28/11/14 Granted

The Bullseye Creek Project consists of two mineral exploration permits located approximately

46km west of Georgetown in North Queensland. Bowen Energy holds 100% interest in both

tenements.

4.1.2 Mineral Asset Status

The tenements comprising the Bullseye Creek Project are considered to be an Exploration Area

according to VALMIN definitions.

4.1.3 Target Mineralisation

Maureen-style hydrothermal uranium and Kidston-style gold-silver.


The regional setting consists of variably metamorphosed and deformed rocks of the

Georgetown Inlier. The geology is characterised by two distinct provinces in faulted contact, the

Palaeoproterozoic Etheridge Province to the east and the Mesoproterozoic Croydon Province to

the west

The rocks of the Etheridge Province (Einasleigh Metamorphics, Etheridge Group and

Langlovale Group) appear deposited in an intra-cratonic rift setting which was subject to

regional metamorphism and a phase of felsic plutonism early in the Mesoproterozoic (Bain et al,

1990). The close of this major deformational event is marked by the eruption of the Corydon

Volcanic Group and the emplacement of co-magmatic Esmeralda Supersuite granites (Corydon

Province).

At the tenement scale the geology consists of a basal metamorphic unit (Einasleigh

Metamorphics) which regionally grades into its metasedimentary protolith (Etheridge Group).

The Langlovale Group sits unconformably between the Etheridge Group and the overlying

Croydon Volcanic Group. The stratigraphy overprinted by multiple deformations and is host to

Silurian-Devonian intrusives and Carboniferous-Permian volcanics and ring dyke complexes. A

younger sequence of Mesozoic sediments and Cainozoic flood basalts mask a large proportion

of the tenements (Gregory, 2012).

Structurally the area is dominated by the north-south striking Croydon Fault (which separates

the two provinces) and the northwest striking Robertson Fault Corridor, both of which are

considered important in the current exploration models. Numerous north to northwest trending

mesoscale faults have also been interpreted from geophysical data.

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Past exploration across the Bullseye Creek tenements has concentrated on a number of

mineralisation styles including Carlin-type bulk tonnage gold, epithermal gold, sub-volcanic

breccia gold, SedEx base metal deposits, hydrothermal uranium and sediment hosted

disseminated gold.

Off tenement a number of small mines and mineral occurrences are in proximity to the Bullseye

Creek project, including:

� Minor copper mineralisation associated with the Permian Awring Granodiroite and

McFarlanes Andesite

� Minor tin and uranium mineralisation associated with Esmeralda Super Suite granitoids

� Minor silver mineralisation associated with the Croydon Volcanic Group

4.1.6 Recent Activities/Work Complete

The most significant zone of mineralisation is the Langlo Prospect, a 100mx300m fault hosted

zone of epithermal quartz confined to the contact between the Etheridge Group and the

Esmeralda Granite on the boundary of the tenure. Drilling in the 1980’s identified 8m @1.5g/t

Au, however subsequent follow up drilling was unable to reproduce similar grades.

The current phase of exploration is targeting epithermal and sub-volcanic gold mineralisation

using aero magnetic and gravity data in conjunction with previous geological mapping. The

targets to fall into one of two possible structural settings:

� Ovoid to circular reversely magnetised ‘bullseye’ targets associated with Permian rhyolite

porphyry breccia

� Or, reversely magnetised linear ‘structural corridors’ believed analogous to the Langlo

Prospect (Fig 2).

Rock chip sampling, soil sampling, ground magnetic surveys and magnetic data modelling have

all been used to refine targets, and as reported in the July-Sept 2012 activities report, RC

drilling has recently been undertaken and results are pending.

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Figure 2: Bullseye Creek Project. TMI RTP image of tenements with current exploration targets. 1: Reversely polarised Permian volcanic complexes. 2: Intersection between the Robertson Lineation and the Croydon Fault. Smaller circles represent additional possible targets (image modified from Gregory, 2012).

Figure 3: Croydon Project. Main layered mafic/ultramafic magnetic complex and proposed 2012 drillhole locations over regional TMI (image modified from Bowen Energy Activities Report, July-Sept, 2012).

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4.2 EPM 16267, EPM 16272, EPM 16274 and EPM 17364 - Croydon Project

4.2.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


EPM 16267 Clara River 1 25 20/1/09 19/1/15

Granted-

relinquishment of

12 sub-blocks by

11/12/12.

EPM 16272 Clara River 2 24 20/1/09 19/1/15 Granted.

EPM 16274 Clara River 3

22 20/1/09 19/1/15

Granted-

relinquishment of

11 sub-blocks by

19/12/12.

EPM 17364 Norman River 13 4/11/09 3/11/12 Renewal lodged.

The Croydon Project consists of four mineral exploration permits located approximately 126 km

south-southeast of the township of Croydon. Bowen Energy holds 100% interest in all four

tenements.

4.2.2 Mineral Asset Status

The tenements comprising the Croydon Project are considered to be an Exploration Area

according to VALMIN definitions.

4.2.3 Target Mineralisation

Bowen has concentrated on the following exploration targets:

� Roll front or palaeochannel style uranium within Mesozoic sedimentary sequences.

� Gold and base metals within the Croydon Volcanic Group

� Massive sulphides within or associated with magnetic intrusives

� Magmatic nickel-copper-PGE mineralisation in layered mafic to ultramafic magnetic

intrusive and extrusive units.


The regional geological setting consists of variably metamorphosed and deformed rocks of the

Georgetown Inlier. The Croydon Cauldron Subsidence Area occupies the westernmost margins

of the tenement area and includes granites of the Esmeralda Supersuite and volcaniclastic

rocks of the Croydon Volcanic Group.

A number of major basement structures have been interpreted from the regional airborne

magnetics, including west-northwest, southwest and north-south trending lineaments.

Significant structures also occur in rocks of Mesozoic age, including the northwest-southwest

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trending Yappar Lineament and a number of inferred east-west structures believed to influence

the course of both the Clara and Norman rivers (Sheppard, February 2011).

The most noteworthy feature in the region is the Croydon Cauldron Subsidence Area. The

Croydon Volcanic Group erupted into the subsiding caldera during the Mesoproterozoic. The

degree of recrystalisation at the current denudation surface suggests that up to 3 km of volcanic

material has been eroded.

At the tenement scale the Croydon Volcanic Group consists of flat lying dacitic, rhyolitic

ignimbrites and ash-fall tuffs intruded by co-magmatic Esmeralda Supersuite granites.

Basement units are unconformably overlain by quartz-rich conglomerate, sandstone and

siltstone lithologies that range in age from Jurassic (Gilbert River Formation) through to the

Quaternary. Rocks are weathered and sporadically capped by siliceous and /or ferruginous

duricrust (Sheppard, January 2012).


Previous exploration work has targeted subsurface magnetic anomalies, tin/base metal/uranium

mineralisation and economic roll front uranium deposits. Drilling during the mid-1970’s in the

Gilbert River Formation identified anomalous uranium in the reduced horizons of the Yappar

Member, in weathered granites and in sediments of the Loth Formation, particularly directly

above the Mesozoic unconformity and in thin carbonaceous clays. All results however were

disappointingly low (Sheppard, January 2012).

A number of small abandoned gold mines exist 35 km north of Croydon Project, within rocks of

the Esmeralda Supersuite, however no known mines or significant mineral occurrences fall

within Bowen’s four tenements.

4.2.6 Recent Activities/Work Complete

Bowen has conducted a review of past work, three dimensional modelling of regional magnetic

data and several TEM lines.

As of September 2012 no field exploration had been undertaken in the Croydon Project area. A

drilling programme with two to four combined percussion and diamond holes will target the

inferred mafic/ultramafic magnetic complex (Fig 3). Start-up is scheduled for October-November

of this year.

4.3 Glen Isla Project

4.3.1 Overview

Project Name No. of

Sub-

blocks

Original

date of

Allocation


EPM 14910 Glen Isla 5 26/5/06 25/5/15 Granted

The Glen Isla Project consists of one mineral exploration permit 45 km north-northwest of the

township of Cloncurry. Bowen Energy intends to surrender the tenement.

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5 MINERAL TECHNICAL VALUATIONS

5.1 Valuation Methodology

The Kilburn Geoscience rating system was used in conjunction with comparative mineral

property transactions. The option of using a DCF/NPV valuation is precluded by the absence of

any JORC/NI43-101 compliant resources.

The Kilburn Geoscience Rating Method is based on the following:

� Basic Acquisition Cost

In Queensland the grant of an Exploration Permit for Minerals is contingent on the following:

� An application fee - $799

� Annual rent - $131.4/sub block/yr

� Minimum expenditure - $1,500/sub block/yr

The BAC may be applied to the entire tenement, or allocated to various prospects within the

tenement/property.

� Proximity to Adjacent (Off-Property) Geophysical and Geochemical Anomalies

� Consideration is given to any geophysical and geochemical anomalies that exist in the

proximity of the tenements to be valued.

� Proximity to Adjacent (Off-Property) Mineralisation

� Consideration is also given to any significant and relevant mineralization that exists in the

proximity of the tenements to be valued.

� Mineralisation and Prospectivity Characteristics of the Properties

� The style, extent and significance of any defined mineralization is assessed, along with

geophysical and geochemical anomalism on the prospects is taken in account in this part

of the assessment.

� Calculated Technical Valuation

� The combination of the basic acquisition cost, actual mineralisation, and anomalism within

the tenements is calculated to form an overall valuation of the prospects.

5.2 Croydon Project Valuation Rationale

Exploration work undertaken by Bowen since the granting of EPM’s 16267, 16272, 16274 &

17364 has involved the collection and modelling of electrical and magnetic geophysical data

over and around two prominent magnetic features in the southern part of the project area.

Processing of the TEM data (two lines over the smaller northern magnetic feature & four lines

over the larger magnetic feature), did not indicate the presence of any significant conductors

within or adjacent to the magnetic features. The absence of discrete conductive anomalies,

whilst not directly indicating the presence of massive sulphides, does not preclude the

occurrence of disseminated sulphides.

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The magnetic character of the southern and larger magnetic feature shows it to consist of

several linear components, trending variously west north west, north-south and north east,

suggestive of a dilational jog structure. Intrusion of mafic dykes along these structural openings

could explain the overall magnetic character of the southern magnetic feature, and potentially

also the need for further drilling to better resolve the lithological nature and potential

mineralisation of the feature.

The southern magnetic feature was drilled with two apparently reconnaissance percussion

holes in 1984 and encountered altered mafic lithologies. One of these drill holes penetrated the

northern part of the magnetic feature, while the other tested the southern contact zone. Neither

of these holes was reported to be mineralised.

In summary, the Croydon Project currently comprises two prominent magnetic features, one of

which has been given preliminary drill testing with negative results. At present, little is known

about the total geochemical character of these magnetic features, but which do not appear to

host massive sulphide mineralisation.

Consequently the positive structural and intrusive attributes are currently offset by the limited or

negative geochemical and mineralisation attributes. The values used to determine the Technical

Values for the Croydon Project are an attempt to reflect these aspects.

5.3 Bullseye Creek Project Valuation Rationale

Exploration work undertaken by Bowen since the granting of EPM’s 16269 & 16270 is

understood to have been focussed on the Langlo Prospect, and to have included the collection

and modelling of magnetic data, geochemical surveys (rock chip and soil sampling), and drilling.

Mining One has seen the results of the geochemical sampling programs, but not the results of

the drilling due to the sample analysis being not yet available.

The regional structural setting of the Bullseye Creek Project appears encouraging, based on the

presence of the northwest trending Roberson Fault Corridor and the north south trending

Croydon Fault. Several extensional structural features occur both within and around the project,

as follows:

� The Permian age volcanic complex identified from reversely magnetised volcanics, with

the epithermal style gold mineralisation at the Langlo Prospect on the southeast boundary

of EPM 16270

� Several rhomboid shaped features in Croydon Volcanics at the western side of EPM

16270

� A rectangular shaped feature in Croydon Volcanics intruded by another smaller Permian

age volcanic complex, and underpinned by the Awring Granodiorite (which hosts porphyry

style copper-gold mineralisation).

Exploration work undertaken by Bowen since the granting of EPM’s 16269 & 16270 is

understood to have been focussed on the Langlo Prospect, and to have included the collection

and modelling of magnetic data, geochemical surveys (rock chip and soil sampling), and drilling.

In summary, the Bullseye Creek Project currently comprises several extensional structural

features, interpreted as dilational jogs, which appear to have been in operation over a long

period, culminating in the Permo-Carboniferous. Work to date by Bowen has focussed on an

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epithermal gold prospect (Langlo) on the eastern side of a distinctive Permian age volcanic

complex.

The Technical Values ascribed to the Bullseye Creek Project are an attempt to balance the

strong structural and intrusive characteristics with the limited (or low calibre) geochemical status

of the project

5.4 Conclusions

5.4.1 Modified Kilburn Ratings

Application of Modified Kilburn Ratings to the Croydon Project results in a range of estimated

Technical Values from $0.16M to $0.62M, with an average value of $0.39M.

Application of Modified Kilburn Ratings to the Bullseye Creek Project results in a range of

estimated Technical Values from $0.23M to $1.38M, with an average value of $0.65M.

Overall the application of Modified Kilburn Ratings to the Queensland mineral assets controlled

by Bowen Energy Ltd results in a Technical Value in the range of $0.39M to $2.00M. This is

equivalent to $544/sqr km to $2,785/sqr km.

Table 25: Valuation of Minerals Exploration Permits

Exploration Permit Proximity to Off-Property Property Features

Name Sub

blocks

BAC $ JV

Factor

Geophys

or

Geochem

Targets

Mineralisation

rank metals

Geophysical

Targets

low high

Geochemical

Targets Rank

low high

Geological

Patterns Rank

low high

Mineralisation Rank

low high metals

Technical Valuation $

low high

Clara River 1

EPM 16267 25 60,760 1 1 1 (Sn, Au, U) 1 1.5 0.8 1 1 1.3 0.8 1.3 Sn, Au (U) 38,886 154,027

Clara River 2

EPM 16272 24 58,330 1 1 1 (Sn, Au, U) 1.5 2 0.9 1 1 1.8 0.8 1.3 Sn, Au (U) 62,996 272,983

Clara River 3

EPM 16274 22 53,469 1 1 1 (Sn, Au, U) 1 1.3 0.8 1 1 1.3 0.8 1.3 Sn, Au (U) 34,220 117,471

Norman

River

EPM 17364 13 31,595 1 1 1 (Sn, Au, U) 1 1.5 0.8 1 1 1.3 0.8 1.3 Sn, Au (U) 20,221 80,094

Bullseye Ck 1

EPM 16269 98 238,179 1 1 1 1 1.3 0.5 0.8 0.8 1.3 0.5 1 Au 47,636 322,018

Bullseye Ck 2

EPM 16270 99 240,610 1 1 1.3 Cu, Au; 1 1.3 0.8 1 1.5 2 0.5 1.3 Au 187,675 1,057,239

391,635 2,003,831

5.4.2 Comparable Transactions

A review of recent mineral property transactions in Queensland shows a range from $128/sqr

km to $2,742sqr km. The magnitudinal similarity between the Modified Kilburn Ratings and the

comparable transactions suggest the former estimate of Technical Value to be reasonable.

Further details are in Appendix 2.

5.4.3 Fair Market Valuation

After consideration of the data provided by the Technical Valuation and the overall market

conditions, Mining One considers the Fair Market Value for the Bowen Energy Ltd mineral

assets to be $1.20M.

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Appendix 1

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6 APPENDIX 1

Table 26: Summary of Valuations of Coal Exploration

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Table 27: Technical Valuation for Coal Exploration Permits

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Appendix 2

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7 APPENDIX 2

ASIC 2011: Content of Expert Reports; Regulatory Guide 111. Australian Securities &

Investments Commission.

Bain, J.H.C., Withnall, I.W., Oversby, B.S. & Mackenzie, D.E., 1990. North Queensland

Proterozoic inliers and Palaeozoic igneous provinces - regional geology and mineral deposits, in

Hughes, F.E., (Ed) Geology of the Mineral Deposits of Australia and Papua New Guinea ,

Australian Institute of Mining and Metallurgy, 963-978.

Bowen Energy 1 (Undated) EPC 930 Richfield Data Evaluation and Target Generation.

Bowen Energy 2 (Undated) EPC 930 Richfield Summary of Exploration and Geology.

Bowen Energy Ltd (2012) Activities Report April to June 2012.

Bowen Energy Ltd (2012) Activities Report July to September 2012.

Bowen Energy Ltd (2008) Technical Information Presentation 2008.

Deloitte (2010) Bowen Energy Limited, Financial Services Guide.

Dowd, M (Feb. 2012) EPC 1085 Middlemount North Annual Report for Year Ending 22 March

2012.

Dowd, M (2012) Annual Report for EPC 1001 West Rolleston Mount Cheops, Year Ending 11

January 2012.

Gregory, P (2012) Open File Review and Target Definition for EPMS 16269 abd EPMS 16270

Bullseye Creek Area, Georgetown Region, QLD. Geodiscovery Group Report for Bowen Energy

Ltd.

Hetherington (Oct. 2012) Bowen Energy Queensland Tenement Obligations Report for Period 1

November 2012 to 31 December 2012.

JORC 2004: Australasian Code for Reporting of Exploration Results, Mineral Resources and

Ore Reserves. Prepared by Joint Ore Reserves Committee (JORC) of the Australasian Institute

of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.

Kamalpreet, R. (March 2012) Final Report for EPC 1083 Tarong-Cooyar Year Ending 25 March

2012.

Kamalpreet, R. (August 2012) EPC 1187 Annual Report 2012 Year Ending 3 August 2012.

Minarco Mineconsult (August 2011) Bowen Energy Review of Underground Mining Potential,

Project Katrina.

RPS Australia Pty Ltd (2011) Prospect Report, Katrina 2D Seismic Survey for Velseis Pty Ltd.

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Raphael, N (2011) EPC 1002 Kia 0ra Annual Report for Year Ending: 24 September 2011.

Ray, H & Perry, K (March 2012) Annual Report, EPC 1014 East Middlemount Cockatoo.

Sheppard, M (June 2012) EPC 1206 – Planet Downs Report for the 12 Months Ending 18 June

2012.

Sheppard, M (January 2012) EPM 16274 Clara River 3 Report of the 12 Months ending 19

January 2012.

Sheppard, M (February 2011) EPM 16274 Clara River 3 Report of the 12 Months ending 19

January 2011.

Sheppard, M (October 2011) EPC 1045 Shotover Report for the 12 months Ending 22 June

2011.

Snowden Consultants (June 2011) Bowen Energy Ltd Katrina Prospect Scoping Study.

SRK Consulting (October 2010) Bowen Energy Limited Independent expert’s report.

SRK Consulting (2012) EPC 1045 Annual Report 12 Month Ending 22 June 2012.

VALMIN 2005: Code for the Technical Assessment and Valuation of Mineral and Petroleum

Assets and Securities for Independent Expert Reports. Prepared by the Australasian Institute of

Mining and Metallurgy, Australian Institute of Geoscientists and the Mineral Industry Consultants

Association with the participation of ASIC, ASX, MCA, PESA and SAA.

Velseis (2012) Processing Report, 2011 Katrina 2D Seismic Survey.

Xstract (Oct 2010) Independent Valuation of the Mineral Assets of Bowen Energy Limited.

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