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Overview
> Large volume thermal coal project in Galilee Basin, adjacent to high-profile
emerging projects
> total JORC resource of 1,179 Mt
> Recently completed Pre-Feasibility Study indicates mine life in excess of 30 years
> significant upward scalability expected with further drilling during DFS stage
> Achievable development timetable - series of open-cut and longwall operations
> 16.6 Mtpa peak production
> targeting high quality D1 and D2 seams
> Development to be undertaken in 3 stages, with production commencing in Q1 2015
> Third party access to rail
> Opportunity to develop a ―small scale‖ 1 Mtpa pit operation as early as 2013
> PFS demonstrates strong project economics:
> $56.55/t average LOM operating costs
> ~$4 billion in development capex (including $827 million indirect costs)
> Significant potential to increase NPV
> Declared Project of State significance in July 2010
> EIS and other approvals well advanced
1
Overview > Large volume thermal coal project in Galilee Basin, adjacent to high-profile emerging
projects
> total JORC resource of 1,179 Mt
> Recently completed Pre-Feasibility Study indicates mine life in excess of 30 years
> significant upward scalability expected with further drilling during DFS stage
> Achievable development timetable - series of open-cut and longwall operations
> 16.6 Mtpa peak production
> targeting high quality D1 and D2 seams
> Development to be undertaken in 3 stages, with production potentially commencing in
Q1 2015
> Third party access to rail
> Opportunity to develop a ―small scale‖ 1 Mtpa pit operation as early as 2013
> PFS demonstrates strong project economics:
> $56.55/t average LOM operating costs
> ~$4 billion in development capex (including $827 million indirect costs)
> Significant potential to increase NPV
> Declared Project of State significance in July 2010
> EIS and other approvals well advanced
2
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Ownership and tenure
AMCI Farm-In
> Farm In and Joint Venture Agreement entered into with AMCI in 2008
> AMCI earned 50% interest in South Galilee
> AMCI currently the manager and responsible for exploration and development, including the preparation of the PFS, DFS and day to day management
Joint Venture
> Unincorporated joint venture structure:
> AMCI 50%
Manager
Exclusive Marketing Agent
> Alpha Coal 50%
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Regional location
> South Galilee Project is:
> 180 km west of Emerald, a major regional
centre servicing both the agricultural and
mining industry. Population approx: 15,000
> 140 km south-west of Clermont, a
township that houses employees of Blair
Athol Mine, is the closest town to the FI/FO
Clermont Coal Mine accommodation
camp and services the nearby
surrounding properties. Population approx:
2000
> 140 km east of Barcaldine, the
administration centre for the Barcaldine
Regional Council, which includes the
SGCP area. Barcaldine also services the
nearby surrounding properties. Shire
population approx: 3,500
> 12 km south-west of Alpha, a small
township that services nearby surrounding
properties. Population approx: 350
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Project well positioned
> Limited opportunity to realistically enter the Galilee Basin – only 5 near term major mining projects
> South Galilee lies adjacent to Waratah Coal‘s proposed 40 Mtpa China First
Coal Project and south of Hancock Coal‘s Kevin‘s Corner and Alpha Coal developments, each proposed as 30 Mtpa operations
> South Galilee project area comprises parts of EPCs 1049 and 1180
> Total project area is 32,595 ha
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> Considerable drilling has been completed to date
> focused on northern end of EPC 1049
> 163 open holes
> 112 partly cored holes, with down hole geophysics conducted
> 17 fully cored holes to assess the geotechnical
characteristics
> over 36,000 metres of drilling undertaken within a 100km2 area
Exploration and drilling
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Exploration and coal resources
> Principal targets are the D1 and D2 seams
> 711.2Mt total resource from D1 seam, 467.2Mt resource from D2 seam
> three plies, 0.5 to 4.5 metres in thickness
> high volatile sub bituminous coal yielding high quality thermal product
> conditions are ideal for high production open-cut and underground mining operations
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> JORC compliant resources of 1,179 Mt have been confirmed
> Capable of supporting a high volume long life mining operation
> The coal seams in the Galilee Basin increase in quality and decrease in depth from north to south
> Focus has been on exploring the higher quality D seams
Unlike other projects in the Galilee Basin, the resources and reserves
identified in the South Galilee Project consist only of the lower ash D1 and
D2 seams
Resources (Mt) Measured Indicated Inferred Total
100% basis 167 206 806 1,179
>15Mtpa from SGCP
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Reserve Estimate
(Open-cut only) (Mt) Proved Probable Total
100% basis 132.3 141.7 274.0
> Maiden reserve statement for Open-cut only
Coal quality
> D1 Lower ash levels c.18%, D2 seam ash levels c.12%
> Upper 10% of D1 seam (D1U) ash levels greater than 30%—to be treated as waste
> Capacity to produce a range of thermal coal products
> Confident of successfully marketing products
Parameter Raw 15% Ash
Product1
5,600 kcal/kg
Product1
5,800 kcal/kg
Product1
Preferred
Product2
Yield (%) 100 96.1 82.1 77.3 74-77
Total Moisture (%ar) 14.5 14.7 14.7 14.8 16.0
Inherent Moisture (%ad) 8.0 7.1 7.0 6.7 6.5
Ash (%ad) 24.4 15.0 13.8 11.0 13.0
Volatile Matter (%ad) 29.1 33.1 33.6 34.8 34.0
Fixed Carbon (%ad) 38.5 44.8 45.6 47.5 46.5
Total Sulphur (%ad) 1.03 0.88 0.86 0.81 0.90
Gross Calorific Value
(kcal/kg ad) 5,166 5,998 6,106 6,352 6,250
Product coal quality alternatives
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Mine Plan
> Mine plan is supported by JORC Code
Compliant Measured and Indicated
resource
> Large scale project comprising multiple
mining operations, open pit dragline
operation and two long wall underground
operations
> 33 year mine life
> Average product 13.6 Mt
> Peak production 16.6 Mt
> Mine plan shows mining commencing in
the east via open cut methods
> As the coal seam dips, underground
mining off the highwall will be introduced
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15 Year
33 Year
Mine Plan
> SGCP represents next generation of large volume low cost operations
> Achieving a peak production of 16.6 Mtpa and a LOM average of 13.6 Mtpa will place the SGCP amongst some of the biggest coal mines in the world
> To realistically achieve the proposed Mine Plan the SGCP will be progressively expanded in 3 distinct phases over almost a decade
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> Likely that only one proponent will build a common-user rail line
> AMCI is negotiating with GVK for third party access
> access regime for infrastructure assets in Australia governed by ACCC
> Queensland Government committed to third party access
> Capacity at Abbot Point will be privately funded by the Joint Venture
> T4 - 9 expansion is expected to be complete by 2017
> AMCI has been approached by a number of parties offering capacity and is currently negotiating to secure capacity on optimum terms
> PFS estimates capex of $672 million for port construction costs
> During the ramp-up of the South Galilee Project (2015-2017), AMCI will negotiate 3rd Party access to rail and port infrastructure
Two other project proponents in the Galilee Basin and QR National are
each proposing to build a privately funded railway line to connect the
Basin’s production to the Abbot Point coal export terminal
Access to infrastructure
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Rail infrastructure > Waratah Coal and Hancock Coal each proposing to construct railway lines to the Port of
Abbot Point
> South Galilee will rely on obtaining third party access to one of these rail solutions
> Queensland State Government has required rail infrastructure to be open to third party
access
> Rail corridor proposed to be a standard gauge rail system resulting in substantially higher
carrying capacity and utilisation efficiencies
> Given the efficiency of a non congested standard gauge dedicated rail line the total rail
haulage costs (above and below rail) are estimated to be substantially lower than the
Bowen Basin
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Port infrastructure
> Abbot Point determined as preferred port
> APT1/X50 recently expanded from 21 Mtpa to 50 Mtpa
> T2 and T3 (GVK) expansion to 110 Mtpa by Q1 2015
> T4-9 - further 180 Mtpa by 2017
> AMCI has been approached by a number of parties offering capacity and is
currently negotiating to secure capacity on optimum terms
> AMCI will negotiate with GVK to secure access to underutilised port capacity at T3,
for the interim period from commissioning in 2015 to 2017
> South Galilee will fund its pro-rata share of construction costs
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20 50
290
110
0
50
100
150
200
250
2011 2013 2015 2017
Po
rt C
ap
ac
ity (
Mtp
a)
300
Power and water infrastructure
> Power
> Powerlink Queensland planning to extend existing high voltage electricity transmission
network into the Galilee Basin via a new 275 kV transmission line and Surbiton Hill
Substation by 2014
> South Galilee will be supplied via a 132 kV transmission line
> South Galilee has submitted its Connection Application to Powerlink
> Powerlink is currently developing project scope, designs and pricing
> Connection and Access Agreement to be negotiated
> Water
> Estimated 3,000 ML per annum of off-site water required
> South Galilee has secured access to water by becoming one of two Foundation
Customers in a water supply scheme to be delivered by SunWater, Queensland‘s
largest bulk water provider
> SunWater proposing to source water from a new dam to be built on the Connors
River, and associated Moranbah to Alpha pipeline with dedicated pipeline to South
Galilee
> Connors River Dam and pipeline is targeted for complete commissioning by Q2 2014
with off-site water connected to South Galilee by Q1 2015
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Approval process - State
> AMCI lodged IAS and applied for ―significant project‖ status from the Coordinator-General under the
SDPWO Act on 11 March 2010
> 4 June 2010 – Coordinator-General declared South Galilee to be a ―significant project‖ requiring an Environmental Impact Statement
> DEEDI is managing the EIS process on behalf of the Coordinator-General
> Final Terms of Reference were received in November 2010
> EIS is on track for submission in March 2012 with no significant issues identified to date
> Anticipate all environmental approvals
will be received by early 2013
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Approval process - Federal
> South Galilee was referred to DEWHA on
17 May 2010 under the Environment
Protection and Biodiversity Conservation
Act 1999 (referral No. 2010/5496)
> Determined to be a ―controlled action‖
on 16 June 2010, due to the potential
impacts on matters of national
environmental significance under sections
18 and 18A (listed threatened species and
ecological communities); and sections 20
and 20A (listed migratory species)
> South Galilee will be assessed under the
bilateral agreement whereby DEWHA has
accredited the Queensland EIS process,
to be conducted under the SDPWO Act
> South Galilee will require approval from
the responsible Federal Minister under Part
9 of the EPBC Act before it proceeds
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Cultural heritage and native title
> Cultural heritage
> Cultural Heritage Management Plan (CHMP) for the South Galilee is required with the
traditional owners, Wangan and Jagalingou People
> The CHMP was signed in July 2011
> Native title
> Native Title Agreement is also required
> Following successful negotiations the Native Title Consent Agreement and Section 31
State Deed was signed by the parties in December 2011. State signed the Section 31
State Deed in January 2012
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Project development
> Intended that the 15 Mtpa project will be progressively ramped up in 3 distinct phases, not including the potential for the development of a 1 Mtpa operation
> Stage 1 open-cut to target shallower portions of D1 and D2 seams
> Modular processing plant design accommodates staged expansion
Development timetable Production profile
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Q3/08
JV signed
Q2/09
First JORC
resource
Q1/11
Revised JORC resources
Complete PFS
Mining lease application
Q3/09
Scoping study Q4/11
Complete
EIS
Q1/13
All approvals
Start construction
Q4/14
First prod ’ n
Rail
Q2/15
Power
Q3/12
Complete
DFS
Q1/15
Water and
Port T3
Q1/17
Port T4
0
2
4
6
8
10
12
14
16
18
FY
15
FY
16
FY
17
FY
18
FY
19
FY
20
FY
21
FY
22
FY
23
FY
24
FY
25
FY
26
FY
27
FY
28
FY
29
FY
30
FY
31
FY
32
FY
33
FY
34
FY
35
FY
36
FY
37
FY
38
FY
39
FY
40
FY
41
FY
42
Mt
Open Cut D1
Open Cut D2
Underground
1Mtpa operation concept
> Proximity to existing rail line to
Rockhampton provides opportunity
to develop a ―small scale‖ 1Mtpa
open pit operation
> Low capital contract mining
operation; producing coal as early
as late 2012 early 2013
> Would provide early cash flows and
de-risk start-up of 15Mtpa operation
> Dependent on being able to
achieve realistic rail costs
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Approvals
> AMCI submitted the mining lease application in May 2011
21
Action Status Completion Date
Initial Advice Statement - preparation Completed February 2010
Initial Advice Statement - submitted to Government Completed March 2010
Declared ‗significant project‘ (s.26(1)(a) SDPWO Act) Completed May 2010
Draft Terms of Reference submitted to Government Completed June 2010
DSEWPaC EPBC Referral Submission Completed May 2010
DSEWPaC EPBC Decision Received June 2010
Draft Terms of Reference public review Completed July 2010
Final Terms of Reference Received November 2010
Cultural Heritage Management Plan Completed July 2011
Native Title Right to Negotiate Notification Completed March 2011
Native Title Agreement Completed December 2011
Environmental Impact Statement - preparation In progress March 2012
Draft Environmental Management Plan - preparation In progress March 2012
Environmental Impact Statement - submission to Government In progress March 2012
Draft Environmental Authority - preparation (CG Report) In progress July 2012
State and Commonwealth Environmental Approvals In progress March 2013
Pegging of Mining Lease boundary Completed May 2011
Mining Lease Application Submission Completed May 2011
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> Lowest quartile for operating
costs
> Following ramp up operating costs are consistently below $60 per product tonne
> Average life of mine operating costs are estimated at $56.55 per tonne
Operating costs
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> LOM capital costs estimated at $3,320 million direct costs with an additional $827 million in indirect costs (excluding sustaining capital $1,000 million)
> Capital costs includes South Galilee‘s capital contribution to the development of the T4 terminal at Abbot Point as well as the connection of a rail spur to rail corridor
> Capital costs phased over several years
Capital costs
South Galilee LOM Capital Costs Estimates
23
Direct Costs $m
Mining 1,234
Processing and On-Site Infrastructure 1,241
Off-Site Infrastructure 845
Total Direct Capex 3,320
Indirect Costs
Contingency 441
EPCM and Owners Costs 386
Total Indirect Costs 827
Total Capital Costs 4,147
Note: Excluding sustaining capital $1,000 million
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> JORC Code compliant resource identified in PFS demonstrates:
> very large resource of reasonable quality thermal coal
> capable of supporting a high volume long life mining operation
> is far in excess of the life of mine production tonnage
> inclusion of the higher quality D seams only
> Since completion of the PFS:
> continuing to actively explore in the area and undertake extensional and in-fill
drilling
> Anticipated that there will be a progressive and steady increase in the overall resource
base of the Project over the medium and long term
> Significant potential exists to increase:
> both the life of the South Galilee
> production levels above the current mine design,
resulting in a significant positive impact on South Galilee‘s NPV
> Opportunities to be further explored in DFS
Significant potential to increase NPV
24
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Opportunity for Collaboration
> Limited number of current and future
proponents together with the very limited
existing infrastructure provides a unique
opportunity for a collaborative approach to
the wider development of the Galilee Basin
> Collaboration and cooperation can be on a
number of fronts
> Between proponents themselves
> Proponents and local and regional
communities
> Proponents and Government at all levels
> Proponents and service and infrastructure
providers
> Examples of collaboration include:
> Power
> Water
> Rail
> Community engagement and social
impact
> Post mining land use
> FIFO and Regionalisation
25
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NB: Application for authorisation to ACCC Part IV of the Competition and
Consumer Act 2010 (Commonwealth) is being progressed
Community Engagement and Social Impact
> By having a collaborative approach to community engagement provides a
more efficient and consistent means of genuinely engaging with the local community
> Post development a collaborative
approach by proponents, the community and local government not only provides a structured means of on-going dialogue but a platform for a collaborative approach to ensuring the development of sustainable
initiatives that provide enduring community value
26
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Structured
Process
Galilee Basin
Community
Partnership
Local
Government
Community
Proponents
Regular
Meetings
Standard
& Agreed Support
Long Term
Initiatives
Agreed
Funding
Plan
Post Mining Land Use
> Post mining land use has long been an
area of debate, study and at times controversy
> Post mining land use has in general only been considered at a site level
and in many instances at only the specific areas of disturbance within a site
> Through a coordinated and
collaborative approach amongst proponents and regulators the Galilee Basin presents a long term opportunity for the progressive development of a ―Galilee Basin Nature Reserve‖
27
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FIFO and Regionalisation
> Over the last 18 or so months there has been a progressive recognition that FIFO is a function of the modern face of mining for isolated areas with no or very limited infrastructure
> This is well reflected in the Galilee Basin, which is isolated and has an extremely
limited employee pool
> The development of the Galilee Basin will be staffed predominantly by a FIFO workforce and to that end there is unlikely to be significant population growth for the township of Alpha – consistent with the view of the local community
28
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FIFO and Regionalisation
> FIFO in the Galilee Basin can potentially provide a very significant opportunity for the further development of a number of regional centres in
Queensland and substantial further wealth creation across the state and county
> FIFO operators that utilise the
Barcaldine Regional Council owned Alpha airport will provide the local and regional community with a source of annual income in excess of $10 million per year and provide the basis for infrastructure upgrades
29
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Summary > Large volume thermal coal project in Galilee Basin, adjacent to high-profile emerging
projects
> total JORC resource of 1,179 Mt
> Recently completed Pre-Feasibility Study indicates mine life in excess of 30 years
> significant upward scalability expected with further drilling during DFS stage
> Achievable development timetable - series of open-cut and longwall operations
> 16.6 Mtpa peak production
> targeting high quality D1 and D2 seams
> Development to be undertaken in 3 stages, with production potentially commencing in
Q1 2015
> Third party access to rail
> Opportunity to develop a ―small scale‖ 1 Mtpa pit operation as early as 2013
> PFS demonstrates strong project economics:
> $56.55/t average LOM operating costs
> ~$4 billion in development capex (including $827 million indirect costs)
> Significant potential to increase NPV
> Declared Project of State significance in July 2010
> EIS and other approvals well advanced
30
South
Galile
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