Indonesian Coal Limited

Indonesian Coal Limited

August 2012

Strong team of Industry professionals with, proven records in project generation, financing, mine operation and corporate governance .

Strategy:

Seek Grassroots to Brownfields level projects in the Asian Region with an initial focus on Indonesia;

Utilise management’s mining industry experience;

Rapidly identify, evaluate and acquire suitable projects;

Add value via drill-out and BFS;

Expand project areas; and

Develop to JORC Resource/Reserve status then decide whether to mine or sell.

The Group, thru its 50% subsidiary Indo Coal, acquired 100% of the Sokal Coal Project in South Kalimantan in September 2011 for $3.0 M.

Historic data for 65 shallow holes was acquired.

An initial 66 holes totalling 4,500 meters drilled by Indo Coal this year.

Interim JORC Resource of 14Mt so far supports 25Mt+ originally estimated.

Funding required to finish the JORC upgrade/conversion and license renewals.

1. Worldwide Mining GroupTEAM

MISSION

INDONESIAN COAL

RON HEEKS – Managing Director• 24 years mining industry experience.• Founding partner in Exploration and Mining Consultants.• Previously worked for WMC, Newmont and RSG Consulting.• Former GM Technical for Straits Asia Indonesian Operations and Chief Technical Officer for

Adamus Resources • B. App. Sc (Geology).

MILAN JERKOVIC – Chairman • Chief Executive Officer of Straits Resources.• Over 25 years of experience in the mining industry involving resource evaluation, operations,

financing, acquisition, project development and general management.• Held positions with WMC, BHP, Nord Pacific, Hargraves, Tritton and Straits Asia.• Member of the Australian Institute of Mining and Metallurgy and a member of the Australasian

Institute of Company Directors.• B. App. Sc (Geology), Post Graduate Diploma (Mineral Economics), Post Graduate Diploma

(Mining).

2. Board & Management

MARK BOJANJAC – Non Exec Director• Over 20 years direct experience in developing resource companies.• A founding director of a gold company sold for A$50m. • Co-founded a 3.0moz gold project in China; sold for US$180M. • MD of a public company which successfully developed and financed a 2.4moz gold resource in

Mongolia.• Most recently CEO of Adamus Resources and oversaw its advancement from an early stage

exploration project through definitive feasibility studies, and managed the debt and equity financing of its recently commissioned $100m mine which was completed within 12 months.

• B. Com CA.

JIM CARTER – Non Exec Director• 16 years’ experience in resources sector, in Indonesia, Singapore & Australia specifically in M&A,

debt financing & equity raisings.• Key roles included CFO for SGX listed coal producer Straits Asia Resources, CFO and Company

Secretary for ASX listed Straits Resources and commercial manager for the Sebuku coal operation in Indonesia.

• 10 years’ experience in Indonesia including involvement with the IPO of thermal coal producer Straits Asia Resources, acquisition of the Jembayan coal operation and Sebuku northern leases as well various associated debt and equity raisings in Asia & Australia.

• B. Bus, CPA Post Graduate Diploma in Applied Corporate Governance.


JOHN LEWIS – Director/Co. Secretary/CFO• B. Bus, CA, Grad Cert. Forensic Studies (Accounting).• Chartered Accountant with 20 years’ post qualification experience working predominantly in

corporate reorganisation, a specialising in the mining industry for the last 10 years.• Previously worked in Corporate Advisory at Deloitte. John has worked on a number of mining

projects including restructuring the business for sale and managing the operations of Croesus Resources NL (now Central Norseman Gold Mines PLC).

• Former Director and Company Secretary of ASX Listed Dragon Mountain Gold Ltd.

PRAYOGO HARGYONO – Geology Manager• Exploration experience in many commodities including over 15 years of field experience in Asia.• Held positions with Pelsart, Borneo Gold Corporation of Canada, North Limited, Straits

Resources, Anglo American and Ivanhoe Mines.• As Head of Exploration for Straits Resources between 2003 -2007 he was responsible for

delineating sufficient resources to restart and maintain production at the Mt Muro Gold Operation and for the massive expansion of the coal resources at the Sebuku Coal Operation. Later with Anglo American, Mr Hargyono was Chief Geologist responsible for Porphyry Copper exploration on Mindanao Island in the Philippines.

• Geological Engineering, Gadjah Mada University, Yogyakarta.

ChairmanMILAN JERKOVIC

GIS Co-OrdinatorEKO SUPRIONO

Senior GeologistSEMUEL POPANG KELIK PRASETYO

SecretaryLINNY KAESANG

Geology Manager IndonesiaPrayogo Hargyono

Managing Director/Technical DirectorRON HEEKS

Director/Co. SecJOHN LEWIS

Non Exec. Director

JIM CARTERNon Exec. DirectorMARK BOJANJAC

LogisticDJONLY DATU

Office ManagerLISA LEWIS

GeologistGANDI NURISTIAWAN

TRI WAHYUNA

Executive AssistantMelanie Martin

Gov. LiaisonSUNDERAGEN

Office AssistantAJI ROSMAYANTI

TransportSUTOPO


Indonesia based

Accountant OfficerLINGKAN PAGALA

5

3. Indonesian Coal - Corporate Structure

Indonesian Coal Ltd(Australia)

Sokal Pte Ltd(Singapore)

PT Sega Bara Persada(Indonesia)

100%

100%

CORPORATE STRUCTURE

Sokal Project

100%

CURRENT INDONESIAN COAL SHAREHOLDING

Smaller Shareholders

22%

Institutions28%

WMP50%

Issued Shares 76,000,000

Options (exc. 12.5 cents)1,140,000

4. Sokal ProjectSOKAL PROJECT

• Thermal coal deposit in South Kalimantan , Indonesia.

• Owned by Indo Coal’s 100% subsidiary, PT Sega Bara Persada (”PT SBP”);

a PMA coy, able to be 100% owned by non-Indonesians.

IUP Production licence (200ha).

IUP Exploration licence (947ha).

• Coal seams are shallow dipping (5°-12°) near surface, low strip-ratio and readily amenable to open cut mining.

• Surrounded by existing producers;

Adjacent mining of ~6Mtpa.

Nearby mining of ~75Mtpa.

Advanced discussions with neighbours;

Sharing data.

Potential acquisition/expansion.

Potential mine-gate coal sales.

• Excellent coal mining logistics and infrastructure.

4. Sokal Project

4. Sokal Project - Sections

3D FLY-BY PRESENTATION

4. Sokal Project

Coal SeamsTonnage

Measured Indicated Inferred

Seam 10 443,000

Seam 15 164,000

Seam 20 766,000

Seam 21 245,000

Seam 29 278,000

Seam 30 1,171,000

Seam 35 509,000

Seam 40 909,000 905,000

Seam 45 155,000

Seam 50 934,000

Seam 60 745,000

Seam 70 767,000

Seam 90 555,000

Seam 100 1,075,000 1,576,000

Seam 200 1,064,000 322,000

Seam 250 78,000 162,000

Seam 300 705,000 490,000

Total 2,922,000 10,191,000 905,000

14,018,000

INTERIM JORC RESOURCE

• 14Mt from 66 new holes so far

• Best section yet to be drilled with 7 identified seams

• 70-80 remaining holes to complete program

• ~6 weeks to complete

• In line with our 25Mt+ estimate

4. Sokal Project

COAL QUALITY

Coal quality expected to be 5,100 – 5,800 Kcal (adb).

Based on;

• Test pit sampling by Indo Coal.

• PT TIA operating directly east of the Sokal Project.

• RKW mining directly south.

PT TIA – Coal Quality Value

Gross Calorific Kcal/kg (adb) 5,400 – 5,600

Ash 5.0 – 7.0%

Sulphur 0.3 – 0.5%

Volatile Matter (adb) 38.0 – 40.0%

Total Moisture (arb) 34.0 – 37.0%

HGI 55%

Sokal Project – Sampling Value

Gross Calorific Kcal/kg (adb) 5,480 – 5,810

Ash 2.0 – 7.0%

Sulphur 1.3 – 3.0%

Volatile Matter (adb) 40.0 – 44.0%

Total Moisture (arb) 39.0 – 41.0%

HGI 46 - 63%

4. Sokal Project

EXPLORATION

POTENTIAL

• Initial exploration targets on Indo Coal tenements;

7-10Mt from the IUP Production (Mining Licence).

25- 50Mt from the IUP Exploration Licence.

• Shallow dipping seams of 5° to 12°;

• Untested shallow mining of undrilled seam(s) on southern boundary.

• Potential deeper seam of up to 25m thickness as mined directly to the east.

2012/2013 Use of Funds A$m

Drilling , Permitting , BFS 1.5**

Other Exploration 0.25

Working Capital 0.25

Total 2.0

BUDGET

**Will bring SOKAL project to Decision to Mine Status.

4. Sokal Project – Infrastructure EXISTING

INFRASTRUCTURE

• Multiple haul road options on tenure.

• 3 multi-user port facilities within 40km.

• Experienced mining contractors operating nearby.

• Well serviced road and air network.

• Multi-user wash plants located nearby if required.

• Negotiating use of existing haul roads and port facilities.

• Contract earthmoving, haulage and port facilities.

• Possible mine-gate sale to neighbouring operators. (discussions commenced)

PROPOSED INFRASTRUCTUR

E SOLUTION

• Purchased Sokal;

Completed due diligence;

Now 100% owned by PMA company;

Acquired & analysed historical drilling data.

• Opened discussions to acquire tenure to north and south;

• Commenced drilling in March 2012;

• Reviewed 150+ potential new coal projects;

Currently undertaking due diligence to acquire further coal projects in Indonesia.

• Significant progress made on permitting;

• Resource Modelling up to date;

• Initial Engineering cost study completed;

• EPA approvals progressing; and

• Lodged all license renewal documents.

PAST 9

MONTHS

Indonesian Management Team

5. Sokal Project - Development Plan

EXPECTEDPARAMETER

S

• Initial work consistent with Scoping Study parameters.

• Independent consultants appointed for BFS;

Interim Resources up to date.

Reserve calculation on drill completion.

Engineering Studies and costing analysis commenced.

Mine scheduling work underway.

• Opex estimate verification commenced and ongoing.

• Infrastructure use discussions commenced.

• Decision to mine or trade sale4Q 2012

• BFS completion expected 4Q 2012

• Funding and off-take arrangements if req. 1Q 2013

STATUS

Parameters Value

Initial Production (1H 2013) 0.75Mtpa

Expanded Production (2015) 1.5Mtpa

Mine Life >5 years

Yield 90%

Expected Strip Ratio 2:1 initially (LOM of 6:1)

Estimated Minegate Costs (LOM) ~US$23-30/t

Estimated FOB Costs (LOM) ~US$30-40/t

Capex ~US$12m



INDICATIVE TIMING2012

APR MAY JUN JUL AUG SEP OCT NOV DEC

EXPLORATION PERMITTING

DRILLING

• WIDE SPACING

• INFILL

RESOURCE CALCULATION

MINE COSTING

RESOURCE CALCULATION / MINE DESIGN

MINE PERMITTING

• LEGAL

• ENVIRONMENTAL

BANKABLE FEASIBILITY STUDY

DECISION TO MINE OR TRADE SALE

6. Peleng Island Project

• Term sheet signed to undertake 6 month legal and technical DD;

• Takeover for cash and Royalty per tonne;

• Approx. 20,000 hectares;

• Existing samples of 6000+ CV coal with low moisture;

• Very poorly explored;

Identified by Mines Department mapping in 1998;

Little serious exploration since.

• No systematic exploration undertaken;

• Remote location east of Sulawesi;

Away from overpriced areas of Kalimantan.

• Licences border coastline;

Excellent logistics for mining and shipping.

7. IndonesiaWHY

INDONESIA?• Large known coal resources – one of the world’s

most productive.

• Quality coal with a proven history.

• Worlds largest exporter of thermal coal.

• Proximal multi-user facilities for coal washing and handling.

• Board & management expertise in Indonesian coal projects.

• Experienced technical team based in Indonesia.

• Experienced mine contractors and low cost workforce.

• Mining Law now allows 100% project ownership.

• “White Paper”: proposal that Indonesian partners buy 51% within 10 years at “fair market value”;

No changes have been implemented to date and may not be.

• Up to 7% Government Royalty.

• 25% Tax Rate (maximum).

MINING REGIME

100% owned tenure.

Market quality thermal coal.

Infrastructure proximity.

Low exploration cost.

Experienced management team.

Immediate value-add from drilling and BFS.

Opportunity to Mine or Sell.

Potential adjoining and regional expansion.

IMMEDIATE TERM SHAREHOLDER VALUE

8. Reasons To Invest

SEBUKU CASE STUDY

Appendix

1996 • Straits purchases 80% for $26 million.

• Resource of 20Mt, Reserve of 13Mt.

• Mine commissioned.

• 1.3Mtpa annual production.

• Straits Asia IPO at S$0.72/share valuing Sebuku at S$750m.

• Resource increased to 240Mt.

• Further acquisition;

• Increasing production from 1.5Mtpa to 10Mtpa over 3 years.

• Straits Asia current market capitalisation of S$3.4 billion.

• Share price of S$2.99.

• Annual production increasing to 20Mtpa by 2014.

1998

2006

2011

Sebuku Case Study

INDONESIAN COAL LIMITED

www.worldwideminingprojects.com.au

Contacts

Indonesian Coal Limited

Documents

Transcript of Indonesian Coal Limited