Universal Coal - One2One Presentation - 13th January 2011

January 2011
ASX:UNV
Pro-Active Investor
Presentation

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by such person in relation thereto.
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Investment Highlights
• Bankable feasibility underway on Kangala targeting production of
3.0Mtpa ROM (domestic/export thermal coal) commencing with
ROM in H1 2011
• Drilling on Berenice Coking coal project underway to substantially
increase Coking coal resources in 2011
• Kangala self financing targeted H2 2011
• Projected production pipeline of 6.0Mtpa ROM in 3 years from 2
additional mines
• Increase 724Mt Gross in situ (JORC-compliant) export/domestic
quality thermal and coking coal resources with growth pipeline.
• Lower quartile operating cost, high-margin assets – early open pit
with proximity to infrastructure
3

Corporate Strategy
• To become a mid tier diversified coal mining company in South Africa and
Southern Africa producing a diversified product range of export /domestic
thermal and coking coal
• Taking advantage of skills and relationships developed over 25 years
• Develop 3 low-cost high-margin thermal coal assets (export/domestic) in
the Witbank coalfield with contiguous areas under application.
• Develop the substantial coking coal assets (+30,000 hectares) within
South Africa’s emerging coalfields
• Target low cost high margin assets with good infrastructure for growth
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Corporate Profile
ASX Code
UNV
Existing Shares on Issue 203.3m
Share Price (10/01/11) A$0.465
Market Capitalisation A$94.5m
Options on Issue
29.9m
Directors
Dr Tony Harwood
Mr Tony Weber
Mr Henri Bonsma
Mr Shammy Luvhengo
Mr John Hopkins
Executive Chairman
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director - Aust
Mining Executive, Geologist
Mining Engineer
Lawyer
Geologist, Investment Banker, BEE
Lawyer
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South African Coal Sector
Mature coal mining culture
Majors and junior miners producing 236mtpa (2008)
Large number of contractors, with spare capacity
Excellent Existing Infrastructure
Port capacity (RBCCT capacity increased 91mtpa)
Rail capacity (RBC rail increase to 81Mtpa in 2014)
Secondary existing Rail access to Maputo and Durban
Excess processing capacity available
Strong Domestic Demand
Eskom Consumption 125mtpa (2008)
Domestic none power sector (10mtpa 2008)
Sasol Coal to Liquids (41mtpa 2008)
Private power producers
Quality coal, quality location
Low moisture, low sulphur coal desired by Indian consumer
Exports - east coast best to service Indian and Asian markets
New Opportunities for Growth
Access to quality coal deals, with additional strong interest
for off take, joint ventures or project sales from Indian customers
6

Universal Current Project Locations
7

Project Ownership Structure
Universal Coal Plc
Universal Coal & Energy Holdings (SA) Pty Ltd
Staged earn in to 50%
Staged earn in to 50%
Staged earn in to 50%
70.5% interest
UCD II
UCD IV
UCD III
UCD 1
BEE
Bono Lithihi
BEE
Xakwa Resources
BEE
Unity Rocks Mining
BEE
Mountain Rush
Berenice &
Somerville
Roodekop
Brakfontein
Kangala
UCD = Universal Coal Development
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Location of Thermal Coal Projects
Railway
Coal Mine
Power Station
Railway
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Kangala Project Overview
Key Figures
Ownership 70.5% (BEE 29.5%)
Resources
Costs
Total of 124Mt in situ Measured, Indicated
and Inferred resource
Opex – ZAR 90 / ROM tonne (A$13/t)
Capex – ZAR 85m (A$12.5m)
Railway
Production Commence H1 2011
Highlights
• Mining Right granted
3.0Mtpa Full production H1 2012
• Full Bankable feasibility underway to allow for full
development to commence in H2 2011
• Commence ROM production in H1 2011, focussing on
Domestic and Eskom grade thermal coal from a 48Mt
Measured Resource
• Entire resource is amenable to low cost open pit
operation averaging less than 2:1 stripping ratio (Phase
1 at 1.6:1)
• Operational synergies being explored with Total (CAC)
and Exxaro ‘s (JSE) Leeuwpan colliery
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Roodekop Project Overview
Key Figures
Ownership Earn in 50% (option to acquire 74%)
Resources
Production
78Mt of in-situ Measured and Indicated
resource – export quality
Targeting 1.5Mtpa ROM with production
development H2 2011
Railway
Highlights
• Lodged New order Mining Right application
• Currently completing infill drilling campaign
• 26.1Mt of Measured resources - including 16.5Mt in the
open cast area defined at present
• Western area amenable to open pit mining:
• 35Mt of which 27.8Mt Measured and Indicated
• 3.5:1 strip ratio
• Yields 16.2Mt of RBCT and 8Mt of Eskom grade
coal.
• 7km south of New Clydesdale’s RBCT linked railway
siding.
• Toll-treatment / JV potential at nearby Exxaro’s New
Clydesdale colliery.
• Commencement of feasibility H2 2011
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Brakfontein Project Overview
Key figures
Ownership
Resources
Production
Earn in to 50% (opportunity to acquire
74%)
126Mt of in situ Indicated and Inferred
resources – export quality
Targeting 1.5Mtpa ROM with production
development H1 2012
Highlights
• Project expected to contain significant tonnages of
Export quality thermal coal
• Significant tonnages expected to be exploitable by openpit
(strip ratio 2.5:1)
• 5km north of Railway siding & 30km west of Kendal
Power Station
• Location synergies with Kangala project and JV potential
with other mining projects
• 148 holes drilled to date, including 34 by Universal
• Commencement of infill drilling during Q1 2011.
• Lodging Mining right application H1 2011
Railway
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Coking Coal Projects – Location Map
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Berenice Soutpansberg Project Overview
Key Figures
Ownership
Resources
Exploration
Earn in to 50% (opportunity
to acquire 74%)
122Mt Gross in-situ inferred
resources – Coking coal
Commenced first phase of
drilling in Q4 2010.
Exploration Target over
~6000h expected to reveal
Inferred resource by end of
H1 2011
Railway
Highlights
• Drilling commenced, with five (5) holes
completed to date
• Call intersections consistently developed
composite coal zone, 35-40m thick
• Current intersection depths from 20m to 200m below surface . The coal zone consists of interbedded bright coal and carbonaceous
mudstone
• These intersections follow on the historic inferred resource recorded over portions of this initial target area
• A significant portion of this exploration Target expected to provide high yielding Coking coal will be shallow, exploitable by open pit
mining
• 30km west of the main railway line linking Musina with the major centre of South Africa
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Somerville Tuli Project Overview
Key Figures
Ownership
Resources
Exploration
Earn in to 50% (opportunity
to acquire 74%)
274Mt Gross in situ Inferred
Coking coal tonnes
Exploration Target within
tenements is 800-1000Mt
Highlights
• Exploration Target of 800 – 1000 Mt
in situ coking coal*
• Significant resource potential to ensure
a large resource base for mining can be delineated.
• 6 holes drilled historically illustrating coking coal potential
Railway
* The potential quantity and grade of the Somerville Tuli Exploration Target is conceptual in nature and there currently is insufficient drilling to define a Mineral
Resource above and beyond the existing Resource as stated.
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Coal Resources Summary
Project
Thermal Coal
Measured
Millions of
tonnes
Kangala 48.7
Roodekop 26.1
Brakfontein
Total Thermal coal 74.8
Coking Coal
Berenice
Somerville
Total Coking Coal
Indicated Inferred
Total
Millions of Millions of Millions of
tonnes tonnes tonnes
4.4 70.9 124.0
50.5 1.6 78.2
96.6 29 125.6
151.5 101.5 327.8
122 122
274 274
396 396
Total 74.8
151.5 497.5 723.8
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Coal Production Profile – Three Year
Production Build Up
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Coal Sales Strategy –
Potential Opportunities
Kangala
• ROM sales to neighbouring collieries – discussions being finalized
• Eskom tender documentation submitted for ten year supply contract – Completed technical
due Diligence with Eskom, Commercial negotiations to be undertaken
• Export (5400) or Domestic B - grade coal for sale into either the Export or Domestic market via
coal marketers.
Roodekop
• Premium RBCT specification coal suitable for direct coal export
• Possible blending with coal from existing RBCT allocation holders
• Possible JV with Exxaro New Clydesdale colliery – existing RBCT export allocation
• Direct sales via an acquired RBCT allocation or via Maputo (Matola).
Brakfontein
• RBCT specification coal suitable for direct coal export
• Possible blending with coal from existing RBCT allocation holders
• Direct sales via an acquired RBCT allocation or via Maputo (Matola)
• Suitable for domestic and export Pulverised Coal Injection ‘PCI’ market.
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Coal Development Programme
Kangala
Feasibility Study
Grant of Mining Right
Commence Development/
Roodekop
Lodge Mining Right
Phase 2 Drilling
Feasibility Study
Commence Development/ Mining
Brakfontein
Lodge Mining Right Application
Phase 2 Drilling
Feasibility Study
Commence Development /Mining
Coking Coal
Phase 1 drilling
Phase 2 Drilling
Lodge Mining Right
Infill drilling
Feasibility Study
H2 10 H1 11 H2 11 H1 12 H2 12
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Summary
• Quality thermal coal projects with an in situ resource base of 328Mt of
Export and Eskom grade coal – further expansion potential
• Kangala Bankable Feasibility H1 2011, targeting 3.0Mtpa ROM open pit coal
operation within 12 months
• Kangala self financing by H2 2011, with ROM production and sales expected
H1 2011
• Development of an additional 3Mtpa
ROM of primarily export quality coal
in next 3 years
• Current drilling underway to substantially increase size of coking coal
resources with in situ resource base of 396Mt from the Exploration Targets
in an area exceeding 30,000 hectares, surrounded by major companies
• Continued potential of acquisitions, new applications, and farm-in ventures
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Contacts
Dr Tony Harwood
Chairman
Universal Coal plc
t.harwood@universalcoal.co.za
Ph: +27 833 006 934
Mr Dan Robinson
Company Secretary
Pursuit Capital Pty Ltd
d.robinson@universalcoal.co.za
Ph: +61 8 6267 9032
Mr Tony Weber
Chief Executive Officer
Universal Coal plc
t.weber@universalcoal.co.za
Ph: +27 12 460 0805
Mr Nathan Taylor
Head of Equities
Stonebridge Group
Nathan.Taylor@stonebridgegroup.com.au
Ph: +61 2 8336 7326
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