Guildford Coal

Location

Guildford holds a 64.4% stake in Clyde Park Coal Pty Ltd with the remaining shares in the subsidiary mostly held by Tiaro Coal Limited (ASX : TCM).

Clyde Park Coal Pty Ltd owns the contiguous EPC1250 and EPC1260, which are located on the north eastern edge of the Galilee Basin in Queensland. The Permian coal seams are known to outcrop in this location and were previously mined in the old Oxley Creek Coal Mine (located entirely within EPC1250).

Guildford Coal recently acquired EPCs 2503 and 2504 which occur directly below EPC 1260.

The Clyde Park Coal Project is a potential early stage development opportunity located North West of Pentland and is in the process of a mining lease application (ML 10369). The project is well located to utilise existing rail and port capacity in townsville. The south eastern boundary of EPC1260 is approximately 15 kilometres from a potential rail siding at Pentland.

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Resource and Exploration

A study of the Clyde Park Project exploration results by independent mining consultants Moultrie Group has resulted in the definition of the first 50.71million tonnes (Mt) of Indicated Coal Resources and an increased Inferred Coal Resource of 677.45Mt within the Galilee Basins Permian coal bearing seams of the Betts Creek beds.

Guildford Coal Ltd has drilled thirty six (36) boreholes within EPC1260 as part of the Clyde Park exploration program and of these; twenty six (26) boreholes have been included in the latest resource model. Drill hole spacing varies across the project area and ranges from 300m to 3.4km point to point.

Eight (8) coal seams and their seam splits have been intersected with coal quality analysis for three (3) main seams showing a moderate ash (15% adb), moderate calorific value (5,800 kcal/kg adb) and low sulphur (0.5% adb) an export thermal coal potential product.

The coal seams found within the project area appear to be consistent with those published by other Galilee Basin explorers such as Adani Mining (Carmichael Deposit), Hancock Coal (Alpha Deposit) and Blackwood Coal (South Pentland Deposit).

*Reporting of Coal Resources have been estimated in accordance with the Australasian code for reporting of exploration results, mineral resources and ore reserves (JORC Code, 2004) and the Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves, 2003 Edition.

A discount factor varying from 5-10% has been subtracted from estimations for unexpected geological losses. This accounts for unexpected conditions such as seam thinning, splitting, or seams missing in barren zones around faults.

Infrastructure

Like Guildford’s Hughenden project, the Clyde Park Coal project is located in close proximity to the Mt Isa to Townsville rail line, with the southern boundary of the tenement located approximately 15 kilometres from a potential rail siding at Pentland.

This project also benefits from the Memorandum of Understanding (MOU) with the Port of Townsville Limited (POTL) signed in December 2010, to conduct a feasibility study on the logistics of exporting coal through Townsville Port via the Eastern Access Rail Corridor.

In December 2012, Guildford Coal agreed to partner to major logistics company, Asciano Limited, to develop an integrated ‘pit to port’ solution for the Hughenden Project.

Feasibility and development

The stratigraphy of the coal reported in this resource correlates well with regional stratigraphy that has been previously published for the Galilee Basin, with the Betts Creek Beds Coal Sequence proving similar to that defined at the Adani – Carmichael Deposit and the Hancock – Alpha Deposit.

Further drilling will continue up dip towards the interpreted sub crop of the Betts Creek Beds Coal Seams to expand the potential open cut resources. With this style of mining in mind, resource calculations were cut-off at 300m depth from surface

The target product quality for the Clyde Park Coal Project is to be confirmed by further analysis, including a quality model of working sections and washability testing. Based on results to date, an export thermal coal with moderate ash is achievable.