Summary Table of Model Data

PT Bara Tabang PT Fajar Sakti Prima PT Brian Anjat Sentosa TABANG CONCESSIONS STATEMENT OF OPEN CUT COAL RESOURCES AND RESERVES AS AT 31 ST March 2008. May 2008 Job 3318Mb_Tabang_March A-54 CONFIDENTIALITY AND USE OF INTELLECTUAL PROPERTY The information contained in this document is solely for the use of the client identified on the coversheet for the purpose for which it has been prepared. This document, comprising figures, tables, appendices or any other inclusions remains the intellectual property of Minarco MineConsult. No party or individual shall copy, modify, or publish the aforesaid material, or any part thereof, without written authorisation from Minarco MineConsult and full and proper acknowledgement of Minarco MineConsult’s contribution. The title of this report and any associated work remains with Minarco MineConsult and does not pass to the client until all consideration has been paid in full. A-55 EXECUTIVE SUMMARY Minarco-MineConsult Pty Ltd MMC was commissioned by PT. Bayan Resources Bayan to complete an independent estimate hereafter, referred to as the “Statement” of the Open Cut Coal Resources and Reserves of three adjoining mining concessions. The three concessions are PT. Fajar Sakti Prima “FSP”, PT. Bara Tabang “BT” and PT Brian Anjat Sentosa “BAS” and are collectively known as the “Tabang Concessions” and are referred to as the “Tabang” project in this report. The Statement reports the Coal Resources and Reserves as at 31 st March, 2008 and has been undertaken in compliance with the requirements of the reporting guidelines of the 2004 Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia “The JORC Code”. The Tabang project is located in the province of East Kalimantan, Indonesia, as shown on Figure 1. Tabang is one of six coal projects operated by Bayan and a separate Coal Resources and Reserves report is being prepared for each project. The two northern concessions FSP and BT comprise the area of interest for an open cut. The third concession, BAS has limited available data and has been excluded from this report. Seven shallow lying coal seams Seams 1 to 7 and sub-seams or seam splits of variable thickness with a single major seam Seam 3 ranging in thickness up to 32.5 m have been identified. The in situ coal is high Total Moisture TM 33.5, low energy 4,305 kcalkg gross as received, gar, low ash 3.5 air dried basis, adb, low sulphur 0.1 adb sub-bituminous coal. The geology in the area is relatively simple with seams dipping gently to the south at less than 5 degrees. The mining method can be described as “multi seam, low dip open cut coal mining using truck and shovel equipment in a haulback operation.” After the initial box cut waste is hauled to ex-pit dumps, waste will be hauled back into the mined out area, when pit room is available and the dump area will then be rehabilitated. The proposed open cut operation will use hydraulic excavators and trucks to mine the coal and waste. The run-of-mine ROM coal is not washed but is to be crushed to produce a thermal export coal or else feed to an upgrade plant. Facilities include offices and a camp with associated road access, power and water supply. Trial coal production commenced in the Fajar Sakti Prima block in 2005, and in 2007 a total of 349,089 tonnes of coal was mined. The adjoining BT block is scheduled to be developed in 2009. PT Kaltim Supacoal a party related to Bayan is currently constructing a coal upgrading plant located in the eastern of the BT block. The plant is planned to initially process 1.5 Mt of raw coal feed to produce an estimated 1.0 Mt of higher CV briquettes with production commencing in 2009. The Tabang mine will therefore produce two coal products, one as a standard thermal coal to be barged to the Balikpapan Coal Terminal BCT for blending and the second as a feedstock for the coal briquetting plant. Coal is currently trucked 27 km from the pit to a temporary barge loading port at Gunung Sari on the Belayan River and transported in small barges 1,000-3,000t to the Mahakam River junction where it is transferred to larger barges 8,000t and barged to the Balikpapan Coal Terminal. Total transport distance is 521 km. In the dry season, the Belayan River may be inaccessible even for small barges at times. The company is constructing a 70 km haul road east to the Kedang Kepala River where 3,000t barges can be loaded all year round. The Coal Resources in the FSP and BT concessions are estimated to total 530 million tonnes Mt of which 258 Mt are classed as Measured, 149 Mt as Indicated with the balance of 123 Mt as Inferred. Of this total, 106 Mt are within the FSP concession and 424 Mt in BT. Coal Reserves were estimated by applying mining factors and exclusion criteria to the Coal Resources. The mining factors such as recovery and dilution were defined from the current open cut mining method. The exclusion criteria included the concession boundary and a minimum working section thickness. Minex “Optimiser” software was used to generate a series of incremental pit shells which reflect different economic scenarios and changes in the breakeven incremental strip ratio. Results were examined and the preferred pit shells were then selected by determining the breakeven strip ratio corresponding to the predicted mining economics. Coal quantities within this pit shell were then evaluated so that only Indicated Coal Resources were classified as Reserves. Based on this approach this gave a total of 60 Mt of Proved Open Cut Coal Reserves, 258 Mt of Probable Open Cut Coal Reserves for a total of 318 Mt of Proved and Probable Open Cut Coal Reserves. A-56 The average strip ratio is 3.2 bcm tonne were estimated. The average coal quality is TM 33.5, CV 4,217 kcalkg gar, ash 4.7 ar and sulphur 0.1 ar. All the Coal Reserves are classified based on the level of detail completed in the mine planning and also the level of confidence in the resources. Coal Resources are reported inclusive of Coal Reserves that is, Coal Reserves are not additional to Coal Resources. There are a number of planning issues which may impact on the stated mining reserves. These include: ‰ detailed geotechnical studies ‰ ongoing exploration drilling and updates to the geological model, ‰ hauling the coal to the more distant Kedang Kepala River, which is navigable by 3,000t barges year round, ‰ processing the coal at the PT. Kaltim Supacoal briquette plant to be constructed nearby to decrease moisture content and increase the energy value, and ‰ ongoing mine planning including different mining equipment and more detailed planning of the start up period. These issues may cause the pit shells and mining quantities to change in future JORC statements. The Coal Resource estimates in the report were estimated by Mr. William Park, BSc Geology, BEcon, MAIG who is a Member of the Australian Institute of Geoscientists. The estimates are based on information compiled and reviewed by Mr Park. He is a full time employee of MMC and has sufficient experience which is relevant to the style and type of deposit under consideration and to the activity undertaken to qualify him as a Competent Person as defined in the 2004 Edition of the JORC Code. The Coal Reserve estimates in the report were estimated by Mr Paul Westcott BE Mining, Hons, FAusIMM, CPMin, MMICA, MAIME, who is a Chartered Professional Mining Engineer, a Fellow of the Australasian Institute of Mining and Metallurgy, a Member of the American Institute of Mining Engineers, and a member of the Mineral Industries Consultants Association. The estimates are based on information compiled and reviewed by Mr Westcott. He is a full time employee of MMC and has sufficient experience which is relevant to the style and type of deposit under consideration and to the activity undertaken to qualify him as a Competent Person as defined in the 2004 Edition of the JORC Code. This report may only be presented in its entirety. Parties wishing to publish or edit selected parts of the text, or use the Statement for public reporting, must obtain prior written approval from MMC and the signatories of this report. A-57 M A K A S S A R S T R A I T M A K A S S A R S T R A I T Sun gai Belayan R vi er Rive r Seny iur Rive r S. Ke dan g Kepa la Sek urau R iv er S. Ki nta p Ke cil S . K e la d a n Sungai Mahakam Sungai Barito 00 °3000 LS 00 °00 00 1 15 °3000 1 16 °0000 1° 0 00 LS 1° 0 00 LU 1° 30 0 LS 2° 00 0 LS 1 16 °3000 1 17 °0000 1 17 °3000 1 18 °0000 1 15 °0000 2° 30 0 LS 3° 00 0 LS 3° 30 0 LS 00 °3000 LU Mah aka m R ive r S. Pin an g S. B e n g a l o n S. K edang Pahu SAMARINDA KAB. KUTAI TIMUR KAB. KUTAI BARAT KAB. PASIR BALIKPAPAN KALIMANTAN TENGAH TIMUR TABANG CONCESSIONS LOCATION PLAN JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 1 PT Bayan Resources Sangkulirang Asemasem SP II BR. TONGKOK TERING Muara Tae TANJUNG BALUI Transhipment point Laminpulut Benanga TABANG Umaq Dian MUARA KAMAN Pendamaran Tuana Tuha Muai Gunung Sari Buluk Sen Penoon KEMBANG JANGGUT KOTA BANGUN D. Semayang Ma. ANCALONG Long Nah SENYIUR Ma.BENGKAL D. Melintang Muara muntai Rimbaayu DAMAI MUARALAWA MELAK B C T MUARA NYAHING TamiangLayang TANJUNG Ampah S. B ARIT O BUNTOK BETUNG BANGKANAI KINTAP SUNGAIDANAU BONTANG BANJARMASIN MARTAPURA SANGKULIRANG LONG IKIS T. GROGOT BATULICIN SATUI PELEIHARI Muara Bengalon Lebuk Tutung To Senyiur ± 67 Km LINGAU Sepaso KAB. KUTAI KARTANEGARA KALIMANTAN KALIMANTAN SELATAN MUARATEWEH MUARA PAHU MR.BUNYUT SANTAN TG. MARANGKAYU MUARA BADAK LEBAK CILONG Gulf of Carpentaria INDONESIA K a l i m a n t a n Borneo Balikpapan Palangkaraya Samarinda Pontianak K a l i m a n t a n Laut MALAYSIA BRUNEI DARUSSALAM Bandar Seri Begawan anjungredeb T Banjarma a sin 15 30 60 TABANG CONCESSIONS N A-58 M A K A S S A R S T R A I T M A K A S S A R S T R A I T Sung ai Belayan R iv er R iv er Senyiur River S. Kedang Ke pala S eku ra u R iv er Sungai Mahakam 00 °3000 LS 00 °00 00 1 16 °0000 1 16 °3000 1 17 °0000 1 17 °3000 1 18 °0000 00 °3000 LU 00 °3000 LS 00 °00 00 00 °3000 LU Mahakam River S. Pin an g S. B e n g a l o n SAMARINDA KAB. KUTAI TIMUR TIMUR SP II BR. TONGKOK TERING Muara Tae Transhipment point Laminpulut Benanga TABANG Umaq Dian MUARA KAMAN Tuana Tuha Muai Penoon KOTA BANGUN Ma. ANCALONG Long Nah SENYIUR Ma.BENGKAL D. Melintang Muara muntai Rimbaayu DAMAI MUARALAWA MELAK MUARA NYAHING BONTANG Muara Bengalon Lebuk Tutung To Senyiur ± 67 Km Sepaso KALIMANTAN MUARA PAHU MR.BUNYUT SANTAN TG. MARANGKAYU MUARA BADAK LEBAK CILONG TABANG CONCESSIONS TABANG CONCESSIONS SITE LAYOUT JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 2 PT Bayan Resources Briquette Plant Haul Road Barge Loading Facility Pendamaran Gunung Sari Buluk Sen KEMBANG JANGGUT D. Semayang Small Barges along Belayan River Large Barges along Mahakam River KAB. KUTAI KARTANEGARA Transfer to Large Barges 15 30 60 N A-59 TABANG CONCESSIONS TYPICAL STRATIGRAPHY JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 3 PT Bayan Resources SEAM T7U - 1.43m SEAM T7L - 0.51m SEAM T5 - 1.35m SEAM T4U - 0.96m SEAM T4 - 3.09m SEAM T3U - 3.34m SEAM T3M - 2.34m SEAM T3 - 11.13m SEAM T3A - 0.52m SEAM T3L - 13.79m SEAM T2U - 0.92m SEAM T2A - 0.39m SEAM T2 - 0.91m SEAM T2L - 0.74m SEAM T1U - 0.93m SEAM T1- 1.68m SEAM T1L - 1.11m IB = 1.80m IB = 1.90m IB = 19.00m IB = 17.60m IB = 15.10m IB = 49.50m IB = 0.20m IB = 29.20m IB = 5.50m IB = 0.10m IB = 13.60m IB = 11.80m IB = 9.30m IB = 0.30m IB = 25.80m IB = 29.40m IB = 0.80m OPEN CUT UNDERGROUND SEAM NAME THICKNESS POTENTIAL POTENTIAL A-60 SECTION 1 SECTION 3 LEGEND SEC3 SEC1 TABANG CONCESSIONS TYPICAL CROSS SECTIONS JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 4 PT Bayan Resources Seam T7U Seam T7 Seam T7L Seam T6B Seam T6 Seam T5 Seam T4BU Seam T4B Seam T4BL Seam T4U Seam T4 Seam T3U Seam T3M Seam T3B Seam T3 Seam T3A Seam T3L Seam T2U Seam T2 Seam T2A Seam T2L Seam T1U Seam T1 Seam T1L 60000N -150RL -100RL -50RL 0RL 50RL 100RL 150RL -150RL -100RL -50RL 0RL 50RL 100RL 150RL 400000E -150RL -100RL -50RL 0RL 50RL 100RL 150RL -150RL -100RL -50RL 0RL 50RL 100RL 150RL Topography Base of Weathering SECTION LOCATION MAP Topography Base of Weathering A-61 IPC - TABANG RESOURCE LIMITS - SEAM 3 JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 5 PT Bayan Resources 397000E 398000E 399000E 400000E 401000E 402000E 403000E 404000E 405000E 406000E 407000E 408000E 409000E 410000E 411000E 412000E 413000E 397000E 398000E 399000E 400000E 401000E 402000E 403000E 404000E 405000E 406000E 407000E 408000E 409000E 410000E 411000E 412000E 413000E 55000N 56000N 57000N 58000N 59000N 60000N 61000N 62000N 63000N 55000N 56000N 57000N 58000N 59000N 60000N 61000N 62000N 63000N N MEASURED RESOURCES INDICATED RESOURCES INFERRED RESOURCES GEOLOGICAL MODEL LIMIT BOREHOLES CONCESSION BOUNDARY LEGEND SUBCROP A-62 TABANG CONCESSIONS 185 OPTIMISED PIT SHELL JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 b Figure: 6 PT Bayan Resources Concession Boundary Optimised Pit Shell A-63 Table of Contents Page No. EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 1.1 I NTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 1.2 A PPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 1.3 R ELEVANT R EPORT AND S TUDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 1.4 P REVIOUS C OAL R ESOURCE AND R ESERVE S TATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 2. COMPETENT PERSONS STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 3. PROJECT DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.1 G ENERAL B ACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.2 L OCATION AND T ITLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.3 M INING O PERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.4 I NFRASTRUCTURE OF S ITE F ACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.5 T RANSPORT AND C OAL H ANDLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.6 M ARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

4. GEOLOGY, COAL QUALITY AND COAL RESOURCE ESTIMATE . . . . . . . . . . . . . . . . . . .

70 4.1 G EOLOGY O VERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 4.2 C OAL Q UALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 4.3 G EOLOGICAL D ATABASE AND M ODELLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 4.4 D ATA V ALIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 4.5 G EOLOGICAL C ONFIDENCE AND R ESOURCE C ATEGORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.6 C OAL R ESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 5. COAL RESERVE ESTIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 5.1 C OAL R ESOURCE E STIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 5.2 S TUDY S TATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 5.3 C UT - OFF P ARAMETERS AND P IT L IMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.4 M INING F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.5 M ETALLURGICAL F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.6 C OST AND R EVENUE F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.7 M ARKETING AND P RODUCT S PECIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 5.8 O THER R ELEVANT F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 5.9 C LASSIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 5.10 A UDITS AND R EVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 5.11 D ISCUSSION OF R ELATIVE A CCURACY AND C ONFIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 5.12 R ESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 5.13 S UMMARY T ABLE OF M ODEL D ATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 A-64 List of Tables Table No. Description Page No Table 4.1 — Seam Thickness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Table 4.2 — Coal Qualities by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Table 4.4 — Coal Resource Categorisation Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Table 4.5 — Coal Resources Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Table 4.6 — Coal Resources by Seam—FSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Table 4.7 — Coal Resources by Seam—BT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Table 5.1 — Total Open Cut Coal Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Table 5.2 — Total Reserves by Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Table 5.3 — Total Coal Reserves by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Table 5.4 — Summary of Model Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 List of Figures These follow the Executive Summary Figure No. Description Figure 1 Location Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Figure 2 Site Layout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Figure 3 Typical Stratigraphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Figure 4 Typical Cross Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Figure 5 Resource Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Figure 6 Pit Shell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 A-65

1. INTRODUCTION

1.1 Introduction

Minarco-MineConsult Pty Ltd MMC was commissioned by PT. Bayan Resources Bayan to complete an independent estimate hereafter, referred to as the “Statement” of the Open Cut Coal Resources and Reserves within three adjoining mining concessions, the “Tabang Concessions” referred to as the “Tabang” project in this report East Kalimantan, Indonesia. The Statement reports the Coal Resources and Reserves as at 31 st March, 2008 and has been undertaken in compliance with the requirements of the reporting guidelines of the 2004 Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia “The JORC Code”. The three mining concessions are as follows: ‰ PT Fajar Sakti Prima FSP ‰ PT Bara Tabang BT ‰ PT Brian Anjat Sentosa BAS The two northern concessions FSP and BT comprise the area of interest for an open cut. The third concession, PT Brian Anjat Sentosa has limited available data and has been excluded from this report. MMC has adopted the following terms for the reporting of Coal Resources and Reserves: ‰ Coal Resources as used in this report are the same as “Mineral Resource” in The JORC Code and “Geological Resources”, a common term used in the industry. ‰ Coal Resources have been subdivided into Measured, Indicated and Inferred Resources to reflect the confidence in the underlying resource data. ‰ Coal Reserves as used in this report are the same as “Ore Reserves” in The JORC Code and “Mining Reserves”, a common term used in the industry. Coal Reserves include geological and mining losses, roof and floor loss and dilution. ‰ Coal Reserves have been subdivided into Proved and Probable to reflect the confidence in the underlying resource data and mine planning detail. ‰ Marketable Reserves allow for practical yields in a beneficiation plant, which is commonly known in the industry as “product coal”. The Tabang coal will not require washing, therefore Marketable Reserves are equal to Coal Reserves. ‰ Coal Resources are reported inclusive of Coal Reserves, that is, Coal Reserves are not additional to Coal Resources. Additional terminology applied within this report includes the following: ‰ Geological Model or “In Situ” Model is the computerised three dimensional representation of the coal deposit based on topographic survey data, coal seam data derived from outcrop, drillhole or other data points, including coal thickness and quality. ‰ Optimiser is the Minex software applied to the geological model to determine the economic pit limits by the application of such factors as geological and mining losses, loss and dilution, geotechnical slope design and costrevenue inputs. ‰ Optimised Pit Shell is the three dimensional economic pit limit determined using the Optimiser. ‰ Mineable Pit Shell is the optimised pit shell after modification to conform to a practical pit design. ‰ Mineable In Situ Coal non-JORC terminology as used in this report is in situ coal within the mineable pit shell ‰ Run of Mine ROM Coal non-JORC terminology as used in this report is coal in the mineable pit shell after application of geological and mining losses, roof and floor loss and dilution. ROM may include some Inferred coal resources. A-66

1.2 Approach

The process adopted for completing the Statement is described below. 1. An “in situ” geological model was created by Bayan geologists working on the Tabang project using Mincom software. This model had no cut off criteria applied, hence the term “in situ” model. 2. This model and underlying raw data such as borehole logs, coal quality reports and geophysical logs were reviewed by MMC geologist, Mr William Park. 3. The Mincom model was then imported into Minex software. The reason for this step was to allow mine planning software called the “Optimiser” to be run. 4. The geological model was categorised into Measured, Indicated and Inferred confidence areas and then coal volumes, tonnages and qualities were estimated and reported in these categories after applying any cut-off criteria. 5. Cross sections, plans and deposit characteristics such as structure, number and thickness of seams were examined in conjunction with the proposed equipment and mining method to decide on minimum mining thickness, coal losses and dilution factors. These factors were then used to convert the in situ geological model to a ROM model. 6. Costs and revenue factors were supplied by Bayan and checked for reasonableness by MMC. These were then converted in a form to suit the Optimiser software and together with other criteria such as depth constraints, geotechnical criteria and minimum mining thickness, a series of pit shells were derived for varying revenue inputs. 7. Pit shells “Optimised Pit Shells” were selected and minor adjustments made as necessary to form practical pit designs “Mineable Pit Shells”. These pit shells formed the basis of the subsequent reserves estimates. 8. The Measured and Indicated confidence limits were overlaid on these pit shells and any Inferred tonnes were excluded from the estimate. 9. The Coal Reserves were categorised as Proved or Probable based on the Coal Resource confidence and the level of detail in the mine planning. 10. Adjustments were the made for depletion due to mining since the previous Statement. 11. Checks were undertaken and results and supporting information documented in this report.

1.3 Relevant Report and Studies

The following reports, documents and studies were used as reference material in the preparation of the Statement. 1. Preston, KB and Sanders, RH, “Estimating the In-Situ Relative Density of Coal”, Australian Coal Geology, Vol 9, pp22-26, May 1993. 2. Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves, 2003. 3. Australasian Code for Reporting of Mineral Resources and Ore Reserves, The JORC Code, 2004. 4. “PT. Indonesia Pratama, Tabang Open Cut Coal Deposit, Statement of Open Cut Coal Resources and Reserves as at 30 th September 2007”. MMC Job number 3182M. 5. “PT. Bara Tabang, PT. Fajar Sakti Prima, PT. Brian Anjat Sentosa, Tabang Concessions, Statement of Open Cut Coal Resources and Reserves as at 31 st January 2008”. MMC Job number 3318M.

1.4 Previous Coal Resource and Reserve Statements

MMC has previously prepared two Coal Resource and Reserve statements compliant with the JORC Code for this project dated 30 th September 2007 and 31 st January 2008. There has been no additional drilling since 31 st January 2008, however the geological model has been updated to include additional coal quality data and there has been some mining 45 kt from Seam 3. A-67