Ferndale An Emerging Coal Producer · 2. Peer Group Index Includes NuCoal Resources Limited,...

An Emerging Coal Producer Investor Presentation May 2012

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2 Investor Presentation – May 2012

Overview 1


Significant, high quality JORC resource of 1.6 billion tonnes across 3 key projects in well renowned coal basins

Investment Highlights Coalworks is one of Australia's most attractive junior coal companies and is quickly moving closer to delivering on its strategy of building an independent coal producer

Clear path to production; expected to commence in 2015

Exceptionally strong board and management who are the founders of Coalworks and are invested alongside other shareholders

Demonstrated track record of project advancement and share price appreciation

Well funded with over A$30m in net cash which will take Coalworks through to completion of bankable feasibility on both Vickery South and Ferndale


Project Summary

Asset Vickery South Ferndale Oaklands North

Ownership 51%¹ 42.5%2 100%

Location Gunnedah Basin Hunter Valley Southern NSW

Coal Type Semi Soft Coking and Thermal Coal Metallurgical and Thermal Coal Thermal

Mine Type Open Cut Open Cut and Underground Open Cut / Coal to Liquids

JORC Resource 58.5 Mt* 743 Mt* 822 Mt*

Infrastructure

~2km overland conveyor, ~12km rail spur to main rail line,

~325km to Port Waratah

Similar approach to Vickery South project is ~5km from main rail line,

~125km to Port Waratah

First production 2015 2016

Partners Itochu Whitehaven / Boardwalk Synthesis Energy Inc

Nearby mines Vickery (Whitehaven) Mangoola (Xstrata)

Coalworks has a diverse portfolio of high quality projects

1, 2. Assumes JV partners fulfil their obligations under the current agreements


Key Metrics Substantial Shareholders³

Coal Types, Production and Resources

Ticker CWK

Share Price (as at 15 May 2012) A$1.03

Issued Shares 171.6m

Market Capitalisation (undiluted) ~A$176m

Available Cash +A$30m

Coal Types Semi Soft Coking Coal and Thermal

JORC Resource (asset level) 1,623Mt

JORC Resource (equity basis) 1,167Mt

Holder Percentage Held Boardwalk Resources / Whitehaven Coal Limited 17.3%

Noble Group 9.0%

Platinum Management 8.7%

Board and Management 8.5%

Macquarie Group 7.4%

Acorn Capital 5.3%

Corporate Snapshot

Source: ASX and company filings

3. As at 15 May 2012

17.3%

8.5%

9.0%

7.4%8.7%5.3%

2.9%

40.9%

Boardwalk Resources

Board and Management

Noble Group

Macquarie Group

Platinum Management

Acorn Capital

Other instititutions

Retail / High Net Worth Individuals


Board Senior Management

Mr. Wayne Mitchell Independent Non-Executive Chairman

Mr. Mitchell is a qualified accountant He has over 30 years senior management experience in the natural

resources sector, both in Australia and SE Asia

Dr. Andrew Firek Managing Director/CEO

Dr. Firek has been involved in coal exploration, mining and processing industries at executive and operational levels for over 20 years

Mr. Ian Craig Non-Executive Director

Mr. Craig is a mining engineer who recently retired from Peabody as MD and Group VP in February 2008 He is currently a Director of MISC and Dingo

Mr. David Smith Head of Commercial and Development

Mr. Smith was previously an investment banker for 15 years He was most recently at BBY Limited where he was Head Equity

Capital Markets and on the Executive and Risk Management Committee

Mr. Geoff Kidd Chief Operating Officer

Mr. Kidd has had extensive experience in the coal industry He was recently NSW Coal Business Manager at Connell Hatch

and previously MD at Sedgman & Associates for over a decade

Mr. David Oastler Chief Financial Officer

Mr. Oastler is a Charted Accountant with over 25 years experience with SME’s, listed and private companies & governmental agencies He is also CFO of Orpheus Energy Limited

Mr. Nathan Bartrop Company Secretary

Mr. Bartrop is a Chartered Secretary and a member of CSA He has had previous experience as a Listings Advisor with ASX,

working in litigation and dispute resolution, as well as tax consulting

Mr. Chris Hagan Senior Advisor

Mr. Hagan has over 25 years experience advising publicly listed

companies on legal and corporate affairs He co-founded both Allegiance Mining NL and Zelos Resources NL

Mr. Steve Harper Vickery South Project Manager

Mr. Harper has 35 years experience in project management, study management, design management and engineering design, in the field of building, infrastructure, mining, petrochemical and industrial

Mr. Matt Morgan Exploration Manager

Mr. Morgan has had 15 years experience in coal, gold, antimony and iron ore mining & exploration, both Open Cut and Underground Previous managerial roles with BHP Billiton, Rio Tinto and Theiss

Board and Management


On 7 May 2012, Coalworks received an unsolicited takeover offer from Whitehaven Coal Limited at $1.00 per share The board recommends that shareholders REJECT Whitehaven’s offer and TAKE NO

ACTION The board believes that the offer price materially undervalues Coalworks and does not

reflect the inherent value of the company, its growth prospects or significant synergistic benefits of its assets to Whitehaven The board also believes the offer is opportunistic and has been timed to coincide with a

separate attempt to destabilise Coalworks by calling a General Meeting to remove Coalworks’ Independent Chairman and Managing Director / Chief Executive Officer. The board will keep shareholders appraised of any further developments and will

provide shareholders with a formal recommendation on the proposal in time for shareholders to make an informed decision

Coalworks’ current board is best placed to independently assess the Whitehaven offer; the board recommends that shareholders VOTE AGAINST the Macquarie resolutions and REJECT Whitehaven’s unsolicited and inadequate offer

Update on Corporate Actions

Unsolicited takeover offer


Coalworks’ current board is best placed to independently assess the Whitehaven offer; the board recommends that shareholders VOTE AGAINST the Macquarie resolutions and REJECT Whitehaven’s unsolicited and inadequate offer

Update on Corporate Actions

General Meeting

Macquarie Bank Limited has requisitioned a general meeting seeking removal of the Independent Chairman, Wayne Mitchell and Managing Director / Chief Executive Officer, Andrew Firek and replace them with persons nominated by Macquarie

The two persons nominated by Macquarie for appointment to the board of Coalworks are unknown to Coalworks and would need to spend considerable time understanding the Company, and its assets. Neither of the nominated board candidates have put forward a statement to the Company to outline their intentions as directors

The board recommends that shareholders VOTE AGAINST Macquarie’s resolutions If the Macquarie resolutions are successful, Coalworks’ board will be entirely

comprised of directors nominated by Whitehaven and Macquarie - a board comprising 3 directors each nominated by Macquarie and Whitehaven /

Boardwalk is not able to independently and fairly assess the offer that has been made by Whitehaven

- Coalworks’ current board is best placed to ensure that decisions made by the board are in the best interests of all shareholders and not just Macquarie and Whitehaven / Boardwalk


Share Price Performance Coalworks has demonstrated significant share price out performance over the past financial year

Source: Bloomberg Notes: 1. Coalworks’ performance is adjusted for the in specie distribution of Orpheus Energy Limited 2. Peer Group Index Includes NuCoal Resources Limited, Bandanna Energy Limited, Stanmore Coal Limited, Endocoal Limited, Rey Resources Limited and MetroCoal Limited

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Jul 1

1

Aug

11

Sep

11

Oct

11

Nov

11

Dec

11

Jan

12

Feb

12

Mar

12

Apr 1

2

May

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Shar

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Perf

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(reb

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-11%S&P ASX 300 Energy Index

-24%S&P ASX 300

Metals & Mining Index

-45%Peer Group

Index

+82%Coalworks


Completion of Bankable Feasibility Study

Coalworks has constructed a well planned and comprehensive path to production for its key projects, Vickery South and Ferndale

Key Milestones and Objectives

Vickery South

Q4 2012

Receipt of environmental and other approvals

Port and logistics solution

Q1 2013

Production

2015

Completion of Bankable Feasibility Study

Ferndale

Q1 2013

Receipt of environmental and other approvals

Q4 2013

Production

2016


Vickery South Project 2


Vickery South Project Highlights

Outstanding position within the renowned Gunnedah Basin, NSW ‒ directly adjacent to Whitehaven’s Vickery Project ‒ rail line can be linked directly to the permit, providing access to infrastructure and low transport costs

High quality coal with attractive mine economics ‒ 58.5 Mt JORC resource; multi seam deposit

‒ predominantly semi soft coking coal; some thermal coal ‒ access to rail; low transport costs; suited to truck and shovel operation ‒ average yield on washing coal: 84% ‒ ash content: SSCC @ 7.7% (a.d); export thermal @ 5.9% (a.d.) ‒ coal handling and preparation plant on site

Access to railway; Excellent quality coal

Clear path to production with first coal expected in 2015 ‒ estimated production of 3 Mt per annum ‒ pre-feasibility study completed ‒ global partner in Itochu (49% owner) ‒ bankable feasibility study in progress and to be completed by December 2012


Vickery South Project Map


Vickery South Project Development Timetable


Ferndale Project 3


Ferndale Project Highlights

743 Mt JORC Resource; Metallurgical and Thermal Coal ‒ approximately 11kms from Xstrata’s Mangoola Mine ‒ close proximity to Coal & Allied’s Bengalla mine ‒ close proximity to BHP Billiton’s Mt Arthur mine

High quality coal with attractive mine economics ‒ potential to deliver significant production ‒ low sulphur content of the coal makes it attractive for blending ‒ rail line intersects the permit

Valuable asset; large resource

Clear path to production with first coal expected in 2016 ‒ Whitehaven Coal required to fund the project through completion of bankable feasibility study on the open-cut

segment of the mine and through to pre-feasibility on the underground part of the mine ‒ drilling of stages 1 and 2 complete with stage 3 nearing completion


Ferndale Project Map


1 Assume the results of the PFS finished end 2012, adequate to submit an EIS 2 Assume EIS is 24 months 3 Assume construction over 12 months sufficient for processing 4 Detail finalised as exploration results confirmed & PFS commences in regard to CHPP and infrastructure

Ferndale Project Development Timetable


Ferndale Project Drilling Map and Geological Model


Oaklands North Project 4


Oaklands North Project Highlights

822 Mt JORC resource, ease of mining ‒ able to mine using conventional open cut methods and potentially suitable for unconventional mining methods

Coal-to-Liquids potential ‒ coal is ideal for gasification ‒ better located than most other potential coal-to-liquids project in the major Australian population centres ‒ currently assessing optimal plant size and capacity

One of Australia’s best positioned coal-to-liquids projects with a large resource and access to world leading technology

Quality Partner ‒ NASDAQ listed Synthesis Energy Inc is partner to a strategic alliance allowing Coalworks to utilise its valuable

U-GAS gasification technology ‒ the Zao Zhuang Plant in Shandong Province is a commercial example of successful implementation of such

technology


Oaklands North Project Map


Contacts

Wayne Mitchell

Independent Chairman

T: +61 2 9922 1344

E: [email protected]

Dudley White

Head of Development and commercial

T: +61 2 8999 1002


David Smith

Head of Commercial and Development

T: +61 2 9922 1344


Garry Nickson

Head of Development and commercial

T: +61 2 8999 1004



COMPETENT PERSONS STATEMENT

Ferndale Project

The following statements apply in respect of the information in this presentation that relates to Exploration Results and Mineral Resources for the Ferndale Project: The information is based on, and accurately reflects information compiled by Mr Stephen Hyland, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hyland is a geologist employed as Principal Consultant by Ravensgate, mineral industry consultants. He has the relevant experience in relation to the coal deposits being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Identified Mineral Resources and Ore Reserves. Mr Hyland has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Vickery South Project and Oaklands North Project

The following statements apply in respect of the information in this announcement that relates to Exploration Results and Mineral Resources for the Vickery South and Oaklands North Projects: The information is based on, and accurately reflects information compiled by Mr Matt Morgan, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Morgan is a geologist employed by Coalworks Limited. He has the relevant experience in relation to the coal deposits being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves. Mr Morgan has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears.

DISCLAIMER

The information in this presentation does not purport to contain all the information that may be required to evaluate the prospects of Coalworks and in particular only discloses material information within the knowledge of Coalworks.

You should seek independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to the information and rely on your own due diligence and analysis accordingly. Other than to the extent required by law (and only to that extent) we disclaim all liability and make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility nor liability for, the information provided.

Appendix Vickery South 58.5 Mt JORC resource, including 48 Mt Measured, 0.1 Mt Indicated and 10.4 Mt Inferred Resource

Ferndale 743 Mt JORC Resource, including 443 Mt Open Cut Inferred Resource and 300 Mt Underground Inferred Resource

Oaklands North - 822Mt JORC thermal coal resource, including 121 Mt Measured, 572 Mt Indicated and 129 Mt Inferred Resource

Ferndale An Emerging Coal Producer · 2. Peer Group Index Includes NuCoal Resources Limited,...

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