Geological Database and Modelling

‰ output from the Mincom geological model was reviewed for accuracy in relation to the available drilling data, ‰ typical cross-sections across the pits, and ‰ coal quality database plans and tabulations. In summary, the database is of an adequate standard and the work has been undertaken by competent professionals. A copy of the model was provided to MMC and MMC is of the opinion that the geological model is of sufficient accuracy to be used for Coal Resource estimation. There are no fatal flaws identified, however the following observations are made in relation to the level of confidence of the database and model: ‰ thin seam interpretation is of lower confidence than for thicker seams due to the use of “touch” coring and the absence of geophysical logging, and ‰ the lack of supporting geophysical logging data lowers the overall level of confidence in the database and model such that the Coal Resource estimates can only be of maximum Indicated status.

4.5 Geological Confidence And Resource Categories

Open-cut Geological Resources are defined as that part of the identified in-situ coal “with reasonable prospects for eventual economic extraction” JORC Code, 2004. The JORC Code identifies three levels of confidence in the reporting of resource categories as follow: ‰ Measured—“that part of a Mineral Resource for which the tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence ”. Note: bolding added by MMC. ‰ Indicated—“...estimated with a reasonable level of confidence”. ‰ Inferred—“…estimated with a low level of confidence”. Determination of “level of confidence” by MMC was based on the categorising the following seam characteristics as “simple”, “moderate” or “complex” based on the following criteria: ‰ variability of seam thickness including seam splitting, ‰ variability in coal quality parameters, and ‰ structural complexity. The categorisation of resources at GBP Block 1 under this system is summarised in Table 4.5 below: Table 4.5—Resource Categorisation Parameters Simple Moderate Complex Sedimentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X Coal Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X Drill Spacing — Measured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500m 250m 100m — Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500-1,000m 250-500m 100-200m — Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000-1,500m 500-1,000m 200-400m Based on the level of complexity of the GBP Block 1 deposit, MMC sub-divided resources into categories based on the following drill spacing: ‰ Measured 0-250m radius of influence 125 m. ‰ Indicated 250-500m radius of influence 250 m. ‰ Inferred 500-1,000m radius of influence 500 m. While the proposed open cut mine area has close drill spacing 50-200 m spacing, the lack of geophysical logging and the use of “touch” coring for relatively thin seams has resulted in the resources being classified as of Indicated status in this area. A-23