Coal Resources PT. Bayan Resources Tbk - Prospectus

Table 4.4—Coal Resources by Seam Depth Elevation m Resources kt Seam Measured Indicated Inferred Sub-Total S103 . . . . . . . . . . -100 m 400 400 S101 . . . . . . . . . . -100 m 2,200 2,200 S100 . . . . . . . . . . -100 m 800 800 S99 . . . . . . . . . . . -100 m 800 800 S98 . . . . . . . . . . . -100 m 600 600 S97 . . . . . . . . . . . -100 m 800 800 S96 . . . . . . . . . . . -100 m 800 800 S95 . . . . . . . . . . . -100 m 3,600 3,600 S94 . . . . . . . . . . . -100 m 400 400 S93 . . . . . . . . . . . -100 m 1,400 1,400 S92 . . . . . . . . . . . -100 m 800 800 S91 . . . . . . . . . . . -100 m 600 600 S90 . . . . . . . . . . . -100 m 1,000 1,000 S88 . . . . . . . . . . . -100 m 1,400 1,400 S87 . . . . . . . . . . . -100 m 7,500 1,600 9,100 S86 . . . . . . . . . . . -100 m 600 600 S85 . . . . . . . . . . . -100 m 1,200 1,200 S84 . . . . . . . . . . . -100 m 400 400 S83 . . . . . . . . . . . -100 m 1,500 400 1,900 S82 . . . . . . . . . . . -100 m 200 200 S81 . . . . . . . . . . . -100 m 6,500 1,000 7,500 S80 . . . . . . . . . . . -100 m 1,900 200 2,100 S79 . . . . . . . . . . . -100 m 2,300 600 2,900 S78 . . . . . . . . . . . -100 m 1,100 400 1,500 S77 . . . . . . . . . . . -100 m 800 200 1,000 S76U . . . . . . . . . . -100 m S76A . . . . . . . . . . -100 m 3,400 600 4,000 S76AB . . . . . . . . . -100 m 200 200 S76B . . . . . . . . . . -100 m 600 600 S76 . . . . . . . . . . . -100 m 2,600 2,700 S76C . . . . . . . . . . -100 m 500 100 600 S75 . . . . . . . . . . . -100 m 300 300 S74 . . . . . . . . . . . -100 m 200 200 74A1 . . . . . . . . . . -100 m 600 600 74A2 . . . . . . . . . . -100 m 200 200 74A . . . . . . . . . . . -100 m 2,400 400 2,800 S73 . . . . . . . . . . . -100 m 700 200 900 S72A . . . . . . . . . . -100 m 200 200 S72 . . . . . . . . . . . -100 m 2,500 400 2,900 S72B . . . . . . . . . . -100 m 200 200 S71 . . . . . . . . . . . -100 m 1,400 200 1,600 S70 . . . . . . . . . . . -50 m S69 . . . . . . . . . . . -50 m 500 500 S68 . . . . . . . . . . . -50 m 1,100 200 1,300 S67 . . . . . . . . . . . -50 m 200 200 S65 . . . . . . . . . . . -50 m 200 200 S64 . . . . . . . . . . . -50 m 500 200 700 S63 . . . . . . . . . . . -50 m 200 200 S62A . . . . . . . . . . -50 m 200 200 S62B . . . . . . . . . . -50 m 200 200 S61 . . . . . . . . . . . -50 m 3,400 200 3,600 S60 . . . . . . . . . . . -50 m 300 300 S59 . . . . . . . . . . . -50 m 900 200 1,100 S58 . . . . . . . . . . . -50 m 400 400 S57 . . . . . . . . . . . -50 m 500 200 700 A-101 Depth Elevation m Resources kt Seam Measured Indicated Inferred Sub-Total S56 . . . . . . . . . . . -50 m 700 100 800 S55 . . . . . . . . . . . -50 m 400 400 S54 . . . . . . . . . . . -50 m 400 400 S53 . . . . . . . . . . . -50 m S52 . . . . . . . . . . . -50 m 800 800 S51A . . . . . . . . . . -50 m S51 . . . . . . . . . . . -50 m 1,400 200 1,800 S51B . . . . . . . . . . -50 m 400 400 S50 . . . . . . . . . . . -50 m 400 400 S49 . . . . . . . . . . . -50 m S48 . . . . . . . . . . . -50 m 600 600 S47 . . . . . . . . . . . -50 m 500 200 700 S46 . . . . . . . . . . . -50 m 200 200 S45 . . . . . . . . . . . -50 m 1,200 1,200 S44 . . . . . . . . . . . -50 m 1,400 1,400 S43 . . . . . . . . . . . -50 m 200 200 S40 . . . . . . . . . . . -50 m S39 . . . . . . . . . . . -50 m 1,500 200 1,700 S36 . . . . . . . . . . . -50 m 100 100 S35 . . . . . . . . . . . -50 m 400 200 600 S34 . . . . . . . . . . . -50 m 500 600 1,100 S32 . . . . . . . . . . . -50 m 400 400 TOTAL . . . . . . . . 49 Mt 35 Mt 85 Mt Note: Totals have reported in Mt and rounded up to one decimal place

5. COAL RESERVE ESTIMATE

The following sections describe the process used in converting the Coal Resources into Coal Reserves. The order generally follows “Table 1—Check List of Assessment and Reporting Criteria” in The JORC Code. This process includes defining viable pit limits and applying various mining recovery, cost, revenue and similar factors to the Coal Resources to estimate Coal Reserves.

5.1 Coal Resource Estimate

The Coal Resource estimate that is used as a basis for the Coal Reserve estimate is documented in this report see Section 4. The Competent person who did the Coal Resource estimate is Mr William Park. Coal Reserves quoted in this report are inclusive of Coal Resources.

5.2 Study Status

The mine is producing and is exporting coal from recently completed infrastructure. The Competent Person for Coal Reserves considers the current mine operation is be technically achievable and commercially viable. He has visited the site and is aware of the status of the operations and issues associated with the mine. It is a complex deposit due to the number of pits close to each other which complicates access, dumping and scheduling. Deep drilling and geotechnical studies and a “Life of Mine Plan” is in progress. A first pass pit optimisation has been completed and a preliminary pit design undertaken based on a geological model as at 30 th September 2007 and a lower coal price and breakeven strip ratio than current prices. However, the new information was still being processed at the time of preparing this Statement and so is not included in this Statement; but will be included in the next update.

5.3 Cut-off Parameters and Pit Limits

The depth was set to a maximum of 300 m. Geotechnical slopes of 45 degrees were assumed for highwalls and 30 degrees for low walls. A-102 The Minex Optimiser software was used to generate a series of incremental pit shells based on a range of coal selling prices. This is a three dimensional approach which provides a series of pit shells where each increment reflects different economic scenarios such as changes to depth, mining cost or coal price. At this stage, the Optimiser was not constrained by confidence limits. An economic model was prepared for the mining operation to determine the project breakeven or incremental stripping ratio. The pit optimisation results were examined and pit shells selected which corresponded to an incremental stripping ratio of 9.8 bank cubic metres per tonne bcmt. It should be noted this is conservative as the breakeven ration strip ration at current prices is 11.7 bcmtonne. The selected pit shells Optimised Pit Shells were modified to form “practical designs” Mineable Pit Shell. Through the application of mining factors Section 5.4 below, the Mineable In Situ coal within these pit shells was converted to ROM coal quantities which were then tested so that only Measured and Indicated Coal Resources were classified as Coal Reserves. The selected pit shells are shown on Figure 6.

5.4 Mining Factors

The selected mining method is an “open cut, multi seam, moderate to steep dip, truck and shovel mining method where dumping is initially ex-pit and subsequently in-pit using a haulback methodology”. The mining factors applied to the Coal Resource model for deriving mining quantities were selected based on the use of excavators and trucks. The assumption is that clean accurate mining practices similar to that achieved at the other Bayan mines are adopted. Loss and dilution factors guidelines are as follows: ‰ Roof and Floor Loss: It is assumed that an average of 50mm of coal will be lost in both the roof and floor of all coal seams i.e. total loss 100mm. ‰ Global Loss: It is assumed that 4 of all coal mined will be lost. This global allowance covers both geological and mining losses including losses which will occur along edges; such as subcrops, faults, wedges and ramps. ‰ Roof and Floor Dilution: It is assumed that an average of 10mm of waste material will be mined with the roof and floor of all coal seams. This assumes small equipment, close supervision and good mining practices. ‰ Minimum Mining Thickness: Coal less than 0.4 m was excluded from the estimate. ‰ Minimum Parting Thickness: Partings less than 0.1 m were assumed to be mined with the coal. ‰ Defaults: Dilution was assumed to be RD 2.1 bcmt and CV of 2,000 kcalkg gar. 5.5 Metallurgical Factors The coal is sold unwashed so no metallurgical factors have been applied.

5.6 Cost and Revenue Factors

Bayan provided a “data sheet” of unit costs relevant to PIK. MMC checked these for reasonableness and also used an in-house NPV based economic model to show that the project and reserves are “economic”. These unit rates were then used to calculate the cost to deliver coal to a ship fob vessel. This allowed a break even strip ratio to be calculated and the rates were also used to calibrate the Optimiser software. The following points summarise the cost and revenue factors used for the estimate: ‰ All costs are in US dollars. ‰ A benchmark coal price of US65 per tonne for coal of CV 6,322 kcalkg gar was used for the estimates. This was discounted 24 for sub bituminous higher moisture coal and further discounted for sulphur greater than 1. The average price applied was US34tonne. ‰ Royalties of 13.5 of revenue less marketing, barging and shipping costs have been allowed. ‰ A fuel price of 68 cents per litre was used for mining costs. ‰ A coal haulage cost of 11 cents per tonne kilometre. ‰ Allowances were made for crushing, stockpiling, barge loading and ship loading which totalled approximately 6.00 per tonne. A-103