1. XstractGroup.com Xstract – Excellence from the outset ENVIRONMENT | GEOLOGY | MINING | PROCESSING | VALUATION | RISK | TECHNOLOGIES Are Australian Coal Mines Overpriced? Manish Garg Principal – Corporate Services

2. 2 XstractGroup.com Overview of Xstract Mining Consultancy formed Feb 2009 Geological assessment Mining Corporate Services Mineral Specialist Reports Asset Valuation Technical Due Diligence Macro Economics & Corporate Strategy Countries Commodities Projects/Mines/Companies First Reserve Corp Glencore US$2.5B Temasek Platmin US$250M AngloPacific Royalty US$25M AMCI Belvedere US$92M IndiaMongoliaIndonesiaCoalIron Ore Excellence from the outset

3. 3 XstractGroup.com Value by Project Development Status Source: Lilford, 2007

4. 4 XstractGroup.com Value by Project Development Status Valuation Approach MethodProducing Properties Development Properties Exploration Properties IncomeDiscounted Cash FlowYesMaybeNo Option PricingYes No CostAppraised Value / Multiple of Exploration Expenditure NoYes Geosciences FactorNoMaybeYes MarketComparable TransactionsYes Rule of thumbYes Use of Comparable Transactions is most popular. The difficulty with this method is in determining to what extent the property or transaction is indeed comparable. Rule of thumb incorporate a capitalisation approach based on an operational or stock metric is often used in the mining industry to provide value estimates for projects that are in development stage for which reliable cash flow estimates or earnings data is unavailable. Common Matrices: $/t Resource, $/t M + I Res, $/t Reserves, $/annual production

5. 5 XstractGroup.com Recent Transactions: Explorers EV per Resource tonne (A$/t) 2006 2007 2008 2009 Average

6. 6 XstractGroup.com Recent Transactions: Developers/Producers EV per Resource tonne (A$/t) Developers Average

7. 7 XstractGroup.com Producers EV per Mining Inventory (Reserve + M + I Resource) of major coal producers A$/tonne Australian International Average

8. 8 XstractGroup.com Emerging Developments Coal Seam gas (CSG) and Underground Coal Gasification (UCG) considerations Overlapping exploration permits (coal, minerals and petroleum) Uncertainty associated with RSPT – higher geo-political risk rating

9. 9 XstractGroup.com Summary Based on comparison of recent transactions Australian coal mines are not overpriced - producers trading close to their international peers (Mar 2010) Time will tell the impact of RSPT on the value of Australian coal mines & projects

10. 10 XstractGroup.com Thank You Manish Garg Xstract Mining Consultants