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white energy company limited
ABN 62 071 527 083
Company Presentation June 2015 A Diversified Coal Company – Coal Technology and Coal Mining
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Forward Looking Statements. Statements in this presentation, particularly those regarding possible, targeted, expected or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, growth, earnings or trend projections are or may be forward looking statements. The words ‘anticipated’, ‘expected’, ‘intended’, ‘projection’, ‘forecast’, ‘estimate’, ‘guidance’, ‘plan’, ‘could’, ‘should’, ‘may’, ‘target’, ‘consider’, ‘believe’, ‘will’ and other similar expressions are intended to identify forward looking
- statements. Such forward looking statements relate to future matters and may involve known and unknown risks, uncertainties, or
- ther factors, many of which are outside the control of the company, which could cause actual results to differ materially from past
results or results expressed or implied by such statements. To the maximum extent permitted by law, the company, its related bodies corporate and their directors, officers, employees, agents and advisers disclaim any obligation to update any forward looking statements to reflect subsequent events or circumstances.
For more information visit www.whiteenergyco.com or contact: Brian Flannery Managing Director and CEO White Energy Company Limited +61 2 9959 0000
Disclaimer
Ivan Maras Chief Financial Officer White Energy Company Limited +61 2 9959 0000
Summary information. The information in this presentation does not purport to be complete. It should be read in conjunction with the company’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au. No liability. No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the information, opinions and conclusions expressed in the course of this presentation. To the maximum extent permitted by law, the company, all of its related bodies corporate and their directors, officers, employees, agents and advisers do not accept any responsibility or liability (including, without limitation, any liability arising from negligence on the part of any person) for any loss or damage incurred by any person in connection with this presentation or any action taken on the basis of such information, opinions or
- conclusions. You must make your own independent assessment of the information, opinions and conclusions and in taking any
action seek your own independent professional advice as appropriate.
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White Energy A diversified coal company listed on the ASX with significant global growth prospects
- White Energy is the exclusive worldwide licensee of a patented technology which upgrades high moisture low value sub-
bituminous and lignite coals through a low cost process of dehydration and compaction. This technology is known as the Binderless Coal Briquetting (“BCB”) technology, and was developed by a consortia led by the Commonwealth Scientific and Industrial Research Organisation (“CSIRO”).
- White Energy has more recently applied the BCB technology to the beneficiation of thermal and metallurgical coal fines.
- White Energy acquired Mountainside Coal Company Inc. (“MCC”) in 2013, following the earlier acquisition of South
Australian Coal Limited in 2010. These assets form the coal mining division of the Company.
Notes: (1) 1 ADR = 5 Ordinary Shares (2) Fully diluted excludes unissued options (3) Includes $2 million WA Supreme Court Security Bond relating to the freeze order obtained in respect of Bayan Resources’ shareholding in Kangaroo Resources Limited and $2.8m in coal mining reclamation bonds at MCC (4) As at 25 March 2015 – Top 40 extract of the White Energy Company Limited share registry
Key Statistics 31 May 2015 Share Price - ASX: WEC A$0.39 US ADR Price - OTCQX: WECFY (1) US$1.52 Ordinary Shares On Issue 328.4 million Equity Market Capitalisation (2) A$128 million Cash Reserves (approx) (3) A$34 million Major Shareholders (4) Shareholding % M&G Investment Management 17.93% Gaffwick Pty Ltd 9.73% Ganra Pty Ltd 9.24% Remaining top twenty shareholders 35.30%
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Solid Platform for Growth
White Energy is organised around two distinct – but related – business divisions which provide an exciting pipeline of projects currently under development.
* 100% owned unless otherwise stated
Coal Mining Coal Technology
Mountainside Coal Company Inc. Briquette Bituminous Coal Fines (thermal, coking) Upgrade Sub-bituminous coals Indonesia Other Markets
To be developed Current focus
Other markets North America China North America Australia/NZ South Australian Coal Limited
51% 51% 51%
Other Opportunities
51%
South Africa 3
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Target Milestones for the Year Ahead
The Company has identified a number of key areas of focus for Financial Year 2014/2015
United States Africa Indonesia Australia
- Mountainside Coal
- Buckskin Mining
- Black River
- TBA
- Lake Phillipson EL4534
- Cessnock Production Plant
- In commercial
discussions
- Commence mining
- perations at the
proposed Flat Creek coal mine.
commission a new and improved coal wash plant at MCC.
- Commence construction
- f a BCB plant at MCC.
- Continue to evaluate
market conditions, specifically progress with coal export facilities.
commission a coal fines beneficiation plant at Woestalleen (Phase One).
construction BCB Plant at Woestalleen (Phase Two)
construct BCB plant with another major South African coal producer.
suitable sub- bituminous coal mining asset.
- Ongoing development of BCB
technology through continued investment in R&D activities.
- Conduct a number of extended
Demonstration Plant campaigns using both bituminous coal fines and sub-bituminous coals.
- Continue to evaluate EL4534 for
coal applications including coal gasification.
commercial partnership with Chinese miner/ power utility.
partner for sub- licensing
Key Partners / Projects FY2014/15 Target Milestones China
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A highly regarded board and management team with an industry wide reputation for delivery and execution of major coal projects Board and Management
Travers Duncan Chairman Brian Flannery Managing Director and CEO Graham Cubbin Non-executive Director Hans Mende Non-executive Director Vincent O’Rourke Non-executive Director Terence Crawford Non-executive Director
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White Energy’s Coal Upgrading Technology
Five Production Stages 1. Coal preparation 2. Crushed coal drying 3. Solids separation 4. Briquetting 5. Cooling / conditioning
The BCB technology has been developed over 20 years, by a consortia led by the CSIRO
Binderless Briquetting Circuit (BCB) 6
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Coal Fines - A Major Environmental Liability Coal fines represent a major environmental liability for coal producers and also carry a significant ongoing maintenance cost
- Billions of tonnes of coal fines are stored in slurry
ponds around the world.
- Coal fines derived from a combination of thermal
coal and coking coal.
- New arising fines continue to be generated at coal
mines around the world, due to inefficiencies in coal processing methods.
- There is a significant ongoing cost for coal
producers associated with the management of coal fines.
- Dried briquettes produced from wet coal fines can
be blended with a coal producer’s saleable coal, for export or domestic markets.
The excavation of coal fines from a typical slurry pond at a South African mine site 7
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Application of the BCB Technology to Coal Fines
Binderless Briquetting Circuit (BCB) Export Conveyor Domestic Thermal Market Power Station Ultra Fines Spiral Fines
Coal Mine Wash Plant
Reclaimed Fines
Slurry pond Collect the waste & discarded fines Dewater and clean the fines Briquette and improve fines calorific value Blend briquetted fines with ROM output
White Energy Value Add Environmental Liability High Value Product
Fine Coal Beneficiation Circuit (FBC)
White Energy is able to leverage its patented and scalable technologies to beneficiate ultra fine coals in order to create saleable product by converting a waste product into a high value product that can enhance a mine’s revenues
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The Coal Fines Beneficiation and Upgrading Process
2 - Reclaiming the coal fines from ponds 1 - A coal fines slurry pond 4 - BCB Briquetting phase 5 - Upgraded coal fines briquettes 3 - Beneficiation/screening phase
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The Coal Fines Opportunity for White Energy White Energy has identified a number of commercial opportunities associated with the deployment of the BCB technology to the briquetting of coal fines
Fine Coal Beneficiation plant under construction at the Woestalleen, RSA site Inspection of briquettes produced from South African coal fines
- During 2015 the Company plans to commence construction of its
first commercial BCB Plant for briquetting of coal fines at recently acquired MCC in Kentucky (U.S.). This coal is very low ash (<2%) metallurgical coal quality.
- In addition to North American coal fines opportunities, South Africa
continues to represent a significant short-term opportunity for the recovery and processing of bituminous coal fines. This coal is all thermal quality.
- A pipeline of potential project opportunities, all centrally located
within the existing Witbank/Middleburg coalfields in South Africa, involve some of the largest coal producers in the South African market.
- The Company conducted a 100 tonne commercial
scale burn test in South Africa on the BCB product as part of a Detailed Feasibility Study.
- The BCB technology produces an upgraded coal
briquette without the need to use a binding agent, which is more costly, and gives the Company a significant advantage over competition.
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The Need for Cleaner Coal White Energy continues to focus on its core BCB coal technology business, which is based on the upgrading of low rank, low cost sub-bituminous coals to export grade higher value coal.
Source: Casey Research published in the mining.com 1/7/2014 article “My air is more expensive than your air”
- A major portion of remaining world coal reserves are low rank.
- The current and future dependence on coal will require technologies that can reduce emissions and
mitigate the negative effects of coal using high moisture, lower rank coal.
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Value Proposition – Upgrading Sub Bituminous Coals
White Energy’s commercial proposition is simple – access low cost / low rank coals and upgrade the coal to more valuable and higher energy briquettes
Product Upgrade Historical Price Arbitrage
Feedstock coal
Upgraded high energy coal briquettes
Kcals/kg GAR Sub- bituminous coal example Indonesia
Kcals/kg GAR PRB Coal
Btu/lb GAR
Btu/lb GAR
* GAR = Gross As Received
Target Source: Argus/Coalindo Indonesian Coal Index Report
Historical Indonesian Coal Prices (US$/ton) 2008 - 2013
$0 $20 $40 $60 $80 $100 $120 $140 $160 6500 GAR 5500 GAR 4200 GAR Price Arbitrage
US$/ton
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White Energy upgraded coal results in improved energy content, lower emissions and enhanced transportation efficiencies when compared to lower rank feedstock coals
Higher energy content Reduced C02 emissions per Kwh Lower risk of spontaneous combustion
- 30% - 100% increased energy content compared to low rank feedstock coal
- In comparison to low rank feedstock coal, White Energy’s upgraded coal has a
reduced CO2 and other emission profile at the point of combustion
- White Energy upgraded coal has improved physical and chemical stability,
enhancing handling, storage and transportation options
- Increased power output and improved heat rate, enabling higher capacity utilisation
and efficiency at point of combustion
- White Energy upgraded coal mitigates exposure to stricter environmental emissions
regulations
- Reduced moisture content results in an up to 30% decrease in load volumes and
associated transportation costs
Improved performance at power stations Enhanced transport efficiency
Benefits of White Energy upgraded coal compared to typical Sub-Bituminous feedstock coal
White Energy Upgraded Coal vs Sub-Bituminous Coal
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- Ash:
- Reduction in ash as a waste
product and consequent dust particles
- Sulphur Oxide:
- Sulphur % of 0.1% is
amongst the lowest in the world, leading to significant reduction in sulphur dioxide emissions
- Nitrogen Oxide:
- Lower levels of nitrogen
- xide are emitted on
combustion
Source: External third party test results
White Energy Upgraded Coal vs Bituminous Coal Upgraded bituminous coal has an improved pollution profile as it maintains the positive environmental attributes of the feedstock coal
Superior environmental performance as compared to typical Australian bituminous coal
Significant reduction in SOx and NOx emissions BCB Coal
Many
the high moisture coals (particularly Indonesian) have very low ash and sulphur contents. Therefore, when the moisture is removed the resultant higher energy product is very attractive from an energy, ash and sulphur viewpoint
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Research & Development - Cessnock The Cessnock Production Plant continues to provide a ‘centre of excellence’, used to test coal samples sourced from coal producers around the world
- The White Energy technical team
completed a number of modifications to the Cessnock Demonstration Plant in 2013.
- The modifications are designed
to enable the Cessnock plant to simulate a bituminous coal fines upgrading operation, in addition to sub-bituminous and lignite coal testing.
Demonstration Plant runs on South African and Australian reclaimed coal fines and Pilot Plant test work on a range of coals has been conducted.
- Results of test work completed to
date continues to show positive results with respect to sub- bituminous coal as well as bituminous (thermal and coking) coal fines.
White Energy Board Members touring the Cessnock Demonstration Plant 15
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Coal Mining - South Australian Coal Limited – EL4534
South Australian Coal Limited holds the exploration rights to a large sub-bituminous coal deposit located in Northern South Australia (EL4534)
approximately 765 kilometres north of Adelaide and 70 kilometres south west of the township of Coober Pedy.
- The Darwin to Adelaide railway
runs through EL4534.
- A conceptual mine plan and
preliminary costings have been completed in preparation for a detailed feasibility study, based
- n the supply of Lake Phillipson
coal to the domestic power market in South Australia.
- Desktop studies have been
completed and confirmed that the Lake Phillipson coal is suitable for gasification using the Lurgi process.
Core from the 2012 South Australian Coal drilling program at EL4534 16
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Coal Mining - Mountainside Coal Company
Open-cut mining operations at Flag Ridge using highwall mining equipment
The acquisition of Mountainside Coal Company has provided White Energy with control and certainty of feedstock coal supply and enables it to capture a greater portion of the value chain by utilising the BCB technology to upgrade the resource
17 Open Cut Mining Operations At Flag Ridge
The MCC reclamation process from left to right: newly sloped areas at Flag Ridge, seeding at Jellico Creek and vegetation growth after one year at Flag Ridge
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Coal Mining - Mountainside Coal Company (cont.) White Energy intends to expand the Mountainside Coal business in a stepped process, including the installation of a coal wash plant which was commissioned in February 2015 and BCB plant at the site
- White Energy intends to increase
production levels with a particular focus
- n increasing the quantum of sales of
the low-ash sized coal product.
- Low-ash sized coal product is currently
sold at an attractive premium.
- Test work conducted at the Cessnock
Demonstration Plant has shown that the fine coal remaining after screening
- ut the washed sized coal from
Mountainside Coal’s production, can be processed into a stable briquette similar to the sized coal.
- These coal fines presently amount to
approximately 25% of production.
- The briquetting of these coal fines using
the BCB process is expected to increase the value of the Mountainside Coal business.
The MCC new coal wash plant was commissioned in February 2015 18
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Level 9, 20 Hunter Street Sydney, NSW 2000 Telephone: +61 2 9959 0000 Facsimile: + 61 2 9959 0099 Email: info@whiteenergyco.com
ABN 62 071 527 083
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