Josh Euler - GVK Resources - Alpha Coal mine and rail project

GVK Hancock’s Galilee Basin Assets Josh Euler Manager Corporate Affairs

Galilee Basin Coal & Energy Conference 2013

11 November 2013

2 25 November 2013 Galilee Basin Coal & Energy Conference 2013

Important Notice - Disclaimer DISCLAIMER – IMPORTANT NOTICE This presentation ("Presentation") has been prepared by GVK Coal Developers (Singapore) Pte Ltd Company No. 201115929C on behalf of its affiliated companies (“Company”) to provide an update on the development of the project. As a condition to accepting the Presentation, each recipient accepts the terms and conditions set out in this Presentation and agrees to keep the Presentation and the contents of the Presentation confidential. If the terms and conditions contained in this Presentation are not acceptable to a recipient, the Presentation and any copies in the recipient's possession must be returned to the Company immediately. The Company retains ownership of the content of the Presentation. The Presentation has been prepared as at 25 November 2013. The purpose of the Presentation is to provide general information regarding the current status of the project. It is supplied to the recipient on the basis that it is not to be used for any other purpose. The Presentation is not to be reproduced, transmitted, made available or discussed with any other person without the prior written consent of the Company. This Presentation is for the Recipients' information only and does not constitute an offer to sell or a solicitation of an offer to purchase any securities or financial products, nor does it constitute an offer or solicitation in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. The information contained in this Presentation is not for publication, release or distribution in any jurisdiction, including in Australia, Singapore, the United States, Canada, Japan, Korea or the PRC. 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Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance to differ materially from the estimations expressed or implied in the Presentation. Neither the Company nor any officers, directors, employees, advisers, agents or associates of the Company ("Agents") guarantees that the assumptions underlying such forward-looking statements are free from errors, nor do such persons accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. This Presentation has not been and will not be independently verified or audited. 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GVK Operations

Power

Airports

Transport M

ining Mining

Urban

Hotels

Bioscience

Bio

scie

nce

GVK Group is one of India’s leading business groups ●  Developed India’s first independent Power Plant and

first toll road project ●  Operates India’s largest private airport – Mumbai

International Airport

GVK’s Project Value Add ●  Is a leading global infrastructure owner, manager and

operator ●  Has significant experience in financing & developing

large scale projects ●  Provides direct access to and strong understanding of

India’s growing energy market ●  Investment / financing capability - strong relationships

with leading global banks across debt & equity ●  Track record of partnering with third party investors and

financiers to deliver large complex projects

GVK A Controlling Shareholder with a Wealth of Expertise


GVK EMRI – Our Innovative PPP (Public Private not for Profit Partnership) Service Delivery Model to provide free Emergency Response Services

The GVK’s Emergency Management & Research Institute (EMRI) is one of the most important social initiatives of GVK.

•  Over 750 million people covered in 14 States and 2 Union Territories

•  Employing more than 28,000 people

•  6000 ambulances

•  Over 23 million cases have been attended

•  808,000+ lives saved to date

Corporate Social Responsibility


GVK Hancock Holding Structure

Aurizon ownership subject to execution of final agreement

79%

Hancock Coal (Alpha coal

project)

21%

79% 100% 49%

GVK Family GVK Power and Infrastructure

90% 1 0%

54%

GVK Coal Developers

51%

Hancock Alpha West

(Alpha West coal project)

Hancock Galilee (Kevin’s Corner

coal project)

GVK Galilee Infrastructure (Rail & Port

projects)


Project Overview

Alpha Kevin’s Corner Alpha West Railway Port

�  Will rank as one of the largest thermal coal operations in the world and the first in the Galilee Basin

�  Will rank as one of the largest thermal coal mines in the world

�  Large underground mine development west of Alpha

�  Proposed 51% Aurizon : 49% GVK strategic partnership

�  Proposed 51% Aurizon : 49% GVK strategic partnership

�  Dedicated terminal at Abbot Point, Australia’s most northern coal port

�  32Mtpa export grade thermal coal mine

�  Up to 30Mtpa export grade thermal coal mine

�  16-24Mtpa export grade thermal coal mine

�  Rail link from Galilee Basin to Abbot Point

�  Awarded Preferred Developer for T3

�  1.82Bt resource

�  1.2Bt reserves

�  4.2Bt resource

�  473 million tonnes reserves

�  1.8Bt resource �  60Mtpa capacity

�  Scalable to >120Mtpa �  Up to 73Mtpa capacity

�  100% Open cut mining, + 30 years mine life

�  Open cut & underground mining, 30 year mine life

�  Underground mining, 30 year plus mine life �  Rail corridor permitted �  2 x 30Mtpa stockpile

capacity

�  High grade thermal coal for export markets



�  Pre feasibility drilling has commenced

�  Tier 1 State and Federal government environmental approvals granted

�  2 x dedicated ship berths

�  Up to 220,000 DWT (large Capesize) capacity

The Galilee Basin assets comprise large scale (approximately 8 billion tonne JORC resource) high quality thermal coal resources with integrated rail and port infrastructure located in Australia’s next major coal basin


Galilee Basin thermal coal & Infrastructure

0 150 km

Galilee Basin

Bowen Basin

Fully permitted GVK Coal Galilee rail route - - - - - -

Abbot Point Coal Port

Carmichael Project (Adani)

(Vale Exploration)

Kevin’s Corner (GVK)

Alpha Project (GVK)

South Galilee Coal Project (AMCI / Bandanna Energy)

China First Project (Waratah Coal)

Waratah Coal exploration

Alpha West (GVK)

Existing Aurizon rail network ______

●  Three world-class coal deposits with a total JORC Resource of 8 billion tonnes of high quality thermal coal – Alpha, Kevin’s Corner, Alpha West deposits

●  The Alpha and Kevin’s Corner coal mines are projected to be amongst the largest thermal coal mines in the world, at 32 Mtpa and 28 Mtpa respectively

●  The Alpha mine development is the most advanced mine development project in the Galilee Basin

●  Alpha is targeting global first quartile cash cost.

150km 0


Alpha - Excellent Coal Quality

Alpha coal Test Pit ●  Construction of the test pit was started by

Hancock Prospecting in 2010 ●  The test pit was the first and is still the only

production and export of coal from the Galilee Basin

●  125,000 tonnes mined ●  Validation of geotech, ground water

assumptions and product quality

Successful test burns 1.  KOSEP, Yeongheung Power Station

South Korea 2.  Guodian Beilun First Power Plant, China

●  Excellent result ●  Coal quality parameters, confirmed Alpha as

a high quality premium product ●  Blended with high ash (Korea) and low rank

(China) coals, improving performance in both cases

Indicative Shipped Specification (LOM1) Proximate analysis As received1 Air-dried

Total moisture (%) 15.5 - 17.0

Inherent moisture (%) 8.0 Ash (%) 8.6 9.5 Volatile matter (%) 30.2 33.5 Total sulphur (%) 0.51 0.56 CV gross (kcal/kg) 5,800 6,430 HGI 52.0 Fuel ratio 1.45

Test Pit over burden removal Mining at Test Pit

(not

e ne

eds

to c

ross

Wet

land

s)

Loading at Gladstone port First vessel sailing out to Korea


Favourable Geology and Large Resource

●  Four economic coal seams, varying in thickness from 4m to 8m

●  All seams dip gently (0.5o to 2o) from east to west, no major dislocating structures

●  GVK’s coal assets are all in the shallowest part of the Galilee Basin

Depth

16m

43m

52m


Rail Infrastructure Development

●  In March 2013, Aurizon and GVK Hancock signed a non-binding term sheet to jointly progress the development of rail and port infrastructure to unlock Galilee Basin coal reserves

● Aurizon would earn a 51% equity in rail and port; GVK to retain a 49% interest

● Transaction process significantly advanced. Both parties working towards an expedited completion.

● Significant work undertaken on developing a cost and time efficient rail solution to connect Alpha mine to Abbot Point Port.

● Up-scalable capacity to meet demand – up to 60Mtpa and beyond as required

Abbot Point Coal Port


Port Infrastructure Development

Planned New Coal Port Terminal – T3 (Abbot Point)

●  2.1 Mt stockyard capacity

●  Deepwater vessel approach

●  Large Capesize vessel berthing capacity - 220,000 (DWT)

●  2 deepwater berths each equipped with dual quadrant shiploaders

●  Shiploader capacity of 8,000tph average

●  Fast vessel turnaround due to higher loading rates than other Queensland Terminals

New GVK Hancock 2.1Mt of stockyard

capacity

Dual high capacity (8,000 tph) train dump

stations

Dual high capacity (8,000 tph) shiploaders

Existing Abbot Point Terminal T1

wharf and stockyards

Deepwater vessel berthing and approach

Abbot Point Northern most coal port in Australia and

closest Australian coal port to Asia


Power & Water Infrastructure

Power

●  Plans to build a 275 kV power line

●  There is sufficient capacity in the line for Alpha, Kevin’s Corner, Alpha West and other mine customers

Water

●  Make Good Agreements

●  Existing site dams

●  Water harvesting during high flow periods - off-stream storage

●  Pit dewatering

●  Supplemented - Nogoa Mackenzie Water Supply Scheme

0 50 100 150 200 250 300

2016

20

19

2022

20

25

2028

20

31

2034

20

37

2040

20

43

2046

Power Dem

and (M

W)

Year

Alpha Mine & Kevin's Corner Power Demand Ramp Up

Alpha Mine Kevin's Corner Mine


Approval Status Target

Alpha Mine Development

79% GVK Coal Developers

CG’s report Received May ’12 Achieved !"

State EIS Approval Received May ’12 Achieved !"

Federal EIS Approval Received Aug ‘12 Achieved !"

Mining Lease Under Process Expected H2 ’13

Kevin’s Corner Mine Development

100% GVK Coal Developers

CG’s report Received Achieved !"State EIS Approval Received Achieved !"Federal EIS Approval Received Nov ‘13 Achieved !"Mining Lease Under Process Expected 2014 "

Rail

CG’s report Received May ’12 Achieved !"

State EIS Approval Received May ’12 Achieved !"

Federal EIS Approval Received Aug ’12 Achieved !"

Rail sublease Under Process Expected H1 ’14 "

Port

Framework Agreement Executed Achieved !"

Onshore Approval T3 Received Oct ‘12 Achieved !"

Onshore Approval (dredging) Under Process Expected H2 ’13

Offshore Approval (relocation) Under Process Expected H2 ’13

Approvals Status


Benefits - Employment

GVK Hancock Alpha

Construction Alpha

Operations Kevin’s Corner

Construction

Kevin’s Corner

Operations

T3 / Northern Rail

Construction

T3 and Northern Rail Operations

Port 600 70 - - 1,330 300

Rail 1,400 250 - -

Mine 2,000 1500 2,000 1,600 - -

Total Direct 4,000 1,820 2,000 1,600 1,330 300

Indirect Long Term Employment

7,735

6,800

1,275

Totals 4,000 9,555 2,000 8,400 1,330 1,575

Direct and Indirect Jobs = 23,000+

Royalties / Taxes etc – estimated over initial project lives = $40 billion


Local Community benefits Our Galilee Basin projects will include direct community support to a wide variety of the local communities in which we operate.

These community support programs will cover the areas of: •  Education and Training •  Environment •  Arts and Culture •  Health and Safety •  Community •  Sports

Current pre-construction sponsorships include: •  Alpha Community Support Program •  Whitsundays Marketing & Development

Program

Alpha Swim Club – Sponsored by GVK Hancock Coal

Winners of the 2012 Hancock Prospecting and GVK Christmas Lights Competition

Proud sponsor of the Longreach School Of Distant Education Recipe Book

Regional Indigenous Employment Program constructing a walking path

Bowen River Rural Fire Brigade


Local Industry Participation Plan (LIPP)

Our project will aim to support local businesses through the use of a Local Industry Participation Plan. We have engaged the firm Industry Capability Network (ICN) to assist with us meeting the LIPP guidelines. Industry Capability Network (ICN) is a business network that connects Australian and New Zealand suppliers with project proponents large and small. Any local business seeking to gain work through our project should register via the ICN Network – www.gateway.icn.org.au


Galilee Basin Development Strategy

•  Lower start-up costs to fuel development

•  Streamlining land acquisitions, planning approvals and red tape

•  Positioning Abbot Point as the Galilee’s gateway to the world

•  Supporting infrastructure development and corridors

•  Supporting regional communities


Disrupt and Delay tactics

Unfortunately, a minority group of activists are focussed on disrupting and delaying a legitimate industry from undertaking one of the most significant pieces of regional development this state has seen for decades.

“Our strategy is to ‘disrupt and delay’ key projects and infrastructure while gradually eroding public and political support for the industry and continually building the power of the movement to win more.” Stopping the Australian Coal Export Boom – Funding proposal for the Australian Anti-coal Movement


Myths and Facts - Great Barrier Reef

Recent scientific evidence conducted by Australian Institute of Marine Science (2012) concluded that the Great Barrier Reef lost half of its coral cover in the last 27 years due to:

•  Storm damage (48%)

•  Outbreaks of crown-of-thorns starfish (42%)

•  Bleaching (10%)

The dredging campaign will be around 2-3 weeks and is around 40 kilometres from the reef.

We fully support the North Queensland Bulk Ports Corporation who have carried out 19 successful dredging campaigns since 1992 without incident.


Thank you

Josh Euler - GVK Resources - Alpha Coal mine and rail project

Business

Transcript of Josh Euler - GVK Resources - Alpha Coal mine and rail project