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An Emerging Coal Company
Investor UpdateWilsons HTMMarch 2011F
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Cautionary Statement
The information contained in this document (Presentation) has been prepared by NuCoal Resources NL 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
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Corporate Strategy
Explore ‐ advance exploration, studies and approvals at the Doyles Creek project;
Develop ‐ the Doyles Creek Project (coal operation and Training Mine Facility) to generate a positive cash flow;
Acquire ‐ Expand the project portfolio to become a multi‐mine coal producer, by targeting acquisitions that allow the Board and Management team to enhance value.
ASX Code: NCR Slide 3
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Snapshot
ASX Code: NCR Slide 4
Market cap:A$302 million – S & P All Ords listed
Cash:A$31 million (at 21/3/11)
Key Project:Doyles Creek Underground Mine andTraining School(100%) Hunter Valley NSW
Management:MD : 11 years Xstrata (ex‐GMunderground operations)
Pre Feasibility Study:Commenced January 2011
Infill/upgrade drilling program underway – 3 rigs: (approx‐ 20‐25 holes)
Coal Products:Semi‐soft coking, Thermal
Total exploration drilling program to date: 19 holes completed
Industry Training Facility:Australia’s 1st – industry backedwith strong strategic partners
Capital Raise:Successful Institutional Placement ‐ $30m Feb 11
Asset acquisitive:Targeting opportunities with synergy / value add opportunity
Resource:497.7 million tonnes
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Location
ASX Code: NCR Slide 5
Doyles Creek (100%) Hunter Valley NSW
• Close to major infrastructure
• Rail• Port• Workforce• University
• Within current coal region
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Corporate Overview
ASX Code: NCR Slide 6
Shares on issue 644.3 million
Market cap. A$302.8million
Cash (18 Feb 2011) $31 Million
Enterprise Value $271.8 million
Options on issue nil
Share price (as at 18/3/11) A$0.47
Capital Structure Significant Shareholders
Major shareholders Equity %
Taurus Funds Management 19.5%
Pooles Australia Pty Ltd 7.5%
Sparta Group 7.4%
Aquila Resources 3.9%
ASX Code: NCR
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Company Journey to date
ASX Code: NCR Slide 7
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Performance to Date
ASX Code: NCR Slide 8Source-RBS Morgans
Comparable Company performance on a TSR basis compared to peers over the last 12 months has been superior at 182.5%F
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Key Asset – Doyles Creek
ASX Code: NCR Slide 9
o Granted EL 7270 over 2,778 hectares December
2008 for a term of 4 years
o Independently assessed 497.7 mt JORC inferred
coal resource
o Current resource calculation on 5 mineable seams
o Coal extraction planned by underground longwall
mining methods
o Adjacent to United Collieries (Xstrata) and Wambo
Mine (Peabody Energy)
o NuCoal owns 240 hectares of land (for surface
infrastructure) over the exploration area and has a
signed agreement to purchase a further 280
hectares in 2013. This provides 520 hectares of
contiguous land across the exploration area.For
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Current Drilling
ASX Code: NCR Slide 10
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Drilling Results
ASX Code: NCR Slide 11
o Results from DCM 001 ‐ 019:
Targeted seams are similar in thickness or thicker than anticipated
Whynot Seam quality exceptional ‐ 6% av ash, CSN 4‐7, 7300kcal/kg, low moisture and sulphur
Additional Whynot coal identified due to a thicker seam section in some areas ‐ (2.3m ‐3.8m)
Whynot Seam potential to sell as ROM product (100% yield) and delay construction of CPP 8‐10 years
Multi Seam longwalling possible.
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Concept Study Outcomes
ASX Code: NCR Slide 12
Draft mine plans laid out in 5 target seams
30 year mine life anticipated for single seam scenarios
Seven potential product transport corridors identified
Total capital estimated at $500m – excludes a Coal Preparation Plant for the initial 10 years
Economic modelling indicates financially robust project in excess of 20% IRR
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Conceptual Mine Plan ‐Whynot
ASX Code: NCR Slide 13
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Path to Production
ASX Code: NCR Slide 14
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2011 Milestones
ASX Code: NCR Slide 15
April – Engineering Manager commences on project team
April ‐ Secure water licence
April ‐ Apply for Industry and Investment Concept Plan approval
May‐ Lodge Major Project Application and Preliminary Environmental Assessment (PEA) to Department of Planning
July‐ Nominate for port access with PWCS
July‐ publish updated JORC Statement including in ‐ fill results
December – Port allocation results published
December – publish updated JORC statement including in ‐ fill results
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Centre of Excellence
ASX Code: NCR Slide 16
A project to establish a Centre of Excellence in:
o Mining
o Training
o Education
o Research
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Strategic Partnerships
ASX Code: NCR Slide 17
Hunter Valley Training CompanyVocational education and training resources and employment
Doyles Creek Mining Pty Ltd Finance, mine management and operation and coordination of research, training and education
University of NewcastleResearch & Development, Undergraduate and Post Graduate education andplacement of students
Westpac Rescue Helicopter ServiceParamedic training, OHS training and rescue simulations
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Doyles Creek Mining Scholarships/Trainees/Apprentices
ASX Code: NCR Slide 18
o Five Students from The University ofNewcastle have been selected as theinaugural recipients of the DoylesCreek Mining Scholarships in EarthSciences (Geology)
o Trainee Drillers have been employedon the drill rigs used on the project
o A trainee exploration Geologist isemployed on the project
o Five Apprentices were employedJanuary 2011, in conjunction withHunter Valley Training Company.For
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NSW – Strategic Land Use Planning
ASX Code: NCR Slide 19
The NSW Coalition has released a Land Use Policy, to be implemented if they form Government, aimed at protecting valuable food sources, underground aquifers and existing agricultural businesses.
NuCoal has been working on a number of planning initiatives for 12 months that will dovetail into the requirements of this proposed policy ‐
A comprehensive Hydro ‐ geological Study has been underway, in conjunction with exploration drilling, since mid 2010 to understand and protect any aquifer systems in the EL area;
Agricultural land uses within the EL will be reviewed and included in any project application;
The Doyles Creek Underground project is being designed to have minimal impact on the neighbouring Thoroughbred Breeding Industry and local Community, using best practice underground mine planning techniques;
An independent legal audit of compliance to the comprehensive EL conditions has been undertaken for the Board since August 2010 and will continue to be updated quarterly.For
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Good quality resource – nearly 0.5 billion tonnes of resource – Underground proposal (long wall mining )
Potential 30 year mine life at IRR > 20% Located near major infrastructure Australian First Underground Coal Training School Company well capitalised – recent $30 million placement completed
Experienced and competent management team Pre‐feasibility and Environmental Studies underway.
Summary
ASX Code: NCR Slide 20
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Competent Person StatementThe Resources estimate 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 qualifyas 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 of this Resource Estimate in reports disclosed by the Company in the form in which it appears.
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APPENDIX
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Probity Review and EL compliance
ASX Code: NCR Slide 23
Recent media coverage on the proposed audit of all mining Exploration Licences (EL’s) in NSW by the NSW Coalition, should it win the upcoming State election, has highlighted the Doyles Creek Underground Project currently being developed in the Hunter Valley by NuCoal Resources NL (“NuCoal” or “Company”).
In response, NuCoal’s Managing Director, Glen Lewis, said :
“NuCoal supports the Coalition’s proposed review of Exploration Licences and its recently announced Strategic Regional Land Use Policy. We believe the policy has the potential to result in appropriate strategic regional land use plans which can minimise conflicts between mining and our communities, and we are pleased that the Coalition has consulted widely to make this matter a priority after the election.
In addition, an independent probity review on the granting of this EL was conducted by O’Connor Marsden & Associates 18 months after the awarding the Licence to Doyles Creek Mining. In their report of 23 August 2010 the probity adviser stated in part:
“….it would appear that the then Minister acted within the powers afforded to him under the legislation in granting the EL to DCMP. There are a number of examples where direct allocations have been previously made by previous Ministers.” (Page 5)
“NuCoal takes the conditions of its EL very seriously, and the Company has fully complied with its obligations. In addition, our compliance with the current comprehensive EL conditions has been independently assessed by an independent law firm every three months since August 2010, in accordance with NuCoal’s internal compliance regime and this practice will continue indefinitely.”
Source: NuCoal ASX release 2/3/11
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80-200m
140-320m
150-350m
200-420m
240-570m
40m
ASX Code: NCR Slide 24
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o 35 coal mines
o 14 producers
o 27 loading points
o 80 different brands of coal
o 34 end buyers
o 12 countries
Strategic Location – Hunter Valley
ASX Code: NCR Slide 25
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Infrastructure Growth
PWCS T4 next
step
ASX Code: NCR Slide 26
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Terminal Projects Updates
Source: HVCCCASX Code: NCR Slide 27
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Land Ownership ‐ outright or under contract
Calago Bloodstock
ASX Code: NCR Slide 28
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Training Panels
Conceptual Mine Plan – West Borehole
ASX Code: NCR Slide 29
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Training Panels
Conceptual Mine Plan ‐Whybrow
ASX Code: NCR Slide 30
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Training Panels
Conceptual Mine Plan – Redbank Creek
ASX Code: NCR Slide 31
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