Corporate Presentation May 2015 NOT INTENDED FOR SALES OR PROMOTION - - PowerPoint PPT Presentation

page 1 NOT INTENDED FOR SALES OR PROMOTION

Corporate Presentation May 2015

page 2 NOT INTENDED FOR SALES OR PROMOTION

I. Attractive Investment Opportunity II. Assets Overview

• III. Market Overview
• IV. Management Profiles

V. Financial Performance

• VI. Group Structure

Content

page 3 NOT INTENDED FOR SALES OR PROMOTION

Attractive investment opportunity

Attractive core asset base & strong

• perations



Existing attributable 380m mineable tonne resource



Plans to ramp up attributable annual production to 10m within 2 years (15 - 20mt longer term)



Solid track record of successful operational performance with steadily improving KPIs



Well connected to world’s largest coal terminal in Richards Bay via rail network

M&A



5 large miners produce >90% of coal and 120 junior miners account for 7%



Lack of scale and resources constrain junior miners’ ability to grow sustainably



Funders have largely withdrawn from this market



Consolidation of the junior coal market is next logical step



IchorCoal viewed as credible player in this

Excellent domestic demand conditions



Many SA coal mines are old and depleted



Eskom well on the way to completing 2 new coal fired power stations, with possibility of Coal 3 longer term



Supply gap of 60m tonnes p.a. means more coal juniors will be needed as this is Eskom focus



Exports will also grow as additional capacity is added to rail, port in medium to long term

Experienced management



Strong management track record:



CEO: Nonkululeko Nyembezi-Heita (also non-executive chairman of the JSE and formerly CEO of ArcelorMittal South Africa)



COO: Andries Engelbrecht (formerly COO of Riversdale Mining)

Uniquely able to execute strategy



Significant expansion of production achieved in 2014



Successfully improving operational performance



Able to bolster relationship with key stakeholders (Eskom; SA government; communities)



Demonstrating capability to pursue value accretive M&A transactions

page 4 NOT INTENDED FOR SALES OR PROMOTION

Asset overview – Locality map

page 5 NOT INTENDED FOR SALES OR PROMOTION

Vunene Mining (74%)

IchorCoal has significant interests in several high profile domestic mining companies with core operations currently at Vunene Mining

Usutu Colliery:

• 125mt resource
• Zero fatal accidents since inception
• Underground refurbishment project commenced with first production expected in

Q1 2016.

• Underground life of mine in excess of 15 years
• Coal supply agreement in place with Eskom
• 16% reduction in cash cost per strip ratio since 2014
• > 80% increase in produced tons per annum since 2013
• > 90% increase in overburden moved per annum since 2013

Asset overview – Vunene Mining

page 6 NOT INTENDED FOR SALES OR PROMOTION

Mbuyelo Coal (45%)

• 40mt phase 1 LOM plan completed
• Coal supply agreement with Eskom

signed

• Boxcut commenced
• First coal Q2 2015
• JV agreement in place – double original

resources

• Processing plant to be commissioned in

May 2015

• Multi-product mine – export, other

domestic and Eskom opportunities Manungu Colliery Welgemeend Colliery Vlakvarkfontein Colliery

• Approx. 100kt/m to Eskom
• Production flexibility
• 5 year LOM
• Low cost mine
• Managed by Continental Coal

Asset overview – Mbuyelo Coal

page 7 NOT INTENDED FOR SALES OR PROMOTION

Universal Coal (29,99%)

Kangala Colliery New Clydesdale

• Project execution phase
• 1,2mt Eskom supply
• Multi product mine
• Export and non-Eskom domestic market

exposure

• 3 coal plants available
• Siding available
• Fully operational and profitable
• CSA in place for phase 1 life of mine

22mt sales – 8yrs

• Low cost mine
• Production flexibility
• Export market exposure
• Life of mine extension to 16 years being

investigated

Asset overview – Universal Coal

page 8 NOT INTENDED FOR SALES OR PROMOTION

Why South Africa? Well supported by fundamentals

Long Term Coal Consumption by Region

Domestic

• SA produces 260mtpa coal – 70% for domestic

use (Eskom 47%) but poor volume growth – just 1% cagr since 2000

• Coal to remain a key fuel for energy production

in the long run – significant coal resources, relative cost advantage

• 2 new power stations with total 9600 MW

coming on stream 2016 onwards

• Estimated 60m tonnes p.a. coal supply gap from

2016 unsecured International

• Decreasing use of coal as percentage of energy

mix but rise in absolute tonnage

• SA well positioned to serve export markets –

advantaged basin with good geology and coal grades

• Access to good infrastructure with rail efficiency

gradually improving

• Longer-term growth driven by China (close to

peak?) and India

Investor sentiment turning sharply negative

• In response to oil price collapse, the closing coal

price at 2014 year end was down 25% vs 2013, with sentiment turning very pessimistic

• Depressed valuations provide good opportunity

for M&A at attractive price points

• However,

sellers becoming increasingly unwilling as undervalued asset prices restrict appetite to consummate deals

• Macro conditions increase importance of cash

and constrain availability of cheap financing

Global demand: BP Energy outlook Eskom demand: IEA World Energy

• utlook 2012

Billion Tons Million tons per annum 1965 2000 2035

Market overview

page 9 NOT INTENDED FOR SALES OR PROMOTION

Nonkululeko Nyembezi-Heita (CEO)

 Nonkululeko has spent the last 6 years as CEO of ArcelorMittal South Africa,

before which she was the Chief Corporate Strategy Officer at the Vodacom Group in South Africa

 Since May 2014 Nonkululeko Nyembezi-Heita is the Independent Non-

Executive Chairman of the Johannesburg Stock Exchange

 She began her career as an engineer at IBM in USA before returning to work

for the company in South Africa. Nyembezi-Heita then switched direction to head the financial services group Alliance Capital Management before joining Vodacom

 Andries has 20 years of experience in the mining industry. Before joining

IchorCoal he was the Chief Operating Officer of Riversdale Mining Limited, an Australian mining company specialized in coal mines in Africa. In this capacity, he was responsible for all projects on that continent

 Before that Mr. Engelbrecht was General Manager and Engineering Manager

at Zululand Anthracite Colliery. He has also held positions at Khutala Colliery (Ingwe Coal Corporation) BHP Billiton and Richards Bay Coal Terminal

Andries Engelbrecht (COO)

Management profile

page 10 NOT INTENDED FOR SALES OR PROMOTION

 Improvement

in

• perating

performance (higher production and lower cash costs) due to successful mine management reflected in financial results:

• FY 2014 sales already higher than FY 2013 sales
• Operating profit margin improved significantly

 Capital structure significantly enhanced following debt

to equity swap in July and December 2014

• Debt/Equity ratio significantly improved

 Solid cash position as operating activities are now cash

flow positive

1 From continued operations 2 Restated as per FY 2014 year end Financials

Source: Company Data

Financial performance

€k FY2013

1)

FY2014 Income Statement Sales 24,565 48,630 EBITDA 1,208 7,266 EBIT

• 3,952
• 108

EBT

• 11,324
• 16,693

EBITDA Margin 4.9% 14.9%

€k FY2013

2)

FY2014 Balance Sheet Current Assets 29,073 26,196 Non Current Assets 123,998 150,432 Total Assets 153,071 176,629 Current Liabilities 5,788 9,193

• f which financial

1,231 2,676

Non Current Liabilities 130,101 103,199

• f which financial

111,497 81,501

Total Liabilities 135,889 112,392 Equity 17,182 64,236

Net Debt 103,393 65,037 Net Debt/EBITDA 86x 9x Debt/Equity 7.9x 1,7x

€k FY2013

1)

FY2014 Cash Flows Cash from Operating Activities

• 6,328

9,906 Cash from Investing Activities

• 50,938
• 18,280

Cash from Financing Activities 53,136 18,178 Cash & Equivalents at end of period 9,335 19,140

page 11 NOT INTENDED FOR SALES OR PROMOTION

Usutu Colliery

Mbuyelo Coal

Cozispot Welgemeend

45.16% 74.00%

Orha Mining Xilombe Mining Linarox Welstand Vapovox Kuilfontein Cozifin Palmietfontain Linanite Langverwacht Akisa Mining Loskop Derdehoek 82% 75% 100% 100% 100% 100% 100% 100% Tshedza Mining Eloff (Manungu)

100%

Ntshovelo Resources Vlakvarkfontein

40%

IchorCoal N.V.

Note: * Post conversion of preferred shares Bold italics mining rights

29.99%*

UCD I (Pty) Ltd UCD III (Pty) Ltd Kangala Brakfontein UCD IV (Pty) Ltd UCD VIII (Pty) Ltd UCD II (Pty) Ltd UCD V (Pty) Ltd UCD VI (Pty) Ltd NCC/Roodekop Bernice and Somerville Cygnus Donkin 70.5% 50.3% 49.0% 50%1 50% 50%2

1 Option to acquire a 74% Shareholding 2 Earn in 50% shareholding 4 UCD II (Pty) Ltd is a JV between Universal Coal and Bono Lithihi Investment Group (Pty) Ltd which houses the

Berenice and Somerville prospecting rights Source: Universal Coal Company Presentation (February 2015)

Universal Coal and Energy Holdings South Africa (Pty) Ltd (“Universal Coal”)

100% Identity Resources (Pty) Ltd Arnot South 49.0%

Group structure

page 12 NOT INTENDED FOR SALES OR PROMOTION The company identified herein as “ICHOR Coal N.V.” (“ICHOR” or the "Company") has prepared this information presentation (the "Information Presentation") and has issued it to recipients for the sole purpose of assisting them in deciding whether they wish to proceed with further investigation and evaluation. The issue of this Information Presentation shall not be taken as any form of commitment on the part of the Company to proceed with any negotiation or transaction. This Information Presentation is not intended to form the basis of any investment decision. Interested recipients should carry out their own due diligence review. This Information Presentation may not be communicated, photocopied, reproduced, disclosed, or distributed to any other person at any time except as agreed in writing by the Company. All statements in this Information Presentation are made as of the date hereof unless stated otherwise. In providing this Information Presentation the Company makes no representation or warranty, express or implied, as to the completeness or accuracy of any information contained in this Information Presentation, and no responsibility or liability is or will be accepted by the Company or its officers, employees, advisors or agents in relation thereto. In accepting delivery of this Information Presentation, the recipient agrees that no information contained in this Information Presentation or any other written or oral communication transmitted or made available to the recipient pursuant to or in connection with this Information Presentation is, or shall be relied upon as a promise or representation, whether as to the past or the future and no liability will attach, except as provided in a definitive agreement between the recipient and the Company, when, and if it is executed, and subject to such limitations as may be provided in any such agreement. The recipient shall hold the Company harmless against any liability for damage or loss that may result from the recipient relying upon this Information Presentation or any other written or oral communication transmitted or made available to the recipient pursuant to or in connection with this Information Presentation. The recipient shall undertake and conduct the recipient's own review and due diligence of the Company, and the terms and conditions of the Transaction, including all uncertainties, merits and risks involved. All statements contained in this Information Presentation, whether of facts or of opinions (e.g., of law, business, tax etc.) shall be verified by the recipient through independent review and due diligence, and the recipient agree that all such statements and any omission to make a statement, do not constitute any form of representation or warranty as to the matters stated or otherwise. Nothing contained herein shall be deemed to constitute an agreement by the Company to permit the recipient to have unrestricted or any other type of access to the Company’s information, books, records, employees or otherwise. This Information Presentation includes forward-looking statements. The Company has based these forward-looking statements on its current expectations and projections about future

• events. These forward-looking statements are subject to risks, uncertainties, and assumptions about the Company and the business environment. The Company’s actual results of
• perations may differ materially from the forward-looking statements. The Company undertakes no obligation to update or revise this Information Presentation, whether as a result of

new information, future events, or otherwise. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this Information Presentation, and in other statements made from time to time by the Company or its representatives, might not occur. The recipient shall not place any reliance upon any forward-looking statements contained in this Information Presentation and the recipient shall hold the Company harmless against any liability for damage or loss which may result from the recipient relying upon any forward- looking statements contained in this Information Presentation. In particular, these principles apply to any information provided in relation to the Company's business plan. Such information only represents the current planning of the Company, is based on a number of assumptions and shall not constitute any projection or forecast of the Company's future earnings. This Information Presentation is not an offer to sell or an invitation to buy or subscribe for any shares, securities or any assets or other interests of whatever nature of the Company and nothing in this Information Presentation shall be construed as an offer to sell or an invitation to buy or subscribe for any shares, securities or any assets or other interests of whatever nature of the Company. Neither this Information Presentation, nor any other written or oral information made available to the recipient constitute any form of commitment or

• recommendation. Neither this document nor any copy of it may be taken or transmitted in or into the United States or to any U.S. person (as defined in Regulation S under the U.S.

Securities Act of 1933, as amended (the “Securities Act”)). Shares in the Company have not been and will not be registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States and may not be offered or sold in the United States absent registration under the Securities Act or in accordance with an exemption from the registration requirements thereof. There will be no public offer of shares in the Company in the United States. The shares of the Company are listed on the Open Market (Entry Standard) of the Frankfurt Stock Exchange and, therefore, are subject to the insider trading rules of the German Securities Trading Act (Wertpapierhandelsgesetz), in particular to the prohibition of insider trading according to section 14 of the German Securities Trading Act.

Disclaimer

page 13 NOT INTENDED FOR SALES OR PROMOTION