for personal use only - asx · 2011. 2. 22. · yanzhou coal acquires felix resources proposed...
TRANSCRIPT
Road Show PresentationCascade Coal – A Company Making Transaction
23 February 2011
For
per
sona
l use
onl
y
Page 22
� Transaction Overview
White Energy’s Acquisition of Cascade Coal
� Strategic Rationale
Cascade Coal - A Company Making Transaction
� Combination Rationale
White Energy and Cascade Coal Combined
� Detailed Asset Overview
The Cascade Coal Assets
For
per
sona
l use
onl
y
Page 33
Why Cascade Coal ?
1Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company
2Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW
3Purchase Price of A$486m for 100% of the Equity in Cascade Coal is “Fair and Reasonable” and at the Lower End of IE Valuation Range of A$459m to A$587m
4Mt. Penny is Competitive with and Superior to Other Comparable Australian Thermal Coal Assets
5Mt. Penny Open-Cut 1 is Being Fast Tracked to Production in 2013, and is well positioned with Existing Rail Connection to Port of Newcastle
6Board/Management with Demonstrated Ability to Bring Coal Assets into Production – Moolarben, Ashton, Ulan and UnitedF
or p
erso
nal u
se o
nly
Page 44
Transaction OverviewWhite Energy’s Acquisition of Cascade Coal
White Energy’s Strategy
� White Energy is a Coal Technology and Coal Mining company.
– Coal Technology: Exclusive worldwide license holder of the patented BCB Coal Technology, a mechanical process which uses drying and briquetting to convert poor quality coal into a higher value product.
– Coal Mining: White Energy recently acquired South Australian Coal which was the foundation transaction for its stated strategy of acquiring quality coal assets to build a more diverse coal company.
� The company currently holds ~A$206m of cash on its balance sheet and has a market capitalisation of ~A$890m.
Cascade Coal
� Cascade Coal owns two coal development properties in New South Wales:
– Mt Penny (EL7406): 174Mt export thermal coal resource (JORC) located in the Western Coalfields of NSW, suitable for open-cut development with potential for a future underground operation also.
– Glendon Brook (EL7405): 50Mt thermal / semi-soft coal resource (target) located in the Hunter Valley Coalfields of NSW, suitable for open-cut development.
� Mt Penny is anticipated to commence production in 2013 and initially build-up to 5.2Mtpa of ROM coal from Open-Cut 1, followed by Open-Cuts 2-4 contributing an additional 4.0Mtpa of ROM coal. This will bring total production to 9.2Mtpa of ROM coal, equivalent to 6.4 Mtpa of product coal, in 2018.
Cascade Coal Transaction
Summary
� On 30 November 2010, White Energy executed an option and exclusivity agreement to acquire all of the issued shares in Cascade Coal for A$486m plus assumed liabilities of A$14m (total EV of A$500m).
� On 23 December 2010, following the completion of initial due diligence, White Energy announced that it had exercised this option and both White Energy and Cascade Coal would continue finalising the terms of the Sale Agreement using best endeavours and good faith.
� On 14 February White Energy and Cascade Coal executed definitive agreements, with completion of the transaction subject to independent shareholder vote.
Key Financial Terms of the Transaction
� Should the proposed transaction proceed White Energy will provide A$486m in consideration for 100% of the shares in Cascade Coal, comprising of:
– Cash: Cascade Coal shareholders may elect to receive up to 20% of their consideration in cash, subject to pro rata scale back if the total cash amount exceeds A$41 million; and
– Ordinary Shares: the remainder of the consideration will be provided in the form of White Energy Ordinary Shares issued at the lesser of A$3.85 per share and their VWAP for the 15 trading days immediately before completion of the proposed transaction, subject to a minimum issue price of A$3.50 per share
For
per
sona
l use
onl
y
Page 55
Transaction Overview (cont’d)White Energy’s Acquisition of Cascade Coal
Related Party Transaction and
Corporate Governance
� Cascade Coal is owned by a group of investors including entities associated with current White Energy management and Directors including:
– Travers Duncan (Chairman), Brian Flannery (CEO), John McGuigan (Director), John Atkinson (Director), John Kinghorn (Director) who own ~12% each and together represent ~60% of the Cascade Coal.
� Due to the related party nature of the Cascade Coal transaction, White Energy established an Independent Board Committee (“IBC”) comprising of independent Directors’ Graham Cubbin, Vincent O’Rourke and Hans Mende.
� The decision to proceed with the acquisition of Cascade Coal follows an extensive and rigorous due diligence exercise performed by the IBC in consultation with its external advisors. Subsequent to this diligence process, the IBC strongly believes that the transaction represents significant value, is a compelling opportunity and is in best interests of all White Energy shareholders.
� The IBC also engaged an Independent Expert, Deloitte Corporate Finance Pty Limited, to prepare a report on the proposed transaction including an opinion as to whether the acquisition of Cascade shares on the term proposed is fair and reasonable to White Energyshareholders not associated with Cascade Coal shareholders. This included an independent technical review by Behre Dolbear.
Due Diligence Undertaken
� The IBC commissioned and was provided with the following due diligence reports in assessing the Cascade Coal transaction
– Commercial Due Diligence Report (Citi)
– Technical Report (Minarco)
– Legal Due Diligence Report on Cascade (Freehills)
– Legal Due Diligence Report on White Energy continuous disclosure (Freehills)
– Tax and Accounting Due Diligence Report (Ernst & Young)
Transaction Implementation
� White Energy and Cascade Coal have entered into a Share Sale Agreement under which White Energy will purchase all the issued shares in Cascade Coal.
� The proposed transaction is subject to various conditions, including White Energy obtaining all necessary shareholder and regulatory approvals.
� Certain Cascade Coal shareholders will execute a Support Deed under which they will provide certain warranties and indemnities in relation to Cascade Coal’s business / assets and enter into agreements restricting the disposal of their ordinary shares for 12 months after issue.
Shareholder Approval
� Shareholder approval for the proposed transaction is necessary under the ASX Listing Rules because:
– Cascade Coal represents an acquisition of an asset valued at 5% or more of the total value of White Energy’s shareholder equity
– Cascade Coal is to be acquired from entities associated with Directors (and therefore related parties) of White Energy
– The transaction also involves White Energy issuing shares exceeding 15% of its issued ordinary share capital
� White Energy shareholders will receive Notice of Meeting (including an Explanatory Memorandum) to convene the shareholder meeting required to approve the Cascade Coal acquisition
– The Notice of Meeting will contain an independent expert’s report prepared by Deloitte
For
per
sona
l use
onl
y
Page 66
Transaction StructureWhite Energy’s Acquisition of Cascade Coal
Mt. Penny Coal
Glendon Brook Coal
Coal Mining
Coal Technology
SA Coal
Coal Mining
Coal Technology
SA Coal
24%
60%
+
White Energy and Cascade Coal have common shareholders including the Chairman, CEO and 3 other Directors of White Energy. Currently this group hold ~24% of White Energy and ~60% of Cascade Coal, and will hold ~35% of White Energy should the transaction proceed.
Travers DuncanChairman: White Energy
Brian FlanneryCEO: White Energy
John McGuiganDirector: White Energy
John AtkinsonDirector: White Energy
John KinghornDirector: White Energy
For
per
sona
l use
onl
y
Page 77
Next Steps and Expected Timetable to Completion
Notice of Meeting and Explanatory Memorandum sent to
shareholders� Early March 2011
Time and date for determining eligibility to vote at the Meeting
� 7.00pm (Sydney Time) on Monday, 4 April 2011
Shareholder meeting to approve Cascade transaction
� 10.00am (Sydney Time) on Wednesday, 6 April 2011
Completion of Transaction (if approved by shareholder)
� April 2011
The Cascade Coal transaction is expected to complete in April 2011.
For
per
sona
l use
onl
y
Page 88
� Transaction Overview
White Energy’s Acquisition of Cascade Coal
� Strategic Rationale
Cascade Coal - A Company Making Transaction
� Combination Rationale
White Energy and Cascade Coal Combined
� Detailed Asset Overview
The Cascade Coal Assets
For
per
sona
l use
onl
y
Page 99
Australian coal peers – market capitalisation (A$m)
The acquisition of Cascade will further enhance White Energy’s operational scale, market position and further diversifies White Energy’s revenue base.
Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company
10,540
4,0353,6003,431
1,8001,5591,376
890767528486
236
Coal & AlliedNew HopeMacarthurWhitehavenAstonGloucesterWhite Energy
- Post
White Energy
- Pre
BandannaCockatooCascadeNorthern
Energy
Source: IRESS as at market close on 22 February 2011 (White Energy closed at A$2.84 per share).
For
per
sona
l use
onl
y
Page 1010
A Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW
Extensive M&A activity in the Australian coal sector has resulted in limited availability of quality coal assets in the market. Consolidation has driven appreciating coal valuations and increased competition, making opportunities scarce.
Xstrata’s unsuccessful takeover of Gloucester
Xstrata’s takeover of Resource Pacific
Xstrata’s acquisition of Tahmoor and Anvil Hill
Mineralogy acquires Waratah Coal and forms China First Coal
Yanzhou Coal acquires Felix Resources
Proposed Gloucester/ Whitehaven merger
Noble takeover offer for Gloucester
Macarthur unsuccessful takeover of Gloucester
BMA acquires New Saraji
Peabody & New Hope launch unsuccessful takeover bids for Macarthur
Noble minority takeout of Gloucester
Banpu’s on-market purchase of 19.9% of Centennial Coal and subsequent takeover offer
2007 2008 20102009
Anglo sale of exploration assets to Cockatoo / KEPCO / POSCO
Linc asset sale to Adani
Gloucester acquisition of Noble’s interest in Middlemount JV and capital raising
Aston IPO
Key Coal Sector Trends
� Shortage of quality coal assets.
� Majors building tier 1 portfolios and divesting non-core assets.
� Foreign strategic investors (China/India/US etc) entering the market.
� JVs with downstream partners to finance project development and secure offtake contracts.
� Mergers amongst mid-caps to build scale – largely unsuccessful in Australia to date.
� Equity raising activity continuing.
Foreign acquisitions of Australian owned assets
Rio Tinto / Riversdale
Griffin Coal Sale
For
per
sona
l use
onl
y
Page 1111
Purchase Price of A$486m for 100% of the Equity in Cascade Coal is “Fair and Reasonable” and at the Lower End of IE Valuation Range of A$459m to A$587m
White Energy is acquiring Cascade Coal at the bottom of the Independent Expert’s valuation range. The transaction has also been deemed “Fair and Reasonable” for non-associated shareholders.
The IER Fair Market Value of Consideration is based on the Independent Expert’s valuation of Ordinary Shares at between A$3.50 and A$3.70 per Ordinary Share and the Implied Value of Consideration is based on market data as at 22 February 2010.
IER Fair Market Value of Cascade Coal
IER Fair Market Value of Consideration
Implied Value of Consideration based on1 Week VWAP (A$2.94)
Implied Value of Consideration based on 1 Month Week VWAP (A$3.09)
Implied Value of Consideration based on 3 Month VWAP (A$3.32)
IER Fair Market Value of Consideration
Implied Value of Consideration based on 1 Week VWAP (A$3.94)
Implied Value of Consideration based on 1 Month Week VWAP (A$3.09)
Implied Value of Consideration based on 3 Month VWAP (A$3.32)
Consid
era
tio
n V
alu
eM
axi
mum
Scrip
Consid
era
tio
n V
alu
eM
axi
mum
Cash
Cascade
Valu
e
459
486
587
514
409
428
460
511
415
433
463
486
Mid-Point A$523m
Value of Consideration (1 Week VWAP)
For
per
sona
l use
onl
y
Page 1212
Mt. Penny is Competitively Positioned Within the Australian Export Thermal Coal Landscape
Mt Penny Open-Cut 1 is attractively positioned in the second quartile of Australian export thermal coal mines. This provides the project with flexibility in varying coal markets and allows it to significantly benefit in robust coal conditions.
0
40
80
120
160
200
0 20 40 60 80 100 120 140
201
0 F
OB
Cash C
osts
–in
c.
Roya
ltie
s &
Levi
es
(A$ p
er
sale
able
to
nn
e)
First Quartile Second Quartile Third Quartile Forth Quartile
Op
en
-Cu
t 1 (
Cascad
e)
Lo
M:
A$
56.0
/t
Op
en
-Cu
t 1 (
BD
A1)
Lo
M:
A$
60.4
/t
Note (1): Costs based on Behre Dolbear (BDA) FOB Cash Costs estimates, adjusted to include marketing, levies and royalties based on Deloitte assumptions for long-term coal prices and foreign exchange.
For
per
sona
l use
onl
y
Page 1313
Pit 1 Pits 2-4
Life of Mine Production 103 Mt 48 Mt
Full ROM Production 5.2 Mtpa 4.0 Mtpa
Full Saleable Production 3.6 – 3.8 Mtpa 2.6 – 2.8 Mtpa
Production Mix 100% Export Thermal Coal 100% Export Thermal Coal
0.0
2.0
4.0
6.0
8.0
10.0
FY13 FY15 FY17 FY19 FY21 FY23 FY25 FY27 FY29 FY31 FY33
Pro
ductio
n (
Mt R
OM
) .
Open Cut - Pits 2-4
Open Cut - Pit 1
Production
Assumptions
Mt. Penny Open-Cut 1 is Being Fast-Tracked to Production in 2013
The Mt. Penny project is expected to come online in 2013 and ramp-up to 9.2Mtpa ROM production in 2018. This positions the asset to significantly benefit from existing and expected buoyant coal markets.
For
per
sona
l use
onl
y
Page 1414
Attractive Asset in Leading Thermal Coal Basin With Existing Rail Connection to Port of Newcastle
Cascade Coal Overview Location
� Private Australian coal developer, with two properties in the Hunter Valley region of New South Wales.
� Mt Penny is a proposed open-cut and underground coal project
– Expected to host 4 open-cut mines and 1 underground mine
– Detailed mine plan established for Open-Cut 1 – expected to commence production in 2013
– Adjacent to rail infrastructure providing direct access to the Port of Newcastle
– Cascade Coal has secured all necessary land and water rights and is confident that it can access sufficient port capacity at PWCS
� Glendon Brook Coal Project is a semi-soft coking coal exploration project
– Exploration target of 50Mt resource
Mt Penny Resources
Reserves Resources
mt Total Measured Indicated Inferred Total
Resource Block 1 - OC 1 103 95 22 2 120
Resource Block 2 - OC 2 - - - 22 22
Resource Block 3 - OC 3 - - - 13 13
Resource Block 4 - OC 4 - - - 13 13
Resource Block 5 - UG 1 - - - 7 7
Total 103 95 22 56 174
For
per
sona
l use
onl
y
Page 1515
Mt Penny Open-Cut 1 is Expected to Receive Final Approvals by 2012 and Producing Coal in 2013
2010 2011 2012 2013 2014
Mine Development
Continued Geological Investigations within EL 7406
Stakeholder Consultation
Part 3A Major Project Approval
Detailed Mine Planning and Design
Construction
Early Procurement
Mine Construction
CHPP Construction
Rail Spur Construction
Production
First Coal
Production Ramp Up
Infrastructure
Port Nomination Port Allocation Process
Rail Nomination Rail Allocation Process
For
per
sona
l use
onl
y
Page 1616
A highly regarded board and management team with an industry wide reputation for delivery and execution of major coal projects.
Board/Management with Demonstrated Ability to Bring Coal Assets into Production
Travers DuncanChairman
Brian FlanneryManaging Director and
CEO
John KinghornNon-executive Director
Graham CubbinNon-executive Director
Hans MendeNon-executive Director
John AtkinsonNon-executive Director
John McGuiganNon-executive Director
Vincent O’RourkeNon-executive Director
� The ownership of a NSW coal asset leverages the skills of the White Energy Board and Management.
� Highly experienced coal mining management team with long track record of success (Felix Resources).
– Travers Duncan is the former Chairman of Felix Resources
– Brian Flannery is the former CEO of Felix Resources
– Hans Mende, Vincent O’Rourke and John Kinghorn are former Directors of Felix Resources
� Significant experience in developing NSW coal projects such as Moolarben, Ashton, Ulan and United
For
per
sona
l use
onl
y
Page 1717
Why Cascade Coal ?
1Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company
2Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW
3Purchase Price of A$486m for 100% of the Equity in Cascade Coal is “Fair and Reasonable” and at the Lower End of IE Valuation Range of A$459m to A$587m
4Mt. Penny is Competitive with and Superior to Other Comparable Australian Thermal Coal Assets
5Mt. Penny Open-Cut 1 is Being Fast Tracked to Production in 2013, and is well positioned with Existing Rail Connection to Port of Newcastle
6Board/Management with Demonstrated Ability to Bring Coal Assets into Production – Moolarben, Ashton, Ulan and UnitedF
or p
erso
nal u
se o
nly
Page 1818
� Transaction Overview
White Energy’s Acquisition of Cascade Coal
� Strategic Rationale
Cascade Coal - A Company Making Transaction
� Combination Rationale
White Energy and Cascade Coal Combined
� Detailed Asset Overview
The Cascade Coal Assets
For
per
sona
l use
onl
y
Page 1919
The Continuing Evolution of White Energy
Upgrade Coal Fines
Other Related Coal Assets
Sub-bituminous Coal Assets
BCB Coal Upgrading
Technology
New Applicationseg. Coking
Coal
Acquisition of SACL provides development
options
Technology Offering
Conventional Coal Mining
Continue with joint venture business
model
Extend BCB technology into
new applications
The Cascade Coal acquisition represents the next step in the continuing evolution of White Energy into a diversified coal company.
Acquisition of Cascade Coal leverages
management skills and expertise
For
per
sona
l use
onl
y
Page 2020
White Energy and Cascade are an Attractive Combination of Assets
� The Cascade acquisition would further reinforce White Energy’s stated strategy of two interdependent divisions:
– Coal technology
– Coal mining
� A more diverse operating model would provide greater stability around future earnings
� A number of development options are opened for White Energy to consider:
– Develop the two divisions separately to better maintain current White Energy capital structure.
– Identify financial partners at the project / asset level.
– Pursue a funding / development strategy centered around geography.
� Post-acquisition White Energy will be positioned as an attractive mid-tier Australian coal company presenting a long term value proposition which will likely appeal to financial partners and / or strategic investors
Coal Technology
Coal Mining
Multiple Geographies
Coal UpgradingSACL
Cascade
Coal Fines Processing
BCB TechnologyApplication
An acquisition of Cascade Coal will position White Energy as an attractive mid-tier Australian coal company with a number of options to optimally develop its diverse set of coal properties. This strategy has been well communicated to the market and shareholders.
For
per
sona
l use
onl
y
Page 2121
1. Crushed coal is injected into the drying column and flash dried to remove moisture
2. The dry, crushed coal is then compacted and briquetted, creating tight bonds between the coal particles and eliminating nearly all voids
3. Raw feed coal is crushed to <3mm to optimise the ability to process
4. Briquettes are then cooled to enable handling and to be stockpiled
5. The result is a higher-density, higher-energy briquette with low permeability and reduced propensity toward spontaneous combustion
Steps in the White Energy ProcessGraphical Depiction of the BCB Process
White Energy will Continue to Focus on its Market Leading Coal Upgrading Platform
White Energy’s coal upgrading technology will remain a central pillar to its long-term strategy and future growth. White Energy’s upgrading process has been developed over 20 years, by a consortia led by the CSIRO, Australia’s pre-eminent government research organisation.
For
per
sona
l use
onl
y
Page 2222
White Energy’s Facility in Tabang is the World’s First Commercial Scale Coal Upgrading Plant
� Kaltim Supacoal (KSC) is a joint venture between White Energy (51%) and Bayan (49%) established to operate coal upgrading plants in Tabang
– Bayan is one of the largest coal miners in Indonesia and owns several large sub-bituminous deposits in Tabang
� Tabang is located in East Kalimantan, Indonesia and is well positioned to key South East Asian and North Asian markets
� KSC has completed construction of an initial 1Mtpa coal upgrading module
– Plant has been commissioned and is currently ramping up to full capacity
– Work to address remaining technical issues at the Plant is underway
� KSC plans to significantly expand the capacity to 15 Mtpa
– Expansion will be prioritised over any other White Energy plants in Indonesia
White Energy’s industry leading plant in Tabang, Indonesia is now in production and has the capability to produce 1Mtpa of upgraded coal.
Joint Venture Structure
Coal Upgrading Technology
IndonesiaApprox. 4,400 Kcals/kg GAR Approx. 6,100 Kcals/kg GAR
PRB CoalApprox. 8,400 Btu/lb GAR Approx. 11,350 Btu/lb GAR
For
per
sona
l use
onl
y
Page 2323
White Energy’s Takeover of South Australian Coal Delivered its First Coal Asset
Upgrade coal via BCB Technology
� The high moisture coal
is a potential feedstock
for BCB Process
� Produce higher energy
briquettes suitable for
export market
� Positive transport
dynamics to Asia from
Darwin or South
Australian ports
� Opportunity to develop
an Australian centric
project
Sell high moisture coal domestically
Identify new coal technologies
Develop minerals and base metals
� South Australia needs
new base load
capacity
� Port Augusta Power
Station currently uses
high moisture, lower
energy coal from Leigh
Creek (similar)
� Lake Phillipson is a
potential alternate coal
source for Port
Augusta
� Opportunity to use the
more efficient,
upgraded BCB coal
� As an owner of a coal
asset, WEC may wish
to test/pursue other
coal technologies
� Size of the reserve
may present
opportunities
associated with
gasification and coal to
liquids
� Olympic Dam and
Prominent Hill are
located in a geological
province known as the
Gawler Craton, as is
the Lake Phillipson
EL4534
� Some of EL4534 will
be tested for potential
base metal
mineralisation
� Opportunity to develop
a more diversified
portfolio of assets
outside of coal
Lake Phillipson Coal Deposit Gawler Craton
Drilling program update
� Comprehensive
resource drilling
program completed in
December 2010
quarter
� A Competent Person
under the JORC Code
has been engaged to
evaluate the results
� Company expects to
receive a final report
within the next [4]
weeks confirming the
additional JORC
resources identified
Potential Uses of the Lake Phillipson Deposit.
For
per
sona
l use
onl
y
Page 2424
� Transaction Overview
White Energy’s Acquisition of Cascade Coal
� Strategic Rationale
Cascade Coal - A Company Making Transaction
� Combination Rationale
White Energy and Cascade Coal Combined
� Detailed Asset Overview
The Cascade Coal Assets
For
per
sona
l use
onl
y
Page 2525
Cascade Coal Background
Cascade Coal Pty Ltd (“Cascade”) was established in 2008 to engage in greenfield coal exploration and developments within NSW.
Cascade Coal Pty Ltd
Mt Penny Coal Pty Limited
Mt Penny Properties Pty Limited
Glendon Brook Coal Pty Limited
EL 7406‘Mount Penny’
Right to acquire key Mt Penny properties
EL 7405‘Glendon Brook’
Cascade Coal Corporate Structure Key Events in Cascade Development
� Cascade bid was in a public tender and was
granted coal exploration licenses EL 7406 and EL
7405 in October 2009
� Cascade’s Board made a decision to focus on the
development of Mount Penny in priority to
Glendon Brook
� An accelerated development timeline has been
followed by Cascade, drilling 60 holes between
Nov. 2009 – Aug. 2010:
– 20 open holes to indicate resource extent,
structural control & depth
– 40 cored holes for resource definition and coal
quality characterisation
– 523 coal and parting samples were recovered
and submitted for analysis
For
per
sona
l use
onl
y
Page 2626
Mount Penny – EL 7406
The Mount Penny coal deposit, EL 7406, is located in the NSW Western coal field.
NSW Coal Fields
NSW Coal & Rail System
Mt Penny
Rail access to Port Kembla
For
per
sona
l use
onl
y
Page 2727
Exploration Tenement Details
� Cascade has developed a detailed
mine plan for Open-Cut 1
� The Mt Penny coal project
contemplates 4 x Open-Cut and 1
Underground mine
� Mt Penny has access to quality
infrastructure with the Sandy-Hollow –
Ulan Rail line cutting across the EL
For
per
sona
l use
onl
y
Page 2828
Exploration Tenement Details
EL 7406 – JORC coal resource Coal Description
� The mine plan for Open-Cut 1 contemplates a 5.2Mtpa
ROM open-cut mine producing 3.6 - 3.8Mtpa of
saleable coal
� The cumulative coal thickness is 7 – 9m
� Open-Cut 1 resource is capable of producing thermal
and steam raising coals for export and domestic utility
generation
� The coal will require washing to produce a product that
is of export quality
� Optimum recovery would be achieved by targeting a
product with 17% ash (±0.5%)
� The coal has low sulphur of less than 0.5% and a CV
of 34.5 MJ/kg (d.a.f.)
The Mt Penny coal deposit has a JORC compliant resource of 174 Mt.
Reserves Resources
mt Total Measured Indicated Inferred Total
Resource Block 1 - OC 1 103 95 22 2 120
Resource Block 2 - OC 2 - - - 22 22
Resource Block 3 - OC 3 - - - 13 13
Resource Block 4 - OC 4 - - - 13 13
Resource Block 5 - UG 1 - - - 7 7
Total 103 95 22 56 174
For
per
sona
l use
onl
y
Page 2929
Exploration Tenement Details
Core mine infrastructure such as rail loop, materials handling plant, haul road and administrative centre is to be constructed in close proximity to Open-cut 1.
For
per
sona
l use
onl
y
Page 3030
Infrastructure and Utilities
Mt Penny is well positioned with respect to rail and utility infrastructure.
Rail Port Power Water
� Staged bi-directional
loop proposed –
enabling routing of trains
to Newcastle or Port
Kembla
� Sufficient excess rail
capacity to cater for Mt
Penny production
� Passing lanes to be
constructed to Wollar
and Bylong
� Port Waratah Coal
Service Terminal has
been identified as a
likely port for export
� Depending on rail
infrastructure Port
Kembla could emerge
as a viable export port
� Power requirements of
approximately 6.5 Mva
will be needed and can
be serviced from the
Bylong sub-station
� An application has been
submitted to Integral
Energy
� Water requirements for
Open-Cut 1 at 5.2 Mtpa
ROM operation is 1,500
mega liters
� Cascade believes it can
control Water Access
Licenses that provide
1,700 mega liters
� There may be an
opportunity to also
source water from site
run off
For
per
sona
l use
onl
y
Page 3131
Land Access and Encumbrances
Cascade Coal’s subsidiary Mt Penny Properties Pty Ltd has secured put and call options to purchase land located within Open-Cut 1 and over the relevant infrastructure areas
Controlled Land Native Title
� Based on searches of the register administrated by the
Native Title Tribunal completed on 30 September
2010, Mt Penny’s exploration license EL 7406 is not
covered by a native title claim
� Aboriginal Cultural Heritage surveys commenced
during October 2010 to ensure that it complies with
relevant guidelines
� Cascade has engaged relevant Aboriginal groups and
are following through with the relevant procedures
� Areas highlighted
in blue denotes
land controlled or
owned by
Mt Penny
Properties Pty
Limited
For
per
sona
l use
onl
y
Page 3232
Glendon Brook – Asset Snapshot
� Cascade was granted Glendon Brook in October 2009 for a
period of 5 years. Glendon Brook is located in the Hunter
Valley Coalfield approximately 12km east of Singleton and
immediately south of ML 1309 “Mitchell’s Flat” held by Xstrata
PLC.
� ML1309 expires in February 2014. The development consent
for the proposed rail access corridor which was also granted,
has allegedly expired, however Cascade is currently
investigating its options in this regard
� The coal is typical of the Vane group and a lower part of the
Burmawood formations, which are host to a number of coal
seams that are mined at Rixs Creek, Ashton, and Camberwell
mines.
� Cascade carried out exploration activity in September 2009
consisting of a fully cored hole in steep dipping zones. 13
samples ranging from 0.3 to 2.1m thick were intersected
For
per
sona
l use
onl
y
Page 3333
Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements, including statements, containing the words “planned”, “expects”, “believes”, “strategy”, “opportunity”, “anticipates”, and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate.
For more information visit www.whiteenergyco.com or contact:
Brian Flannery
Managing Director and CEO
White Energy Company Limited
+61 2 9959 0000
Forward looking statements
Ivan Maras
Chief Financial Officer
White Energy Company Limited
+61 2 9959 0000
For
per
sona
l use
onl
y
Page 3434
Competent Person Statement
Cascade Coal Pty Limited
The information in this presentation concerning the proposed acquisition of Cascade by White Energy, which relates to Coal
Reserves and Coal Resources at EL7406 and EL7405 is based on information compiled by Mr Michael Johnstone, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Johnstone is the principal consultant of Minerva Geological Services PL.
Mr Michael Johnstone has 32 years of relevant mining and geological experience in coal. During this time he has either managed
exploration programs or contributed significantly to mining studies related to the estimation and assessment of coal resources, and in
the development of coal mining operations in Australia, India, Pakistan, Philippines and Vietnam. He was the project Geologist responsible for implementing the Ulan Stage 2 exploration program, and Exploration Manager for the Ashton and recently
commissioned Moolarben Development. He has sufficient experience which is relevant to the style of coal occurrence 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 Mineral Resources and Ore Reserves”. Pursuant to the requirements of ASX Listing Rule 5.6,
Mr Johnstone consents to the inclusion in the announcement of the matters based on their information in the form and context, which it appears.
Michael Johnstone - February 2011
Member AIMMPrincipal Consultant
Minerva Geological Services Pty Ltd
For
per
sona
l use
onl
y
Maritime Trade TowersLevel 20, 201 Kent StreetSydney, NSW 2000Telephone: +61 2 9959 0000Facsimile: + 61 2 9959 0099Email: [email protected] ABN 62 071 527 083
For
per
sona
l use
onl
y