1.1 Summary Table of Model Data

PT Wahana Baratama Mining WAHANA OPEN CUT COAL DEPOSIT STATEMENT OF OPEN CUT COAL RESOURCES AND RESERVES AS AT 31 st March 2008. May 2008 Job 3318f_Wahana_May A-134 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 includions 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-135 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 within the mining tenement at the PT Wahana Baratama Mining hereafter referred to as “Wahana” Coal Project in South Kalimantan, Indonesia. The Statement reports the Coal 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”. Wahana is located in the province of South Kalimantan, Indonesia, as shown on Figure 1. Wahana is one of six coal projects operated by the Bayan group and a separate Coal Resources and Reserves report is being prepared for each project. Adjacent and up dip of the Wahana lease area is the operating Satui mine run by PT Arutmin Indonesia Arutmin. An agreement has been reached with Arutmin to mine the coal at the concession boundary. This report only includes open cut Coal Resources and Reserves within the Wahana concession. The northeastern part of the Wahana concession is currently the subject of an underground mining study, however any potential underground Coal Resources are also excluded from this report. The area of interest for an open cut is approximately 9km by 1.5km. A total of 17 coal seams and sub-seams have been identified. The in situ coal has an average Total Moisture TM of 5.9, Calorific Value CV of 6,660 kcalkg gross as received, gar and sulphur 0.5 air dried basis, adb. The upper series of seams S1 to S8 are relatively thin 0.2-0.9 m and higher ash average 14.0 adb, while the lower seams are on average thicker sub-seams or splits of the main Satui Seam, ranging from 0.5-2.5 m and have lower ash average 8.6 adb. Dips vary from 13-17 degrees to the south-southeast. Mining commenced in December 2008 and total production to the end of March 2008 was approximately 189,000 tonnes. The mining method can be described as “multi seam, moderate dip open cut coal mine using truck and shovel equipment in a haulback operation.” After the initial box cut waste has been 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 crushed to produce a thermal export coal. Facilities include offices and a camp with associated road access, power and water supply. Construction of the Wahana infrastructure is in the early stages and the current construction schedule allows for completion of facilities in 2008. Coal is currently trucked 21 km from the pit to the stockpile area at the coast. Then it will be crushed and stockpiled. There is a barge loading facility as the draft is too shallow for large ships. Hence, from the shallower water the coal will be barged to an off-shore floating coal transfer station. This will in turn load large ships for long distance transport to international markets. In the longer term there are plans to construct an overland conveyor to the port. Planned coal production will require blending from both higher and lower ash coal to maintain the product specification or alternately a second lower coal quality may be produced. The open cut Coal Resources are estimated to total 250 million tonnes, of which 16 million tonnes are classed as Measured, 137 million tonnes as Indicated with the balance of 98 million tonnes as Inferred. At this time Coal Reserves were estimated by applying mining and processing factors and exclusion criteria to the Coal Resources. The mining factors such as recovery and dilution were defined from the open cut mining method chosen. The exclusion criteria included the lease boundary with Arutmin 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 strip ratio. Results were examined and the preferred pit shell was 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 Measured and Indicated Coal Resources were classified as Reserves. Based on this approach this gave a total of 15 Mt of Proved Open Cut Coal Reserves, 61 Mt of Probable Open Cut Coal Reserves for a total of 76 Mt of Proved and Probable Open Cut Coal Reserves. The average strip ratio is 15.0 bcm tonne were estimated. The average coal quality is TM 5.8, CV 6,480 kcal kg gar, ash 12.6 ar and sulphur 0.5 ar. All the Coal Reserves are classified based on the level of detail A-136 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 open cut geotechnical studies, ‰ any future studies in relation to including a washplant in the operation, ‰ recovery of the thin seams between 0.2 m and 0.4 m, ‰ detailed planning for the implementation of the “boundary” agreement with the neighbouring Arutmin lease, ‰ ongoing exploration drilling and updates to the geological model, ‰ ongoing underground mining studies and related geotechnical investigations, and ‰ ongoing mine planning including different mining equipment and more detailed planning of the start up period and the box cut design. These issues may cause the pit shell 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-137 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 Be layan R iv er Riv er Sen yiur Rive r S. K e dang K epala Se ku rau R ive r S. Ki nt ap K ec il S .K e la a d n Sungai Mahakam Sung ai Bari to 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 iver S. Pi na ng S. B e n g a l o n S. K e dang P ahu SAMARINDA KAB. KUTAI TIMUR KAB. KUTAI BARAT KAB. PASIR BALIKPAPAN KALIMANTAN TENGAH TIMUR WAHANA LOCATION PLAN JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f 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 Banjarmasin N 15 30 60 PT. WAHANA BARATAMA MINING PT. WAHANA BARATAMA MINING A-138 Satui Riv er Sat ui Riv er Washing plant E 309,000 E 312,000 E 315,000 E 300,000 E 303,000 E 306,000 E 327,000 E 330,000 E 318,000 E 321,000 E 324,000 N 9,574,000 N 9,585,000 N 9,588,000 N 9,591,000 N 9,577,000 N 9,574,000 N 9,580,000 N 9,583,000 N 9,585,000 N 9,588,000 N 9,591,000 N 9,577,000 N 9,574,000 N 9,580,000 N 9,583,000 Settingpond Stockpile Office Camp Con ve yor Trac k H aul Road Jetty Magazine Contractor Camp Ja wa Sea N WAHANA SITE LAYOUT JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f Figure: 2 PT Bayan Resources Proposed Pit Shell Mulia PT Arutmin Pit Temporary Haul Road BBI Jetty Stockpile and Barge loading Facility Arutmin Lease Area A-139 SEAM S1 - 0.15m SEAM S2 - 0.32m SEAM S3 - 0.51m SEAM S3U - 0.40m SEAM S3L - 0.26m SEAM S4U- 0.37m SEAM S4L - 0.21m SEAM S5U - 0.54m SEAM S5L - 0.32m SEAM S6U - 0.73m SEAM S6L - 0.47m SEAM S7U - 0.57m SEAM S7L - 0.40m SEAM S8U - 0.34m SEAM S8L - 0.42m SEAM SM1U - 0.32m SEAM SM1L - 0.34m SEAM S4 - 0.49m SEAM S5 - 0.64m SEAM S6 - 0.90m SEAM S7 - 0.97m SEAM S8 - 0.48m SEAM SM1- 0.37m SEAM SM2 - 0.53m SEAM SL1 - 0.96m SEAM SL2 - 1.98m SEAM SL2U - 0.14m SEAM SL2L - 1.02m IB = 29.80m IB = 35.60m IB = 18.50m IB = 11.90m IB = 0.50m IB = 13.10m IB = 11.30m IB = 0.40m IB = 11.60m IB = 11.50m IB = 0.80m IB = 9.90m IB = 6.60m IB = 0.20m IB = 6.30m IB = 7.30m IB = 0.60m IB = 16.30m IB = 13.00m IB = 1.20m IB = 16.90m IB = 15.90m IB = 1.60m IB = 8.80m IB = 7.30m IB = 3.20m IB = 3.70m IB = 2.30m OPEN CUT UNDERGROUND SEAM NAME THICKNESS POTENTIAL POTENTIAL WAHANA TYPICAL STRATIGRAPHY JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f Figure: 3 PT Bayan Resources A-140 WAHANA TYPICAL CROSS SECTIONS JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f Figure: 4 PT Bayan Resources -100 -200 -300 100 Topography Base of Weathering Lease Line approx Lease Line approx -300 -200 -100 100 310000E -100 -200 -300 100 -300 -200 -100 100 Topography Base of Weathering SECTION 1 SECTION 3 307000E 308000E 309000E 310000E 311000E 312000E 313000E 314000E 315000E 316000E 317000E 9585000N 9586000N 9587000N 9588000N 9589000N 9590000N 9591000N 9592000N Section Location Map Section 1 Section 3 A-141 CH 0 5 0 KV A 50 KV A 500 KV A 50 KV A DIE SE L GE NE RA TOR RO OM EX HA US T EX HA US T EX HA US T M C C R O O M SW IT C H B O AR D S W IT CH B O A R D F U TU R E F U TU R E M CC M C C M C C FU TU R E WA LL FR AM E AT OU TS IDE OF CO LO UM HA ND RA IL AT CE NT RE LIN E OF CO LO UM WA LL FR AM E AT OU TS IDE OF CO LO UM W A RE H O U S E G E N E R AL G O O D S O F F IC E S TO R A G E A R E A E 312,000 E 313,000 E 314,000 E 308,000 E 307,000 E 309,000 E 310,000 E 31 1,000 E 306,000 E 302,000 E 301,000 E 300,000 E 303,000 E 304,000 E 305,000 E 315,000 E 316,000 E 317,000 E 312,000 E 313,000 E 314,000 E 308,000 E 307,000 E 309,000 E 310,000 E 31 1,000 E 306,000 E 302,000 E 301,000 E 300,000 E 303,000 E 304,000 E 305,000 E 315,000 E 316,000 E 317,000 N 9,586,000 N 9,585,000 N 9,587,000 N 9,588,000 N 9,589,000 N 9,581,000 N 9,582,000 N 9,583000 N 9,584,000 N 9,590,000 N 9,600,000 N 9,586,000 N 9,585,000 N 9,587,000 N 9,588,000 N 9,589,000 N 9,581,000 N 9,582,000 N 9,583000 N 9,584,000 N 9,590,000 N 9,600,000 WAHANA RESOURCE LIMITS - SEAM SL2 JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f Figure:5 PT Bayan Resources Arutmin Lease Area Stockpiles Conveyor LEGEND MEASURED RESOURCES INDICATED RESOURCES INFERRED RESOURCES GEOLOGICAL MODEL LIMIT BOREHOLES CONCESSION BOUNDARY N A-142 Inferred Resources Legend Indicated Resources Measured Resources Concession Boundary Optimised Pit Shell WAHANA 095 OPTIMISED PIT SHELL JORC RESOURCES AND RESERVES STATEMENT 31st March 2008 Date: Mar 2008 Job No: 3318 f Figure: 6 PT Bayan Resources A-143 Table of Contents Page No. EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 1.1 I NTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 1.2 A PPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 1.3 R ELEVANT R EPORT AND S TUDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 1.4 P REVIOUS C OAL R ESOURCE AND R ESERVE S TATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 2. COMPETENT PERSONS STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 3. PROJECT DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.1 G ENERAL B ACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.2 L OCATION AND T ITLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.3 M INING O PERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.4 I NFRASTRUCTURE OF S ITE F ACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.5 T RANSPORT AND C OAL H ANDLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3.6 M ARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

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

151 4.1 G EOLOGY O VERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 4.2 C OAL Q UALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 4.3 G EOLOGICAL D ATABASE AND M ODELLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 4.4 D ATA V ALIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 4.5 G EOLOGICAL C ONFIDENCE AND R ESOURCE C ATEGORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 4.6 C OAL R ESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 5. COAL RESERVE ESTIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 5.1 C OAL R ESOURCE E STIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 5.2 S TUDY S TATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 5.3 C UT - OFF P ARAMETERS AND P IT L IMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 5.4 M INING F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 5.5 M ETALLURGICAL F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 5.6 C OST AND R EVENUE F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 5.7 M ARKETING AND P RODUCT S PECIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 5.8 O THER R ELEVANT F ACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 5.9 C LASSIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 5.10 A UDITS AND R EVIEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 5.11 D ISCUSSION OF R ELATIVE A CCURACY AND C ONFIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 5.12 R ESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 5.13 S UMMARY T ABLE OF M ODEL D ATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 A-144 List of Tables Table No. Description Page No. Table 4.1 — Seam Thickness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Table 4.2 — Average Coal Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Table 4.3 — Coal Qualities by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Table 4.4 — Resource Categorisation Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Table 4.5 — Drill Spacing by Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Table 4.6 — Resource Category by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Table 4.7 — Coal Resources Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Table 4.8 — Coal Resources by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Table 5.1 — Total Open Cut Coal Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Table 5.2 — Probable Open Cut Coal Reserves by Seam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Table 5.3 — Summary of Model Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 List of Figures These follow the Executive Summary Figure No. Description Figure 1 Location Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Figure 2 Site Layout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Figure 3 Typical Stratigraphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Figure 4 Typical Cross Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Figure 5 Resource Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Figure 6 Pit Shells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 A-145

1. INTRODUCTION

1.1 Introduction

Minarco-MineConsult Pty Ltd MMC has been 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 the mining tenements at the Wahana Coal Project in South Kalimantan, Indonesia. The Statement reports the Coal 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”. 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 Wahana 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.

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 Wahana 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. A-146 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 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 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 last year. 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. Wahana Baratama Mining, Wahana Open Cut Coal Deposit Statement of Open Cut Coal Resources and Reserves as at 30 th September 2007”. MMC Job number 3186M.” 5. “PT. Wahana Baratama Mining, Wahana Open Cut Coal Deposit Statement of Open Cut Coal Resources and Reserves as at 31 st January 2008”. MMC Job number 3318M_f.

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 some drilling and additional mine planning completed since the last Statement and there has been some mining 189,000 tonnes from various seams. A first pass Life of Mine Plan has been completed and a much more detailed plan has been completed by the mining contractor in the start up area. Coal Resources estimates have increased significantly since the previous report due to additional drilling. Measured category coal is almost unchanged; however Indicated category coal has increased significantly which has resulted in increases to Coal Reserves estimates. Measured category coal has been converted to Proved Coal Reserves due to the status of mine planning. A-147