For personal use only Indonesian Coal Production …2012/03/21 · For personal use only 2 INDONESIAN COAL PRODUCTION AND EXPLORATION – INVESTOR PRESENTATION Executive Summary Orpheus

Indonesian Coal Productionand Exploration

Investor Presentation – March 2012

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1 INDONESIAN COAL PRODUCTION AND EXPLORATION – INVESTOR PRESENTATION

Certain statements contained in this presentation, including information as to the future financial or operating performance of OrpheusEnergy Limited (“Orpheus” or “OEG”) and Orpheus Energy Group Pty Ltd (“OEGPL”) and its projects, are forward looking statements.

Such forward looking statements may include, among other things, statements regarding targets, estimates and assumptions in respect ofmineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, operating costs and results,capital expenditures, and are or may be based on assumptions and estimates related to future technical, economic, market, political, socialand other conditions; are necessarily based upon a number of estimates and assumptions that, while considered reasonable byOrpheus/OEGPL, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties andcontingencies; and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially fromestimated or anticipated events or results reflected in such forward looking statements.

Orpheus/OEGPL disclaims any intent or obligation to update publicly any forward looking statements, whether as a result of newinformation, future events or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”,“intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements. All forwardlooking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forwardlooking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forwardlooking statements due to the inherent uncertainty therein.

Competent Person’s Statement:

The following statements apply in respect of the information in this announcement that relates to mineral resources, exploration results andexploration targets. The information is based on, and accurately reflects information compiled by Wes Harder, who is a Member of theAustralasian Institute of Mining and Metallurgy. Wes Harder is a Director of Orpheus Energy Limited and is a Geologist who has sufficientexperience which is relevant to the style of coal mineralisation and type of deposit under discussion and to the activity which he isundertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves". Wes Harder consents to the inclusion in the report of the material, based on his information, in theform and context in which it appears.

* JORC- Exploration TargetIt is common practice for a company to comment and discuss its exploration in terms of target and size type. The information in this presentation relating to exploration targets should not bemisunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. The potential quantity and grade is conceptual nature, there has been insufficient work completed to define amineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

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Executive SummaryOrpheus Energy Limited (“OEG”) is a coal company focusing on coal production and exploration inIndonesia. OEG also owns some Australian coal and industrial minerals projects.

Orpheus has signed a strategic alliance with PT Mega Coal International (‘Mega’) which is anexisting coal producer and exporter.

ASX Ticker OEG

Shares on issue ~115M

Options ~17M

Share price $0.13

Market capitalisation* ~$18m

Cash $3.6m (Dec 2011)

* Fully diluted basis

Management/Board8% Corporate

5% Institutional5%

Coalworks33%

Private/Individuals49%

Proforma Shareholding Structure

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Orpheus Directors

David Smith B Econ, Dip Mgmt - Executive MBA (Executive Director)

Mr Smith was previously an investment banker for 15 years, where he advised and raised capital in a range ofindustries, and particularly for emerging coal and iron ore companies. He was most recently Head ofCorporate Finance at BBY Limited and prior to that, he worked at Ord Minnett and then JPMorgan Chase.

Wayne MitchellAASA, AAIM (Chairman)

Mr Mitchell is a qualified accountant with over 30 years extensive senior management experience in the natural resources sector, both in Australia and in South East Asia.

Wesley HarderBSc. Dip SIA. MAusIMM (Director, Exploration Manager)

Mr. Harder is a former coal analyst with Jackson Ltd stockbrokers. He has also worked as a fieldexploration geologist for fifteen years in Australia and its near neighbours.

Tony KingB Sc. BA. (Non-Executive Director)

Mr King is a professional Metallurgist and qualified geologist with over 20 years operational and technical experience within the resource industry. He has also been involved in design and construction of coal washing plants and has participated in a wide variety of resource projects.

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Orpheus ManagementDavid OastlerBcom. CA. - Chief Financial OfficerDavid is a Chartered Accountant with over 25 years experience with various SMEs, listed and private company groups as well as services to various governmental agencies.

Nathan BartropLLB, B Com, ACIS – Company SecretaryMr Bartrop is a Chartered Secretary. He previously was Assistant Company Secretary at Mirabela Nickel Limited, and prior to that, he worked at ASX for 2 years as a Listings Adviser. Mr Bartrop also has previous experience in litigation and dispute resolution.

Christopher HaganBA. LLB - Senior AdvisorMr Hagan has over 25 years’ experience advising publicly-listed and private companies on legal and corporate affairs, including large scalecapital raising strategies, IPOs and restructures.

Rudi Hasan PutraSenior Geologist, Jakarta OfficeMr Putra has a Bachelor Degree in Geological Engineering, Faculty of Mineral Technology, Trisakti University, Jakarta. Mr. Hasan has more than15 years experience in the Indonesian Mining Industry. Mr. Hasan worked from 1994 to 2011 as Geologist for various mining companies inIndonesia. Mr. Putra joined OEG in June 2011.

Hally Pong Lantera TuliliMining Engineer, Jakarta OfficeMr. Tulili has a Diploma in Mining Engineering from the University of Samarinda, East Kalimantan. Mr. Tulili worked from 2005 until 2011 for various mining companies in Kalimantan. Mr. Tulili joined OEG in September 2011.

Ardiansyah Ahmad SitumorangAccountant, Jakarta Office Mr. Situmorang has studied Economics and Business Administration in Jakarta. He worked from 2004 to 2009 for the Singapore InternationalSchool, Jakarta, as Finance and Accounting Supervisor. From 2010 to October 2011 he is working for Putera Sampoerna Foundation asAccountant

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Indonesia and Australia remains the key playersin the export coal market.

Indonesia has been the fastest growingexporter, overtaking Australia as the largestsupplier to the global seaborne market in 2005.

China plans to add 1TW new coal-fired powerplants by the end of 2020, triple the size of itstotal capacity from the current 650GW.

Demand visibility from India is also strong aswith plans to add 130GW of power plants overthe next five years.

India even more relevant to Indonesia’s exportssince its imports from Indonesia account for~65% of its total coal imports.

The trend is expected to continue as India’srequirement for more low-CV coal fits with theoutput outlook from Indonesian producers.

Indonesia is a key player riding on the strong and growing export coal market

Why Indonesia ?F

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Why Indonesia ?

2011 EBITDA Margin

0%

5%

10%15%

20%

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30%

35%40%

45%

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Australian Margin=30%

Indonesian Margins=36%

2012 PE Multiples

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Indonesia average = 8.4X

Australia average = 13.3X

Better Operating Margin compared to Australian coal companies

Indonesian coal companies are priced at an attractive discount of 36% compared to their Australian peers

Due to lower cost of production, Indonesian coal companies have better operating margins compared to their Australian peers.

The lower cost of production will provide additional buffer against coal price fluctuation, more so in view of the current volatile market condition.

Attractive Valuation Compared to Australian Coal Companies

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Growth Strategy

Supported by strong local partner in PT Mega Coal

NEAR TERM OBJECTIVES

• Ramp up production at Kintap ADK Project

• To move the B26/B34 project into production

• Acquire near term coal production assets

MEDIUM TERM OBJECTIVES

• Develop near term production assets

• Consolidate mining at B26/B34 project – steady production rate of 30,000 t/month

• Increase production over portfolio of assets

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PT Mega Coal International• Founded in 2005, and is a privately-held coal mining company with an

extensive local network and mining experience.

• Key Management: Ir Nugroho Suksmanto (Chairman & CEO) and Mike Rhodes (President-Director).

• A joint venture partner in the Oorja Coal Mine in East Kalimantan, which has been in operation for 3 years and according to PT Mega Coal International produces 80,000 tonnes per month.

• Holder of a number of exploration & mining concessions in Kalimantan.

• Strategic Alliance with Orpheus for exploration & development of further concessions and infrastructure assets in Indonesia.

• OEG not affected by the recent legislative changes by the Indonesian government concerning foreign ownership.For

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Kintap ADK Project• In March 2012, Orpheus secured a 50% interest in

Orpheus’s JV partner PT Mega Coal’s ADK operating coal mine located in South Kalimantan, Indonesia

• ADK mine in production since April 2011 – 95,000 tonnes shipped over the past three months

• Existing infrastructure in place – port allocation ~15km away secured then loaded onto barges for shipment

• Exploration programme ongoing with resource drilling due to commence in late March 2012

• A joint venture is in place providing OEG with 50% of net profits of ADK’s coal mine operations.

• Coal mined from the ADK mine to date has an average calorific value of 5400 Kcal/Kg (ADB), and is low in ash (6%) and sulphur (0.4%).F

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Kintap ADK ProductionF

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B26/B34 Project• B26/B34 project comprises two areas, B26 and B34.

• B26 is located in East Kalimantan, ~100km from Balikpapan and has a totalexploration target of 2.8Mt to 4.5Mt* of high grade thermal coal with somecoking coal potential (current JORC Resource of 1.13Mt).

• Port allocation, ~27km away, has been secured. Haul road improvements tofacilitate streamlined truck movements are almost completed.

• Part of B26 has already had trial mining in 2011 and the next stage mineplan has been developed by Minarco Mine Consult:

4 potential mine pits for up to 246,000 tonnes

Target production rate of 30,000 tonnes per month

Target SSCC / thermal coal split of 15% / 85%

Target strip ratio of 10:1

45o of overall highwall slope, to generate the pit shells, situated to thenorth and south of the previously trial mined area.

Sales offtake agreement currently being negotiated to reflect current prices.

• Mining contractor about to be appointed and PRODUCTION EXPECTED TORECOMMENCE Q2 2012F

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B26/B34 Project

• B34 has an exploration target of 5-10 Mt of coal and target calorific value of 7200 to8100 Kcal/kg*.

• B34 is located ~60km west of B26 and it is ultimately planned to be mined using thesame road/port infrastructure.

• Drilling program is planned for Q4 2012 to establish a JORC resource. B34 has hadhistorical geological mapping and reported the following high quality coal samples:

B3: low ash (1.5%); low total moisture (8.3% ar); energy content of 7,123Kcal/kg.

B4: low ash (1.9%); low total moisture (6.5% ar); energy content of 7,235Kcal/kg.

• Following conversion of B34 Exploration KPs into Exploitation IUPs, scheduled for Q42012, mining from B34 is planned to double OEG’s total production out of the area.

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• Highly prospective greenfield exploration area located within 40km of the coast in Papua.

• Coal outcrops throughout the tenement area

• Field Exploration and drilling program to commence in Q2 2012


Papua ProjectF

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Additional Indonesian Projects• Orpheus has progressed plans to expand the Strategic Alliance with PT Mega Coal

with an ongoing acquisition program underway.

• A number of projects have been identified for possible acquisition located in the

Kintap and Tapin areas of South Kalimantan and in East Kalimantan

All have good infrastructure including good proximity to barge loaders or

appropriate port sites and transport options.

• The framework has been developed to allow completion of the following activities:

Technical review of each project;

Memorandum of Understanding with each owner;

Term Sheet for Orpheus Participation; and

Completion of legal due diligence.

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Australian ProjectsHodgson Vale

• Project is located in SE Queensland in proximity to other producing coal mines• Past drilling shows coal measures exist in the EPC with medium grade export quality coal

potential• Drilling is planned later in 2012 to explore for coal in the southern zone of EPC 1145

Ashford• Past drilling shows potential for chemical grade Ground Calcium Carbonate (GCC)• Orpheus proposes to outline zones of high quality limestone suitable for GCC• Exploration target of 30-40 Mt* of high quality ground calcium carbonate (with target white

rating index of 89-91%)• Drilling is planned in Q2 2012 to delineate a JORC resource

Wingen• Project lies just north of Unimin’s operating bentonite mine.• Past work shows potential for high quality bentonite• Orpheus’s joint venture partner has previously located outcropping bentonite on EL7142• Existing granted EL7124 has been extended by ELA 3657 • A drilling program is scheduled to commence in Q2 2012 to delineate a JORC resource

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Investment Highlights

• Strong Indonesian partner, PT Mega Coal International, providing for future Indonesian JV coal projects/infrastructure opportunities

• Strong portfolio of production and near-term production assets with a close proximity to existing infrastructure

• Ongoing program to explore suitable potential acquisitions

• Experienced management in Australia and Indonesia

• Attractive project financial economics

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Appendices

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Summary of B26 Coal Quality

Summary of the B26 Coal Resource by JORC Classification

Resource Category Block 2Indicated

Block 2Inferred Total

Density 1.45 1.45 1.45

Average Thickness ~0.5 - 1.5m ~0.5 - 1.5m ~0.5 - 1.5m

Tonnes (million) 0.95 0.18 1.13

Total Moisture (ar)% 7.6 8.1 7.7

Ash (adb)% 19.1 13.7 18.2

Volatile Matter (adb)% 26.6 25.8 26.5

Fixed Carbon (adb)% 56.9 59.5 57.3

Total Sulphur (adb)% 1.44 0.86 1.35

Gross Calorific Value (adb)% 6,520 7,080 6,600B26 – Coal Exploration Target by TenementLicense Target (Mt) CommentBlock 2 1.3 – 2.0 Not inclusive of the JORC resource of 1.13 Mt

Block 6 1.5 – 2.5 Awaiting 2012 coal drilling results.

Total 2.8 – 4.5 B26. Average CV range 5,950 to 7,100 kcal/kg (adb).

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Coal Production in Block 2F

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B2 Coal Quality

(Source: Ravensgate, March 2011)

Block 2 Stockpile and Pit Coal Quality Assays – Grab Samples

No

Laboratory Client Mass Air Drying Residual Total Moisture in

the Ash Volatile Fixed Total Calorific Calorific

HGI

Relative Crucible

Sample Sample Received Loss Moisture Moisture Analysis

sample Matter Carbon Sulphur Value Value Density Swelling

ID No. ID Kcal/g Kcal/g No.

(gr) % % % % % % % %

ar adb ar Adb Adb Adb Adb Adb Daf

1 KT.00744/11 SP No.1 2,965.60 2.4 1.3 13.7 26.8 58.2 2.66 7402 91 9

2 KT.00744/11 SP No.2 4,636.40 7 2.6 28.6 21.9 46.9 0.91 5712 95 5

3 KT.00745/11 SP No.3 2,774.40 7.8 2.4 32.8 21 43.8 1.17 5387 91 5

4 KT.13449/10 Pit 1 28,945.00 1.79 0.96 6.52 28.86 63.66 2.56 8074

5 KT.13450/10 Pit 2 28,260.00 1.51 0.77 9.8 27.63 61.8 3.94 7846

6 KT.00242/11 Pit 3 5,744.70 1.89 1.13 3 1.14 7.75 27.97 63.14 0.81 7925

7 KT.00243/11 Pit 4 7,205.70 3.53 1.38 4.86 1.32 14.83 27.61 56.24 3.09 7296

8 KT.00244/11 SP No.2 3,028.50 1.97 1.05 3 1.04 17.29 25.08 56.29 1.23 7110

Total 3.92 1.44 16.4 25.86 56.25 2.05 7094

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B6 Coal Quality

(Source: Ravensgate, March 2011)

Coal Quality Sample Assays for Block 6

No

Laboratory Client Mass Air Drying Residual Total Moisture in the Ash Volatile Fixed Total Calorific Calorific

HGI

Relative Crucible

Sample Sample Received Loss Moisture Moisture Analysis sample Matter Carbon Sulphur Value Value Density Swelling

ID No. ID % Kcal/g Kcal/g No.

% % % adb % % % %

(gr) ar adb ar Adb Adb Adb Adb db Daf

1 KT.9013/07 BBA19-S1 4,760.60 4.3 3.16 7.32 3.16 14.34 24.38 58.12 0.67 6776 8213

2 KT.9014/07 BBA19-S2 4,884.80 3.3 1.47 4.72 1.4 6.77 26.65 65.18 0.53 7946 8653

3 KT.11650/07KP6-25 C –

S17,44.00 13.29 1.16 18 16.93 63.91 1.65 6994 8652 100 1.46 9

4 KT.11651/07KP6-25 C –

S21,238.40 16.6 1.02 19.68 16.24 63.06 1.64 6897 8697 99 1.47 8.5

5 KT.11652/07KP6-17 C -

S11,070.90 10.28 1.38 29.1 16.47 53.05 0.99 5904 8493 94 1.55

6 KT.11653/07KP6-17 C -

S21,074.50 8.12 1.23 32.1 15.85 50.82 0.39 5644 8466 86 1.62

7 KT.15963/07KP6-01 AC (S1&S2)

1,252.30 3.52 1.74 5.2 1.82 29 17.44 51.74 0.94 5785 8362 89 1.48

8 KT.15964/07KP6-07 AC (S1&S2)

615.5 10.1 1.89 11.71 1.99 22.34 16.93 58.71 0.63 6438 8508 94 1.47

9 KT.15965/07KP6-25 AC –

S1418.6 15.85 2.86 18.26 2.94 23.48 18.74 54.84 0.37 6048 8220 1.48

10 KT.15966/07KP6-27 C (S1&S2)

483.2 15.84 2.24 17.73 2.16 39.9 14.93 43.01 0.62 4698 8108 1.67

11 KT.15967/07 526 9.08 1.23 10.2 1.26 15.4 17.27 66.33 1.14 7210 8624 98 1.34

Total 11.22 1.77 22.71 18.35 57.16 0.87 6395 8454 94 1.5

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Enquiry and Contact

Orpheus Energy Limited(ASX Code: OEG)

Wayne Mitchell – Executive ChairmanDavid Smith – Executive Director

[email protected]

AustraliaLevel 5 44 Miller Street

NORTH SYDNEY NSW 2060

Phone +61 2 9922 3930

Fax +61 2 9929 6820

IndonesiaMenara Anugrah Lt. 27, Kantor Taman E.3.3, Kawasan Mega

Kuningan, Jakarta 12950

Phone: +62 21 5794 8860

Fax +62 21 5794 87861

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Documents

For personal use only Indonesian Coal Production …2012/03/21 · For personal use only 2 INDONESIAN COAL PRODUCTION AND EXPLORATION – INVESTOR PRESENTATION Executive Summary Orpheus