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COCKATOO COAL LIMITED

and its controlled entities

A.B.N. 13 112 682 158

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED

30 JUNE 2015

COCKATOO COAL LIMITED

and its controlled entities

CONTENTS

Page
Overview	1
Chairman's Report	2
CEO Report	4
Operating and Financial Review	6
Statement of Corporate Governance	16
Directors' Report	17
Lead Auditor's Independence Declaration	31
Consolidated Statement of Profit or Loss and Other Comprehensive Income	32
Consolidated Statement of Changes in Equity	34
Consolidated Statement of Financial Position	35
Consolidated Statement of Cash Flows	36
Notes to the Consolidated Financial Statements	37
Directors' Declaration	77
Independent Auditor's Report	78
Additional Stock Exchange Information	80
Corporate Directory	82

OVERVIEW

Corporate and Financial Summary

$125m recapitalisation and revised business plan to complete Baralaba Expansion project Restructure of Board of Directors

Appointment of new Chief Executive Officer

Sale of interest in North Surat Joint Venture for $25 million, resulting in an impairment reversal of $13 million Impairments recorded against non-core assets held by the Group

Acquisition of minority interests in Baralaba from JFE

Release of $37.0 million of restricted cash via agreements with Noble Group & SKN Exploration Joint Venture with JOGMEC

New offtake agreements with JFE, Noble Group and SKN Termination of ANZ Project Finance Facility

Termination of Management Agreement for the Bylong Project

Operating Summary

A company record for 365 days Recordable Injury Free

701,445 tonnes of coal produced at the Baralaba mine during the full year 666,831 tonnes of coal sold during the full year

Transition of mining operations to Baralaba North complete, with mining, ceased at Baralaba Central Completed opening of the new Outrigger pit

Strong productivity and efficiency gains achieved

Aggressive cost reduction program in response to falls in the benchmark PCI price Construction of the new train load out facility and balloon loop > 75% complete Coal Haulage & Road Infrastructure Agreements executed

Baralaba Expansion Prescribed Project declaration granted 2 year extension Baralaba Expansion project EIS deemed adequate by DEHP

Resource upgrades at Baralaba and South Pentland Projects

CHAIRMAN'S REPORT

Dear Shareholder,

In the 2015 Financial Year Cockatoo Coal has seen a difficult mix of successful mine development and financial stress imposed by continually deteriorating market conditions.

Outside of all market expectations, the benchmark metallurgical coal price continued to edge lower in response to the global slow-down in demand for steel. Metallurgical coal prices reached a 10 year-low in the June Quarter driving the benchmark PCI coal price down 25 per cent below prices at the time of our corporate restructuring and equity raising earlier this year.

The recapitalisation of Cockatoo was necessary to provide equity funding for the Baralaba Expansion project when the unexpected slide in coal prices made our debt funding arrangements unsustainable. It had the benefit of bringing to the Company a major new investor, Liberty Metals and Mining, LLC, and its financial expertise to the Board. Our other major shareholder Noble Group continues its cornerstone support and the certainty provided by off take agreements.

Despite the market pressures Cockatoo Coal has successfully pressed forward with the development of the Baralaba Expansion project, knowing that the new mine is intrinsic to the Company's future and that global coal prices will recover in due course. By pressing ahead against these head-winds, we will secure a productive mine constructed during a period of historically low contract costs which will lock- in a low cost base for future production in the years ahead.

We remain on target to deliver on our planned ramp-up in output from 1mtpa to 3.5mtpa by 2017. This aligns with our commitments for rail haulage and port access through the Wiggins Island Coal Export Terminal.

The expansion also creates further opportunities for scale efficiencies. Across all parts of our operations we see the steady growth in production will create incremental reductions in our average costs per tonne of production. There are opportunities to utilise equipment more efficiently. Our employees will benefit from being part of an expanding workforce where working efficiencies are achieved by increasing the number of jobs, rather than by the kind of staff cuts that have affected most of our peers in Queensland.

Nonetheless, 2015 has imposed enormous pressures of Cockatoo Coal to adapt to the new market environment. Since the corporate restructuring in February, we have systematically reviewed all aspects of our business. The Board's immediate objective was to ensure the Baralaba operation continues to be sustainable. Longer term we critically examined all aspects from mine plan to production management, cash-burn, use of assets and executive requirements to ensure every aspect of our operation was optimised for efficiency. This review process has seen sweeping operational change at the same time as we have driven the timely development of the Baralaba Expansion.

The review proved to be an extraordinary success, and it reflects great credit on everyone involved at all levels of Cockatoo Coal.

The declining market conditions of 2015 demanded a comprehensive response which came in jointly from the recapitalisation and the operational review. Anything less at that time would have risked Cockatoo Coal being unable to continue its operations. This made 2015 a break-through year, and we remain optimistic about the future.

Our product, Low Volatile Pulverised Coal for Injection (LVPCI), is a cost efficient input for steel production at a time when steel manufacturers are looking to lower costs and improve their competitive positions. Once Cockatoo Coal is in full production, we expect to produce around 15% of the global tradable LVPCI market. As well, despite a current over-supply, steel remains a key requirement of the modern industrial world, and an increasing supply is a fundamental requirement for raising living standards in the developing world. As a metallurgical coal, PCI demand and value is also somewhat protected from the debate about the carbon output and the threat of dis- investment in fossil fuels including thermal coal.

I take this opportunity to acknowledge the strong contribution made by Andrew Lawson as the initiator and leader of the Baralaba Expansion project and who resigned as Managing Director after seeing through the financial restructuring. Also Directors Hye ondong (Henry) Cho, Rod Ruston and Will Randall made valuable contributions to Cockatoo Coal before resigning during the year.

I welcome to the Board Damon Barber, Mark Tomek and Stephen Motteram, and Neil Dhar in his role as alternate Director, all of whom brought strong commercial and financial expertise that has helped our efficiency drive in recent months. Our new CEO Peter Kane has been tireless in his review and reshaping our operations. Together with the continuing directors, Cockatoo Coal shareholders have a leadership team that is capable and committed to serving their interests.

I thank management and staff for their consistent effort and understanding in a very difficult market conditions as your willingness and commitment has kept the Company moving ahead at a time when many peers have been unable to find a way forward. Likewise, I thank our shareholders for their forbearance and continued support despite suffering from the Company's setbacks during this watershed year.

With a difficult year behind, I look forward with anticipation at seeing the benefits of our hard earned improvements start to flow back to shareholders in the year ahead.

Mr Peter Richards Chairman

CEO Report

Dear Shareholder,

It is a pleasure to report to you as the new Chief Executive of Cockatoo Coal.

The Company has faced significant challenges over the past twelve months as we respond to the global downturn in the demand for steel and the raw materials used in its production. To remain competitive in this environment, we must reduce the cost of coal production. It is a challenge that affects the whole industry. Only the lower cost producers will survive.

To meet this challenge, the Company embarked on a focused and successful cost reduction campaign. Its success keeps us on-track with the development of the Baralaba Expansion project and ensures we are a competitive coal producer in a turbulent global market.

This year Cockatoo Coal has been recapitalised to provide the funding needed to secure our financial future. The $125 million equity raising was vital for the Company's continued development and future growth. Securing the future of the Company is also critical for the Central Queensland economy and more specifically the long term survival of local industry in the Baralaba region.

The new Outrigger pit at the Baralaba North mine has now opened, and we are pleased that the time line for the Baralaba Expansion project remains on target. We successfully completed the first stage of the project which involved the construction of the vital infrastructure to support the expansion of coal production at the Baralaba North mine to 1 million tonnes per annum which was delivered on time and under budget.

The next phase in the development of the Baralaba North mine involves the completion of the transportation infrastructure to provide for the mine's expansion to 3.5 million tonnes of coal per annum. The construction of the new train load out facility east of Moura and the balloon loop is approximately 75% complete. To date, more than 6km of rail track has been constructed to the existing Moura rail line and the project is expected to be completed by the end of 2015.

In a year of cost-cutting, it would have been easy to also cut corners. But amongst our most pleasing successes this year has been our efforts in workplace safety which have resulted in Cockatoo Coal achieving a company record of 365 days injury free. We ask for the highest workplace standards from all our employees and are committed to having best-practice operations across all our mining activities. The reforms undertaken over the past twelve months are about ensuring we operate with a leaner and safer operating model as we move forward with the completion of the second stage of the Baralaba expansion and ramp up production to 3.5 million tonnes per annum.

Longer term our employment strategy commits Cockatoo Coal to being part of the local community in which we operate. We want to provide job security for local workers and see that as integral to the future success of the Company's operations. Our commitment to ongoing community involvement continues with Cockatoo Coal getting behind the local community and sporting groups as well as local events. This year the Company proudly supported the Moura Coal and Country Festival, the Moura Hack and Pony Club, the Baralaba Agriculture and Pastoral Society Inc. and the Baralaba Local Ambulance Committee.

The cost reduction efforts and the need to recapitalise have resulted in changes at a corporate and an operational level. It is important to thank those that have made significant contributions in steering Cockatoo Coal through the recent challenging and uncertain market conditions. I would like to acknowledge my predecessor Andrew Lawson and the former Board Members for their significant contributions.

I would like to warmly welcome the new Directors of Cockatoo Coal, Mr Damon Barber, Mr Mark Tomek, Mr Stephen Motteram, and Mr Neil Dhar who has been appointed as an alternative Director for Mr Tim Gazzard and Mr Stephen Motteram. I look forward to working with the Board on the future vision of the Company.

I would like to take this opportunity to thank and congratulate the whole Cockatoo team on meeting the challenges of a tough year that required significant reforms. I'm confident these reforms put Cockatoo Coal on a stronger path for 2016 and beyond.

As the Shareholders, you must be thanked for your ongoing support throughout the year. I look forward to this continuing as we proceed with the Baralaba expansion and safely increasing our coal production.

Mr Peter Kane

Chief Executive Officer

OVERVIEW

This year has seen Cockatoo Coal Limited ('Cockatoo' or the 'Company') and its controlled entities ('the Group') undertake major reforms necessary to ensure the Company could drive ahead with the Baralaba Expansion Project despite the difficulties presented by an unexpectedly challenging global economic environment.

Coal prices for metallurgical coal reached 10-year lows with the benchmark PCI coal price having declined similarly. Weak growth in Asia and an excess of steel production has seen an oversupply in the metallurgical coal market.

Cockatoo Coal continues to focus on delivering greater efficiencies to ensure the Baralaba mine complex will be one of the lowest cost and enduringly efficient mines in Australia for Ultra-Low Volatile Pulverized Injection Coal ('PCI'). The operating environment and outlook for Cockatoo Coal remains challenging with the future direction of market conditions unclear. Despite this, the Board and the Management are focused on driving greater efficiencies that maintain productivity and allow the Company to pave the way for a more sustainable long term future in a volatile global market.

CORPORATE AND FINANCIAL REVIEW

Cockatoo has undertaken an aggressive cost reduction program in response to falls in the benchmark PCI prices, with metallurgical coal under sustained pressure. All parts of the business operations have been subject to the systematic review to reduce the production cost of coal per tonne and to take advantage of the opportunities of that will become available with the planned ramp up in output from 1mtpa to 3.5mtpa by 2017.

A revised and re-optimised mine plan has been developed for Baralaba, reducing overburden removed in advance and focusing the next three years of production within more efficient mining areas. The significant deferral of capital expenditure spread across five years, combined with realisation of revenue from recent non-core asset sales has materially reduced Cockatoo's expected funding requirements for Baralaba to approximately $125m, with the forecast mine cash flows covering deferred expansion costs.

The results of the aggressive cost reduction program during the second half were an increase in efficiencies and stronger productivity gains at the end of the 2014/2015 Financial Year.

Recapitalisation

The Company undertook and completed a $125 million equity raising to fund Cockatoo's flagship Baralaba Expansion project. This was needed to replace the previous ANZ loan facility which became unsustainable as benchmark coal prices fell. The equity raising was via a fully underwritten pro-rata entitlement offer of fully paid ordinary shares. It was supported by existing major shareholders Noble Group Limited ('Noble Group') and PT Harum Energy Tbk and many of our smaller investors. As well, a new cornerstone investor joined the register, the US-based Liberty Metals & Mining Holdings LLC, a subsidiary of Boston based Liberty Mutual Insurance group.

Restructure of Board Directors

A restructure of the Company's Board was undertaken at the time of the recapitalisation with the appointment of Mr Damon G. Barber, Mr Mark Tomek and Mr Stephen Motteram as Non-Executive Directors. In addition to these appointments, Mr Neil Dhar was appointed as an alternative Director for Mr Tim Gazzard and Mr Stephen Motteram. Leaving the Company's Board included Mr Hyeondong (Henry) Cho and Mr Rod Ruston while Mr William Randall resigned as an alternative Director. Since then independent Director Mr Robert Yeates has resigned after long and committed service to the Board and shareholders.

Appointment of a Chief Executive Officer

As part of the restructure the position of Managing Director was made redundant. The Board acknowledged the contribution of Mr Andrew Lawson for the development of Cockatoo and thanked him for his service. He was replaced by Mr Peter Kane as the Chief Executive Officer of the Company. Mr Kane is a mining engineer with more than 27 years' experience in the mining sector in Australia, New Zealand and Mongolia.

North Surat Joint Venture

Cockatoo's wholly owned subsidiary Cockatoo Coal (Taroom) Pty Limited completed the sale of its 51% interest in the North Surat Joint Venture (NSJV) to North Surat Coal Pty Ltd (a wholly owned subsidiary of New Hope Corporation Limited) for $25 million. The NSJV comprised the 'Collingwood', 'Taroom', and 'Woori' coal projects. The sale of these non-core assets is part of Cockatoo's strategy of focusing on the expansion of Baralaba.

Acquisition of Minority Interests in Baralaba from JFE

During the full year, Cockatoo announced that it had reached agreement with JS Baralaba Wonbindi Pty Ltd ('JSBW'), a subsidiary of JFE Shoji Trade Corporation ('JFE Shoji') to acquire its minority shareholdings in Baralaba Coal Pty Ltd and Wonbindi Coal Pty Ltd (collectively Baralaba JV) for A$1 with existing loans from JSBW of approximately A$68m to remain in place following completion of the sale. Repayment of the JSBW shareholder loans are subordinated to any new funding contributed by the Company up until completion of the Baralaba Expansion project, and will then be repaid from Baralaba JV cashflows on an equal dollar per dollar basis with the existing shareholder loans that the Company has advanced to the Baralaba JV.

Subsequent to year end, JSBW who held a 37.5% interest in Baralaba Coal Pty Ltd, and a 20% interest in Wonbindi Coal Pty Ltd transferred their total minority shareholdings in Baralaba Coal Pty Ltd and Wonbindi Coal Pty Ltd to Noble Group and Liberty Metals and Mining Holdings, LLC, a subsidiary of Boston based Liberty Mutual Insurance for a nominal amount. The current value in Baralaba and Wonbindi is in the shareholder loans owing to the Company and JFE Shoji.

Shareholder Cash Release: $37.0 Million in Funding

Additionally, Cockatoo reached agreements with Noble Group, SK Networks Co Ltd ('SKN') and its principal bank Australia and New Zealand Banking Group ('ANZ') to release $37.0 million of restricted cash. The arrangements have a term of 3 years and guarantee fees charged at 12.5% per annum plus expenses (capped at 1% per annum) to be capitalised and repaid on termination of the facility. The restricted cash is being used for working capital and development purposes.

New offtake agreements with JFE, Noble and SKN

During the year ended 30 June 2015 the Company has agreed the following off-take arrangements; the current PCI coal offtake tonnage with JFE Steel Corporation ('JFE Steel') has been increased from 300,000 to 500,000 tonnes per annum and the term of the off-take agreement has been extended to 31 March 2022. Noble and SK Networks agreed to each offtake 5.85Mt of ULV PCI coal from the Baralaba JV. Noble has also agreed a new off-take agreement for 28.5Mt.

The new off-take arrangements helps secure the sale of Cockatoo's future production. The agreements provide greater certainty on the ability to sell the Company's scheduled production of 3.5Mtpa for the next 20 years.

Workforce Management

During the year the continuing slowdown in the coal market has been a constant pressure. Comprehensive information was provided to employees and contractors with employees invited to participate in information sessions. Redundancies became unavoidable in response to the continuing deterioration in market conditions. Total redundancies were minimised through effciencies in rostering as the Company moved through the development phase of the Baralaba Expansion.

Additionally, to manage cash flows, mining operations at Baralaba were suspended for a period of four weeks across the holiday period. Sales of coal continued during that period with only minimal interruption to haulage and railing of coal from existing stockpiles. Mining Operation resumed at Baralaba on 14 January 2015.

In the second half, new CEO Peter Kane and General Manager Brian Wyatt conducted an extensive review of executive and corporate head office requirements. This has resulted in redundancies for approximately 86% and 22% of the staff in Brisbane and Baralaba respectively, including a majority of head office executives, the Chief Financial Officer, Chief Operating Officer, Chief Development Officer and Company Secretary.

Termination of management agreement of Bylong Project

During the year, Cockatoo reached mutual agreement with KEPCO Bylong Australia Pty Ltd ('KEPCO') to terminate the agreement between Cockatoo and KEPCO to manage the 100% KEPCO owned Bylong project in New South Wales. Cockatoo had delivered the final milestone required under the management agreement, with the termination aligning with Cockatoo's strategy of focusing on the Baralaba Expansion project.

OPERATING SUMMARY

Health and Safety

Cockatoo's strong performance in the area of Health and Safety resulted in a company record reached in May when Cockatoo Coal achieved 365 days without recording a Lost Time Injury (LTI). The company recorded an LTI in June, but our priority continues on developing an extremely safe but efficient operation. Cockatoo's twelve month rolling TRIFR is 2.47 compared to the 2014 financial year Queensland Open Cut Mines average of 13.3.w.

Production

701,445 tonnes were produced for the full year and 666,831 tonnes of coal were sold during the period. This compares to 686,310 tonnes mined in the previous year and included a low Dec 2014 to March 2015 period due to ongoing adverse weather conditions with subsequent affects on the rail corridor and a four week enforced mine shutdown over the holiday period.

Key mining initiatives

Some of the key mining initiatives that were deployed over the past year included the:

Re-optimised mine plan which allowed Cockatoo to reduce the mining equipment requirements, specifically removing the need for the second excavator and associated trucking fleet.

Re-focused mine plan on the highest quality, ULV PCI coal, which Baralaba can sell to market on a raw crushed basis. Fuel and coal haulage optimisation.

Targeted cost cutting including contract reviews of key operations activities

Mining Fleet

Productivity per person has been improved with Liebherr 996 excavator rates achieving best in class for productivity and utilisation. Along with Cat 793 truck efficiencies, it has allowed the revised mining plan to be achievable and avoided the added cost of a second hired fleet. The restructured team is committed to maintaining a best practice, lean operation capable of mining at the 1mtpa mining rate and supporting the future production ramp-up to 3.5mtpa.

New Outrigger pit (Baralaba North Mine)

Mining operations ceased at Baralaba Central pit at the beginning of the June 2014 quarter and the Company completed the transition to the Baralaba North mine. Pre-strip and ramp construction completed the opening of the new Outrigger pit (Baralaba North Mine). This resulted in a 17:1 strip ratio during the mine start-up. The Company estimates the strip ratio to average 9:1 for financial year 2016. Operations are also on target for 80kt per month of coal starting from July 2015 with more steady state mining ahead now that the Outrigger pit has been established.

Baralaba Expansion Project

The Baralaba Expansion project Stage 1 involved the construction of the related infrastructure to establish production at the Baralaba North mine to 1 million tonnes per annum. Stage 1 was delivered on time and under budget.

Stage 2 works involve the further development of the Baralaba North mine and construction of the transportation infrastructure to sell 3.5 million tonnes per annum of Ultra-low Volatile PCI coal from the Port of Gladstone. The Company continues with the development of Stage 2 works for the Baralaba Expansion project and construction of the new train load out facility and balloon loop is more than 75% complete.

The Baralaba Expansion project remains on target for the scheduled increase in production from 1Mtpa to 3.5Mtpa. The key remaining step ahead of finalising the Environmental Authority (EA) is a single objection before the Queensland Land Court at the time of writing. Once completed, we expect mining to continue the ramp-up to 3.5mtpa.

Extension to Baralaba Expansion Project

Cockatoo Coal's Baralaba Expansion Project has been granted an extension to its existing 'prescribed project' declaration, recognising the continued economic and social significance of the project to the local region and Queensland. The project declaration enables the project to benefit from timely decision making for approval of construction, maintenance and operation. The declaration covers the Baralaba Expansion Project for supporting infrastructure. The extension of the declaration was made by the Queensland Minister for State Development and Natural Resources and Mines, Dr Anthony Lynham on 28 July 2015 in accordance with part 5A of the Queensland State Development and Public Works Organisation Act 1971.

Baralaba Expansion Project EIS deemed adequate by DEHP.

Cockatoo received correspondence from the Department of Environment and Heritage Protection (DEHP) of a Section 56A (Environmental Protection Act 1994) decision notice to proceed with the Baralaba North Continued Operations Project ('BNCOP') Environmental Impact Statement ('EIS'). This notice was received within five months of Cockatoo's EIS submission. The notice received from DEHP confirmed that the EIS lodged by Cockatoo was deemed adequate. Following this Cockatoo received the BNCOP EIS Assessment Report from DEHP on 3rd November 2014, which was the final step in the DEHP EIS approval process.

Coal Haulage & Road Infrastructure Agreement

Cockatoo also announced it executed a Coal Haulage & Road Infrastructure Agreement with Banana Shire Council. This Agreement will see Cockatoo significantly upgrade council controlled roads, improving the safety, access and amenity of the road corridor for all users, while allowing the scheduled increase in road haulage activities by Cockatoo to its Train Load Out Facility ('TLO'). Additionally, Cockatoo has received final construction approvals for the TLO, in the form of an approved Material Change of Use Application and an Operational Works Permit being granted for the TLO site.

Exploration

During the year a total of $4 million was spent on exploration an evaluation activities not related to the Baralaba North Expansion. The Company continued managing the JOGMEC farm-in of the Dingo West project during the quarter which is 100% funded by JOGMEC.

Exploration Joint Venture with JOGMEC

Cockatoo secured a Joint Exploration Agreement with the Japan Oil, Gas and Metals National Corporation ('JOGMEC') to provide $3.5 million to Cockatoo over a three year period for exploration expenditure on the Company's wholly owned Dingo West Project. JOGMEC will earn up to a 35% economic interest in the Dingo West project, while also possessing the right to assign that interest to a Japanese nominee company in the future, in order to progress the project for development. The project is 50km north of Cockatoo's Baralaba mining complex and is also adjacent to Cockatoo's 30% owned Dingo joint venture project with Whitehaven Coal. The joint Exploration Agreement provides funding for all planned exploration activities over three years and includes drilling, coal quality analysis and feasibility studies with the Dingo West project.

Baralaba North Upgrades

Cockatoo announced a significant increase of JORC Resources at the Baralaba North mine from 72 million to 92.3 million tonnes of Ultra-low volatile PCI coal. This represented a 41% and 44% increase in Measured and Indicated Resources respectively, underpinning a further JORC Reserve upgrade at Baralaba North. Cockatoo achieved the upgraded results at a reduced cost compared to previous drilling campaigns, with an approximate saving of 35%, predominantly due to a reduction in the number of holes required to define JORC Resources.

South Pentland

Cockatoo also announced the upgrade of JORC Resources at its South Pentland project to 445 million tonnes, comprising 94 million tonnes of Indicated JORC and 351 million tonnes of inferred JORC compliant Resources. Cockatoo acquired a 100% interest in South Pentland through its takeover of Blackwood Corporation.

Weather Event Impacts

Weather events adversely affected operations during the March 2015 Quarter. This included the crossing of Tropical Cyclone Marcia which delivered heavy rainfall to the region. Production activities at the site were halted intermittently during this event however the impacts to the Baralaba mine were minimal. The Moura rail system was damaged in parts as a result of Marcia and railing operations were suspended for 25 days. Operations subsequently resumed in mid-March.

OPERATING ACTIVITIES

Cockatoo Coal is a coal mining, exploration and development company with projects in the Bowen, Galilee and Surat Basins in Queensland, Australia. The Company has a significant tenement portfolio with an interest in projects which have reported a total of 69 million tonnes of JORC compliant Marketable Reserves and 1,876 million tonnes of JORC compliant Resources.

The Company's lead project is an operating mine (Baralaba) with contiguous tenements located in the Bowen Basin, with a focus on ULV PCI coal. The Company also has an extensive thermal coal tenement portfolio across the Surat and Galilee Basins.

The Company's Bowen Basin projects extend from the Dingo project in the north to the Baralaba South project in the south and have contiguous target areas covering an area of approximately 56,320 hectares with Permian age, Rangal Coal Measures sub-cropping over a strike length of approximately 92 kilometres. Production at the Baralaba mine has demonstrated that the seams of the Rangal Coal Measures in this area have PCI and thermal coal properties. The seams mined at the Baralaba mine have been intersected in the Baralaba South and Lochinvar target areas. The Company also possesses a suite of exploration projects throughout the Southern Bowen Basin, primarily around the Rolleston area.

The Company's Surat Basin projects cover an area of approximately 4,000 km². The Juandah and Taroom Coal Measures of the Walloon Sub-Group both sub-crop within the Surat project area. The Tin Hut Creek and Davies Road projects are located in the Juandah Coal Measures and the Bottle Tree, Bushranger and Krugers projects are located within the Taroom Coal Measures.

The Company's Galilee Basin projects cover an area in excess of 960 km2 located approximately 150km SW of Charters Towers. The Galilee Basin in central Queensland contains resources of high volatile, thermal coal, found within the seams of the Permian Age, Betts Creek Beds coal measures.