Introduction PT. Bayan Resources Tbk - Prospectus

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 to 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 quantities were then scheduled and tested in an economic model including capital and operating costs to check the overall economic viability of the results. 10. The Coal Reserves were categorised as Probable based on the Coal Resource confidence and the level of detail in the mine planning. 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. Gunungbayan Pratamacoal, GBP Block 1, Cilong and Keham Open Cut Coal Deposits Statement of Open Cut Coal Resources and Reserves as at 30 th September 2007”. MMC Job number 3181M.” 5. “PT. Gunungbayan Pratamacoal, GBP Block 1, Cilong and Keham Open Cut Coal Deposits Statement of Open Cut Coal Resources and Reserves as at 31 st January 2008”. MMC Job number 3318M_a.

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 mining or updated geology since 31 st January 2008, therefore there is no change to previously reported estimates. A-18