Annual Conference August 2016 Include all ELAs www.lcke.com.au - - PowerPoint PPT Presentation

1 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Include all ELAs

Presentation to GM-USG Annual Conference

August 2016

2 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

This presentation has been completed by Leigh Creek Energy Limited. It may contain forward looking statements that are subject to risk factors associated with the energy industry. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of changes in underlying assumptions which could cause actual results or trends to differ, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates amongst other items, and the cumulative impact of items. Mineral Resource Statement Estimates of Mineral Resources reported in this announcement were initially reported and released to the ASX on 8 December

• 2015. Leigh Creek Energy Limited is not aware of any new information or data that materially affects the information included

in the 8 December 2015 announcement and all the material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed. Gas Resources Statement Gas Resources reported in this announcement were initially reported and released to the ASX on 8 January 2016. Leigh Creek Energy Limited is not aware of any new information or data that materially affects the information included in the 8 January 2016 announcement and that all the material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed. All Estimates are based on the deterministic method for estimation of petroleum resources.

Disclaimer

3 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Introduction and Overview



Presently obtaining all necessary regulatory approvals to allow ISG demonstration targeted for Q1 2017.



Seeking to initially develop an electricity and methane gas production facility



Actively engaged with potential gas and electricity buyers.



The South Australian State Government is supportive of ISG and has developed a clear legal and regulatory framework to guide ISG operations.



Leigh Creek has significant existing infrastructure in place.

Image: LCEP Laydown area July 2015

→ SA electricity market is experiencing intermittent grid instability, volatile pricing and power outages. → The market for gas in eastern Australia is tight with shortages forecast and new supply options required to meet demand forecasts

4 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Image: LCEP Laydown area July 2015

Leigh Creek Energy Project (“LCEP”)

The LCEP is located at Leigh Creek, 550km north of Adelaide, over a former coal mine area and will develop coal resources that are unable to be economically accessed by open-cut mining.

Lock Moomba Whyalla Cummins Adelaide Lyndhurst Pt Lincoln Pt Augusta Leigh Creek

Legend

Rail Gas Pipelines ARP TriEnergy

ARP TriEnergy PELAs

PEL 650

Leigh Creek Energy’s PELAs

 100% owned by Leigh Creek Energy

Limited

 Situated on PEL 650 in the area of the

existing Leigh Creek open cut mine

 Independent JORC coal resource of

377Mt

 Independent PRMS ISG gas resource:

Category 1C 2C 3C ISG Resource 2,748 PJ 2,964 PJ 3,303 PJ

5 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

In-Situ Gasification “ISG”

6 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

ISG Worldwide Experience

Commercial Operations:



Angren, Uzbekistan – 60 years of operation



Eskom, Majuba, South Africa – co-firing power station with syngas North American Experience:



40 years of trials & demonstration



Multiple sites, techniques, outcomes



Utilised standard oil-field Australian Experience:



Linc Energy – demonstration facility

• perated for 11 years



Carbon Energy – demonstration facility

• perated for 5 years

Queensland Government’s Chief Scientist, Dr Geoff Garrett AO, confirmed that Carbon Energy:

• met the key recommendations of

the government appointed Independent Scientific Panel (ISP)

• “it is clear that Carbon Energy has

contributed to the collective understanding of UCG and the conditions under which the

• peration is likely to be both safe

and successful.”

• demonstrated safe and effective

decommissioning and completing

• f a plan for rehabilitation which

were independently reviewed by experts appointed by the DEHP.

Carbon Energy Bloodwood Creek Project

7 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Leigh Creek Coal Field

Produced coal at up to 2.5 Mtpa for captive power station 250km south at Port Augusta (now closed). Infrastructure:

 LCEP is ideally located with ready access

to infrastructure in the area. Existing infrastructure includes the following:

 Major pipeline 125 km away  Power transmission lines  Sealed road, airport, rail, water  Township of Leigh Creek

8 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Supportive Environment

 South Australian government  ISG legislation in place - Specifically contemplated and supported by Petroleum and Geothermal Energy Act  No issues regarding overlap of tenements at LCEP  DSD 1-stop-shop for Inter-departmental agreements with referral agreements  Suitable Location  Existing brownfields mine site  Well understood groundwater regime  Remote from major population centres

9 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Traditional Owner Engagement



Adnyamathanha Traditional Land Association (ATLA)  Adnyamathanha are the traditional owners of the broader region



Both parties seeking positive engagement  Regular communications  Maximising employment and business opportunities  Mutual respect  Shared benefits

10 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Appraisal

• JORC 2012

resources

• Gas certification
• Site environmental

characterisation Stage 1 Gas Demonstration

• Approvals
• Construction
• Cold and hot

commissioning

• Demonstration

(Q1 2017) Stage 2 Commercial

• Approvals
• Construction
• Cold & hot

commissioning

• Electricity and Gas

production (2019)

• Plant expansions

2015 2016 2017 2018

LCEP Stages

11 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Gas Demonstration

Target demonstration operation during Q1 2017 at LCEP. Outcome:



Demonstrates to government and community that ISG can be completed both:

 Safely; and with  Minimal impact to the environment.

Data Obtained from Demonstration Allows:



Government to approve Commercial Project;



Development of safety and environmental controls;



Optimisation of plant design;



Operating costs discovery.

Date Event Q4 2016 Stage 1 gas demonstration approval Q1 2017 Stage 1 gas demonstration

Indicative Timeline For Stage 1 Gas Demonstration:

12 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Commercial Gas & Electricity Production

Outcome: Produce electricity and methane:

 Power for LCEP, mines to west and industrial customers  Planning underway for 300 – 600 MW power  Electricity via syngas  Gas into pipeline linked to SA and east coast markets  Pipeline specification natural gas is >93% CH4 (methane).

Partners:

 Power – working with Shanghai Electric Group following HoA (April 2016).  Power – in discussion with major customers of power.  Gas – in discussion with major customers of gas (methane).

Timelines:

 Intended approvals Q4 2017  18 month construction time and long lead time item procurement.

13 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Electricity South Australia

 Price offers up > 100% - impacting viability of existing and new projects  Gas fired generation reduced with gas shortage and higher gas prices  Wind energy dominating SA supply is intermittent  Manufacturing and mining must live with interruptions and higher cost electricity

Figure: South Australian Wholesale Prices

Source: CQ Partners – Electricity Procurement in SA

14 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Procurement Strategy

 LCK committed to LOCAL procurement  Local means: 1.

Leigh Creek and USG,

2.

then Adelaide,

3.

then rest of Australia,

4.

then the world.

 Commercial and operational benefits to local procurement

strategy

 Working with GM-USG and ICN:  Excellent reception  Supportive community  Suitable resources and skills available in USG

→ Shortlisted key fabricators and suppliers for the Demonstration phase

15 Leigh Creek Energy Limited (ASX: LCK) – Investor Presentation www.lcke.com.au

Conclusions

 LCEP will initially generate electricity to support existing and

potential manufacturing and mining operations in SA.

→ Future expansion looking to include natural gas and

ammonia-based fertilisers

 SA has a supportive and enabling regulatory framework and

process

 Leigh Creek site is commercially and environmentally

suitable

 LCK is working with the local and regional communities to

achieve positive outcomes → LCK is buying locally