Brisbane Office

Level 2 / 307 Queen Street

Brisbane QLD 4000

P 07 3002 8700

F 07 3221 3068

Sydney Office

Unit 7 / No.3 Gibbes Street

Chatswood NSW 2067

P 02 9415 0100

F 02 9417 6877

Perth Office 25 Richardson St

West Perth WA 6872 P 08 9321 8857

ACN 149 197 651

19 July 2012

The Manager

Company Announcements

Australian Securities Exchange

Exchange Plaza

Perth WA 6000

Dear Sir / Madam

Positive Results of Phase 1 Drill Programme - EPC 2197 at South

Blackall

The Board of ICX is delighted to confirm the technical results of the company’s Phase 1

drill programme from its South Blackall project EPC 2197 – now referred to as “South

Gumbardo Creek Project”)

Highlights of the results are as follows –

Total Inferred coal resource of 728 million tonnes to date;

Of the total Inferred resource, 349 million tonne has “Raw” (unwashed)

Gross Calorific Value in the range of 4,360 – 5,040 Kcal/kg (see table 4);

Washing and treatment of raw material could be expected to increase Gross

Calorific Values by around 10 – 20% from raw / unwashed values;

Inferred Resources estimated from 48 to less than 250 metres depth;

Simple structure, no faulting;

Shallow, simple synclinal structure with dips of 1-3o on the limbs;

Low in-situ Cumulative Strip Ratio;

Initial quality testing indicates a low-medium ash, low sulphur, sub-

bituminous coal;

This tonnage represented only 14.7% of the tenement area drilled;

Results provide a basis for an extension of the drill program with significant

upgrades and infill drilling planned and

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New Coal Province

ICX’s South Gumbardo Creek Project is located on the main coal-rich corridor, extending in

a south-south westerly direction from the township of Blackall in Western Queensland.

There has been significant recent reporting about the Inverness (Coalbank ASX:CBQ),

Alambi and Carlow deposits (East Energy Resources ASX:EER) which lie upon the same

trend to the north, with all deposits targeting sub-bituminous coal seams in the lower

Winton Formation, of Cretaceous Age.

Blackall is only 130 km south-west of the Alpha area coal projects, and Mr Hugh Dai,

Managing Director, said that “when considered in the context of neighbouring coal

projects to the north of International Coal, it was clear that a major new coal province had

emerged. Due to the fact that it’s seven other tenements in the region are close to granting,

International Coal is ideally placed to be at the forefront of development in this new coal

province.”

Drilling at South Gumbardo Creek Coal Project

Mr Dai continued “during the March Quarter, International Coal and our contractors completed

an efficient and well-staged drilling program at the South Gumbardo Creek Project that has been

the cornerstone in understanding the large scale of our maiden coal deposit

A total of sixteen (16) holes were drilled for 2,855.7m of chip and 161.95m of HQ-sized

diamond core as shown in the table (Table 1) below:

Table 1 EPC2197, 2011-12 Phase 1 Drilling Program Statistics

Borehole Easting_z55 Northing_z55 CRL Total Depth (m)

SB001 313487.00 7091730.00 336.60 210.0

SB001R 313490.00 7091735.00 336.45 224.0

SB002 310010.00 7090330.00 346.30 250.0

SB002R 310015.00 7090325.00 346.10 205.0

SB003 306920.00 7088430.00 319.20 215.0

SB003R 306920.00 7088430.00 318.95 Pad ready

SB004 303850.30 7090325.50 320.30 192.0

SB004R 303855.00 7090330.00 320.05 200.0

SB006A 314191.00 7095430.00 342.10 8.0

SB006R 314188.00 7095425.00 342.10 204.0

SB007 310540.00 7097440.00 349.00 224.0

SB007R 310543.00 7097432.00 349.20 206.0

SB012 310650.00 7093970.00 349.70 6.0

SB012R 310655.00 7093971.00 349.50 248.0

SB013 307570.00 7091620.00 348.80 200.0

SB014 307380.00 7095800.00 350.60 206.0

SB014C 307389.50 7095792.30 350.25 203.6

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Deposit Location

The Coal Project lies in south-western Queensland, some 85km south of the township of

Blackall. The deposit’s extents are currently open in all directions, and currently limited in

Resource reporting to a depth of 250m. Other than public road easements, all land is privately-

owned. The South Gumbardo Creek Coal Project area is also located 185 kilometres south-west

of Alpha and 700 km west-northwest of Brisbane.

Mr Hugh Dai, Managing Director, said the South Gumbardo Creek Project area represented

only a small part of the Company’s overall coal tenement coal portfolio in Queensland. He said

International Coal held many coal exploration permit areas in the state, primarily focused on

coal exploration in Central and Western Queensland.

Coal Interpretation

Interpretation of the boreholes was hampered by the poor sidewall stability conditions of the

majority of the boreholes, necessitating the logging of the hole from inside the steel drill pipes,

which were first lowered to total depth. The diameter of the sonde is small enough to fit inside

HQ pipes (100mm), but this has the effect of attenuating the signal, making coal identification

less obvious (refer to Figure 1). By reversing the natural gamma and long-spaced density (in

g/cc) traces and overlaying them, coal seams of varying qualities were able to be discerned and

their depths recorded. Coal seams were encountered in five (5) main groups, mainly below 40m

and through to 190m and proved to be mostly as predicted from preliminary modelling prior to

exploration taking place.

Some 54 ply-by-ply coal quality and 13 geotechnical samples were taken from the only cored

hole (SB014C) completed in Phase 1. The coal quality results are undergoing final checking and

interpretation, but the geotechnical results were very revealing, allowing some understanding of

why borehole stability in the concluded drilling program was hard to achieve – no result was

above 4MPa, as shown in the histogram of results below (Figure 2). The average moisture of the

roof and floor non-coal samples was 17.1% and the wet relative density 1.97. The average of

Stage 1 Slake Durability Index tests was 70%. Whilst this soft rock contributed to drilling

instability, these values also indicate that much of the overburden may be free-diggable,

lowering overall mining costs.

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Figure 1 Sth Gumbardo Ck. Example of Geophysical Log Interpretation SB006

Figure 2 SB014C, Histogram of Uniaxial Compressive Strength, various rock cores

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Uniaxial Compressive Strength (MPa)

South Gumbardo Creek : UCS Histogram

Frequency

Cumulative %

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Deposit Structure

A broad synclinal structure trending west-northwest is present throughout the south-western and

central part of the deposit. Coal seams are relatively flat lying so minor variations in base of

weathering; seam dip and topography cause seams to sub-crop locally, particularly for the upper

seams (WIN1-6). This creates an axial zone in which a vast majority of the coal resource is

concentrated in a large, shallow, flat-lying, linear depositional centre. Regional dip of strata is

west-southwest. The strike length of the deposit currently exceeds seven (7) kilometres. Within

the area explored no evidence of igneous activity has been detected at the current borehole

spacing.

Modelling

All historical and current exploration data was loaded and validated in Ventyx’s Minescape

GDB and subsequent structural modelling was undertaken in Minescape Stratmodel. A detailed

report outlining the modelling methodologies, model construction, and resource estimation was

forwarded to International Coal in May 2012. Figure 3, below illustrates the major structural

feature in the deposit, the Gumbardo Syncline, displayed overlying a structure roof contour plot

of the second top-most seam, the WIN02, from the Minescape model.

Figure 3 Sth Gumbardo Creek Deposit, Seam WIN02 Structure Roof contours showing fold axes

Coal Quality

Figure 4 below, illustrates good correlation between the ply-by-ply samples for a scatter

diagram of air-dried raw ash (%) versus raw gross calorific value (MJ/kg). The samples

represent coal; roof and floor material collected from the Phase 1 drilling program.

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Figure 4 SB014C, Cross-correlation of raw ash versus Calorific Value

Fourteen (14) raw coal (seam) composites were made up from the fifty-four ply-by-ply samples

and float/sunk at a relative density of 1.60, consist with treatment regimes applied on Winton

Formation coals by East Energy (ASX: EER) and Coalbank (ASX: CBQ). Table 2 highlights

some preliminary results, whilst those previously published for East Energy Resources Alambi

Deposit are listed in Table 3:

Table 1 – Sth Gumbardo Ck Coal Deposit washed Coal Qualities and Yields at CF1.60 (to date)

Typical SB014C Clean Coal

Composite 1

Product Yield @CF1.60 up to 72.4%

Inherent Moisture up to 10.3%, but more commonly 9-9.5%

Clean Ash as low as 9.1 %, but more commonly 18-25%

Volatile Matter as high as 35.5 %, but more commonly 31%

Total Sulphur as high as 0.556%, but more commonly 0.35-

0.40%

Gross Calorific Value as high as 21.33 MJ/kg, or 5,095Kcal/kg

Crucible Swell Number all samples 0.0, no coking properties.

1 Typical analysis reported on an air-dried basis. Not all data is available from the laboratory as yet. Further evaluation will be reported when all data reported.

Source: Preplab P2 Preliminary Report May 2012

Table 3 – EER: Alambi Coal Deposit washed Coal Qualities and Yields at CF1.60

Seam Group Yield F1.60 Ash1 F1.60 VM

1 F1.60 CV

1

F1.60

CV2

F1.60

% ad % ad % ad kcal/kg daf kcal/kg

350kg

Bulk Sample

70 12 31 5,000 6,755

(1 Analyses on air dried basis) (2 Analyses on dry ash free basis) Source: East Energy Resources ASX release 23 Apr 2009

y = -0.2698x + 23.185 R² = 0.997

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SB014C Raw Ash vs Calorific Value

Series1

Raw Ash vs CV

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Testing for other thermal coal parameters such as Hardgrove Grindability, ash fusion, and ash

analyses did not find any deleterious properties that would impact upon this coal’s ability to be

used for steam raising, however not all analyses have been returned and further reports will be

published after the final report is issued. The distribution of the results to hand can be seen in

Figures 5 and 6 which show both a histogram and cumulative frequency curve for the calorific

value and CF1.60 Product Yield.

Figure 5 SB014C CV Histogram

Figure 6 SB014C CF1.60 Product Yield Histogram

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Calorific Value (MJ/Kg)

SB014C: Calorific Value Histogram

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CF160YLD

SB014R: Product Yield CF160 -Histogram

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Coal Resource Limits and Assumptions

Coal resources were estimated for seams WIN1 to 20 within EPC 2197. As part of the

resource estimation process, the total resource area was divided into discrete blocks for

each seam. Coal resources were then estimated for each of these blocks. The following list

details limits and assumptions used to define resource areas. Seam resource blocks were

divided by Formation groups. For each seam, resource exclusion zones were based on the

following considerations:

A minimum coal ply thickness of 0.10 metres was applied;

Coal sub-cropping against the base of primary weathering was used to delineate

the upper resource mask limits;

The lower limit for Resource masks was an reduced level that equalled topography

minus 250m;

Last line of boreholes in which the seam was intersected, where borehole spacing

assures sufficient confidence;

An ash cut off of 50% (air dried basis) has been used to exclude all non-coal

lithologies from tonnage estimates;

Relative Density was obtained from coal quality laboratory results, however a

derived in situ, wet density has been established and used, based upon an estimate

of in-situ moisture content of 15%;

Environmental features or existing infrastructure were not used to excise

resources thereby allowing mining studies to determine the economic limits;

Based on the current borehole spacing for the Sth Gumbardo Ck Deposit (4,000m

between Points of Observation), all resource polygons were classified as Inferred

Resources, and the details are recorded in Table 4, below:

Table 4 EPC2197, JORC Inferred Resource for the Winton and Mackunda Formations

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Future Work

Following this initial delineation of the geology of the South Gumbardo Creek Coal Project,

International Coal plans to undertake further targeted geological studies including additional

drilling, wash testing and bulk sampling to provide data for the development of an optimal

mining scenario utilising the shallowest and highest quality coal.

A new program of drilling, designed to explore the north-eastern and north-central section of

EPC 2197 has recently begun, and the location of the fourteen (14) planned holes is shown on

Figure 7, below.

Figure 7 – planned drill holes for Phase 2 program

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About ICX’s South Blackall Projects (including South Gumbardo Creek)

ICX’s South Gumbardo Creek Project (EPC2197) represents just one of a number of very

significant landholding in the region that we hold. In total, ICX holds, in granted or

application form, an additional 10 projects surrounding our EPC2197. The total

landholding exceeds 8,000 sqkms.

ICX is committed to the further exploration of this new and emerging coal region and we

look forward to the interpretation of our results from the Phase 2 programme.

The company’s board and senior management shall continue to liaise with investors and

parties whom have expressed an interest in working with us to develop this region.

Yours sincerely

David Round

Director / CFO

For further information contact –

Hugh Dai David Round

Managing Director Director

0416 186 888 0411 160 445

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Competent Person’s Statement Technical information on International Coal Limited coal projects in this report had been

compiled by Mr Mark Biggs, Principal Geologist of Moultrie Database and Modelling. Mr

Biggs is a member of the Australasian Institute of Mining and Metallurgy and has the

experience relevant to the style and type of coal deposit under consideration and to the

activity which is being undertaken to qualify as a Competent Person as defined by the

Australasian Code for Reporting of Minerals Resources and Reserves (JORC) 2004. The

resource information in this report is being released to the Australian Stock Exchange.

Mark Biggs consents to the inclusion in the report of the matters based on this information

in the form and context in which it appears.

The report is based on factual geological data acquired by International Coal Limited over

a period of 12 months as well as pre-existing data from Government stratigraphic drilling

and private company coal exploration. Interpolation and extrapolation of data has been

avoided in most cases but where necessary it was done with due consideration of the JORC

Guidelines.

Users of this report should independently verify all facts upon which they may wish to rely in making decisions relating to the Sth Gumbardo Creek project or any associated opportunities. The estimates of the Coal Resources presented in this Report are considered to be a true reflection of the Coal Resources as at 27th June 2012 and have been carried out in accordance with the principles and guidelines of the Australian Code for Reporting of Coal Resources and Coal Reserves published in September 2004 (JORC Code).

Name Job Title Registration Experience

(Years)

Signed

M Biggs Principal Geologist

Moultrie Database & Modelling

AusIMM

107188

26

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