jordan energy and mining limited - melanie silver

Jordan Energyand Mining LimitedAnnual Review 2011/2012

Contents

2 Jordan Energy & Mining Limited Annual Review 2011/2012

Jordan Energy and Mining Limited (JEML) is a UKcompany that specialises in the mining and processing ofoil shale, with a first project in the Hashemite Kingdom ofJordan and plans to extend into other countries where oilshale resources, energy needs and political will coincide.

JEML operating company Karak International Oil PSC(KIO) is employing leading edge technology and specialistexpertise to unlock the potential of Jordan’s oil shalereserves, the 4th largest in the world. This untappednatural resource will help Jordan meet its domestic energyrequirements and reduce its dependence on oil imports.

“Oil shale, in light of the current hikein oil prices, has become a viableenergy resource”Abdullah Ensour, Prime Minister of the Kingdom of Jordan - December 2012

Highlights 3

Energy: A global dilemma 4

Oil shale: A fuel lifeline 6

About us 8

Achievements and expectations 10

Outlook 12

The story so far 14

From rock to oil 17

Jordan: A kingdom rich in resources 20

Managing director’s review 22

Corporate and social responsibility 25

Meet the team:The board 26The management team 28

Financial information 29

Summary financial statements 30

3

Energy dilemmaThe world faces an energy dilemma: demand for energy, driven by developingeconomies, is rising relentlessly but readily accessible global oil supplies are running out.While renewable energies such as wind and solar power could in the future make upsome of the shortfall, trucks and aeroplanes still need the high energy density and largevolumes provided by carbon-based fuels such as diesel.

Alternative energy sourceOil shale is an alternative liquid hydrocarbon energy source that could extend the world’senergy supply. There are 2.5 to 3 trillion barrels of verified extractable oil shale resourcesglobally – more than double the world’s recoverable conventional crude oil reserves.

Abundant supplyJordan’s proven oil shale deposits are, in total, the fourth largest in the world.

Energy securityJordan Energy & Mining is helping the Jordanian government take a step towards energyself-sufficiency by transforming two of its oil shale deposits – at Al Lajjun and Na’diyya –into much-needed liquid products and electrical power.

Foundations laidHaving invested $35m to date, the project is well underway. A small-scale commercial plantis scheduled to come on-stream in 2016, initially producing 4,000 barrels per day. In 2020,the second phase of the plant is set to come online, bringing production up to 22,000barrels per day. Finally, by 2026, the full-scale plant is expected to produce up to 38,000barrels of shale oil per day in the Al Lajjun area. The project will also contribute power toJordan’s grid, generating 15MW at 4,000bpd, rising to 150MW as production expands.

Attractive investment returnsFeasibility studies show that phase 1 of the project will generate a positive cash flow withoil prices of US $50 per barrel, and generate acceptable investment returns when pricesexceed US $65 per barrel and following the phase 2 expansion the breakeven point willbe US $40 per barrel.

Technically and commercially viableOil upgrading tests have demonstrated that it is technically feasible and commerciallyviable to produce either high-grade synthetic crude oil during Phase I or a range ofprofitable finished products for a modest incremental cost during Phases II and III, thelatter making the project’s economics even more attractive.

Replicable in any countryOnce demonstrated, Jordan Energy & Mining’s approach to the extraction andconversion process means that it is repeatable in any country with significant oil shaleresources and the right geographic, economic and political profile.

Best practice in Corporate Social Responsibility (CSR)Jordan Energy & Mining is following best practice in the area of corporate social responsibilityand has embraced the IFC’s Equator Principles, UN Global Compact and the ILODeclaration of Fundamental Principles and Rights at Work as a starting point.

“Global energydemand grows bymore than one-third over theperiod to2035...with China,India and theMiddle Eastaccounting for60% of theincrease.”International Energy Agency -World Economic Outlook 2012

Highlights

Energy:A global dilemma


Increasing dependence on the world’s reducing oil supplies at a time when production isbeing challenged to meet demand has led to volatile oil prices. It is a sobering fact thatwe consume six barrels of oil for every new barrel we discover. Long-term, the projectedsustained shortfall between supply and demand means that oil prices are under upwardpressure and that the current level of supplies cannot be sustained indefinitely.

“Conventional oil production haspeaked and is now on a terminal,long-run global decline”1

Deborah Gordon, Carnegie Endowment for International Peace

As easily accessible oil fields become depleted, oil exploration companies inevitably turnto offshore and arctic drilling. However, pushing the boundaries always entails not onlyhigher costs but also increased risk of accidents and environmental impact, as illustratedall too clearly by the Deepwater Horizon oil spill. The mining and treatment of oil shale isinherently safer and uses conventional mining and materials processing technology.Consequently, such an ecological disaster could never occur.

With world demand for oil growing at the rate of almost one billion barrels a year, there isa clear requirement to find long-term solutions for viable, alternative hydrocarbon sources.

6:1The world consumes six barrels of oil for every new barreldiscovered

1 'Understanding Unconventional Oil’ by Deborah Gordon of the Carnegie Endowment forInternational Peace: May 2012 http://www.carnegieendowment.org/files/unconventional_oil.pdf

5

“With non OPEC conventional oil likelyto peak soon and with the world set tobecome more and more dependent onOPEC oil production, unconventional oilsources could make an importantcontribution to enhancing the world’senergy security.”International Energy Agency, 25 May 2010

Successful JEML trial mining exercise

Oil shaleA fuel lifeline


What is oil shale?Oil shale is an alternative hydrocarbon energy source that, unlike crude oil, is in abundantsupply. The US geological survey estimates that there are 2.5 to 3 trillion barrels ofproven oil shale resources worldwide2 - more than double the world’s recoverable crudeoil reserves.

Oil shale is sedimentary rock that contains a waxy organic material called kerogen. This can be heated, converted into hydrocarbon vapours, condensed, processed andturned into liquid shale oil. It can then be treated and refined into diesel, petrol and jetfuels, as well as gas products for generating electrical power.

Oil shale mining and processing, either for electrical power generation or oil production,has a proven track record, with successful commercial ventures in Estonia, Brazil,Australia and China and on a smaller scale in other countries. Where Jordan Energy &Mining leads, others follow and many ‘Big Oil’ companies such as Shell, Total, BP andPetrobras are also actively exploring potential oil shale mining opportunities in Jordan.

Why Jordan?• Despite the upheaval of the Arab Spring and volatility across the Middle East, Jordan

remains a beacon of relative stability in the region. A fourth generation monarchy and democratically elected parliament mean the Kingdom is ranked as one of the top countries for security worldwide. It also enjoys transparent governance, ranking highly among Arab countries in the 2010 Corruption Perception Index and third in the Middle East for freedom of expression and choice.

• Jordan’s economy has enjoyed an annual growth rate of 6% for the past decade.

• Jordan is actively seeking ways to reduce its dependence on foreign energy imports, which account for up to 20% of its Gross National Product (GNP). The Kingdom aims to increase self-provision from 4% to 25% by 2015 and to 39% by 2020. As its only indigenous energy resource, oil shale is a fundamental part of that strategy.

• Jordan has the 4th largest oil shale reserves and estimated resources in the world.

• Jordan Energy & Mining’s founders established strong relationships with the Jordanian government, having advised it on mining, oil and gas policy from 2000 to 2005.

40%projected increase in globaldemand for liquid hydrocarbonsby 2030

Source: Ministry of Energy and Mineral Resources/Jordan Investment Board

29%

40%14%

10%6%

1%

Oil Products

Natural Gas

Oil Shale

Renewable Energy

Nuclear Energy

Imported Electricity

29%

51%

11%7%

2%2015 2020

2 "Source: US Geological Survey 2005 - Geology & resources of someworld oil shale deposits"

7

Jordan’s energy strategyJordan intends to maximise the use of oil shale through a three phased plan:

• Power generation (600-900MW) by an Estonian company (Enefit) burning oil shale under a joint venture with the Government

• Surface mining and treatment of oil shale with selected companies including JEML subsidiary Karak International Oil

• In situ treatment of oil shale in the longer term (after 2025) utilising the In situ Conversion Process (ICP) method adopted by the Royal Dutch Shell Group.

However, while JEML is focusing on Jordan today, its proven approach to the extractionand conversion process means the mining and processing concept developed in Jordanis repeatable in any country with significant oil shale resources and the rightgeographic, economic and political profile.

Jordan facts:3

Population: 6.2 million and growing at 2.2% a yearReligion: Sunni Muslim 92%, Christian 6%, Other 2% (Shia Muslim and Druze)Languages: Arabic, EnglishCurrency: Jordanian Dinar (JOD)GDP per capita: 2,979 JOD (US $4,203)Inflation: 5% (2010)GDP Growth: 5.6%Capital: AmmanMain imports: Crude oil, textiles and garments, transport equipment, machinery

and vegetable productsMain exports: Garments and textiles, pharmaceutical products, jewellery,

electrical appliances, machinery and equipment, furniture, chemicals, minerals and plastic products

4Jordan has the 4th largest oilshale resources in the world

Source: Bloomberg - September 2012

3 Source: Jordan Investment Board - January 2013

“Rising transport demand and upstreamcosts reconfirm the end of cheap oil.”International Energy Agency's 2011 World Energy Outlook

Test drilling leads to internationally recognised ratingExploration drilling in 2007 and 2008 confirmsthe thickness and quality of Al Lajjun oil shale.Based on the test drilling results, respectedmining consultants Marston certify thatJEML’s resources meet the NI 43-101standard - the Canadian government’smineral resources classification scheme.Block A of the project has also beenindependently assessed for reserves totalling159 million barrels under Canada’s NI 51-101Standards of Disclosure for Oil and GasActivities

About


Our vision Jordan Energy & Mining and Karak International Oil are committed to helping theJordanian government reach its goal of energy self-sufficiency by transforming itscommercial oil shale deposits into liquid products and electrical power.

Our missionJordan Energy & Mining and Karak International Oil will further the interests of theirshareholders and stakeholders by bringing together specialist expertise, industryexperience, state-of-the-art technology and international investment, while building goodrelationships with suppliers and governments. The companies set exemplary standards inthe areas of environmental responsibility, safety and the welfare of their people.

Our strategyJordan Energy & Mining puts experience and expertise at the centre of its business,recruiting high calibre staff with extensive knowledge and experience of the mining and oilprocessing sectors. It has assembled a board of executive and non-executive directorswith strong experience gained in senior management positions with blue chip companies.On the ground, Karak International Oil aims to recruit local people wherever practical.

Both companies believe their goals are best achieved through close liaison with theJordanian government, which is very supportive of their activities in the country.

Jordan Energy & Mining has invested $35m to date, demonstrating its commitment tothe project. Its experienced team is actively working to hit key project milestones andachievements to date include:

• Four highly successful pilot plant test runs• Successful oil upgrading tests with proven technology• An extremely positive Bankable Feasibility Study and Addendum Report• Fruitful negotiations with the Jordanian government leading to the signing of a

Concession Agreement• Signing a Memorandum of Understanding for a further oil shale area, Na’diyya, adding

further value to the company• Managing the risk profile and the amount of capital investment required in a global

downturn by adopting a phased approach

Jordan Energy & Mining intends to raise equity and debt finance from private investorsand banking institutions before considering making an Initial Public Offering (IPO) on amajor stock exchange such as the London Stock Exchange once commercial productionis approaching or underway.

“Kerogen has thepotential to beone of the largestunconventionalhydrocarbonsources in theworld.”Carnegie Endowment forInternational Peace

Source: ‘Understanding Unconventional Oil’ by Deborah Gordon of the Carnegie Endowment forInternational Peace: May 12http://www.carnegieendowment.org/files/unconventional_oil.pdf

9

Our valuesThe core values of Jordan Energy & Mining and Karak International Oil are:• Accountability• Ambition• Efficiency• Practicality• Responsibility

KIO is transparent about the risks involved in any mining and processing venture andmanages those risks through employing experienced management and working tointernational standards. KIO acknowledges its responsibilities as a global corporate citizenand is eager to minimise environmental damage, working towards reducing anyenvironmental effects through technological advances and carbon offsetting.

The company believes that a sustainable business requires a sustainable workingenvironment and acts responsibly towards its workers and the communities in which itoperates.

KIO operates in accordance with the IFC’s Equator Principles - a financial industrybenchmark for determining, assessing and managing social and environmental risk inproject financing.

Our objectivesConstruction of an initial commercial plant of 4,000bpd is scheduled to start in 2014 and come into production 2015/16. Once the processing methods and yields are stable, JEML will ramp up progressively, largely using internally generated cash flow, to22,000bpd. KIO’s potential production capacity at Al Lajjun is up to 38,000bpd.

In the long-term, JEML expects to employ similar methods and technology at othersuitable sites. The company has already had positive exploratory discussions withgovernment representatives in Egypt, which faces a huge increase in its powerrequirements from a growing population.

38,000KIO’s potential productioncapacity: up to 38,000 barrelsper day by 2020

About

Achievements and expectations


2007Representatives from Jordan’s NaturalResources Authority (NRA) and Ministry ofEnergy & Mineral Resources (MEMR) visitCanada to view the ATP pilot plant andlarge-scale tar sands operations near FortMcMurray.

Initial JEML exploration drilling to confirmthickness and quality of Al Lajjun’s oil shale.

Pre-Feasibility Study (PFS) completed.

Independent Competent Person’s Reportproduced supporting the findings of thePre-Feasibility Study.

Public hearing in Amman as part of theEnvironment and Social ImpactAssessment (ESIA).

2008Commissioned Environmental & SocialImpact Assessment (ESIA).

Consulting engineers Hatch appointed tolead the Bankable Feasibility Study (BFS).

Trial mining exercise and bulk sampling forfurther test work in Calgary.

Further exploration drilling at Al Lajjun (25 holes).

Second successful pilot plant test run in Calgary.

“This major newoil shale venturewill make asignificantcontribution to the government’sdeclared energystrategy toincrease energyfrom indigenousoil shale resourcesfrom zero to 14% of thecountry’s energyrequirements by 2020; andthereby reduceour reliance onimported oil andgas products fromour neighbours.”His Excellency Dr KhaledToukan, former Minister ofEnergy & Mineral Resources,Jordan - 2011

2000 to 2005JEML founders advise Jordaniangovernment on its mining/naturalresources policy.

2006JEML awarded an area of Al Lajjun oilshale following competitive bidding.

Memorandum of Understanding (MOU)signed with the government of Jordan.

Successful 86-ton pilot plant run of theAlberta Taciuk Process (ATP) technologyconducted in Calgary.

Helping Jordan meet domesticenergy demandBy unlocking the potential of Jordan’s oil shalereserves JEML will help the Kingdom towardsits goal of energy self-sufficiency. The projectwill benefit Jordan in many ways, attractinginward investment, increasing national wealth,creating employment opportunities,transferring skills and positioning Jordan as aworld leader in oil shale development.

KIO director Munther Akroush (l) and HisExcellency Alaa Al-Batayneh, Minister ofEnergy & Mineral Resources, sign theMemorandum of Understanding for a newarea at Wadi Al Na'diyya in December 2012.

11

201150-year Concession Agreement passed byJordanian Parliament and Royal Decreeissued.

Promising Jordan Energy & Mining-sponsored research at Australia’s MonashUniversity into the influence of different airand gas reaction environments on oil shaleprocessing continues.

2012Co-operation agreement signed with theUniversity of Jordan in Amman to offerwork experience to gifted engineeringstudents who have completed internshipsin Germany giving Karak International Oilaccess to a pool of local talent.

Karak International Oil invests US $40,000in a powerful new computer facility atMu’tah University in the Karak Governorateas part of a sustainable developmentproject to develop IT skills among Jordan’snative workforce.

Further exploration and assessment ofadditional blocks in the Al Lajjun area atNa’diyya to the south east – three trialholes already provide promising results.

Report commissioned from consultingengineers Hatch confirming the revisedCapex and Opex costs, together with theprojected returns, of the phased approachAl Lajjun project.

Memorandum of Understanding signed for32 sq km area at Na’diyya estimated tocontain at least 800 million barrels.

2009Commissioned R&D work in Australia, UKand Germany.

Benchmark studies on carbon emissionsand water usage commissioned.

Third pilot plant test run to analyse liquidsgenerated by the ATP process.

Fourth pilot plant test run to analyse gasesproduced in the retorting process.

Bankable Feasibility Study andEnvironmental Impact Assessment (EIA)submitted to Jordanian government.

Authoritative industry guide to oil shalepublished.

Sponsored three-year researchprogramme at Durham University’s EnergyInstitute into the use of spent shale toreduce the carbon footprint created bymining and oil shale processing activities.

Bankable Feasibility Study accepted by theJordanian government.

Commissioned oil upgrading test work inNew York in Chicago.

Environmental Impact Assessment formallyaccepted by the Jordanian government.

High level delegation from majorshareholders visits Jordanian sites.

2010Series of factsheets published on variousaspects of the Al Lajjun project.

Oil upgrading tests show the technical andcommercial viability of manufacturing highgrade synthetic crude oil (SCO) and arange of finished products.

Jordan Energy & Mining presentation on AlLajjun sparks regional interest at MENAconference on energy security, showingthe potential for further projects.

Published oil shale reserves statement thatmeets Canadian NI 43-101 requirements.

ThyssenKrupp Group formally appointedas technical partner on the Al Lajjun project.

Formal statement meeting ‘NI 51-101Standards of Disclosure for Oil and GasActivities’ giving ‘2C’ Best Estimate at 159million barrels.

Top level delegation from technicalpartners ThyssenKrupp Group and leaddebt financing partner KfW Bank visitJordan in support of JEML and meet withthe Minister of Energy and MineralResources, the Director General ofJordan’s Natural Resources Authority,Chairman of the Jordan Investment Boardand Chairman of the Social SecurityInvestment Unit, as well as the ExecutiveBoard of the German Jordanian Universityin Amman.

Signing ceremony and reception hosted byPeter Millett, the British Ambassador toJordan, and attended by 150 dignitariesincluding Dr Khaled Toukan, Jordan’sMinister of Energy & Mineral Resourcesand HE Dr Maher Hijazin, Director of theKingdom’s Natural Resources Authority.

Outlook


2020Phase 2 plant goes live bringing productionto 22,000bpd.

2026Phase 3: Full-scale production at Al Lajjunplant with production at 38,000bpd.

2013Fundraising.

Staff build up and trainingRevise Environmental Impact Analysis (EIA)for additional Na’diyya block.

Additional exploration drilling at Na’diyya toconfirm test drilling findings.

2014Completion of Front End EngineeringDesign (FEED) process.

Finalisation of project financing (debt andequity) from investors including exportcredit institutions.

Formal appointment of Engineering,Procurement & Contract (EPC) partner.

Construction of 4,000bpd plant begins.

Explore opportunities for new ventures inEgypt, Turkey and Morocco.

2015Build up and training of operational staff.

Construction activities and initialcommissioning of supporting infrastructure.

2016Finalise construction and conduct test runsof mine and plant.

First commercial production at Al Lajjun asphase 1 plant comes fully on stream andramp up to 38,000bpd productioncommences.

13

“It is becoming increasingly clear that global conventionaloil production will never exceed 100Mbpd, and may in fact have peaked already, whilst growing demand willcontinue to support prices at the current level or evenhigher. Alternative sources of liquid hydrocarbons musttherefore be found and we believe oil shale, which is inplentiful supply around the globe, is an attractive andviable solution.”Richard Savage, Head of Energy Research, Mirabaud Securities

The story so far


Two of the JEML founders, Christopher Morgan and Chris Nurse, have been heavilyinvolved in the Jordanian energy sector from 2000 to the present day, providingconsulting services to the mining and oil and gas sectors. Consequently, they know thecountry well, understand how it operates and, importantly, have forged strongrelationships with key industry figures.

When the oil price broke through the $50 a barrel barrier in 2005, the Ministry of Energyand Mineral Resources (MEMR) asked Christopher Morgan to suggest how Jordan’ssignificant oil shale resources could be developed.

The partners’ recommendations led to the MEMR developing a strategy, supported bythe Government of Jordan and the Natural Resources Authority (NRA), of open biddingfor oil shale bearing ground, which came into effect in 2006.

David Pedley, Munther Akroush and Eike von der Linden joined Christopher Morgan andChris Nurse in establishing Jordan Energy & Mining in 2006. It was invited by the NRA tobid for oil shale concession areas along with 12 other organisations.

A successful bidJEML’s tender was accepted and the company signed a Memorandum of Understandingfor Al Lajjun on 5 November 2006.

From the start, JEML was determined to work with only the leading names in their fields –such as the renowned engineering firms AECOM/UMATAC, ThyssenKrupp Polysius andLahmeyer - to ensure the best outcome for its stakeholders.

Seed financing was secured from RAB Capital plc funds, an investment managementcompany with a reputation for spotting winners among early stage junior naturalresources ventures.

“Oil shale is thesaviour ofJordan'seconomy. Thecost of extractingoil shale inJordan would be around $1billion, which isonly 22% of theKingdom's $4.8billion oil importsbill.”Mamdouh Salameh,International Oil Economist andConsultant on Oil and Energy,World Bank - May 2012

Jordan

0102

03

Aqaba

Quweira

Ma’an

Shaubak

Tefia

Karak05

06

Amman

SaltEl Azraq

As Safawi

AR Ruwashid

Mafraq

Zerqa

Ajlun

Irbid

Ramtha

Israel

Saudi Arabia

Gaza Strip

WestBank

Egypt

Dead Sea

01

02

03

04

05

06

07

07

NORTH

04

Kms

0 1 2 3

25

250

0

50m

50km

No East_Pal North_Pal1 236000.062 1074000.0002 236000.062 1067771.1313 234299.964 1067772.0954 234299.964 1062500.000 5 232250.985 1062500.000 6 232250.979 1064000.000 7 231300.234 1064000.000 8 231300.000 1065800.000 9 232100.000 1065800.000 10 232100.000 1066999.291 11 231497.327 1069000.00012 231751.319 1070950.34213 233577.194 1071426.32814 234112.611 1071257.68715 234573.272 1072529.40216 234582.832 1073274.12817 234030.404 1073099.75618 233803.436 1072801.23119 231387.878 1072797.86820 231387.782 1074000.000

3 2

120

19 18

17 16

15

1413

12

11 10

98

7 6

5 4

1

2

4

3

No East_Pal North_Pal1 269850.00 1042000.002 269850.00 1045400.003 279400.00 1045400.004 279400.00 1042000.00

Area Coordinates

Area Coordinates

The story so far

15

Tests bear fruitJEML has exclusive use of the modern and energy efficient ATP technology for itsoperations in Jordan. In the period 2006 to 2009 Jordan Energy & Mining conductedpilot plant test runs for a total of 300 tons of oil shale, which produced some 200 barrelsof shale oil. The shale was treated in partner UMATAC's ATP test plant.

The test results were extremely positive in terms of capturing the oil and other energyproducts such as fuel gas and steam. The spent shale left after oil extractiondemonstrated excellent properties in being able to neutralise the sulphur dioxide andother acidic products discharged during the process.

A comprehensive Pre-Feasibility Study (PFS) was presented to the MEMR and NRA inMay 2007. This clearly showed that the combination of Al Lajjun oil shale and ATPtechnology made the project technically feasible and economically viable with breakevenof full costs when oil prices hit around $40 to $50 per barrel and good returns whenprices exceed $60 to $70 per barrel.

In September 2007 the Jordanian government, impressed with progress, guaranteed vital water resources of 2.5Mm3 per year from a brackish aquifer for the JEML Lajjun resource.

In July 2009 lead consulting engineers Hatchcompleted a Bankable Feasibility Study(BFS), which demonstrated the technicaland economic viability of the project.

Upgrading work conducted by internationaloil processing groups UOP and ChevronLummus demonstrated the technical andcommercial viability of manufacturing bothhigh grade synthetic crude oil (SCO) and,for a modest incremental cost, a range offinished products from Al Lajjun shale oil.This gives Karak International Oil theflexibility to bypass refineries and sell highervalue finished products such as kerosene,diesel and gasoline more profitably into thewholesale market in Jordan andinternationally.

Attarat Um GhudranSiwaqaWadi MagharAl LajjunSultaniJurfAl Na’diyya

KIOconcessionarea Al Lajjun

KIO MOU area Al Na’diyya

Area 32.47km2

Area 35.1km2

The story so far


Respect for the environmentIn mid 2007 JEML commissioned environmental baseline and impact studies fromindependent environmental consultancy Citrus Partners. The Environmental ImpactAssessment (EIA) demonstrated the project’s compliance with all Jordan’s relevantenvironmental regulations including specific quality standards for air and noise emissions,raw water and wastewater quality and habitat protection. Health and safety standardswere also taken into account, as stipulated under the Kingdom’s Labour Law.

After thorough review by the Technical Committee of the Ministry of Environment, the EIAwas formally approved in November 2009. Jordan Energy & Mining’s environmentalmanagement and impact mitigation plans include ongoing monitoring of importantindicators such as water and air quality as the project progresses.

From rock to oil

17

TransformationOil shale is an organic-rich rock that, when heated to 550°C, yields oil. The rock wasformed around 50 million years ago when algae-rich sediments collected in swamps andlakes and solidified. Over time the organic matter in the sediments has been transformedinto kerogen, a waxy organic material. When oil shale is heated the kerogen vaporisesand can be cooled or distilled to produce a range of liquid oil products.

Proven extraction methodsShale rock is extracted by conventional open cast mining using front-loading shovels andtrucks and transported to the production facility. The stripping ratio (the relationshipbetween waste removed and oil shale mined) at Al Lajjun is particularly favourable atabout 1:1.

Processing technologyThere are more than 60 oil shale processing technologies but JEML opted to employ theAlberta Taciuk Process (ATP), which has a 35-year track record and, as a recent studyconfirms, is the best available technology for Jordanian oil shale. This features a uniquethermal process and hydrocarbon cracking system for separating and extracting waterand organic substances from host solids.

Under the current ramping up scenario to 38,000bpd plant, the initial plant will be a single250tons/hr ATP retort that will simultaneously extract and primary upgrade the oilrecovered from the oil shale. The retort is a multi-compartmented rotating process thatachieves:

• Heat exchange to preheat and dry incoming feed• Thermal reactions to recover light hydrocarbons (shale oil)• Combustion of by-product carbon (coke) as the primary heat source, which means it is

extremely energy-efficient.

$19Global finding and developmentcost per barrel of conventional oil

Source: BMO Oil & Gas Study - July 2011

$8KIO finding and developmentcost per barrel for initial4,000bpd plant.

Source: Hatch update study - 2012

Successful pilot plant test runsJEML has exclusive rights to the use of theproven Alberta Taciuk Process (ATP) oilshale extraction technology at its sites inJordan. The effectiveness of this method,which has a 35-year track record, wasdemonstrated in three highly successful pilotplant test runs between December 2008and July 2009 at manufacturer UMATAC’stest plant in Calgary, Canada. Some 150barrels of shale oil were produced and theliquids, oil and gases produced by theprocess thoroughly analysed.

From rock to oil


There are many aspects of ATP thatmake it a superior technology:

EffectiveThe process delivers high kerogen oil yields.

ReliableThe retort’s simple, robust design and lackof moving parts for the mechanical transferof solids minimises the risk of breakdown.

EfficientSolid-to-solid heat transfer optimisesenergy use.CleanEmissions meet strict environmentalstandards.

ProfitableBy-products of ash and sulphur generatedfor use in Jordan’s construction andfertiliser industries respectively, creatingadditional revenue streams.

ProvenThe Stuart Oil Shale Project in Queensland,Australia deployed an ATP retort tosuccessfully produce over 1.5m barrels ofshale oil between 2000 and 2004.

VersatileThe retort’s simple horizontal designenables it to handle both fine and largematerial.

Potential for energy self-sufficiencyNo external power or heat required.

Environmentally-responsibleMinimal water required for the treatmentprocess.

Excess Steam toPower Generation

Excess Steam toPower Generation

PowerGeneration

LPG(Future)

LFO

Sulphur

Sour Gas

HeavyEnds

Combustion AirTo theCementIndustry

Flue Gas toAtmosphere

ATP OilRecovery

UnitUpgrading

PowerOffgas

Compression& Sweetening

Light EndsRecovery

Sulphur BlockSpent Shale

Heat Recovery

Flue GasTreatment

Mining andMaterialHandling Preheat Retort

Sour Gas

From rock to oil

19

How the ATP process works:In preparation for the ATP process theshale is first crushed to ≤10mm pellets.

FinishingGas and hydrocarbon vapour iscondensed and distilled into raw naphthaand medium shale oil, as well as a heavyoil product that is re-treated to feed intothe medium oil product. Produced oil istransferred to storage tanks prior totransportation to a refinery for furtherprocessing into fuel products.

The shale lifecycleSpent shale has a variety of uses such asthe production of asphalt and cement,which adds value to mining projects.

Waste disposalTo minimise environmental impact,unwanted spent shale will be returned tothe mine, covered with the original, storedoverburden and landscaped to blend inwith its desert setting. A clay lining in themine will guard against any leakage intothe ground water supply.

1 The Preheat ZoneThe prepared shale is then fed into a pre-heating portion of the retort and thetemperature increased to approximately250°C.

2 The Retort ZoneShale is transferred to the reaction zone ofthe retort, heated to 500 - 550°C. At thistemperature the kerogen in the shaledecomposes into gas, hydrocarbonvapour and coke.

3 The Combustion ZoneThe spent retorted shale is then heatedfurther to 750°C by the injection of air toassist in burning the residual carbon. Thishot combusted shale is then used to pre-heat the incoming feed shale.

3. Combustion

ZoneCooling Zone

2. Retort Zone

1. Preheat Zone

Flue Gas

Feed

Spent SolidsHeat Transfer Combusted Solids

Combustion Air

Hydrocarbon Vapours

Auxillary Burner

Cooling Zone Solids

Preheat Steam

ThyssenKrupp engineeringsection of 500tph ATP retort

JordanA kingdom rich in resources


Energy-related imports currently account for up to 20% of Jordan’s GNP. Difficulties withsupply could put it at a disadvantage, economically and strategically. Yet Jordan sits onthe world’s 4th largest supply of oil shale, which has been proven to be a technically andcommercially viable energy source.

Oil shale will play a major role in the kingdom’s future. If its abundant reserves aredeveloped, the country could transform from an importer to an exporter of oil and energy.

The world’s conventional easy-to-access liquid oil reservoirs are declining and are notbeing replaced fast enough by alternative oil energy sources. Despite this, demand for oilcontinues to increase and will soon exceed conventional oil production on a regular basis.But plentiful global oil shale resources – the world’s largest untapped liquid hydrocarbonresource - can extend the world’s oil supply.

Oil shale in JordanWith proven and projected reserves and resources in Jordan in excess of 100 billionbarrels of oil, JEML’s focus within the region represents an exciting, yet low risk, long-terminvestment opportunity.

Licence areasAl Lajjun is located in a desert region that receives 300 to 400mm of rainfall a year. Thesite has good access to infrastructure including water supplies. Shale from the Al Lajjundeposit has excellent characteristics:

• Near the surface (<30m waste covering around 30m of oil shale)• High oil content (>10%)• Low moisture levels (2-3%)• Containing high level of total organic material (>20%)• Thick seam with consistent quality (~30m) • A low stripping ratio (1:1)

100billion barrels of oil contained inoil shales in Jordan (conservativeestimate)

Managing Director’s review


Jordan Energy & Mining and itsoperating subsidiary KarakInternational Oil are proud to beworking with the Kingdom ofJordan to exploit its oil shaledeposits, which represent asignificant and much-neededsource of indigenous energy forthe Kingdom. Drawing on ourexpertise and experience of themining and oil sectors, Jordanhas the opportunity to reduceits dependence on oil and gasimports to meet its dailypetroleum consumption ofaround 120,000 barrels per day.

While final details of theConcession Agreement werebeing agreed, we made gooduse of the time to lay theproject's foundations.Consequently, on signing, wewere able to hit the groundrunning and I am satisfied withthe progress made over thepast 18 months:

23

Patience rewardedThe highlight of 2011 was undoubtedly the long-awaited signing of the ConcessionAgreement for Al Lajjun in March and its ratification by the Jordanian parliament in July ofthat year. Until this point, we did not have the right to develop or exploit the area.Consequently, this was welcome news indeed for our shareholders who had beenpatiently waiting for several years for their investment to become a valuable asset.

This achievement was marked by a formal signing ceremony attended by around 150dignitaries representing shareholders, service providers, lawyers and governmentrepresentatives. Peter Millett, the British Ambassador to Jordan, honoured us by hostinga reception to celebrate the milestone.

The Jordan Energy & Mining team had been working hard behind the scenes planning forthis moment, which meant we were well advanced on several key fronts such as theselection of a bank to seek financing, project planning and staffing.

However, our efforts to secure financing to fund the next stage of development werehindered somewhat by the upheaval of the Arab Spring. While the unrest has not directlyaffected Jordan, which remains relatively stable, the influx of refugees from Iraq and, mostrecently, Syria has strained the Kingdom’s economy and coloured potential investors’perceptions of the region.

Against this backdrop, we acted on our advisers’ advice to re-phase the project andthereby reduce financial risk to make the project a more appealing proposition forcautious investors. We commissioned Hatch to update our business case starting withthe ATP 250 plant and it was gratifying that their report validates our approach andconfirms our own calculations.

Board restructureSince our last Review, we have changed the profile of the Jordan Energy & Mining board.Dr Peter Klaus and Peter Cassidy stood down and, on behalf of my fellow directors andshareholders, I would like to thank them both for their valuable input. We were delightedto welcome three new non-executive directors to join Sentient’s appointed representativeBen McKeown and bring fresh impetus to the board:

• Paul Ellis has over 35 years’ experience in the areas of exploration, production, development and management of international oil and gas ventures, recently serving as CEO of Serica.

• Dynamic minerals/energy geologist Toby Pierce brings a wealth of international financial contacts.

• Well-known industry figure Richard Cottee has a formidable reputation in Australia and the Far East and will bring considerable creative flair to the Board.

“We have beenvery happy withthe commitmentand quality ofwork by JordanEnergy &Mining/KarakInternational Oilover the past fiveyears and lookforward toworking closelywith them todevelop thisimportant newventure to thebenefit of allparties.”Dr Maher Hijazin, former Director General of the NaturalResources Authority, Jordan –September 2011

Concession Agreement signed –September 2011Following extensive consultations andnegotiations with the Natural ResourcesAuthority (NRA) over two years, JEML’sConcession Agreement (CA) was signedinto law by the Jordanian Parliament andthereafter received a Royal decree.

Managing Director’s review


Continued government supportThe upheaval caused by the Arab Spring means energy independence has emerged asan issue of national security for Jordan. Energy officials have prioritised oil shale as key toweaning the country off energy imports, which cost Jordan more than a quarter of itsgross domestic product annually.

Demonstrating its confidence in our ability to develop oil shale, the Jordanian governmenthas awarded us an additional block at Na’diyya that, when fully drilled, will give us anasset base of over 1 billion barrels compared with our current 300m capacity.Comparable oil sands transactions regularly change hands for up to US $2 per barrel inthe ground so our venture has an exciting future once funding is in place to get the nextstage underway.

In the last quarter of 2012 we appointed Investec, which has strong oil and gas teams, asour lead broker. The bank was impressed by the project’s potential and with this seal ofapproval from an independent third party, we are confident about the outcome of thislatest funding round. This will allow us to make substantial progress in 2013 towardsbringing the Al Lajjun project to fruition.

Christopher MorganManaging Director Jordan Energy & Mining Limited

1.1billionEstimated barrels in awardedareas)

“Sustained highoil prices allowunconventionalresources tobecomeeconomicallycompetitive,particularly whengeopolitical orother ‘aboveground’constraints limitaccess toprospectiveconventionalresources”EIA World Energy Outlook 2009

Corporate socialresponsibility

25

Jordan Energy & Mining believes that inorder to meet its corporate objectives asuccessful company must accept itsresponsibilities as an internationalcorporate citizen, even where theseresponsibilities have not yet been made law.

Accordingly, JEML is dedicated tofollowing best practice in the areas ofcorporate governance, professionalbehaviour, labour relations, health andsafety, community relations and theprotection of the environment. That’swhy it has embraced both the IFC’sEquator Principles and the UN GlobalCompact.

For JEML, this is a matter not only ofgood corporate governance but also oflong-term viability as a company. Itsdirectors believe that only by treatingfairly its shareholders, employees,community stakeholders and theenvironment can the company achievesustainability.

Sustainable developmentKIO allocates US $75,000 annually to bespent on projects for sustainabledevelopment in Jordan.

reasonably practical for a company of itssize and stage of development.

JEML demands the strictest standards ofintegrity and professionalism from itsemployees and has procedures in place toprotect individuals who report unethicalbehaviour.

Health and safetyJEML and KIO are committed to protectingtheir workforce and the wider community.They will demand high safety standards atwork, conduct risk assessments andprovide all necessary resources, training andsafety equipment to ensure a safe workingenvironment based on internationalstandards of best practice.

The directors’ concern for workers’ healthgoes beyond preventing physical injury andfor this reason KIO will provide healthchecks and medical services designed toensure workers’ health is monitored andmaintained as appropriate during their timewith the company.

LabourAt JEML and KIO we believe that if acompany expects its employees to act withdecency and fairness, the company musttreat them the same way. It regardscompliance with the ILO Declaration ofFundamental Principles and Rights at Workas the starting point of its policies.

Recognising that fair employment mustbegin with fair recruitment, KIO appliesstrong principles of equality in selectingworkers – a commitment that is maintainedthroughout their employment.

Lastly, KIO invests in its workforce by notonly enhancing their work skills throughtraining programmes but also cultivatingskills and knowledge that can be appliedoutside their current jobs. This way JEML andKIO are creating a bank of expertise that willbenefit local communities after they have left.

CommunityGood relations between the company andthe communities in which it operates atnational, regional and local level are importantto us at JEML. We are determined tocontribute economically and socially to ourhost country, providing not only employmentopportunities but also expertise and advice.

Rather than make people dependent on us,we will give them the tools and resources tohelp themselves. We will consult with thelocal community and regional and nationalgovernment to ensure we meet real needs.

EnvironmentConcern for the environment before, duringand after our operations, is an integral partof JEML’s approach. We aim to developprojects that can become carbon-neutraland employ methods that result in the leastpossible damage to the environment. Eachemployee and contractor will be heldaccountable for managing the equipment,people, facilities and resources within theircontrol to minimise environmental impact.

Before we begin any project we ensure wehave a comprehensive rehabilitationprogramme for our sites to return them totheir original condition wherever possibleand, at the very least, to leave them safe,non-polluting and useable.

We wholeheartedly support the creation of amining site certification scheme and willseek accreditation once a scheme emergesthat has broad industry support.

Governance and ethicsJordan Energy and Mining believes itsresponsibilities to its shareholders can onlybe met through a culture of honesty,transparency and accountability. It iscommitted to achieving high standards ofgovernance and has chosen to implementthe guidelines of the Financial ServicesAuthority’s (FSA) Combined Code onCorporate Governance, as far as is

Meet the teamThe Board


Christopher MorganManaging Director

Christopher Morgan has over 40 years’experience in the mining, energy andenvironmental sectors. This includes 20years with Billiton International Metals(previously the metals arm of Shell) tooperating company Managing Directorlevel where he was involved in themanagement of large, open pit mineoperations in South America, Africa andlatterly in Central Asia with Western Mining Corporation.

From 1984 to 1988 he headed Shell’s OilShale and Tar Sands group globally.During this time he completed worldwideranking studies of oil shale resources, aBankable Feasibility Study on the Tarfayaoil shale resource in Morocco and plansfor a large European oil shale processingunit in The Netherlands.

Having held a succession of seniorcorporate and project management roles incoal, metals, environment and oil and gas,Christopher Morgan set up his ownsuccessful consultancy group specialisingin the natural resources and energy sectors.

Christopher is a Chartered Engineer, aFellow of the Institution of Materials,Minerals and Mining and holds anHonours degree in Mining Engineeringand a Master’s in Mineral ProductionManagement.

Chris NurseDirector and Company Secretary

Chris Nurse studied law at OxfordUniversity prior to joining the Londonpractice of accountants PriceWaterhouse where he specialised innatural resources industries.

In 1989 Chris set up his ownindependent consultancy practiceadvising clients on mining law policy andthe legal and financial aspects of duediligence for investment. A lawyer andchartered accountant, he has worked ona large number of major corporaterestructures, mining law reform projects,legal and privatisation studies and lent histechnical expertise to strengthenlegislative controls.

He is a Fellow of the Institute ofChartered Accountants in England andWales and a Member of the EnergyInstitute.

$66global breakeven cost per barrelof conventional oil from new fielddevelopments

Source: BMO Capital Markets Research - Oil & GasGlobal Costs Study - July 2011

$29cash operating costs per barrelfor initial 4,000bpd plant

Source: Hatch update study - 2012

Meet the teamThe Board

27

Ben McKeownNon-Executive Director

A partner with Sentient, theprivate equity group, BenMcKeown has spent his entirecareer in the natural resourcessectors, working in a variety of technical and commercialroles in both the mining andoil & gas industries. AChartered Engineer, Benholds a Bachelor ofEngineering (MiningEngineering) from the RoyalSchool of Mines, ImperialCollege, London and an MBAfrom IESE Business School inBarcelona, Spain.

Paul EllisNon-Executive Director

A highly experiencedinternational petroleumengineer, Paul Ellis has over35 years’ experience in theareas of exploration,production, development andmanagement of internationaloil and gas ventures forcompanies such as BP, Elf,Charterhouse Petroleum,British Gas and EmeraldEnergy.

He has held seniorappointments with severalmajor upstream oil and gascompanies and withindependent explorationcompanies, recently servingas CEO of Serica. Paul hasheld technical and financialresponsibility for new venturesand projects in more than 20countries.

He holds an MA EngineeringScience (Oxon) and is amember of the Society ofPetroleum Engineers.

Richard CotteeNon-Executive Director

Well-known industry figureRichard Cottee has more than20 years’ broad experience incommercial and managementroles in the resource andenergy sector. He has anenviable track record ofgrowing smaller companies,notably Queensland GasCompany, for which he isacclaimed for developing froma $20 million to a $5.7 billionconcern during his six-yearstint as managing director.

A lawyer by background,Richard holds an LLB (Hons)degree from the University ofQueensland and has strongconnections throughoutAustralia and the Far East.

Toby PierceNon-Executive Director

Toby Pierce worked as ametals/energy geologist withHunter Dickinson andKennecott Exploration beforejoining Tristone Capital inCalgary as director of oil andgas research.

Toby relocated to the UK twoyears ago to open a Londonoffice for GMP Securities thenset up his own consultancy inFebruary this year. During thisperiod he developed a wealthof international financialcontacts in both the miningand oil & gas sectors.Toby holds an MBA from theUniversity of Toronto.

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Meet the teamThe management team


Munther AkroushKIO Director, Jordan

Munther Akroush has morethan 24 years’ diversifiedexperience of the mechanical,petroleum, construction andenergy sectors. Following asuccessful commercial career,Munther spent 15 years asAssistant Director General ofJordan’s Natural ResourcesAuthority (NRA) in Amman.

A qualified MechanicalEngineer, Munther also holdsa Master’s degree inEconomics from Cal Poly.

Dr Eike von der LindenTechnical Director

Dr von der Linden has beeninvolved in the global miningindustry for more than 35years. He has considerableexperience in the technicaland financial management ofmining projects and hasworked as lead in projectdevelopment, independentadviser to financial institutionsand been involved in projectfinancing in the naturalresources industry. He hasalso acted as technical andfinancial adviser to severalnational and internationalcompanies.

John FraserOperations Manager

John Fraser joined JordanEnergy & Mining after asuccessful 15-year career atHuntsman during which hewas responsible for managingprocess and engineeringteams of over 100 people,leading manufacturing activityand driving continuousimprovement in plantperformance. This wasfollowed by five years’experience in developing newmarkets for co-products andcommercial sales in acommodity pricingenvironment. Consequently,he brings a wealth of technicalknowledge and practicalexperience of complexindustrial processescombined with soundcommercial skills.

John is a Chartered Engineerwho holds an Honoursdegree in ChemicalEngineering.

Mark PuckettManager – Project Finance

Mark Puckett is a seasonedfinance professional with asuccessful track recordfocused on major energy andmetals processing projects inthe Middle East. During his25-year City career he workedfor Bank of TokyoInternational, Bank ofMontreal, Bank of America,KPMG and German mortgagelender Hypo Real Estate.

His role at Jordan Energy &Mining is to co-ordinate andraise equity and debt financefrom prospective investorsand banking institutions tocover the cost of the FEEDprocess and, ultimately, to put all financing arrangementsin place.

Financial information

29

CAPEX by broad categoryThe initial capital cost of the project isexpected to be approximately $500million, broken down as follows:

The feasibility study financial analysis hasbeen prepared based on a capital structureof 60% debt at 7.5% interest and 40%equity. The project’s rates of return below.

First oil and power in 2016• 4,000bpd initial average production, rising to 22,000bpd in 2020 and 38,000bpd by 2026• 30-year mine life• Total production potential of around 300 million barrels of oil• Breakeven with oil prices at $50 per barrel• Respectable returns with oil prices at >$65 per barrel• Opportunity to sell finished products and high quality SCO at a 10% premium

Samer Al-MakhamrehGeology & ExplorationManager

Prior to joining Jordan Energy& Mining’s Jordan team,Samer Al-Makhamreh wasManager of Geology andExploration for Al-RajhiCement Co. Before that heheld the position of Head ofStudy Division and Deputy tothe Exploration Director forJordan’s Natural ResourcesAuthority.

A geological engineer, Samerholds an MSc in Geomaterialsfrom the University of London.

OPEX by broad categoryThe annual operating cost is expected toaverage US $38m in the first four years andUS $270m in years 10 to 30, expressed in2012 dollars. This is equivalent to aboutUS $29/bbl in the first four years and US$23/bbl in the remaining years. The piechart shows the breakdown by component:

2%3%3%3%

4%

17%

33%

35%

32%

17%17%

13%

12%

5% 4%

ATP & oil recovery

Mining

Upgrading plant

Site wide common services

Owners cost

Power generation

OPP & material handling

Balance of plant, utilities, ore prep, freight

ATP train

Others (Engineering contingency)

Power plant

Hydrogen production plant

Sulphur recovery unit and storage

Mine development

Water treatment plant

An attractive investment proposition

At 4,000bpd At 22,000bpd At 38,000bpd(phase 1) (phases 1 & 2) (phases 1, 2 and 3)NPV10 $250m NPV10 $1,774m NPV10 $2,310mIRR 15.9% IRR 22.8% IRR 23.2%

Figures post tax project economics @ $90/bbl

Fixed Assets

Tangible Fixed Assets at Cost

Less: Depreciation

Net

Current Assets - Debtors

Other Debtors

Prepayments and accrued income

Total Debtors

Cash at Bank and in Hand

(including deposits)

Total Current Assets

Current Liabilities - Creditors

Convertible Loan Notes

Trade Creditors

Taxation

Accruals

Other Creditors

Total Creditors

Total Current Liabilities

Net Current Assets / (Liabilities)

Net Assets / (Liabilities)

Represented By:

Called-up Share Capital & Premium

Profit & Loss Account Deficit

Total Shareholders' Funds / (Deficit)

The balance sheet details have been extracted from the audited financial statements. However, this presentation has not been audited. Acopy of the audited financial statements is available from the company on request.

Jordan Energy & Mining GroupSummary financial statements


March 2008£000s

42.2

(23.6)

18.6

33.3

8.2

41.5

55.6

97.1

1,300.0

13.6

21.7

86.6

26.6

1,448.5

1,448.5

(1,351.4)

(1,332.8)

1.0

(1,333.8)

(1,332.8)

March 2009£000s

76.9

(32.7)

44.2

114.8

183.9

298.7

10,931.0

11,229.7

-

1,711.3

-

478.0

-

2,189.3

2,189.3

9,040.4

9,084.6

16,482.1

(7,397.5)

9,084.6

March 2010£000s

66.5

(42.4)

24.1

64.1

16.1

80.2

2,801.5

2,881.7

-

77.7

-

279.6

4.1

361.4

361.4

2,520.3

2,544.4

16,482.1

(13,937.7)

2,544.4

Dec 2010£000s

72.5

(50.5)

22.0

40.5

16.9

57.4

1,513.8

1,571.2

-

51.3

-

373.3

4.2

428.8

428.8

1,142.4

1,164.4

16,482.1

(15,317.7)

1,164.4

Dec 2011£000s

77.8

(63.2)

14.6

33.6

18.1

51.7

446.0

497.7

-

60.6

-

559.5

4.4

624.5

624.5

(126.8)

(112.2)

16,482.1

(16,594.3)

(112.2)

Balance Sheet

31

Project expenditure

Financial Costs- Bank Charges & Exchange Variances Relative to Sterling

Depreciation & Profits on Disposal

Taxation

Net Interest Paid / (Received)

Net Expenditure

Total to March 2008Conceptual

Study

£000s

1,222

3

24

(12)

97

1,334

April 2008 toMarch 2010

BankableFeasibility Study

£000s

14,127

(1,211)

19

12

(343)

12,604

March 2010 toDecember 2011Concession and

pre-development

£000s

2,661

29

21

-

(2)

2,709

Total toDecember 2011

£000s

18,010

(1,179)

64

0

(248)

16,647

Founders and Management

Munther Akroush

Eike von der Linden

Christopher Morgan

Christopher Nurse

David Pedley

Total Founders & Management

Institutional Shareholders

RAB Capital

(Special Situations (Master) Fund & Octane Fund)

Sentient Group

(Sentient Executive GPII Ltd and GPIII Ltd)

J P Morgan

(Two funds)

Institutional and Other Shareholders

(each individually holding less than 5%)

Total Shares in Issue

Options have been awarded to founders and personnel over 360,367 shares. The board has been given authority by the shareholders to issue optionsover a further 140,578 shares to executives or staff.The table above represents the beneficial ownership of shares to the bestof the company's knowledge and belief.

% of Total

1.7%

2.0%

11.7%

2.3%

2.0%

19.7%

23.6%

37.8%

8.2%

10.7%

100%

Shares

85,794

102,242

580,867

115,594

102,242

986,739

1,183,316

1,891,547

408,653

539,197

5,009,452

Profit & Loss Account

Project Expenditure

Shareholdings at December 2012

£000s619715

6,0646,5401,3801,329

NotesAudited Profit & Loss figures for the respectiveyears are shown below. The table above providesan analysis of the profit and loss but this analysishas not been audited.

Audited Lossfor the period to 31st March 2007for the year to 31st March 2008for the year to 31st March 2009for the year to 31st March 2010for the 9 months to 31st December 2010for the year to 31st December 2011

A copy of the Audited Accounts is available fromthe company on request.

Studies

Owner’s team

Office & general

Professional fees

Jordan works

63%15%

9%

8%5%

100% of the inks used are vegetable oil based 95% of press chemicals are recycled for further use and on average99% of any waste associated with this production will be recycled.

Whilst this information is given in good faith based on the latest information available to Jordan Energy and MiningLimited (JEML) and its Directors, no warranty or representation is given concerning such information, which mustnot be taken as establishing any contractual or other commitment binding upon JEML or any of its Directors

Designed and printed in the UK by BMDA 01992 552500

JEML Advisers

AuditorsPricewaterhouseCoopers LLP9 Greyfriars RoadReadingRG1 1TG

LawyersK&L GatesOne New ChangeLondonEC4M 9AF

BankersHSBC19 St. George StreetHanover SquareLondonW1S 1FN

Public RelationsPelham Bell Pottinger5th FloorHolborn GateLondonWC1V 7QD

CopywritingWords etc LimitedBelvedere Court58 Pinner RoadWatfordWD19 4EDwww.melaniesilver.co.uk

JEML Offices

UK Registered OfficeSpa House18 Upper Grosvenor RoadTunbridge WellsKent TN1 2EPUnited Kingdom

Tel: +44 (0)1892 509950Fax: +44 (0) 1892 686119E Mail: [email protected]: www.jeml.co.uk

London Office33 St. James’s SquareLondon SW1Y 4JSUnited Kingdom

Tel: +44 (0) 203 178 4511Fax: +44 (0) 203 178 4821

Jordan OfficeSixth CircleCrowne Plaza Trading Centre1st Floor, Office No. 5P O Box 2959Amman 11821Jordan

Tel: +962 65561905Fax: +962 65560303Mobile: +962 777498015Email: [email protected]: www.kio.jo

jordan energy and mining limited - melanie silver

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