An Emerging Coal Company
Longwall Conference
Creating a Mid-Tier Public Mining Company from Scratch – Lessons Learnt
October 2012
Cautionary Statement
The information contained in this document (Presentation) has been prepared by NuCoal Resources Ltd and Doyles Creek Mining Pty Limited (Company). This Presentation does not constitute an offer or invitation to any person to subscribe for or apply for any securities in the Company.
While the information contained in this Presentation has been prepared in good faith, neither the Company or any of its shareholders, directors, officers, agents, employees or advisers give any representations or warranties (express or limited) as to the accuracy, reliability or completeness of the information in this Presentation, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as ‘Information’) and liability therefore is expressly disclaimed. Accordingly, to the full extent permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or limited, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained in this Presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.
Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any inaccuracies in, or omissions from, this Presentation which may become apparent. The right is reserved to terminate any discussions or negotiations with any person. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any errors.
This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained in this Presentation necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relations to such matters.
This Presentation may include certain statements that may be deemed ‘forward-looking statements’. All statements in this discussion, other than statements of historical facts, that address further activities and events of developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. The Company, its shareholders, directors, officers, agents, employees or advisers, do not represent, warrant or guarantee, expressly or impliedly, that the information in this Presentation is complete or accurate. To the maximum extent permitted by law, the Company disclaims any responsibility to inform any recipient of this Presentation or any matter that subsequently comes to its notice which may affect any of the information contained in this Presentation. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions.
Investors are cautioned that any forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward-looking statements.
ASX Code: NCR Slide 2
What do we have?
Snapshot Prior to Plashett Acquisition
ASX Code: NCR Slide 4
Market cap:A$138.3 million
Projects:Doyles Creek Underground Mine andTraining School (100%) Hunter Valley NSW
Dellworth Pty Ltd EL 6594 and EL 6812 (100%) Hunter Valley NSW
Port Access (Doyles Creek):PWCS 1Mt initial allocation commencing 2015
Savoy Hill (EL 6812) Exploration:Initial exploration commenced September 2011 - 24 cored holes completed to date
Coal Products:Semi-soft coking, thermal
Doyles Creek (EL 7270) Exploration: 51 holes completed including a 200mm hole
“Greenfields” Industry Training Facility:Australia’s 1st – industry backedwith strong strategic partners
Dellworth (EL 6594) Exploration:11 open holes completed to date – Initial Concept study completed
Coal Resource Reserve (Doyles Creek):
Measured – 23.1Mt Probable Reserve – 51MtIndicated – 119.3 Mt Inferred – 369.5 MtTotal – 511.9Mt
Cash: A$29.9 m (at 30/9/12)
Management:Significant operational experience
o 35 coal mines
o 14 producers
o 27 loading points
o 80 different brands of coal
o 34 end buyers
o 12 countries
ASX Code: NCR Slide 5
Strategic Portfolio Location – Hunter Valley NSW
Savoy Hill
Dellworth
Doyles Creek
Project
Plashett Coal
ProjectProject Status
Doyles Creek BFS commencing
Dellworth Initial Concept Study completed
Plashett Conceptual Mining Study
Savoy Hill Exploration Drilling
* Plashett purchase subject to Shareholder approval and completion of conditions precedent.
Detailed Portfolio Locations
ASX Code: NCRSlide 6
Savoy Hill
Dellworth
Plashett
Doyles Creek
Executed Joint Venture documents with Mitsui Matsushima for them to earn up to 10% of the Doyles Creek Project Joint Venture by spending $40m.
Project Overview document submitted to NSW Department of Planning and Infrastructure for the Doyles Creek Project. Director Generals Requirements were received in May 2012 and EIS is currently underway.
Successfully raised $29m on 1 March 2012 via placement and a further $6.3m via SPP during April 2012.
Plashett acquisition Share Sale & Purchase Agreement executed 2 May 2012.
Doyles Creek Project Pre-feasibility Study completed on time and within budget.
Renewal lodged for Dellworth (EL 6594) and Initial Concept Study completed.
Conceptual Mining Study underway for Plashett and drilling to commence Q4 to add to historical 70 hole database.
Latest Achievements
ASX Code: NCRSlide 7
Doyles Creek EL 7270
Pre-feasibility Study Outcomes
ASX Code: NCR Slide 9
Detailed Underground mine plans laid out in the first 2 of 5 target seams achieving an initial 21 year mine life.
Substantial NPV of $523m at 10.0% discount rate - IRR 20.8%.
Project start up capital of $727m.
Run of Mine (ROM) production of 101Mt for initial 21 years.
Average pit top ROM costs of $31.44 / tonne.
Average Project Outputs Units
Pit Top ROM Cash Costs A$/t ROM 31.44
CHPP Costs (when required) A$/t ROM 6.99
FOR Cash Costs A$/t Product 45.70
Ex Mine Costs (excl Royalties) A$/t Product 20.07
C1 Cash Costs A$/t Product 65.77
Start Up Capital A$M 727
ROM Tonnes Mt 101.9
Saleable Tonnes Mt 85.7
Average Revenue / Tonne A$/t Product 149.01
Discount Rate % 10.0%
NPV A$M 523
Whynot Seam Mine Plan
ASX Code: NCR Slide 10
Whybrow Seam Mine Plan
ASX Code: NCR Slide 11
Igneous Silling
Training School Project
ASX Code: NCR Slide 12
A project to establish a
Centre of Excellence in:
o Mining
o Training
o Education
o Research
Doyles Creek Mining Pty Ltd
Finance, mine management and operation and
coordination of research, training and education
Hunter Valley Training Company
Vocational education and training resources and
employment
The University of NewcastleResearch & Development, Undergraduate and Post
Graduate education and placement of students
Westpac Rescue Helicopter Service
Paramedic training, OHS training and rescue
simulations
Doyles Creek Mining Scholarships/Trainees/Apprentices
ASX Code: NCR Slide 13
NuCoal supports the Institute of Frontier Geosciences at The University of Newcastle through funding for student scholarships, academic positions and research funds.
Internal and external training programs support apprentices and trainees including office staff, drillers, electricians and fitters to support the mining industry.
Training programs in first aid and safety related issues support the local community.
Students in local schools access funding for mentoring, career planning, health, trade training and industry related programs.
Plashett EL 6705
Plashett adds to the NuCoal portfolio and offers significant synergy between the existing tenements, particularly Doyles Creek.
Open cut proposition with the ability to link to the Doyles Creek Project via an underground corridor.
Approximately 70 historical boreholes of data available with an exploration target based on past drilling of 89-300Mt of semi soft coking and thermal coal.
Located near major infrastructure and provides substantial opportunity to develop a concentrated coal handling hub for a number of related projects.
Conceptual Mining Study commenced and will be modified as required with the newest drilling data as its obtained.
Plashett Acquisition Benefits
ASX Code: NCR Slide 15
Plashett Initial Exploration and Synergy
ASX Code: NCR Slide 16
Potential Resource Area
ASX Code: NCR Slide 17
EL 6705 Seam Cross Sections
ASX Code: NCR Slide 18
Dellworth Pty Ltd EL’s 6594 & 6812
Dellworth Initial Drilling
ASX Code: NCR Slide 20
Draft mining plan laid out over the most prospective area.
+10 year mine life anticipated for domestic coal sales scenarios.
Base case as a contract mining opencut providing 500kt – 1Mt to local domestic consumer.
Existing infrastructure provides access to local consumer within 7kms of project site.
Capital requirements estimated at $24m - $34m to establish an operation with contract mining rates utilised for the Concept Study.
Draft Mine Plan
ASX Code: NCR Slide 21
Savoy Hill Initial Drilling
ASX Code: NCR Slide 22
Corporate
• Company fully funded until end 2013.
• Experienced and competent management team.
• All Projects located near major infrastructure.
Doyles Creek Project
• Good quality resource – 0.511 billion tonnes. Pre-feasibility Study completed and EIS underway.
• Potential >30 year mine life via underground longwall mining.
• Australian First “Greenfields” Underground Coal Training School.
• Sufficient land owned for all necessary infrastructure and access requirements.
Savoy Hill Project
• Drilling well advanced and Environmental Studies underway.
Dellworth Project
• Stage 1 drilling and Initial Concept Study completed.
Plashett Project
• Acquisition underway and Conceptual Mining Study commenced to identify significant synergies with the Doyles Creek and Savoy Hill Projects.
Summary
ASX Code: NCR Slide 23
How did we get there?
Value Accretion Profile
Source - Gresham Group 15 Oct 12 Slide 25
Journey to Date
Slide 26ASX Code: NCR
$4.6m spent prior to listing
Secure seed capital.
Identify and attain an asset with prospect for development.
Employ good people every step of the way.
Commence developing the project.
List the private Company on market to increase shareholder base raising further funds through the listing process.
Continue adding value to the project and identify additional projects to acquire - if the strategy is to increase in size as well as diversify risk.
Raise further funds as needed to build / grow the Company.
Be passionate about what your doing.
Steps
ASX Code: NCR Slide 27
Strong Board and Management Team
ASX Code: NCRSlide 28
Chairman
Mr. Gordon Galt
G.Eng (Mining,
Hons), B.Com,
GDip AppFin
(Finsia), MAusIMM,
MAICD
Non Executive
Director
Mr. James
Beecher
B.Com, MBA,
FCPA, FAICD
Non Executive
Director
Mr. Michael
Davies
BA Hons, MBA
Non Executive
Director
Mr. Mike
Chester
B. Com, ACA
Managing
Director
Mr. Glen Lewis
MAICD
Commercial
Manager and
Company
Secretary
Mrs. Megan Etcell
B.Com, CA
General Manager
Operations
Mr. Gary
Cambourn
B.Eng Mining
(Hons)
Director Doyles
Creek Mine
Training School
Mrs. Maree
Roberts
Dip T, B Ed St, M
Ed Admin, GAICD
Managing DirectorGLEN LEWIS
Commercial Manager & Company Secretary
MEGAN ETCELL
General Manager Operations
GARY CAMBOURN
Director of Training School
MAREE ROBERTS
Personal Assistant(s)KELLY WILLIAMS &
HOLLY STEPHENSON
Project ManagerLEIGH NICHOLLS
Engineering ManagerGREG NICHOLLS
Trainee Administration Assistant
RACHEL GIBBS
Commercial Accountant
CASS PHILLPOTT
Environment & Community Manager
JEMMA SARGENT
Organisational Structure - proven track record
ASX Code: NCR Slide 29
Corporate Overview
ASX Code: NCR Slide 30
Shares on issue 768.6 million
Market cap. A$138.3 million
Cash (30/9/2012) A$29.9 million
Enterprise Value A$100.6 million
Options on issue nil
Share price (as at 9/10/12) A$0.18
Capital Structure Significant Shareholders
Major shareholders Equity %
Taurus Funds Management 19.7%
HSBC Custody Nominees 6.6%
Sparta Group 6.2%
National Nominees Limited 5.5%
Citicorp Nominees Limited 5.2%
Big Ben Holdings (Bloomfield Group) 3.9%
What did we learn
Have faith in your ability and back yourself.
Do what you say!
Combine with like minded people to raise initial funds – they need to understand the sector you wish to work in – both risks and rewards.
Identify a quality asset at the start.
Do what you say!
Be prepared for criticism along the journey.
Understand the “market” doesn’t always follow fundamentals.
Keep shareholders informed.
Do what you say!
Learnings
ASX Code: NCRSlide 32
Questions?
Competent Person Statement
The information in this report that relates to exploration results and mineral resources is based on information compiled by Dr Ian Stone, who is a Member of the Australasian Institute of Mining and Metallurgy (102087). Dr Stone is Manager, Geology of Palaris Mining Pty Ltd. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Stone has over 30 years experience in exploration and mining of coal deposits. Dr Stone consents to the inclusion in this report disclosed by the Company, of the matters based on his information, in the form and context in which it appears.
The Underground Reserves estimate is based on information compiled by Mr Michael Barker, who is a Member of the Australasian Institute of Mining and Metallurgy (112634). Mr Barker is General Manager, Underground Services for Palaris Mining Pty Ltd. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Barker has over 16 years’ experience in the estimation, assessment, evaluation and economic extraction of Coal Reserves. He consents to the inclusion of this Reserve Estimate in reports disclosed by the Company in the form in which it appears.
This estimation of Underground Coal Reserves has been undertaken by a team of people in the Palaris Mining office and in co-operation with technical staff employed by NuCoal Resources Ltd. Mr Barker is satisfied that the work of the other contributors is acceptable, and Mr Barker accepts responsibility and accountability for the Underground Coal Reserve estimate documentation under the Code.
Refer to detailed Doyles Creek JORC Resource Statement in Table A1 and the initial Reserve Statement in Table A2 below.
Appendix
JORC Resource Statement
ASX Code: NCR Slide 36
Reserve Statement
Slide 37
SeamProbable Reserves
(ROM Mt MoROM 8%)
Total Marketable Reserves
(Mt various moisture basis)
Total Yield
(%)
West Borehole 23.3 13.8 59 %
Whynot 27.6 26.4 96 %
Total 50.9 40.2 79 %
Table A2 - Underground total probable and marketable reserves
ASX Code: NCR
