PT. Bayan Resources Tbk - Prospectus

NOT FOR DISTRIBUTION IN INDONESIA

O F F E R I N G M E M O R A N D U M C O N F I D E N T I A L

833,333,500 Ordinary Shares

PT Bayan Resources Tbk

(incorporated with limited liability in the Republic of Indonesia)

This is the initial public offering of our ordinary shares of par value of Rp100 (the “Shares”). We are offering 333,333,500 new Shares (the “New Shares”) and two of our shareholders, referred to in this document as the selling shareholders (the “Selling Shareholders”), are collectively offering 500,000,000 Shares (the “Vendor Shares” and, together with the New Shares, the “Offering Shares”) (i) to eligible investors resident outside the Republic of Indonesia (the “International Offering”) and (ii) through a public offering in Indonesia (the “Indonesian Public Offer,” and together with the

International Offering, the “Combined Offering”). The International Offering comprises an offering to non-U.S. persons outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and in the United States only to qualified institutional buyers (“QIBs”) as defined in Rule 144A in transactions exempt from registration under the Securities Act. The completion of the Indonesian Public Offer and the International Offering are each conditional upon the completion of the other. We will not receive any of the proceeds from the sale of the Vendor Shares by the Selling Shareholders.

The Selling Shareholders have agreed to sell to Enel Investment Holding B.V. (the “Cornerstone Investor”), and the Cornerstone Investor has agreed to purchase, 333,333,500 Offering Shares (the “Cornerstone Shares”), representing 10.0% of our outstanding Shares after the completion of the Combined Offering, at the Offering Price (as defined below), subject to the conditions described under “Plan of Distribution—Cornerstone Placement.”

In connection with the International Offering, Merrill Lynch (Singapore) Pte. Ltd. and Macquarie Capital (Singapore) Pte. Limited (together, the “International Selling Agents”) are soliciting applications from eligible investors resident outside Indonesia on behalf of PT Trimegah Securities Tbk. (the “Domestic Lead Managing Underwriter”). The Indonesian Public Offer will be conducted by a group of underwriters (the “Underwriters”) in Indonesia represented by, and including, the Domestic Lead Managing Underwriter. This offering memorandum is being made available to potential investors with respect to the International Offering only, and may not be distributed to persons who are either citizens of Indonesia (wherever located) or residents of Indonesia.

There is currently no public market for the Shares. We have applied to have the Shares admitted for listing and quotation on the Indonesia Stock Exchange (the “IDX”) upon completion of the Indonesian Public Offer. The offering price for the Offering Shares (the “Offering Price”) below may not reflect the price of the Shares after the Combined Offering.

Investing in the Shares involves risks that are described in the “Risk Factors” section beginning on page 16.

Offering Price: Rp5,800 per Share

The Shares have not been registered under the Securities Act, and unless they are registered, the Shares may be offered only in transactions that are exempt from, or not subject to, registration under the Securities Act. Accordingly, we are offering the Shares only to QIBs in the United States in transactions exempt from registration under the Securities Act and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. For further details about eligible offerees and resale restrictions, see “Plan of Distribution” and “Transfer Restrictions.”

The Selling Shareholders have granted the Domestic Lead Managing Underwriter, for and on behalf of the International Selling Agents and the Underwriters, an option (the “Over-subscription Option”), exercisable in whole or in part during the period commencing on August 7, 2008 (being the last day of the offer period in connection with the Indonesian Public Offer) and ending on August 8, 2008 (being the date of the final allotment of the Shares) to procure subscription from the Selling Shareholders, collectively, for up to an additional 83,333,500 Shares (the “Over-subscription Option Shares”) at the Offering Price, less any applicable underwriting fees and commissions in the event of over-subscription by purchasers in the Combined Offering.

The Selling Shareholders have also granted the Domestic Lead Managing Underwriter, as stabilizing agent for and on behalf of the International Selling Agents and the Underwriters, an option (the “Over-allotment Option”), exercisable in whole or in part for a period of 30 days after the closing date of the Combined Offering to purchase from the Selling Shareholders, collectively, up to 15.0% of the aggregate of the Offering Shares and the Over-subscription Option Shares (the “Over-allotment Option Shares”) at the Offering Price, less any applicable underwriting fees and commissions, to cover over-allotments, if any, which may be made in connection with the Combined Offering.

We expect the delivery of the Offering Shares will be made to purchasers on or about August 11, 2008. The Shares will begin trading on the IDX on the listing date, which we expect to be August 12, 2008.

Sole Bookrunner and Lead International Selling Agent

Domestic Lead Managing Underwriter

TABLE OF CONTENTS

Pages

Summary . . . 1

Risk Factors . . . 16

Use of Proceeds . . . 39

Dividend Policy . . . 40

Exchange Rates and Exchange Controls . . . 41

Capitalization and Indebtedness . . . 42

Dilution . . . 44

Selected Financial Information and Other Data . . . 45

Our Reorganization and Group Structure . . . 50

Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . 64

Coal Mining Industry . . . 98

Business . . . 107

Material Contracts . . . 140

Management . . . 157

Principal and Selling Shareholders . . . 164

Related Party Transactions . . . 166

Regulation of the Indonesian Coal Mining Industry . . . 176

Description of Share Capital . . . 184

Indonesian Capital Markets . . . 189

Taxation . . . 198

Plan of Distribution . . . 205

Transfer Restrictions . . . 219

Legal Matters . . . 221

Independent Public Accountants . . . 221

Independent Mining Consultant . . . 221

Summary of Significant Differences Between Indonesian GAAP and U.S. GAAP . . . 222

Glossary . . . 233 Index to the Consolidated Financial Statements . . . F-1 Appendix A—Statements of Open Cut Coal Resources and Reserves as of March 31, 2008 of

PT Bayan Resources Tbk . . . A-1 Appendix B—Asset Appraisal . . . B-1

The Indonesian Capital Markets and Financial Institutions Supervisory Agency (Badan Pengawas Pasar

Modal dan Lembaga Keuanganor “BAPEPAM-LK”) does not declare its approval or disapproval of the Shares,

nor does it declare the accuracy or adequacy of this offering memorandum. Any statement to the contrary is a violation of Indonesian law. For the purposes of the Indonesian Public Offer, the formal offering document is an Indonesian prospectus.

In connection with the Combined Offering, the stabilizing agent, on behalf of the International Selling Agents and the Underwriters, may effect transactions in the Shares or related securities in any over-the-counter market or otherwise with a view of supporting the market price of the Shares at levels above those that would otherwise prevail in the open market. Those transactions may be effected on the IDX in compliance with all applicable laws and regulations. Stabilization, if commenced, may be discontinued at any time and may not be effected after the date falling 30 days after the listing date or (if earlier) the date on which the Over-allotment Option is exercised in full.

You should rely only on the information contained in this offering memorandum. We have not, and each of the International Selling Agents and the Domestic Lead Managing Underwriter has not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent

information, you should not rely on it. We are not, and each of the International Selling Agents and the Domestic Lead Managing Underwriter is not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this offering memorandum is accurate only as of the date on the front cover of this offering memorandum. Our business, financial condition, results of operations and prospects may have changed since that date.

We are relying on an exemption from registration under the Securities Act for offers and sales of securities that do not involve a public offering. By purchasing the Shares, you will be deemed to have made the acknowledgments, representations, warranties and agreements described under the heading “Transfer

Restrictions” in this offering memorandum. You should understand that you will be required to bear the financial risks of your investment, which may be for an indefinite period of time.

This offering memorandum has been submitted confidentially to a limited number of institutional investors so that they can consider a purchase of the Shares. We have not authorized its use for any other purpose. This offering memorandum may not be copied or reproduced in whole or in part. It may be distributed and its contents disclosed only to the prospective investors to whom it is provided. By accepting delivery of this offering memorandum, you agree to these restrictions. See “Transfer Restrictions.”

The distribution of this offering memorandum and the offering or sale of the Shares in certain jurisdictions may be restricted by law. Persons into whose possession this offering memorandum comes are required by us and each of the International Selling Agents and the Domestic Lead Managing Underwriter to inform themselves about and to observe any restrictions applicable in such jurisdiction. No representation or warranty, express or implied, is made by the International Selling Agents or the Domestic Lead Managing Underwriter as to the accuracy or completeness of the information set forth herein, and nothing contained in this offering memorandum is, or shall be relied upon as a promise or representation by them, whether as to the past or the future. In making an investment decision, you must rely on your own examination of us and the terms of the offering and the Shares, including the merits and risks involved.

We are not, and each of the International Selling Agents and the Domestic Lead Managing Underwriter is not, making any representation to any purchaser of the Shares regarding the legality of an investment in the Shares by such purchaser under any legal investment or similar laws or regulations. You should not consider any information in this offering memorandum to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business, financial and tax advice regarding an investment in the Shares.

Each purchaser of the Shares must comply with all applicable laws and regulations in force in each jurisdiction in which it purchases, offers or sells such Shares or possesses this offering memorandum and must obtain any consent, approval or permission required by it for the purchase, offer or sale by it of such Shares under the laws and regulations in force in any jurisdictions to which it is subject or in which it makes such purchases, offers or sales and neither we, the International Selling Agents nor the Domestic Lead Managing Underwriter shall have any responsibility therefor. You may not deliver or forward this document to any other person.

The Shares have not been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or any state or foreign securities commission or regulatory authority. The foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense in the United States. In addition, until the date 40 days after the commencement of the Combined Offering, an offer or sale of the Shares offered hereby within the United States by a dealer, whether or not participating in the Combined Offering, may violate the registration requirements of the Securities Act, if such offer or sale is made otherwise than in accordance with Rule 144A.

NOTICE TO NEW HAMPSHIRE RESIDENTS

Neither the fact that a registration statement or an application for a license has been filed under Chapter 421-B of the New Hampshire Revised Statutes Annotated (“RSA 421-B”) with the State of New Hampshire nor the fact that a security is effectively registered or a person is licensed in the State of New Hampshire constitutes a finding by the Secretary of State that any document filed under RSA 421-B is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the Secretary of State has passed in any way upon the merits or qualification of, or recommended or given approval to, any person, security or transaction. It is unlawful to make or cause to be made to any prospective purchaser, customer or client any representation inconsistent with the provisions of this paragraph.

U.S. INTERNAL REVENUE SERVICE CIRCULAR 230 DISCLOSURE Pursuant to U.S. Internal Revenue Service Circular 230, we hereby inform you that the description in this offering memorandum with respect to U.S. federal tax issues was not intended or written to be used, and such description cannot be used, by any taxpayer for the purpose of avoiding any penalties that may be imposed on the taxpayer under the U.S. Internal Revenue Code of 1986, as amended. Such description was written to support the marketing of the Shares. Each taxpayer should seek advice based on their particular circumstances from an independent tax advisor.

CERTAIN DEFINED TERMS AND CONVENTIONS

We have prepared this offering memorandum using a number of conventions, which you should consider when reading information contained herein.

All references to the “Company” or “Bayan Resources” are references to PT Bayan Resources Tbk. All references herein to the “Bayan Group” are references to the Company and each of its subsidiaries and any references to a “Bayan Group Company” are references to a member of the Bayan Group. All references herein to “we,” “us,” “our” and “our group” are references to the Bayan Group taken as a whole.

All references herein to “Indonesia” are references to the Republic of Indonesia. References to the “United States” or “U.S.” are to the United States of America. All references herein to “Government” are to the Government of Indonesia.

Unless otherwise indicated or otherwise required by the context, all references in this offering memorandum to “Rupiah” or “IDR” or “Rp” are to Indonesian Rupiah, the lawful currency of Indonesia. References to “U.S. dollars” or “US$” are to United States dollars, the lawful currency of the United States. References to “S$” are to Singapore dollars, the lawful currency of the Republic of Singapore. References to “HK$” are to Hong Kong dollars, the lawful currency of Hong Kong.

All references to “tonne” or “tonnes” are to a metric tonne or to metric tonnes, respectively. A “metric tonne” is a unit of mass equal to 1,000 kilograms, or approximately 2,204.6 pounds. A “hectare” is a unit of area equal to 10,000 square meters, or approximately 2.471 acres.

All references to calorific values are to calorific values on a gross as received basis, unless otherwise stated. All strip ratios are expressed in terms of waste BCM to ROM tonnes of coal.

All references to Coal Contracts of Works, or CCOWs, are to aPerjanjian Kerjasama Pengusahaan

Tambang Batubaraor aPerjanjian Karya Pengusahaan Pertambangan Batubara. See “Regulation of the

Indonesian Coal Mining Industry—CCOWs and KPs” for further details.

Certain other terms used in this offering memorandum are defined in the “Glossary” contained elsewhere in this offering memorandum.

Unless otherwise indicated, all amounts in relation to the Bayan Group presented and discussed in this offering memorandum are presented on a consolidated basis.

PRESENTATION OF FINANCIAL INFORMATION

Solely for the convenience of the reader, unless otherwise indicated, certain Rupiah amounts in this offering memorandum have been translated to U.S. dollars based on the middle exchange rate announced by Bank Indonesia as of March 31, 2008, which was Rp9,217 = US$1.00. On July 21, 2008, the Bank Indonesia middle exchange rate was Rp9,147 = US$1.00. No representation is made that the Rupiah or U.S. dollar amounts referred to in this offering memorandum could have been or could be converted into U.S. dollars or Rupiah, as the case may be, at any particular rate or at all. See “Exchange Rates and Exchange Controls.”

This offering memorandum contains our audited combined consolidated financial statements as of and for the years ended December 31, 2005 and 2006, audited consolidated financial statements as of and for the year ended December 31, 2007, and as of and for the three months ended March 31, 2008, and our unaudited

consolidated financial statements as of and for the three months ended March 31, 2007. Our combined consolidated financial statements as of and for the years ended December 31, 2005 and 2006 included in this offering memorandum have been restated to retrospectively apply the accounting for restructuring transactions between entities under common control that occurred in 2006 and 2007, in accordance with the Indonesian Statement of Financial Accounting Standards No. 38 (Revised 2004), “Accounting for Restructuring of Entities under Common Control” (“PSAK 38(R)”).

The financial information included in this offering memorandum has been derived from our combined consolidated financial statements and consolidated financial statements. Our combined consolidated financial statements and consolidated financial statements are presented in Rupiah and have been prepared in accordance with generally accepted accounting principles in Indonesia (“Indonesian GAAP”), which differ in significant respects from the generally accepted accounting principles in the United States (“U.S. GAAP”). For a summary of significant differences between Indonesian GAAP and U.S. GAAP, see “Summary of Significant Differences Between Indonesian GAAP and U.S. GAAP” included elsewhere in this offering memorandum.

Rounding adjustments have been made in calculating some of the financial and operating information included in this offering memorandum. As a result, numerical figures shown as total amounts in some tables may not be exact arithmetic aggregations of the figures that make up such total amounts.

INDUSTRY AND MARKET DATA

This document includes market share and industry data and forecasts that we have obtained from industry publications and surveys including a report dated June 2008 that we have commissioned AME

Consulting Pty Limited to prepare (the “AME Report”), reports of governmental agencies and internal company surveys. Certain industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. While we have taken reasonable actions to ensure that the information is extracted accurately and in its proper context, neither we, the International Selling Agents nor the Domestic Lead Managing Underwriter has independently verified any of the data from third party sources or ascertained the underlying economic assumptions relied upon therein. As a result, you are cautioned against placing undue reliance on such information.

RESERVE STATEMENTS

We report our coal reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Resources (2004 edition) (the “2004 JORC Code”), published by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia.

Under the 2004 JORC Code, the term “coal resource” refers to a concentration or occurrence of coal of intrinsic economic interest in or on the earth’s crust in such form and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a coal resource are known, estimated or interpreted from specific geological evidence and knowledge. Coal resources are subdivided, in order of increasing geological confidence, into “inferred,” “indicated” and “measured” categories.

The term “coal reserve” is defined in the 2004 JORC Code as the economically mineable part of a measured and/or indicated coal resource. It includes diluting materials and allowances for losses which may occur when the coal is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Coal reserves are subdivided in order of increasing confidence into “probable coal reserves” and “proved coal reserves.” The choice of the appropriate category of coal reserve is determined primarily by the relevant level of confidence in the coal resource and, after

considering any uncertainties in the modifying factors, pursuant to the 2004 JORC Code, must be made by the “competent person” or “competent persons” preparing the reserve statement.

Under the 2004 JORC Code, the term “coal reserves” represents the combination of proved and probable coal reserves.

The term “marketable coal reserves,” representing beneficiated or otherwise enhanced coal product, may, pursuant to the 2004 JORC Code, be used in public reports for companies in conjunction with, but not instead of, reports of coal reserves. The basis of the predicted yield to achieve marketable coal reserves should be stated.

The term “in situ coal reserves” refers to the coal contained in an economic pit shell before any mining adjustments have been made.

Coal Reserve Statements

We have derived the information contained in this offering memorandum relating to our proved and probable reserves and our estimates of resources as of March 31, 2008 from the (i) Statement of Open Cut Coal Resources and Reserves of PT Gunungbayan Pratamacoal Block I as of March 31, 2008, (ii) Statement of Open Cut Coal Resources and Reserves of PT Gunungbayan Pratamacoal Block II as of March 31, 2008,

(iii) Statement of Open Cut Coal Resources and Reserves of PT Wahana Baratama Mining as of March 31, 2008, (iv) Statement of Open Cut Coal Resources and Reserves of PT Perkasa Inakakerta as of March 31, 2008, (v) Statement of Open Cut Coal Resources and Reserves of PT Fajar Sakti Prima, PT Bara Tabang and PT Brian Anjat Sentosa as of March 31, 2008 and (vi) Statement of Open Cut Coal Resources and Reserves of PT Teguh Sinar Abadi/PT Firman Ketaun Perkasa as of March 31, 2008, items (i) – (vi) collectively referred to as the “Reserve Statements” and attached as Appendix A to this offering memorandum. The Reserve Statements have been prepared by Minarco-MineConsult Pty Ltd (“Minarco-MineConsult”), an independent mine consultant. See “Independent Mining Consultant.”

Estimates of coal reserves, resources, recoveries and operating costs are largely dependent on the interpretation of geological data obtained from drill holes and other sampling techniques, and feasibility studies which derive estimates of operating costs based on anticipated tonnage, expected recovery rates, equipment operating costs and other factors. No assurance can be given that the reserves and resources presented in this offering memorandum will be recovered at the quality or yield presented. In addition, investors should not assume that the resource estimates are capable of being directly reclassified as reserves under the 2004 JORC Code. The inclusion of resource estimates should not be regarded as a representation that these amounts can be economically exploited, particularly inferred resources, and you are cautioned not to place undue reliance on those estimates.

Assumptions Underlying Our Coal Reserve Estimates

We estimate our coal reserves using various assumptions regarding our mining costs and the price of coal. Our reserves are sensitive to the cost and revenue assumptions used due to the geological structure of our deposits, which means that, all other factors being the same, if the cost assumption is higher or the price assumption is lower, we estimate lower reserves, and if the cost assumption is lower or the price assumption is higher, we estimate more reserves. Some of our deposits are more sensitive to the cost and revenue assumptions used than others due to the characteristics and geological structure of those deposits.

Our revenue assumptions underlying our coal reserve estimates are based, in part, on the following key assumptions (which vary for each concession area as set out in detail in the Reserve Statements):

‰ a benchmark coal price of US$65.00 per tonne for a calorific value of 6,322 kcal/kg coal with a

graduated adjustment based on energy content for higher or lower energy coal, respectively;

‰ a discount of 24.0% has been applied to the sub-bituminous quality coal;

‰ a penalty or discount has been applied for each 0.1% of sulfur content above 1.0%; and ‰ a premium of US$10.00 per tonne has been applied in relation to our semi-soft coking coal and

pulverized coal injection property of our coal.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources

There are differences between reporting regimes for reserve estimates in the United States and in Australia. The principal difference between the reporting regimes in Australia under the JORC Code and in the United States under the requirements as adopted by the SEC in its Industry Guide 7 — Description of Property

by Issuers Engaged or to be Engaged in Significant Mining Operations (“Industry Guide 7”) is the absence in the United States of any provision for the reporting of estimates other than proved (measured) or probable (indicated) reserves. There is, therefore, no equivalent for “resources” under the SEC’s Industry Guide 7.

The SEC has applied the following reporting definitions to reserves under Industry Guide 7:

‰ A “reserve” is “that part of a mineral deposit which could be economically and legally extracted or

produced at the time of the reserve determination. Reserves are customarily stated in terms of “ore” when dealing with metalliferous minerals; when other materials such as coal, oil, shale, tar, sands, limestone, etc. are involved, an appropriate term such as “recoverable coal” may be substituted.”

‰ “Proven (measured) reserves” are “reserves for which:

(a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and

(b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.”

‰ “Probable (indicated) reserves” are “reserves for which quantity and grade and/or quality are

computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.”

This offering memorandum, including Appendix A, uses the terms “measured,” “indicated” and “inferred” resources. United States investors are advised that while such terms are recognized by some investors, the SEC does not recognize them. “Inferred resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under SEC rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies.You should not assume that all or any part of measured or indicated resources will ever be converted into reserves. You are also cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable.

NON-GAAP FINANCIAL MEASURES

We define EBITDA as net income, plus interest expenses, income tax expense—net, depreciation of fixed assets and amortization of deferred exploration and development expenditures for the periods presented. EBITDA as well as the related ratios presented in this offering memorandum are supplemental measures of our performance that are not required by, or presented in accordance with, Indonesian GAAP or U.S. GAAP. EBITDA is not a measurement of financial performance or liquidity under Indonesian GAAP or U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with Indonesian GAAP or U.S. GAAP or as an alternative to cash flow from operating activities as a measure of liquidity. In addition, EBITDA is not a standardized term; hence, a direct comparison between companies using such a term may not be possible.

We believe that EBITDA facilitates comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest and finance charges), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and the age and booked depreciation and amortization of assets (affecting relative depreciation and amortization of expense). EBITDA has been presented because we believe that it is frequently used by securities analysts, investors and other interested parties in evaluating similar companies, many of whom present such non-GAAP financial measures when reporting their results. Nevertheless, EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, analysis of our financial condition or results of operations, as reported under Indonesian GAAP. Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our businesses.

See “Selected Financial Information and Other Data” for a reconciliation of our net income under Indonesian GAAP to our definition of EBITDA.

AVAILABLE INFORMATION

Subject to the following sentence, and for so long as the Shares remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, we will furnish, upon the request of any shareholder, such information as is specified in paragraph (d)(4) of Rule 144A under the Securities Act, to such holder or beneficial owner or to a prospective purchaser of such Shares or interest therein who is a “qualified institutional buyer” within the meaning of Rule 144A, in order to permit compliance by such holder or beneficial owner with Rule 144A in connection with the resale of such Shares or beneficial interest therein in reliance on Rule 144A. Notwithstanding the above, we will not provide such information if, at the time of such request, we are subject to the reporting requirements of Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), or we are included in the list of foreign private issuers that claim exemption from the registration requirements of Section 12(g) of the Exchange Act and therefore are required to furnish to the SEC certain information pursuant to Rule 12g3-2(b) under the Exchange Act.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated in Indonesia. Most of our commissioners, directors, executive officers and certain of our experts named in this document are residents of Indonesia. Also, most of our assets and the assets of our commissioners, directors, executive officers and certain of our experts are located in Indonesia. As a result, you may not be able to:

‰ effect service of process upon us or these persons outside Indonesia; or

‰ enforce against us judgments obtained in courts outside of Indonesia including judgments based, in

whole or in part, on the federal securities laws of the United States.

Indonesian courts will not enter any judgment or order obtained outside Indonesia, but a judgment or order from a foreign court may, in the discretion of a court in Indonesia, be admitted as evidence of an obligation in a new proceeding instituted in that court, which will consider the issue or the evidence before it.

FORWARD-LOOKING STATEMENTS

This offering memorandum contains “forward-looking” statements that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained in this offering memorandum including, without limitation, those regarding our future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where we participate or are seeking to participate, including forecast supply and demand in the coal industry, and any statements preceded by, followed by or that include the words “believe,” “expect,” “aim,” “intend,” “will,” “may,” “project,” “estimate,” “anticipate,” “predict,” “seek,” “should” or similar words or expressions, are forward-looking statements.

The future events referred to in these forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control, which may cause the actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future and are not a guarantee of future performance. Important factors that could cause the actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, the following:

‰ the change in economic growth of Asian economies such as Indonesia, China, Malaysia, Thailand and

‰ changes in laws and regulations that apply to the Indonesian, regional or global mining industries,

including with respect to customs duties, excise duties, export or import levies or environmental regulations or changes in the regulatory policy of the Government related to the coal industry and generally;

‰ our ability to successfully implement our strategy of expanding our coal production and improving

profit margin (including with respect to exploration in all of our mining areas) and increasing sales of our premium and low calorific value coals;

‰ the loss or closure of our coal mines including, but not limited to, as a result of accidents, civil unrest,

terrorism or environmental hazards;

‰ the price of coal including factors influencing the price of coal, such as local, regional and global

supply and demand;

‰ global and regional recession, reduced economic activity or market disruption due to world and

regional events;

‰ the inability of us or our contractors to obtain raw materials, equipment, machinery or spare parts

from our or their major suppliers in the timeframe anticipated or at all and significant increases in the costs of those raw materials, equipment, machinery or equipment;

‰ changes in our relationship with the Government and/or regional governments in Indonesia; ‰ changes in our coal mining concessions;

‰ continued increases in the cost of fuel;

‰ the effects of competition in the geographic and business areas in which we conduct our operations; ‰ the effects of changes in laws, regulations, taxation or accounting standards or practices;

‰ the ability to maintain or increase market share for coal products while controlling expenses; ‰ loss of, or reductions of purchases by, major customers;

‰ acquisitions, divestitures and various business opportunities that we may pursue;

‰ technological changes that affect the extraction, preparation, processing, shipping or combustion of

coal;

‰ replacement of coal reserves;

‰ changes or volatility in inflation, interest rates and foreign exchange rates; ‰ the effects of international and domestic political events on our business;

‰ accidents, natural disasters, severe weather or outbreaks of infectious diseases, such as the H5N1

virus (“avian flu”), in our market areas;

‰ the ability of third parties to perform in accordance with contractual terms and specifications; ‰ labor unrest or other similar situations;

‰ our relationship with the local community; ‰ the availability of skilled personnel;

‰ the availability of insurance coverage at commercially acceptable premiums; ‰ the outcome of pending or threatened litigation; and

‰ our success at managing the risks of the above factors.

This list of important factors is not exhaustive. Additional factors that could cause the actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “Risk Factors.” When relying on forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, especially in light of the political, economic, social and legal environment in which we operate. Such forward-looking statements speak only as of the date on which they are made. Accordingly, we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. We do not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements

represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Accordingly, you should not place undue reliance on any forward-looking statements.

In addition, the expectations of our management with respect to mining natural resources, whether conducted by us, any of our subsidiaries or any of our contractors or suppliers, are also subject to risks arising from the inherent difficulty of predicting the presence, yield or quality of natural resource reserves, as well as unknown or unforeseen difficulties in extracting, transporting and processing any natural resources found or doing so on an economic basis.

Our ability to maintain and grow our revenues, net income and cash flows depends upon continued capital expenditure, whether by us or by our contractors. In addition, our capital expenditure and investment plans are subject to a number of risks, contingencies and other factors, such as coal prices, market demand and acquisition opportunities, some of which are beyond our control. We adjust our capital expenditure and

investment budgets periodically, based on factors deemed relevant by us. Our ability to obtain adequate financing to satisfy our capital expenditure and investment budget and debt service requirements may be limited by our financial condition, results of operations, legal and regulatory issues and the liquidity of the international and domestic financial markets. We may make additional capital expenditures and investments as opportunities or needs arise. We may increase, reduce or suspend our planned capital expenditures or investments or change the timing and use of our capital expenditures from what is currently planned in response to market conditions, production trends or for other reasons. For the foregoing reasons, our actual future capital expenditures and investments are likely to be different from our current budgeted capital expenditure and investment amounts, and those differences may be significant.

SUMMARY

This summary may not contain all the information that may be important to you in deciding to invest in the Shares. You should read the entire offering memorandum, including our financial statements and related notes and the section entitled “Risk Factors” beginning on page 16 included in this offering memorandum before making an investment decision.

Overview

We are the eighth largest coal producing group in Indonesia in terms of production volume in 2007, according to the AME Report, with integrated coal mining, processing and logistics operations. We are engaged in the business of surface open cut mining of thermal coal and we believe we are one of the few large coal producing groups in Indonesia that mines and sells high calorific value coal. We also produce other grades of coal including environmentally-friendly, low sulfur sub-bituminous coal and semi-soft coking coal.

We have significant proved and probable reserves to meet increasing worldwide demand for coal. As of March 31, 2008, our coal reserves within our concession areas totaled an estimated 476.9 million tonnes, comprising proved reserves of 78.7 million tonnes and probable reserves of 398.2 million tonnes. These proved and probable reserve amounts have been independently estimated by Minarco-MineConsult.

We obtained our first mining concession in November 1997 covering the Muara Tae reserve in East Kalimantan with the acquisition of PT Gunungbayan Pratamacoal (“Gunungbayan”) by our founding shareholders. Since then, we have acquired a number of new concessions, which, through a series of transactions substantially completed between 2005 and the second quarter of 2008, we consolidated into the Company (the “Reorganization”).

We have exclusive rights to undertake mining activities through eight mining companies, under five Coal Contracts of Work (“CCOWs”) entered into with the Government of Indonesia and three mining

authorizations (Kuasa Pertambanganor “KPs”) granted by regional governments over a total concession area of 81,265 hectares. These eight companies operate a total of six mining projects comprising eight concession areas:

‰ the Gunungbayan Block II Project, which consists of one CCOW held by Gunungbayan;

‰ the Gunungbayan Block I Project, which is covered by the same CCOW as the Gunungbayan Block II

Project but is a geographically and operationally separate project;

‰ the Wahana Project, which consists of one CCOW held by PT Wahana Baratama Mining

(“Wahana”);

‰ the Perkasa Project, which consists of one CCOW held by PT Perkasa Inakakerta (“Perkasa

Inakakerta”);

‰ the Teguh/Firman Project, which consists of two CCOWs respectively held by PT Teguh Sinar Abadi

(“Teguh”) and PT Firman Ketaun Perkasa (“Firman”); and

‰ the FTB Project, which consists of three KPs respectively held by PT Fajar Sakti Prima (“Fajar”),

PT Bara Tabang (“Tabang”) and PT Brian Anjat Sentosa (“Brian”).

The Gunungbayan Block II Project has produced coal since 1998 and in 2007 yielded 87.8% of our total production and accounted for 58.3% of our total coal sales volume. We have commenced exploitation and production in varying degrees at all six of our projects.

In 2005, 2006, 2007 and the three months ended March 31, 2008, we produced 4.3 million, 5.1 million, 4.7 million and 1.3 million tonnes of coal, respectively. With the exception of the Gunungbayan Block II Project, for which we conduct our coal extraction operations and the majority of coal haulage operations ourselves, and the Teguh/Firman Project, for which we are in the process of selecting additional contractors, we have contracted to mining contractors all of our overburden removal, coal extraction, hauling and barging operations.

We export all of the coal we produce to utility companies, steel mills, internationally known commodity trading companies and other industrial end-users in countries such as Italy, Japan, Taiwan, Korea, the

Approximately 88.0% of our total production in 2007 and 77.3% of our total production in the three months ended March 31, 2008 consisted of coal with calorific values above 6,301 kcal/kg, while approximately 12.0% of our total production in 2007 and 22.7% of our total production in the three months ended March 31, 2008 consisted of coal with calorific values below 6,301 kcal/kg. We expect the percentage of high calorific value coal to total production to decrease as we increase production at our new mines. We believe our established reputation and ability to deliver high calorific value coal enables us to attract large customers from the power generation and other industries. In addition, with coal reserves across eight concession areas, we are able to produce coal of various grades, from high calorific value coal to low sulfur, low calorific value coal.

We own and operate one of the largest coal terminals in Indonesia in Balikpapan, East Kalimantan with a handling throughput capacity of 15.0 million tonnes per annum (the “Balikpapan Coal Terminal”). We are currently also the only coal producing group in Indonesia to charter a floating transfer station with the capability to

temporarily hold approximately 50,000 tonnes of coal prior to vessel loading, magnetic separators and an automated sampling system (the “Floating Transfer Station”). We have an option under the charter agreement to purchase the Floating Transfer Station. In March 2008, we notified the owner of our intention to exercise the option. Our subsidiary, PT Muji Lines (“Muji”), expects to purchase the Floating Transfer Station for an aggregate purchase price estimated at US$34.0 million, subject to adjustment based on the net book value on the completion date. We expect to complete the acquisition of the Floating Transfer Station in the second half of 2008. In June 2008, we purchased all of the outstanding shares of Muji. Muji owns one tug and barge set and we intend to purchase, through Muji, five additional tug and barge sets in the second half of 2008. The Balikpapan Coal Terminal and acquisition of the Floating Transfer Station and barges complement the logistical aspects of our business, provide cost benefits and enable us to efficiently manage our blending, storage, transport and shipping operations.

Coal sales representing approximately 83.5% of our gross coal sales volume in 2007 were made under coal supply agreements that had terms of one year or longer, and the balance through short term contracts and spot market sales. For the years ended December 31, 2005, 2006 and 2007, our total coal sales revenues were Rp1,455.3 billion, Rp2,878.0 billion and Rp3,308.9 billion (US$359.0 million), respectively, and our total revenues were Rp1,671.2 billion, Rp2,995.8 billion and Rp3,451.1 billion (US$374.4 million), respectively. For the first three months ended March 31, 2007 and 2008, our total coal sales revenues were Rp885.2 billion and Rp749.4 billion (US$81.3 million), respectively, and our total revenues were Rp912.5 billion and Rp772.1 billion (US$83.8 million), respectively.

Competitive Strengths

We believe our principal competitive strengths include the following:

Well-positioned to capture attractive growth opportunities in seaborne thermal coal markets

Global thermal coal demand has been driven by industrial growth, with the growth in electricity consumption contributing to the demand for coal-fired power generation, particularly in China, India and

elsewhere in Southeast Asia. In 2005, approximately 53% of the global demand for internationally traded thermal coal was from Asia. The global thermal coal demand has historically been driven by coal-fired power generation, which accounted for approximately 43% of total power production in 2007. Coal continues to gain a larger share in the energy mix due to coal’s cost effectiveness as compared to other sources of energy. As a result, coal power plants are being constructed in Asia, with many more around the world being converted to be able to process coal feedstock as opposed to oil and other energy sources. In Indonesia alone, under the Government’s fast track program, the national power company intends to develop coal-fired electricity generating plants at 40 locations in the country. In contrast, decline in coal production in certain developed countries due to prohibitively high costs and coal reserve depletion has led to a tightening of supply in these countries.

Due to its location and production methods, Indonesian coal producers are well-positioned to benefit from these factors by supplying comparable quality coal at a freight advantage to its competitors in the region. According to the AME Report, since 2005, Indonesia has surpassed Australia as the largest thermal coal exporter in the world because of enduring infrastructure bottlenecks hindering export growth in Australia. The lower than average production costs of Indonesian coal mining companies compared with other coal mining companies in the Asia Pacific region also gives us a competitive advantage over coal producers in these markets as all of the coal we produce is exported.

As an Indonesian coal producing group, we believe we are well-positioned to capture these growth opportunities due to our high quality coal reserves, expected increase in production levels and the proximity of our mines to our loading infrastructure and to our coal markets in China, India and the rest of Asia.

Large, high quality coal reserve base to facilitate sustainable production growth

As of March 31, 2008, we had proved and probable reserves of an estimated 476.9 million tonnes, comprising proved reserves of 78.7 million tonnes and probable reserves of 398.2 million tonnes, that have been determined in accordance with internationally recognized JORC standards. We believe we have access to some of the highest calorific value proved and probable coal reserves in Indonesia. As of March 31, 2008, we had 103.8 million tonnes of high calorific value proved and probable coal reserves, comprising proved reserves of 18.7 million tonnes and probable reserves of 85.1 million tonnes with calorific values above 6,301 kcal/kg, and which include 2.0 million tonnes of probable semi-soft coking coal reserves at the Gunungbayan Block I Project. These proved and probable coal reserves possess properties such as low moisture and relatively low to moderate sulfur content and are of better quality compared to the general Asia Pacific bituminous benchmark (e.g., Australia’s Newcastle coal port).

We have put in place, or are in the process of constructing infrastructure improvements, such as camps, haul roads, crushing and stockpiling facilities, reclaiming and barging facilities, and equipment at our newer projects, which we believe makes us well-positioned to increase our production. We commenced full commercial production at the Perkasa Project and at the Wahana Project in the third and fourth quarters of 2007, respectively, and at the Teguh/Firman Project in the second quarter of 2008. In addition, coal mined from the Fajar concession area, which was previously assigned in favor of an affiliate, will be included in our production figures from May 2008 onwards. These Projects will contribute to our production growth in 2008, along with the Tabang and Brian concession areas within the FTB Project which we expect will commence production in 2009.

Diversified product portfolio with high quality coal products to meet customer specifications

With coal reserves spread across six projects covering eight concession areas in South and East Kalimantan, we are able to produce various grades of coal. Our products range from semi-soft coking coal to sub-bituminous coal with low calorific value and low ash and sulfur content. The diverse quality of our reserves provides us with an advantage in cost efficient blending of various coal products to enhance realized value per tonne. In addition, our blending capabilities at the Balikpapan Coal Terminal and the Floating Transfer Station enable us to tailor products to meet customer specifications while at the same time optimizing our utilization of our coal reserves and their inherent coal quality characteristics.

Access to technologically advanced infrastructure with capacity for growth

We own and operate the Balikpapan Coal Terminal, one of the largest coal terminals in Indonesia. The Balikpapan Coal Terminal has a handling throughput capacity of 15.0 million tonnes per annum and 16 stockpiles with an aggregate capacity of approximately 1.0 million tonnes. The Balikpapan Coal Terminal has computer controlled reclaiming and conveying facilities that allow blending from up to four stockpiles of coal to produce coal of numerous different specifications. We also own land adjacent to the Balikpapan Coal Terminal, which will allow us to expand the capacity of the Balikpapan Coal Terminal in the future if it is commercially viable for us to do so.

In addition, we also operate the Floating Transfer Station, which is positioned to take advantage of an anticipated significant shortage of coal terminal capacity in South Kalimantan. The Floating Transfer Station can be moved to take advantage of the location with the greatest demand or to avoid bad weather. We can position the Floating Transfer Station to load Capesize vessels that cannot otherwise be loaded by many of Indonesia’s land-based terminals. This gives rise to freight efficiencies, which we believe allows us to serve markets that other coal producers may not be able to serve. The Floating Transfer Station also has the capability to

temporarily hold approximately 50,000 tonnes of coal prior to vessel loading and an automated sampling system. Like the Balikpapan Coal Terminal, though to a lesser extent, the Floating Transfer Station also has facilities that allow coal to be blended through two barge compartments. In March 2008, we notified the owner of our intention to exercise the option to purchase the Floating Transfer Station, which we expect to complete in the second half of 2008.

Involvement in the Indonesian coal sector since the 1980’s

Dato’ Low Tuck Kwong, our controlling shareholder, has more than 35 years of experience in the construction services and mining industries through various businesses in Indonesia. Prior to acquiring the first mining concession in November 1997, he was one of the leading coal mining contractors in Indonesia through his company PT Jaya Sumpiles Indonesia (“JSI”). This experience has provided us with the expertise to manage our operations and supervise our third party contractors. Key members of the management team have also previously worked with JSI and have experience in coal contract mining, earthworks and civil works.

High quality, diversified customer base with long-term supply and price contracts

We maintain a diversified customer base across geographical regions, with customers comprising major power plants, steel mills and utility companies and commodity trading houses. We believe this diversity enables us to mitigate risks associated with fluctuations in demand. Our top five customers in 2007 by sales revenues, Enel Trade SpA (“Enel”), Mitsui & Co., Ltd (“Mitsui”), TNB Fuel Services Sdn Bhd (“TNB”), Taiwan Power Company (“Taipower”) and Constellation Energy Commodities Group, Inc. (“Constellation”), collectively accounted for 76.9% of our coal sales revenues in 2007. Our top five customers in the three months ended March 31, 2008 by sales revenues, Enel, Vitol SA and Vitol Asia Pte Ltd (collectively, “Vitol”), Coal and Oil Company DMCC, Dubai (“Coal and Oil Company”), Mitsui and Adani Enterprises Ltd and Adani Global Pte Ltd (collectively, “Adani”), collectively accounted for 78.4% of our coal sales revenues in the three months ended March 31, 2008. As of June 1, 2008, we expect to sell 9.9 million tonnes of coal in 2008, of which 9.4 million tonnes of coal will be delivered under existing contracts. Of the 9.4 million tonnes of coal delivered or to be delivered under existing contracts, 71.8% is either at fixed pricing or has index-linked pricing that we have in effect fixed by entering into hedging transactions.

Experienced management team with a culture of excellence and track record of delivering results

Our founding shareholders, together with our management team, built our mining and exploration businesses from start-up to our current state as the eighth largest integrated coal producing group in Indonesia in less than 10 years. Working together as a team, our management has demonstrated a successful track record of acquiring high quality assets and developing them, expanding operations and increasing revenues. We benefit from their experience in working within the Indonesian regulatory regime to acquire coal concessions and develop them from exploration through to production. The team also has long-standing relationships with many of our major customers and third party contractors.

Operational risk reduced through diversity of mine locations

We operate eight concession areas in East and South Kalimantan with a combined concession area of 81,265 hectares. This enables us to mitigate risks associated with labor, weather or other disruptions that might occur at one concession area but not necessarily at all locations. It also enables us to mitigate against a potential disruption in operations at the Balikpapan Coal Terminal by using independent ship loading capability at Perkasa Inakakerta and, separately at Wahana, through the Floating Transfer Station. We believe that this diversity in location and effective management of our inventory stockpiles at various sites should enable us to reduce the risk that temporary disruptions in production will affect our ability to fulfil our contractual commitments.

Our Strategy

The following are our principal business strategies:

‰ leverage existing coal reserves and infrastructure to deliver sustainable growth in coal production

levels;

‰ work closely with reputable third party mining contractors to improve productivity and efficiency of

operations;

‰ improve our operating margins through various cost saving and value adding initiatives;

‰ complement our current portfolio of high quality assets by seeking strategic acquisitions of additional

‰ enhance the effectiveness of sales and marketing efforts to strengthen and develop customer

relationships;

‰ expand and upgrade our coal infrastructure network; and

‰ establish effective management systems and enhance corporate governance. Recent Developments

On July 10, 2008, we and our controlling shareholder, Dato’ Low Tuck Kwong, received a two-page notice from the law firm of Hotman Paris & Partners alleging that Mr. Sukamto Sia is entitled to 50% of the shares in the Company and its subsidiaries comprising the Bayan Group. Through his attorney, Mr. Sia has alleged that our controlling shareholder agreed to provide these shares to him in return for an unspecified amount of financing allegedly provided by Mr. Sia to our controlling shareholder in 1996. Through his attorney, he has also threatened to initiate legal proceedings.

On July 21, 2008, Hotman Paris & Partners, on behalf of their client Mr. Sia, sent a letter to various parties including the regulatory authorities in Indonesia which repeated the allegations and requested cancellation of the Combined Offering.

We believe, and our controlling shareholder has advised us that he believes, Mr. Sia’s claim is totally without merit and is frivolous. The Bayan Group has had no dealings whatsoever with Mr. Sia and our controlling shareholder has advised us of the following matter in which the Bayan Group is not involved, as described below.

Our controlling shareholder has advised us that he is a plaintiff to a litigation in Hong Kong involving a company in which Mr. Sia owned an 80% interest and of which Mr. Sia was a director. In the litigation, our controlling shareholder obtained a judgment in 2001 against the company for approximately HK$108.4 million (US$13.9 million based on the noon buying rate as of July 22, 2008) plus interest from July 22, 2000.

The company is in the process of being liquidated because it was unable to satisfy the 2001 judgment. In addition, the provisional liquidator of the company has instituted proceedings against Mr. Sia in Hong Kong. In June 2008, the provisional liquidator of the company obtained an interim court order against Mr. Sia, which purports to be effective worldwide, to freeze his assets (and those of his co-defendant) up to a value of HK$277.0 million (US$35.5 million based on the noon buying rate as of July 22, 2008), pending the resolution of the proceedings against him and his co-defendant.

We believe, and our controlling shareholder has advised us that he believes, that there is no basis whatsoever for the claim against us and him set out in the notice. Notwithstanding the foregoing, we and our controlling shareholder expect that litigation proceedings may be commenced against us and our controlling shareholder. We intend to vigorously defend Mr. Sia’s claims against us and our controlling shareholder has advised that he intends to vigorously defend Mr. Sia’s claims against him. However, investors should note that the resolution of legal claims in Indonesia involves uncertainties and judicial decisions in Indonesia may be unpredictable.

Group Structure

Our organizational structure as of July 24, 2008 is set forth in the chart below:

PT Gunungbayan Pratamacoal

(producing)

Holding Company Operating Company

Coal Company

PT Metalindo Prosestama

PT Bayan Energy

PT Indonesia Pratama (contractor)

PT Perkasa Inakakerta (producing)

PT Wahana Baratama Mining

(producing)

PT Dermaga Perkasapratama (Balikpapan Coal Terminal) PT Muji Lines

PT Teguh Sinar Abadi (producing)

PT Firman Ketaun Perkasa (development)

PT Kaltim OTR Tyres PT Bara Tabang

(development)

PT Fajar Sakti Prima (producing)

PT Brian Anjat Sentosa (development)

4.8%

1% 97.4%

90%

90%

90%

90% 75%

75%

75%

75% 75% 75%

99.9%

0.1% 95.2%

25%

25%

25%

25% 25% 25% 25%

100%

62.4% Founding

Shareholders(1)

PT Bayan Resources (ListCo)

(1) Refers to Dato’ Low Tuck Kwong, our controlling shareholder, Engki Wibowo and Jenny Quantero.

Corporate Information

Our registered office is at Graha Irama Building, Suite O, Jl. HR Rasuna Said Blok X-1, Kav 1&2, Jakarta Selatan 12950, Indonesia. Our telephone number is +(62 21) 526 9868.

The Offering

The Company . . . PT Bayan Resources Tbk.

Selling Shareholders . . . Engki Wibowo and Jenny Quantero.

For further information regarding the Selling Shareholders, see “Principal and Selling Shareholders.”

Controlling Shareholder . . . Dato’ Low Tuck Kwong.

Combined Offering . . . We are offering 333,333,500 New Shares and the Selling

Shareholders are collectively offering 500,000,000 Vendor Shares in the International Offering and Indonesian Public Offer. We expect the Offering Shares to comprise 25.0% of our post-offering issued and outstanding share capital after the completion of the Combined Offering, assuming the subscription Option and the Over-allotment Option are not exercised. We expect the aggregate of the Offering Shares, the subscription Option Shares and the Over-allotment Option Shares to comprise 31.6% of our post-offering issued and outstanding share capital after the completion of the Combined Offering, assuming the Over-subscription Option and the Over-allotment Option are exercised in full. The completion of the Indonesian Public Offer and the International Offering are each conditional upon the completion of the other.

International Offering . . . Concurrently with the Indonesian Public Offer, we and the Selling Shareholders are offering 666,667,000 Offering Shares through the Domestic Lead Managing Underwriter’s arrangements with the International Selling Agents (i) outside Indonesia and the United States, to non-U.S. persons in reliance on Regulation S under the Securities Act and other applicable laws, and (ii) within the United States, only to QIBs in transactions exempt from registration under the Securities Act.

Indonesian Public Offer . . . Concurrently with the International Offering, we and the Selling Shareholders are offering 166,666,500 Offering Shares through the Underwriters in an initial public offering in Indonesia.

Clawback and Re-allocation . . . The Offering Shares may be reallocated from the Indonesian Public Offer to the International Offering andvice versain the event of an under-subscription in one and an over-subscription in the other. Offering Price . . . Rp5,800 per Share.

Over-subscription Option . . . The Selling Shareholders have granted the Domestic Lead Managing Underwriter, for and on behalf of the International Selling Agents and the Underwriters, the Over-subscription Option, exercisable in whole or in part during the period commencing on August 7, 2008 (being the last day of the offer period in connection with the Indonesian Public Offer) and ending on August 8, 2008 (being the date of the final allotment of the Shares) to procure subscription from the Selling Shareholders, collectively, for the Over-subscription Option Shares comprising 83,333,500 Shares at the Offering Price, less any applicable underwriting fees and commissions, in the event of over-subscription by purchasers in the Combined Offering.

Over-allotment Option . . . The Selling Shareholders have also granted the Domestic Lead Managing Underwriter, as stabilizing agent for and on behalf of the International Selling Agents and the Underwriters, the Over-allotment Option, exercisable in whole or in part for a period of 30 days after the closing date of the Combined Offering to purchase from the Selling Shareholders, collectively, the Over- allotment Option Shares comprising up to 15.0% of the aggregate of the Offering Shares and the Over-subscription Option Shares at the Offering Price, less any applicable underwriting fees and commissions, to cover over-allotments, if any, which may be made in connection with the

Combined Offering.

Share Capital . . . We have an authorized share capital of Rp1,200,000,000,000 consisting of 12,000,000,000 Shares of par value Rp100 each, of which 3,000,000,000 Shares were issued and outstanding prior to the closing of the Combined Offering and 3,333,333,500 Shares will be issued and outstanding immediately following the closing of the Combined Offering.

Stabilization . . . In connection with the Combined Offering, the stabilizing agent, on behalf of the International Selling Agents and the Underwriters, may effect transactions in the Shares or related securities in any over-the-counter market or otherwise with a view of supporting the market price of the Shares at levels above those that would otherwise prevail in the open market. Those transactions may be effected on the IDX in compliance with all applicable laws and regulations. Stabilization, if commenced, may be discontinued at any time and may not be effected after the date falling 30 days after the listing date or (if earlier) the date on which the Over-allotment Option is exercised in full.

Use of Proceeds . . . The aggregate net proceeds to us from the Combined Offering, after deducting underwriting fees and commissions, structuring fee and other estimated expenses, will be approximately Rp1,848.6 billion (US$200.6 million).

We intend to use the net proceeds of the Combined Offering primarily to acquire the Floating Transfer Station and to fund capital

expenditures, working capital and general corporate purposes. For a further description of how we intend to use the proceeds of the Combined Offering, see “Use of Proceeds.”

We will not receive any of the proceeds from the sale of Vendor Shares by the Selling Shareholders.

Dividends . . . The declaration, amount and payment of future dividends on the Shares, if any, is discretionary and will be subject to the

recommendation of our Board of Directors and approval at a general meeting of shareholders. See “Dividend Policy” for a description of our dividend policy.

Employee Stock Allotment Plan . . . We have reserved a total of up to 10.0% of the New Shares included in the Combined Offering for issuance to our permanent employees as of March 31, 2008, including our executive officers, directors and commissioners (except the independent commissioner) (the “ESA Shares”), pursuant to an employee stock allotment plan

We expect to incur a maximum expense of approximately

Rp58.0 billion (US$6.3 million) in connection with the issuance of the bonus Shares in the second half of 2008.

Each staff member, including our executive officers, directors and commissioners (except the independent commissioner) will receive, depending on their designation within the Bayan Group, either (a) a number of bonus shares which, when valued at the Offering Price, are equal to between three and six months’ salary (based on basic salaries as of March 31, 2008) depending on the length of employment, or (b) a number of shares to be determined by our Board of Directors and approved by our Board of Commissioners based on the number of years employed and the position held by such employee.

ESA Shares will be subject to a lock-up period of one year from the date of listing of the Shares on the IDX.

Other employees, comprising principally workers at our mining projects, will be given a cash bonus in lieu of ESA Shares in an amount equal to between six and 12 months’ salary (based on basic salaries as of March 31, 2008) depending on their length of employment.

Voting Rights . . . Owners of the Shares will be entitled to full voting rights, as described in “Description of Share Capital—Shareholders’ Meetings and Voting Rights.”

Listing of the Shares . . . There is currently no public market for the Shares. We have applied to the IDX for the listing and quotation of the Shares (including the Offering Shares to be issued pursuant to the Combined Offering) on the IDX upon completion of the Indonesian Public Offer. If listing approval is granted, trading in the Shares on the IDX is expected to commence on or about August 12, 2008 under the symbol “BYAN”. Delivery . . . Delivery of the Offering Shares to successful applicants will be made

against payment therefor through the depository facilities of the Indonesian securities depository company,PT Kustodian Sentral Efek

Indonesia(“KSEI”). See “Plan of Distribution—Registration of the

Offering Shares in KSEI” and “Indonesian Capital Markets.” It is expected that the Offering Shares will be delivered on or about August 11, 2008.

Transfer Restrictions . . . The Shares have not been, and will not be, registered under the Securities Act. Therefore, resales by subscribers and/or purchasers of all Shares offered by this Combined Offering will be subject to certain restrictions described in “Transfer Restrictions.”

Lock-up . . . We, our controlling shareholder and each of the Selling Shareholders have agreed, with certain exceptions, not to sell or transfer any Shares for 180 days after the closing of the Combined Offering without first obtaining the consent of the Domestic Lead Underwriter and Merrill Lynch (Singapore) Pte. Ltd., acting as representative for the

International Selling Agents (the “Representative”).

The lock-up provision does not apply to a sale and transfer by any of our Controlling Shareholder and the Selling Shareholders of Shares, in each case, representing up to 10.0% of the outstanding Shares of the Company prior to the completion of the Combined Offering to

one or more of our directors at the Offering Price, provided that in each case, the transferee agrees to be bound in writing by the terms of the lock-up agreement prior to such transfer.

See “Plan of Distribution—Restrictions on the Disposition of the Shares” for a further description of these restrictions.

Cornerstone Investors . . . The Selling Shareholders have agreed to sell to the Cornerstone Investor, and the Cornerstone Investor has agreed to purchase, 333,333,500 Cornerstone Shares, representing 10.0% of our

outstanding Shares after the completion of the Combined Offering, at the Offering Price, subject to the conditions described under “Plan of Distribution—Cornerstone Placement.” As a result, we expect the Cornerstone Investor to be a significant shareholder after the completion of the Combined Offering.

See “Plan of Distribution—Cornerstone Placement” and “Principal and Selling Shareholders” for a summary of the placement of the Cornerstone Shares, including a summary of the conditions to the purchase of the Cornerstone Shares by the Cornerstone Investor. Risk Factors . . . Investing in the Shares involves certain risks which are described in

Summary Financial Information and Other Data

You should read the summary financial information presented below in conjunction with our consolidated financial statements and the notes to those financial statements included in this offering

memorandum. You should also read the section of this offering memorandum entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We have derived our summary financial information from our audited combined consolidated financial statements as of and for the years ended December 31, 2005 and 2006, audited consolidated financial statements as of and for the year ended December 31, 2007, and as of and for the three months ended March 31, 2008, each prepared in accordance with Indonesian GAAP, and included elsewhere in this offering memorandum.

Our consolidated financial statements as of and for the year ended December 31, 2007 and as of and for the three months ended March 31, 2008 have been audited, in accordance with auditing standards established by the Indonesian Institute of Certified Public Accountants (Institut Akuntan Publik Indonesiaor “IAPI”) (formerly

Ikatan Akuntan Indonesia—Kompartemen Akuntan Publikor “IAI—KAP”), by KAP Haryanto Sahari & Rekan

(a member firm of PricewaterhouseCoopers). In addition, KAP Haryanto Sahari & Rekan also audited the combination of the consolidated financial statements as of and for the years ended December 31, 2005 and 2006, after restatement in 2007 for the pooling of interests of PT Metalindo Prosestama (“Metalindo Prosestama”), Fajar, Tabang and Brian as if the transactions had occurred on January 1, 2005, in accordance with PSAK 38(R).

Our consolidated financial statements as of and for the years ended December 31, 2005 and 2006 have been audited, in accordance with auditing standards established by the IAPI, by other auditors, before the restatement adjustments recorded by us to retrospectively apply the accounting for restructuring transactions of entities under common control that occurred in 2007, in accordance with PSAK 38(R). These consolidated financial statements are not included in this offering memorandum.

We derived the summary interim financial data below for the three months ended March 31, 2007 from our unaudited interim consolidated financial statements contained elsewhere in this offering memorandum. These financial statements have been prepared on the same basis as our audited consolidated financial statements and reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of our results of operations and financial condition. Our results for any interim period may not be indicative of our results for the full year or for any period.

From 2005 through the second quarter of 2008, through a series of related transactions, substantially all of the coal mining, marketing, infrastructure development operations and related business operations controlled by our founding shareholders were consolidated into the Company. See “Our Reorganization and Group Structure” for details of our Reorganization. The formation of the Bayan Group has been accounted for as a reorganization of companies under common control. Our consolidated financial statements have been prepared as if certain of the coal mining, marketing, infrastructure development operations and related business operations of the founding shareholders had been consolidated into the Company and had become a part of the Bayan Group from the date the founding shareholders assumed control or ownership of such operations.

Our financial statements are reported in Rupiah. We have prepared and presented our financial

statements in accordance with Indonesian GAAP, which differs in certain material respects from U.S. GAAP. For a description of significant accounting differences between Indonesian GAAP and U.S. GAAP that are relevant to our consolidated financial statements, see “Summary of Significant Differences Between Indonesian GAAP and U.S. GAAP.”

Income Statement

Year Ended December 31, Three Months Ended March 31,

2005 2006 2007 2007(1) 2007 2008 2008(1)

Rp Rp Rp US$ Rp Rp US$

(restated)(2) (restated)(2) (unaudited)

(Rp in billions and US$ in millions)

Income Statement Data:

Revenue . . . 1,671.2 2,995.8 3,451.1 374.4 912.5 772.1 83.8

Cost of revenue . . . (1,363.8) (2,319.6) (2,484.6) (269.6) (664.0) (621.2) (67.4)

Gross profit . . . 307.4 676.2 966.5 104.8 248.5 150.9 16.4

Operating expenses . . . (65.8) (454.2) (556.1) (60.3) (128.4) (146.5) (15.9)

Operating income . . . 241.6 222.0 410.4 44.5 120.1 4.4 0.5

Other (expenses)/income . . . (118.0) (36.8) (42.7) (4.6) 20.9 20.8 2.3

Profit before income tax . . . 123.6 185.2 367.7 39.9 141.0 25.2 2.8

Income tax expense, net . . . (41.9) (64.1) (112.9) (12.2) (40.9) (6.1) (0.7)

Income before minority

interests . . . 81.7 121.1 254.8 27.7 100.1 19.1 2.1

Minority interests in net income of

subsidiaries . . . (0.1) (0.1) (2.1) (0.2) — (2.6) (0.3)

Net income . . . 81.6 121.0 252.7 27.5 100.1 16.5 1.8

(1) Converted into U.S. dollars for the convenience of the reader as described under “Presentation of Financial Information.”

(2) The 2005 and 2006 financial statements were restated in 2007 for the pooling of interests of Metalindo Prosestama, Fajar, Tabang and Brian as if the transactions had occurred on January 1, 2005, as described in Notes 3 and 4 of the notes to our consolidated financial statements included elsewhere in this offering memorandum.

Balance Sheet

As of December 31, As of March 31,

2005 2006 2007 2007(1) 2007 2008 2008(1)

Rp Rp Rp US$ Rp Rp US$

(restated)(2) (restated)(2) (unaudited)

(Rp in billions and US$ in millions)

Balance Sheet Data:

Cash and cash equivalents . . . 38.6 50.3 291.4 31.6 148.1 189.6 20.6

Trade receivables(3):

Third parties . . . 9.1 32.4 387.8 42.1 293.3 346.0 37.5

Related parties . . . 35.5 102.5 13.3 1.4 16.3 7.1 0.8

Inventories(4) . . . 186.9 271.3 135.2 14.7 158.8 286.2 31.1

Total current assets . . . 331.1 664.4 949.0 103.0 836.8 941.4 102.1

Fixed assets, net(5) . . . 782.8 1,139.4 1,091.4 118.4 1,056.2 1,111.4 120.6

Deferred exploration and

development expenditures(6) . . 63.3 136.9 233.4 25.3 162.4 249.3 27.0

Deferred stripping costs . . . 182.1 223.1 428.1 46.4 244.1 470.7 51.1

Total assets . . . 1,526.4 2,257.0 2,833.7 307.4 2,432.8 3,039.5 329.8 Short-term loan:

Third parties . . . — — — — — 184.3 20.0

Related parties . . . 243.8 — — — — — —

Trade payables:

Third parties . . . 162.4 249.0 307.5 33.4 268.3 589.1 63.9

Related parties . . . 51.5 56.7 124.2 13.5 163.7 75.3 8.2

Current maturities of long-term loans:

Third parties . . . 26.1 79.4 123.9 13.4 80.2 142.1 15.4

Related parties . . . 204.8 357.6 229.9 24.9 284.0 170.3 18.5

Current maturities of derivative

liabilities . . . — 1.1 205.2 22.3 7.5 184.2 20.0

Total current liabilities . . . 1,004.1 1,103.5 1,428.1 154.9 1,143.5 1,726.6 187.3

Long-term loans—net of current maturities:

Third parties . . . — 241.7 599.6 65.1 224.3 542.5 58.9

Related parties . . . 708.9 957.3 467.8 50.8 1,015.3 404.5 43.9

Derivative liabilities, net of current

maturities . . . — 3.3 70.4 7.6 3.1 135.3 14.7

Total non-current liabilities . . . 723.9 1,229.9 1,189.3 129.0 1,276.9 1,141.8 123.9

Total equity . . . (201.7) (76.6) 213.7 23.2 12.0 166.2 18.1

(1) Converted into U.S. dollars for the convenience of the reader as described under “Presentation of Financial Information.”

(2) The 2005 and 2006 financial statements were restated in 2007 for the pooling of interests of Metalindo Prosestama, Fajar, Tabang and Brian as if the transactions had occurred on January 1, 2005, as described in Notes 3 and 20 of the notes to our consolidated financial statements included elsewhere in this offering memorandum.

(3) Net of allowance for doubtful accounts of Rp0.1 billion, Rp nil and Rp nil in 2005, 2006 and 2007, respectively, and Rp nil and Rp nil in the three months ended March 31, 2007 and 2008, respectively. (4) Net of allowance for obsolete inventory of Rp1.5 billion, Rp0.3 billion and Rp2.1 billion (US$0.2 million)

in 2005, 2006 and 2007, respectively, and Rp1.3 billion and Rp2.8 billion (US$0.3 million) in the three months ended March 31, 2007 and 2008, respectively.

(5) Net of accumulated depreciation of Rp550.5 billion, Rp779.2 billion and Rp970.3 billion (US$105.3 million) in 2005, 2006 and 2007, respectively, and Rp809.2 billion and Rp988.6 billion (US$107.3 million) in the three months ended March 31, 2007 and 2008, respectively.

(6) Net of accumulated amortization of Rp nil, Rp nil and Rp5.1 billion (US$0.6 million) in 2005, 2006 and 2007, respectively, and Rp nil billion and Rp10.3 billion (US$1.1 million) in the three months ended March 31, 2007 and 2008, respectively.

B.PT DERMAGA PERKASA PRATAMA Kariangau Kelurahan,

West Balikpapan Sub-District, Balikpapan, East Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Land . . . Rp. 24,413,868,000.- Rp. 24,413,868,000.-—Buildings . . . Rp. 20,281,910,000.- Rp. 18,280,517,000.-—Other Land Improvements . . . Rp. 333,434,048,000.- Rp. 226,735,152,000.-—Machinery and Equipment . . . Rp. 574,690,650,000.- Rp. 362,352,010,000.-—Vehicles . . . Rp. 2,063,300,000.- Rp.

1,458,500,000.-TOTAL. . . Rp.954,883,776,000.-

Rp.633,240,047,000.-C. PT FIRMAN KATAUN PERKASA Muara Bunyut Village, Melak Sub District, West Kutai District, East Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Buildings . . . Rp. 3,574,424,000.- Rp. 3,532,367,000.-—Other Land Improvements . . . Rp. 57,819,555,000.- Rp. 56,084,969,000.-—Machinery and Equipment . . . Rp. 85,704,400,000.- Rp. 81,281,500,000.-—Vehicles . . . Rp. 500,000,000.- Rp.

300,000,000.-TOTAL. . . Rp.147,598,379,000.-

Rp.141,198,836,000.-D. PT INDONESIA PRATAMA

Gunung Sari Village, Tabang Sub-District, Kutai Kartanegara District,

East Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Buildings . . . Rp. 3,871,759,000.- Rp. 3,086,150,000.-—Other Land Improvements . . . Rp. 657,380,000.- Rp. 572,172,000.-—Machinery and Equipment . . . Rp. 78,295,480,000.- Rp. 49,479,820,000.-—Vehicles . . . Rp. 1,200.600,000.- Rp.

835,000,000.-TOTAL. . . Rp.84,025,219,000.-

Rp.53,973,142,000.-Professional Consulting Services in Valuation and Property Economics

International Network In:

Australia, Belgium, Brazil, Dutch Caribbean and Aruba, France, Germany, India, Indonesia, Italy, Mexico, The Netherlands, New Zealand, Portugal, Singapore, Spain, Sweden, Thailand, U.K., U.S.A

E. PT PERKASA INAKAKERTA Jin Raya Bengalon Sankurilang, Bengalon Sub-District,

East Kutai District, East Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Buildings . . . Rp. 6,610,730,000.- Rp. 5,989,887,000.-—Other Land Improvements . . . Rp. 70,907,916,000.- Rp. 64,526,204,000.-—Machinery and Equipment . . . Rp. 188,402,940,000,- Rp. 162, 710,240,000.-—Vehicles . . . Rp. 4,661,900,000.- Rp.

3,365,000,000.-TOTAL. . . Rp.270,583,486,000.- Rp.

236,591,331,000.-F. PT TEGUH SINAR ABADI Muara Bunyut Village,

Melak Sub-District, West Kutai District, East Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Machinery and Equipment . . . Rp. 112,344,460,000.- Rp. 81,912,720,000.-—Vehicles . . . Rp. 1,696,950,000.- Rp.

1,225,000,000.-TOTAL. . . Rp.114,041,410,000.-

Rp.83,137,720,000.-G. PT WAHANA BARATAMA MINING Sungai Cuka Village, Setui Sub

District, Tanah Bumbu District, South Kalimantan

Reproduction/

Replacement Cost, new Market Value

—Buildings . . . Rp. 11,222,516,000.- Rp. 11,001,367,000.-—Other Land Improvements . . . Rp. 17,623,098,000.- Rp. 16,830,059,000.-—Machinery and Equipment . . . Rp. 207,752,160,000.- Rp. 190,314,030,000.-—Vehicles . . . Rp. 1,729,600,000.- Rp.

1,090,000,000.-TOTAL. . . Rp. 238,327,374,000.- Rp. 219,235,456,000.-GRAND TOTAL . . . Rp.2,577,372,116,000.- Rp.1,778,242,822,000.-ROUNDED TOTAL . . . Rp.2,577,372,100,000.-

Rp.1,778,242,800,000.-Professional Consulting Services in Valuation and Property Economics

International Network In:

Australia, Belgium, Brazil, Dutch Caribbean and Aruba, France, Germany, India, Indonesia, Italy, Mexico, The Netherlands, New Zealand, Portugal, Singapore, Spain, Sweden, Thailand, U.K., U.S.A

Therefore, its our considered opinion thatRp.1,778,242,800,000,- (One Trillion Seven Hundred Seventy Eight Billion Two Hundred Forty Two Million Eight Hundred Thousand Rupiah)represents the

Market Valueof the properties under appraisement as ofMarch, 31 2008for continued use as part of a going concern.

Notes:

‰ For the valuation of imported machinery equipment we used the exchange rate of Rp.9,217.- per US Dollar.

‰ The reproduction cost/replacement cost new of the properties of PT Dermaga Perkasa Pratama does not include work in progress (CIP) for reclaiming conveyors (RC 9 & 13) amounting to

Rp.15,230,495,224.72 since the work was still in progress.

‰ Coal loading unloading equipment of PT Dermaga Perkasa Pratama the reproduction cost/ replacement cost new amounting to Rp.461,525,880,000.- which in the financial statement were recorded as building facilities and related assets, in the appraisal report, we separated them and classified them as machinery and equipment.

‰ The reproduction cost/replacement cost new of the properties of PT INDONESIA PRATAMA does not include work in progress (CIP) amounting to Rp.17,210,599,372.- since the work was still in progress.

We have made no investigation of and assume no responsibility for titles to or liabilities against the properties appraised because we understand that these matters have been handled by the Legal Consultant and Independent Auditors appointed by PT Bayan Resources.

We hereby certify that we have neither present nor prospective interest on the property appraised or on the value reported.

Respectfully

Ir.Antonius Setiady, SCV, MAPPI (Cert) President Director

MAPPI No. 81-S-0002

Appraisal License from Minister of Finance No.1.99.0013 AS/Rn

D.2008/SF/Bayan IPO – Dir 069 Eng

Professional Consulting Services in Valuation and Property Economics

International Network In:

Australia, Belgium, Brazil, Dutch Caribbean and Aruba, France, Germany, India, Indonesia, Italy, Mexico, The Netherlands, New Zealand, Portugal, Singapore, Spain, Sweden, Thailand, U.K., U.S.A

Registered Office of the Company PT Bayan Resources Tbk

Graha Irama Building, Suite O Jl. H. R. Rasuna Said Blok X-1, Kav 1&2

Jakarta 12950 Indonesia

Legal Advisors

Counsel to the Company and the Selling Shareholders as to

U.S. Federal Securities and English Laws

White & Case LLP

50 Raffles Place #30-00 Singapore Land Tower

Singapore 048623

Indonesian Counsel to the Company and the Selling Shareholders

Hadiputranto, Hadinoto & Partners

The Indonesia Stock Exchange Building Tower II, 21st Floor

JI Jendral Sudirman Kav. 52-53 Jakarta 12190

Indonesia

Counsel to the International Selling Agents and the Underwriters as to

U.S. Federal Securities and English Laws

Latham & Watkins LLP

9 Raffles Place #42-02 Republic Plaza

Singapore 048619

Indonesian Counsel to the

International Selling Agents and the Underwriters

Ery Yunasri & Partners

Graha Niaga Building, 11th Floor Jl. Jenderal Sudirman Kav. 58

Jakarta 12190 Indonesia

Independent Public Accountants KAP Haryanto Sahari & Rekan

(A member firm of PricewaterhouseCoopers) Jl. H.R. Rasuna Said, Kav. X-7 No. 6

Jakarta 12940 Indonesia

833,333,500 Ordinary Shares

PT Bayan Resources Tbk

(incorporated with limited liability in the Republic of Indonesia)

O F F E R I N G M E M O R A N D U M

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