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White Energy Company LimitedCompany ProfileMay 2009
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The White Energy Story
Table Of Contents
Appendices
• World Coal Markets• White Energy Technology Benefits• The White Energy Platform
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Introduction
White Energy has a unique and commercially viable technology that upgrades low quality coal to a high value product through a low cost production process.
White Energy’s technology takes advantage of the significant margin that exists between the costs of sub‐bituminous and bituminous coals worldwide.
Coal Price Arbitrage Delivers Compelling Financial Model
White CoalSub‐Bituminous
SUB‐BITUMINOUS COAL
BITUMINOUS COALS
Current Market PriceApprox. US $8‐12/tonne
Current Market PriceApprox. US$60‐$75/tonne
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White Energy Company
Who We AreWhite Energy Company Limited (“WEC”) is a technology‐enabled natural resources company.
WEC holds exclusive world‐wide rights to commercialize the Binderless Coal Briquetting (“BCB”) clean coal upgrading technology developed by a consortia led by the CSIRO, the science agency of the Australian Government.
VisionLeverage proprietary BCB Technology and exploit WEC’s first‐to‐market advantage in industrial‐scale coal upgrading technologies to become a leading global producer of high energy content thermal coal products with beneficial environmental characteristics.
Market OpportunityThere are an estimated 465.4 billion tonnes of proven high moisture sub‐bituminous and lignite coal reserves worldwide, almost half the global proven coal reserves.
Coal continues to be the world’s fastest growing source of fuel with the International Energy Agency predicting 61% global growth in coal use for electrical power generation by 2030. Today, according to the US Energy Information Administration, coal generates 50% of the Untied Sates electricity.
Deployment of WEC’s BCB Technology is consistent with objectives of many governments including the US to use their abundant coal resources to increase energy independence while minimizing emissions of greenhouse gases and other pollutants
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White Energy Business Strategy
The Strategy
WEC’s principal business model includes the development of BCB Technology coal upgrading facilities in 1 million tonnes per annum modules individually or by way of joint venture, incorporating long‐term feedstock coal supply agreements with owners of significant low rank coal deposits as well as offtake purchase agreements.
The joint venture / development model ensures WEC’s economic participation in coal upgrading operations in multiple ways including direct participation in the profitability of the coal upgrading operations by way of joint venture entity ownership as well as a royalty per tonne of upgraded coal paid to WEC by the joint venture entity.
WEC plans to develop a series of BCB Technology coal upgrading facilities at strategic locations throughout the world that are situated at or near large low rank coal deposits which have appropriate infrastructure for transporting the upgraded coal product.
WEC may also license parts of the BCB Technology for integration into coal gasification systems with a particular focus on the China market.
Our People
WEC’s management brings a combination of executive skills, coal mining operations and related technologies, business and corporate development, research and development, intellectual property management expertise and experience on the international stage.
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White Energy Is Operating On A Global Stage
Projects Underway
Discussions Underway
North AmericaBuckskin
India
South America
IndonesiaBayan
Adaro / Itochu
China / MongoliaDatang
Mongolyn Alt / IB Daiwa
Coal Gasification
Australia / New Zealand
Africa
Russia
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Key Relationships
Global Relationships
Supply Chain Partners
Feedstock White Coal Technology Logistics Offtakes
White Energy has successfully leveraged key relationships across the globe to establish itself as the leading clean coal upgrade technology company.
Respected financial and strategic global partners.
White Energy is unlocking value at a key point in the supply chain, driving opportunities for each of its partners.
TechnologyEngineering & Construction
Coal SourceCoal Source
White Energy Company
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Technology Developed Over 15 Years
1993Newcastle Pilot Plant
Australia 1997 ‐ 2005Collie Development Plant
Australia
2008Cessnock
Production Plant Australia
2009Tabang Commercial Plant
Indonesia 1 MTPA
Coals from around the world have been successfully upgraded using the BCB technology, including coals from Indonesia, China, USA, South America, India, Africa and Russia
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A Five Step Process – Uncomplicated & Mechanical
Power for briquetting
Raw Coal Storage &Crushing
Raw Coal Storage &Crushing
Drying Process
Drying Process
Briquette Presses
Briquette Presses
Briquette Storage &
Reclamation
Briquette Storage &
Reclamation
Combustor Gas Generator For Drying
Combustor Gas Generator For Drying
Raw coalROM
Sized rawcoal
Drycoal
Mix of briquettes and flash
Briquetted product put through small surge bin in preparation for transport and delivery to customer
STAGE 1
STAGE 2
STAGE 3
STAGE 4
STAGE 5
Briquette fines
HotGas
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What Does White Energy’s Process Do To Coal?
Sample – 4,670 Kcal/Kg (8,400 BTU/lb) PRB coal which starts with 30% moisture
WEC Upgraded
CoalPROXIMATE ANALYSIS (as received basis)
Total Moisture (%) 6.4
Ash (%) 6.1
Volatile Matter (%) 41.4
Fixed Carbon (%) 46.1
ULTIMATE ANALYSIS (dried basis)
Carbon (%) 69.7
Hydrogen (%) 5.0
Nitrogen (%) 0.9
Sulfur (%) 0.4
GROSS CALORIFIC VALUE (as received basis)
Kcal/Kg (BTU/lb) 6,300 (11,345)
Removes moisture
Energy content increases from approximately 4,670 Kcal/Kg to 6,300 Kcal/Kg (8,400 BTU/lb to 11,345 BTU/lb)
No chemical change to the coal
All other characteristics of the coal stay virtually the same
Creates stable and easy to handle briquette product
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Sub‐bituminous coal upgraded by White Energy compares very favourably with higher priced bituminous coal
Parameter Sub‐bituminous Coal
White Energy Upgraded Coal
Australian Bituminous Coal 14% ash
Boiler Efficiency (%) 85.3 89.4 89.5
Parasitic Load (%) 6.4 5.7 5.9
Overall Efficiency (%) 34.1 36.3 36.1
NOx (mg/Nm3) 284 280 454
SOx (mg/Nm3) 223 169 1404
Ash Generation (Kg/MWh) 21.3 17.3 57.6
Source: BHP Billiton 2007
Compare
How Does White Energy’s Coal Perform At A Power Plant?
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Cessnock Production Plant in Operation
In August 2008, the Company completed the construction of a 90,000 tonne per annum commercial scale production plant at Cessnock, New South Wales.
The plant was commissioned in Q408, successfully upgrading coals with a moisture content ranging from 25 to 65%.
The successful commissioning and operation of the plant has provided invaluable practical experience for the Company ahead of the commissioning of the Tabang plant.
The purpose of the Cessnock facility is to process a range of feedstock coals provided by existing and potential partners to provide sufficient quantity of material for combustion testing and trial burn purposes.
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First Commercial Plant in Commissioning Phase
Tabang Plant (Indonesia): Construction activities for the first 1MTPA main production module at Bayan Resources Tabang mine in Indonesia are now complete. The commissioning process is currently underway. Production is planned to grow to 15MTPA.
Bayan JV: Tabang Project Site, Kalimantan
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US$ Per Metric Tonne Basis
Input cost feedstock per tonne $8.00 $9.00 $10.00
Input cost feedstock per upgraded tonne 1 $11.20
$6.00
$2.00
Handling / transport / maintenance 6 $14.00 $14.00 $14.00
$33.20
$14.00
Processing cost 2
$12.60
$6.00
$2.00
$6.00
Core plant capital & site prep cost 5 $2.00
$34.60Total cost $36.00
$74.00$75.40$76.80$110.00
$64.00$65.40$66.80$100.00
Value Arbitrage Per Tonne of Upgraded Coal Sensitivity Table US$
Value arbitrage per tonne at cost ofSelling value of upgraded coal
$44.00$45.40$46.80$80.00
$86.80
$56.80
$36.80
$26.80
$16.80
$8.00
$85.40
$55.40
$35.40
$25.40
$15.40
$9.00
$84.00$120.00
$54.00$90.00
$34.00$70.00
$24.00$60.00
$14.00$50.00
$10.00
1. Approximately 1.4 million tonnes of feedstock coal is required to produce 1 million upgraded tonnes of briquettes.
2. Processing cost varies from US$4.50 to US$6.00. 3. Includes core production module for feedstock with moisture content to 35%.4. Total site preparation capital costs is completely site dependent and can vary
significantly.5. Plant is assumed to be depreciated on a straight‐line basis over 20 years.6. Maintenance portion approximately US$500K per year. Transportation costs
may vary significantly dependent on diesel costs.Note: Depending on the infrastructure at the mine site, there may be additional one‐off capital costs due to the need for power plant (approx. US$15 million) and higher operating costs due to remoteness of location, as is the case with the first plant being constructed at Bayan’s Tabang mine.
The historical and current spreads between the cost of feedstock coals and bituminous coals are significant, enabling White Energy to generate strong financial returns.
20 YearsLife of Plant 5
US$40 M
US$10 M
US$30 M
Total Capital Cost (exl. Power Plant)
Site Prep 4
Core Plant Capital Cost 3
Likely Plant Costs & Life Expectancy
Compelling Economic Returns – Indonesia Example
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2008/09 Key Achievements
Cessnock Production Plant (Australia): Construction of a 90,000 TPA commercial scale production plant at Cessnock, NSW was completed in August 2008 and has since been successfully used for coal upgrading activities. The project was partly funded by the Australian Commonwealth Government through an A$4.35 million AusIndustry grant.
Tabang Production Plant (Indonesia): Construction of the first 1MTPA main production module at the Bayan Resources Tabang Mine in Indonesia has been completed. Target production capacity has been expanded to 15MTPA.
Black River Asset Management (Africa): In November 2008, the Company signed a JV agreement with Black River to jointly develop and commercialise White Energy’s coal upgrading technology throughout Africa. Black River has committed US$70 million for its 49% interest in the joint venture company.
Buckskin Mining Agreement (North America): Coal supply and site services agreement signed with Buckskin Mining (an indirect wholly owned subsidiary of Kiewit Corporation) to develop a coal upgrading facility in the Powder River Basin near Gillette, Wyoming.
China: Working toward finalising a joint venture agreement with Datang for the construction of 10 million tons of capacity in Inner Mongolia, China.
Mongolyn Alt/ IB Daiwa (Mongolia): In February 2009, signed development agreement to conduct a feasibility study to evaluate the economic, technical and logistical viability of constructing coal upgrading plants in Mongolia.
International QTCQX Listing: The Company’s US ADR program began listing on the International OTCQX platform during 23 July 2008.
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2009 Planned Milestones
Tabang Production Plant: Finalise construction of first of 1 million tonne facility – completed.
Tabang Production Plant (Indonesia): Complete commissioning of the plant and commence operating at full capacity.
Project Debt Financing: Secure debt financing for Tabang project to facilitate accelerated rollout of additional plant modules.
Buckskin Project (North America): Obtain necessary air and land permits and commence construction of first commercial plant in PRB, USA.
Black River Project (Africa): Secure first commercial deal in Africa.
Datang International Power (China): Complete feasibility study to evaluate the economic, technical and logistical viability of constructing coal upgrading plants in China.
Mongolyn Alt/ IB Daiwa (Mongolia): Complete feasibility study to evaluate the economic, technical and logistical viability of constructing coal upgrading plants in Mongolia.
Enhance Capital Base: Merger Transaction with Asia Special Situation Acquisition Corp. (ASSAC) which, subject to Shareholder approval, may provide up to US$100 in additional capital.
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Future Timelines
3Q 08:90,000 tonne commercialscale production plant at Cessnock, New South Waleson line
4Q 08:Signed agreementBuckskin Mining Company for first US plant
1Q 09:Completion of construction ofTabang plant inIndonesia
4Q 09:Produce and sellupgraded coal for Tabang facility atfull capacity
Begin constructionfirst US Facility
2010 ‐ 2012Expansion and deploymentof technology in the Power River Basin, USA,Indonesia and other keymarkets
Value
Creation
2008 2009 2010 ‐ 2012
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White Energy Investment OpportunityInvestors are looking for...
Huge, need‐driven market opportunity
Established market position
Proven, differentiated technology
Compelling business model
Predictable, transparent earnings potential
Creditworthy, reputable counterparties
Exceptional management
Increasing global demand for economical, high energy value coalGlobal shift towards “clean” energy sources
First to market with commercial processStrategic relationships to accelerate global platform
Unique, patented coal upgrading process developed over 15 years90,000 tonne per annum production plant at Cessnock on line withexpected commissioning of 1 million tonne per annum commercial Indonesian scale plant in near future
Margin structure sustainable in variable market conditionsEvolutionary process presents additional development opportunities
Earnings based on stable conversion economics and known commodity marketsContracted cash flow
Sales to “AAA” and “AA” utility and natural resource companiesCurrent and potential suppliers include some of the world’s largest coal producers
Relevant experience in developing and financing coal projectsSignificant global experience and relationships
Supporting Metrics
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World Coal Markets
Appendices
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World Coal Markets Drivers
Rapidly growing coal demand: Coal remains the world’s largest and fastest‐growing fuel source. Global coal demand is expected to grow significantly through 2030, particularly from the fast growing economies of China and India.
Coal is here to stay: coal is a vital resource option for meeting the world’s sustainable energy needs.
Deliverability of high quality coals is declining: In both North America and Asia, production of high thermal value / low emission coal is declining.
Increasing global emphasis on emissions reductions: Across the globe, emissions of CO2, SOx, NOx and Hg are coming under increased regulation. Clean coal technologies are paving the way for a lower‐carbon future.
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Issues Facing The Coal Industry
CO2 release: Combustion of coal releases CO2 and inefficient use could have global climatic impact.
Pollutants:Many traditionally utilised coals are major sources of pollutants such as SO2 and NOx.
Coal quality: The world has very large reserves of coals that are low in pollutants like sulphur and ash but are not exploited because of their low energy and transportation economics.
Coal dust: In some regions (e.g. USA) dust from coal transportation and handling is a major
environmental, economic and logistical problem.
Coal is the lowest cost and most easily accessed energy source in the world, however several issues reduce its attractiveness as a future energy source.
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White Energy Technology Benefits
Appendices
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Higher energy content: increases heat, the useable energy content, by between 30% and 200%, creating valuable power generation efficiencies.
Mechanical process: a mechanical process that is designed to work at coal mines, not a complex chemical process.
Low upgrading costs: favourable conversion economics allow the product to compete with bituminous coals.
Lower spontaneous combustion risk: upgraded coal is physically and chemically stable, and can be handled, stored and transported as normal coal.
Lower transportation costs: process reduces moisture, resulting in up to 30% decrease in load volumes and concomitant transportation costs.
Reduced greenhouse gas and pollutant emissions: more efficient burning results in lower CO2, SOx, NOx and Hg emissions.
Reduced levels of dust: significantly reduces the quantity of dust when compared with unprocessed sub‐bituminous coal.
White Energy Technology Benefits
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White Energy Is Well Positioned To Exploit The Global Shift Towards “Clean Energy” Sources
US President Barack Obama: “We’ll invest in technology that will allow us to use more coal, America’s most abundant energy source, with the goal of creating five first‐of‐a‐kind coal‐fired demonstration plants with carbon capture and sequestration.”
US Secretary of Energy Steven Chu: “The coal resources in the United States are immense. I am hopeful and optimistic we can use those resources in a clean way. It’s really a question of technology. I think we will be using that great natural resource.”
US EPA Administrator Lisa Jackson: “Coal is a vital resource in our country. It provides about 50% of our electricity.”
Source: President Obama: Aug. 4, 2008 speech in Lansing, Mich.; Secretary of Energy Chu: Jan. 13, 2009 Senate Energy and Natural ResourcesCommittee hearing; EPA Administrator Jackson: Jan. 14, 2009 Senate Committee on the Environment and Public Works hearing.
Political support for cleaner coal technologies is rapidly increasing, particularly in the USA
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The White Energy Platform
Appendices
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Building A Global Footprint
ChinaMongolia
ChinaMongoliaIndonesiaIndonesia North AmericaNorth America
White Energy Company
White Energy Company
Strategic Partner relationship Bayan
Resources (KSC) for 15 MTPA
Adaro‐Itochu
AfricaAfrica
Buckskin Mining DatangMongolyn Alt / IB Daiwa
Potential Coal Gasification Opportunities
Assessing further opportunities with both coal miners and power utilities
Black RiverAssessing fines upgrading opportunity
India South America
India South America
Assessing opportunities
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Building A Global Business (continued) Adaro Group / Itochu Corporation (Indonesia): Pre‐production feasibility work is now complete which has confirmed viability of the project. The partners are currently in discussion regarding the next phase of this potential project.
Datang International Power (China): Financial feasibility about to conclude. If parties agree to proceed, next steps involve finalising structure and agreeing commercial terms for a JV with Datang to build the first of 10MTPA plants at Datang’s sub‐bituminous coal mine in Inner Mongolia, China.
Buckskin Mining (North America): Coal supply and site services agreement signed in January 2009 with Buckskin Mining (an indirect wholly owned subsidiary of Kiewit Corporation) to develop a coal upgrading facility in the Powder River Basin near Gillette, Wyoming. The Company is currently in the process of obtaining the necessary permits before construction of the first 1MTPA facility (estimated cost US$80 million) can commence.
Black River Asset Management (Africa): In November 2008, the Company signed a JV agreement with Black River to jointly develop and commercialise White Energy’s coal upgrading technology throughout Africa. Black River has committed, subject to milestones, US$70M for its 49% interest in the joint venture company. The newly incorporated JV company is currently pursuing a number of business development initiatives.
Mongolyn Alt / IB Daiwa (Mongolia): In February 2009, the Company signed a development agreement to conduct a feasibility study to evaluate the economic, technical and logistical viability of constructing coal upgrading plants in Mongolia.
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Key StatisticsASX:WEC / USA ‐ OTC:WECFY (OTCQX)
Shares: 153.9 M / Options: 20.6 M / Fully diluted*: 174.5 M
Share price @ 4 May 09: ASX A$1.66 / USA ‐ OTCQX US$6.00
52 week range: ASX A$1.18 to A$3.95 (US$0.86 to US$2.88) USA ‐ OTCQX US$4.00 to US$18.95
Equity market capitalisation: A$289.7 M (US$211.5 M) on fully diluted basis
Available funds: A$6.9 M (US$5.0 M)
Corporate headquarters: Sydney, Australia
Office locations: Indonesia, China and USA
Public since:March 2005
Insider ownership: 34% of shares outstanding
Note: * Assumes A$45M notes are not converted. If all notes converted, market cap = A$311 M (US$227 M). Exchange Rate A$1.00 = US$0.73.
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Financial Snapshot
(A$000’s) 31 Dec 2008 30 Jun 2008 30 Jun 2007
Current Assets 22,370
169,198
191,568
111,517
80,051
80,051
40,056 18,411
Non Current Assets 108,113 67,482
Total Assets 148,169 85,892
Total Liabilities 77,173 8,423
Net Assets 70,996 77,469
Total Equity 70,996 77,469
Consolidated Balance Sheet
(A$000’s) 31 Dec 2008 FY 2008 FY2007
Net Cash (Outflows) from Operating Activities (9,078)
(52,356)
37,227
(24,206)
10,750
(1,301)
Net Cash (Outflows) from Investing Activities
(7,994)
(44,007)
71, 884
19,883
(12,700)
Net Cash Inflows from Financing Activities 22,509
Net Increase (Decrease) in Cash & Equivalents 8,508
Closing Cash & Cash Equivalents 34,956 15,072
Consolidated Statement of Cash Flows
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Except for the historical information contained herein, the matters discussed in this presentation contain forward‐looking statements, including statements, containing the words “planned”, “expects”, “believes”, “strategy”, “opportunity”, “anticipates”, and similar words. Such forward‐looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward‐looking statements. We assume no obligation to update any forward‐looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate.
Forward Looking Statements
For more information visit www.whiteenergyco.com or contact:
Judy Tanselle
President
White Energy Coal North America, Inc.
+1 301 840 3844
John Atkinson
Managing Director
White Energy Company Limited
+61 2 9959 0000
