1 2 Important Notice THESE PRESENTATION MATERIALS ARE FOR - - PowerPoint PPT Presentation

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Important Notice

THESE PRESENTATION MATERIALS ARE FOR INFORMATION PURPOSES ONLY AND DO NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES, AND NEITHER THE PRESENTATION MATERIALS NOR ANYTHING CONTAINED THEREIN NOR THE FACT OF THEIR DISTRIBUTION SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. The Presentation Materials, being this presentation and any additional documents handed out in the meeting, are being issued on a strictly private and confidential basis and solely to and directed at persons (a) who (i) are qualified investors within the meaning of Section 86(7) of the Financial Services and Markets Act 2000 and (ii) have professional experience in matters relating to investments and who are persons specified in Article 19 and/or Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotions Order”); or (b) who are otherwise lawfully permitted to receive them. Any investment to which the Presentation Materials relates is available to (and any investment activity to which it relates will be engaged with) only such persons. This document is exempt from the general restriction on the communication of invitations or inducements to enter into investment activity and has therefore not been approved by an authorised person as would otherwise be required by section 21 of the Financial Services and Markets Act 2000. It is a condition of your receiving this document or attending this presentation that you fall within, and you warrant and undertake to the Company that (i) you fall within, one of the categories of persons described above, (ii) you have read, agree to and will comply with the terms of this disclaimer, (iii) you will conduct your own analyses or other verification of the data set out in the Presentation Materials and will bear the responsibility for all or any costs incurred in doing so, (iv) you will use the information in the Presentation Materials solely for evaluating your possible interest in acquiring securities of the Company and for no other purpose; and (v) you will not at any time have any discussion, correspondence or contact concerning the information in the Presentation Materials or acquiring securities with any of the directors or employees of the Company, or their subsidiaries nor with any of their respective suppliers, customers, sub-contractors or any governmental or regulatory body without the prior written consent of the Company. If the Presentation Materials have been received in error, they must be returned immediately to the Company. The Presentation Materials are confidential and should not be copied, transmitted, distributed or passed on, directly or indirectly, to any other class of persons. They and any further confidential information made available to you are being supplied to you solely for your information and may not be reproduced, transmitted, forwarded to any other person or published, in whole or in part, for any other purpose. The Presentation Materials contain only a synopsis of more detailed information published in relation to the matters described therein and accordingly no reliance may be placed for any purpose whatsoever on the sufficiency or completeness of such information and to do so could potentially expose you to a significant risk of losing all of the property invested by you or the incurring by you of additional liability. The proposals in the Presentation Materials are preliminary. The information contained in the Presentation Materials is for background purposes only and is subject to updating, completion, revision, amendment and verification, which may result in material changes. Some of the statements made in the presentation represent the opinion

• f the directors of the Company. No reliance should be placed on any of the information and no representation or warranty, express or implied, is given by the Company as to the accuracy of

the information or opinions contained in this document and, save in respect of fraud, no liability is accepted by the Company or any of their respective directors, members, officers, employees, agents or advisers for any such information or opinions. Certain forward looking statements may be contained in the Presentation Materials. Words such as “expect(s)”, “project(s)”, “believe(s)”, “forecast(s)”, “may”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations, assumptions, statements, projections, beliefs and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be accurate. Accordingly, results could differ materially from those expected, projected, assumed or believed as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and

• perational risks. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will

continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, circumstances, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of the Presentation Materials. Neither this document, nor any copy of it, may be taken or transmitted into the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa or Japan, and their states, territories or possessions, except in accordance with applicable laws. Any failure to comply with this restriction may constitute a violation of relevant local securities laws or regulations.

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Highlights 2014

 Altona has taken 51% interest in the project from

CNOOC-NEIA. Altona is therefore now the 100%

• wner of the Arckaringa project.

 Completed Pre-Feasibility Studies for an integrated

Mine

 Key Final Feasibility Studies commenced, including

final CTM technology selection and Groundwater Management Plan

 Wintask completed the investment of £3.22million

into Altona.

 Altona signed the JV agreement with Sino-Aus,

Wintask

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The Arckaringa Project Location

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Fuel for Australia And the World

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Arckaringa Project Rationale

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Coal Resources One of the World’s Largest Undeveloped Energy Banks

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Coal Resources Wintinna Deposit

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Company and Project Overview

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Community Engagement

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Coal Quality

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CO2 Mitigation Strategy

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Sustainable Water Management

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Australia - Summary

 Joint Venture receives all drilling approvals  5 Drilling contractors obtain pre-qualification under internal

procurement process

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South Australian government renews EL’s until 6 June 2015

 Altona spent over 50% of the total JV spend required for EL renewal  JV presented a programme designed to progress the BFS including the

planned drilling programme and mine design and environmental work

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Receives bid documents from 3 of the 5 contractors

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Progress at Arckaringa 2014

• The Arid Lands Natural Resources Management Board extended the ‘Water Affecting

Activity Permit’ up to April 2015. Likewise, the Work Area Clearance was obtained from the Native Title Claimant Group

• Ernst & Young carried out a report containing the results of their analysis of the impact of

the Carbon Pricing Mechanism on the Arckaringa Project

• Their evaluation demonstrated that the CTL or CTL/CTM project would need Carbon

Capture & Storage (CCS), whereas CTM alone there is less incentive for CCS due to the low carbon emissions. Provisions for CCS are built into both the CTL and CTL/CTM projects.

• Government offset assistance is available for CTM but not CTL and would result in a cost of

A$6 per tonne CO2 emitted for CTL/CTM with CCS and a cost of A$7 per tonne of CO2 emitted without CCS for CTM production

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Joint Venture - Summary

 Altona signed an JV Agreement with Sino-Aus and Wintask. Includes the

in principle terms for an investment in Arckaringa.

 Sino-Aus and Wintask will invest AUD $33 million into the Arckaringa

project

 Initial drilling programme and Bankable Feasibility Study (“BFS”)

targeted to be completed within two years

 Sino-Aus and Wintask will provide Altona with working capital of

£2million , subject to certain conditions, through a subscription of Altona ordinary shares of 0.1P each

 The product focus of the Arckaringa project will be Coal-to-Methanol, coal

chemical and synthetic gas production due to market demand and reliance

• f proven technology

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2014 achievements and Outlook

• Board
• Excellent relationships with South Australian government
• The Board plans to adopt a more aggressive approach to the joint venture
• Investor joins the board to support and strengthen the Company’s strategy
• Arckaringa Joint Venture
• Signed JV agreement with Wintask and Sino-Aus
• Altona commissions Jacobs to evaluate CTM proposal
• Project continues to be strategically important in South Australia
• Strong support from government
• Licences renewed until June 2015 - 50%+ of required spend incurred by Altona
• Sino-Aus and Wintask’s support gives Altona confidence and capacity to be more pro-active

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Summary of the Altona Report

• n Coal to Methanol

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Alternative Fuels Supply

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• Arckaringa CTL project converts gasified coal into diesel and naphtha. A similar process scheme can

convert gasified coal into methanol, which is a major blend component for gasoline

• The Altona report puts forward the strategy of co-development of Coal to Liquids (CTL) and Coal to

Methanol (CTM) at the Arckaringa mine development in South Australia

• The products from a CTL/CTM complex lend themselves to being substantial blend components for

both conventional refinery based diesel and gasoline

• The proposed CTL/CTM complex produces the full range of fuels, but also valuable petrochemical

feedstocks

• The Methanol can be blended with conventional refinery gasoline in the range up to 15%-20% (M15

and M20). This blended gasoline benefits from reduced contaminants and enhanced performance in the same way as CTL improves Diesel

• Compares favourably in all aspects with other sources of energy

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CTL/CTM Complex

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• Altona originally focussed on a CTL development of 2x15,000 BPD trains.
• At comparable cost a 1 x 15,000 BPD CTL Plant combined with a 1 x 6,200 TPD CTM Plant represents a

better economic solution with a 18% (~$212million) increase in gross revenue

• The total coal consumption being the same as the original concept.
• The plant design and equipment is essentially the same for both CTL and CTM, except that the syngas is

processed in a Fischer Tropsch Reactor system for CTL. Whereas, for CTM the syngas is processed in a Methanol Reactor system.

• One train of 15,000 BPD CTL plant can provide 34% of the diesel demand for SA and NT
• One train of CTM can supply 90% of the methanol to make M15 grade gasoline for the Australian

domestic market

• A major advantage of blending methanol into gasoline is that it is not subject to excise tax in Australia,

which for a M15 fuel (15% Methanol) - a tax savings of 5.7 cents/litre

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CTL Plant

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CTL / CTM Plant

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Methanex Trinidad Methanol Plant (5,500 TPD)

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Summary

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 Methanol consumption globally was 32 million TPY in 2000 and is anticipated to be at 60 million TPY in 2013/14 some 20 million TPY consumption is primarily in gasoline and diesel blending  The CAPEX/OPEX of coal based plants manufacturing CTL and CTM are comparable to conventional/unconventional hydrocarbon feedstocks when recognising the total investment for feedstocks delivery  Arckaringa’s CTL/CTM complex can serve a regional export energy market as well as Australia’s domestic fuel and petrochemical market and reduce its enhance on hydrocarbon importation  The methanol technology selected represents 40% of the world’s methanol plant capacity  CTL/CTM plant capex unchanged but has the potential to increase annual project revenue significantly, when compared to a CTL only plant, by circa US$ 212 million

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Arckaringa Coal to Methanol Process (CTM)

Coal Preparation Gasification CO Shift Acid Gas Removal Methanol Synthesis Distillation

Coal Oxygen UTILITIES & OFFSITES

Raw Water

Power BFW Steam

Waste Water Fuel Gas

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26 Imports Coal 14880 TPD Oxygen 6230 TPD Electricity

• Raw Water
• Exports

Methanol 6460 TPD Electricity 220 MW Sulphur 151 TPD CO2 Product 11,455 TPD Slag 1594 TPD

Arckaringa CTM Plant Performance

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Overall Plant Layout (800M X 900M)

WATER TREATMENT & STORAGE METHANOL SYNTHESIS & DISTILLATION METHANOL STORAGE TANKS AIR SEPARATION UNITS FIREWATER SYSTEM POWER ISLAND WASTE WATER TREATMENT METHANOL SYNTHESIS & DISTILLATION SYNGAS TREATMENT – ACID GAS REMOVAL – SYNGAS COMPRESSOR ADMINISTRATION & CONTROL ROOM & WAREHOUSE SYNGAS TREATMENT- ACID GAS REMOVAL – SYNGAS COMPRESSOR SULPHUR RECOVERY PLANTS & PELLITISER COAL MILLING & DRYING 6 GASIFIERS COAL PILE SLAG STORAGE FLARE FLARE INTERCEPTOR POND OFFSPEC & CRUDE METHANOL TANKAGE

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Coal Handling/Preparation 102 Gasification 676 Syngas Conditioning 292 CO2 Drying & Compression 26 Methanol Synthesis 177 BFW 254 Utilities 50 Offsites 70 Total Direct Costs 1647 Total Indirect Costs 73 Total Engineering Costs 115 Grand Total 1835

CTM CAPEX (US$) Q4 2010

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Revenue

Methanol ($435/ton) $936 million Power ($40/MWhr) $70 million Total $1,006 million

Costs

Chemicals & Catalyst $5 million ($20 million) Staffing $19 million Maintenance (3% ISBL) $44 million

CTM Plant Revenue & Costs

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Product Technology Acetic Acid BP DME Uhde Formaldehyde Topsoe Gasoline Exxon Mobil MTBE Axens

Typical Licensors for Methanol Derived Products

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Revenue $’s per annum Acetic Acid 3.7 billion DME 1.5 billion Formaldehyde 1.2 billion Gasoline 3.0 billion Methanol 0.9 billion Olefines 2.9 billion Typical Revenues from conversion of Methanol into Alternative Products

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 Underground Coal Gasification is being investigated as a way of converting deep coal to gas for the CTM Project  If feasible in the Arckaringa UCG will provide gas at a greatly reduced CAPEX and OPEX.  There is no need for coal handling  Reduces gasification costs  No need to dispose of ash

Underground Coal Gasification (UCG) on Deep Coal

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How Does UCG Work?

• Two wells are drilled

into the coal seam.

• Air is introduced via the

injection well and subsequently the coal is ignited and gasified.

• The product gas

(syngas) is extracted via the production well.

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UCG syngas composition & uses

UCG raw syngas composition permits many product options:

Raw syngas − composition & use H2 CH4 CO CO2 N2 BTXs Liquids Power gen    Syn natural gas  Ammonia (NH3)   Ammonium nitrate (AN)   Urea    Liquid fuels  Synfuels   Enhanced oil recovery 

Methanol   

Specialty chemicals 

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Board & Management

 Michael Zheng Qiang Chairman

Michael Q. Zheng (“Michael”) began his career as an economist at the China Economic Commission before moving to the China Rare Earth

Office of The State Council Rare Earth Leading Group of the State Planning Commission, where he was in charge of Rare Earth production. He subsequently became the Deputy General Manager of the China Rare Earth Development Corporation, a commercial arm of the State Council Rare Earth Leading Group. Michael was one of the founders and the Director of Advanced Material Resources Limited (“AMR”) and was the Beijing office Chief Representative with support from the State Council Rare Earth Office and China National Nuclear Corporation. AMR became Neo Material Technologies, a leading rare earth company listed on Toronto Stock Exchange subsequently acquired by Molycorp Inc. Michael has rich experience in international investment and fund raising, and maintains good relationships with the Chinese government and many international investment banks, and has lead many major M&A projects.

 Zhang Qinfu Executive Director

Mr Qinfu Zhang has over 30 years work experience in the fields of clean energy and manufacturing. Mr Zhang holds the position of chairman at Wintask Group Limited, Shaanxi Hailang Group, Hlevel Co. Ltd, and Fu'an Biology Technology Co., Ltd.

 Phil Sutherland Non-Exec Director

Mr Sutherland joined the Board of Altona Energy in November 2006. He was the Chief Executive Officer and Chief Industry Advocate for the South Australian Chamber of Mines and Energy (SACOME) from February 2001 until January 2007. SACOME is the peak industry association for companies with business interests in the Resources Industry in South Australia. Prior to his employment with SACOME, Mr Sutherland had extensive executive management experience with local, state and federal government agencies. Mr Sutherland is well known in government, industry and media circles and is a graduate in business management from the South Australian Institute of Technology and the University of South Australia. He is a Fellow of the Australian Institute of Management and a Member of both the Australian Institute of Company Directors and Australian Human Resources Institute. 32

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