COCKATOO COAL LIMITED - ASX: COK

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Description

Cockatoo Coal Limited is a rapidly growing Australian metallurgical and thermal coal producer. ASX-listed in 2005, the Company is aggressively expanding production with the aim of becoming a major independent coal company, suited to servicing the ongoing growth in global demand for coal, particularly from Asia.

Among Cockatoo’s key assets as at 31 December, 2010, were:

* Baralaba PCI open cut coal mine in the world-class Bowen Basin metallurgical coal region, Queensland Woori coal project
* 84.3Mt Thermal coal project in the Surat Basin, Queensland,
* 1.13 Bn tonnes JORC global equity resource portfolio
* $24.7m cash at bank, and
* Several of the world’s largest metallurgical and thermal coal buying concerns as strategic investors.

Having grown from an explorer to coal producer within 3 years of listing – and posted its inaugural net annual profit in FY2010 of $3.5m – the company plans to lift production at its Bowen Basin operations to:

* ~750,000tpa from 2011/12, and then expanding to
* 3.5Mtpa @ 90% PCI coal from 2013/14.

Baralaba Coal Mine

The Baralaba mine is located near the town of Baralaba in south eastern limb of the Bowen Basin, Queensland. The coal mined is from the Rangal coal measures, and the operation sits within a larger 550km2 area of Cockatoo Coal exploration projects.

Reflecting the significant growth in export coal demand forecast globally to occur during the next 10+ years, planning is being undertaken with a view to staged expansion of output from Baralaba mine and the Company’s nearby exploration grounds. The grant of the Mining Lease 80157, received on 22 July 2010, enables the Company’s mining at the Baralaba Mine to continue north from the current operations. Mining in ML 80157 is expected to continue for approximately 24 months. The company currently anticipates increasing production from Baralaba to

* 750,000tpa by FY2011/12, and to
* 3.5Mtpa from 2014/15.

Bowen Basin Projects

Cockatoo Coal’s Bowen Basin projects extend from the Wonbindi project in the south to the Dingo project in the north, across approximately 92 kilometres of strike length, in an area located approximately 180km west of Gladstone, in central Queensland. Permian age Rangal Coal Measures sub-crop throughout the project package, offering 550km2 of contiguous target areas.

The Company is currently using 2 core drilling rigs, and will increase to 3 rigs with improving ground conditions, advancing the company’s understanding of the geology, coal quality and further development potential of the Baralaba mine and Baralaba North projects. As at 31 December 2010, drilling has successfully in-filled the known area of coal resource within ML 80157 and MDL 184 areas of the Baralaba mine project.

Surat Basin Projects

Cockatoo Coal currently holds 100% interests in approximately 4000km2 of coal projects in the Surat Basin region of South Eastern Queensland, inclusive of the Kingaroy project. The Company has also acquired 100% of Anglo Coal (Taroom) Pty Ltd which owns 51% of the Taroom, Collingwood and Ownaview assets. Only a small area of this tenement package has been explored to date, and considerable further resource potential exists that will be progressively targeted for delineation in future years.

Recent drilling results at the Tin Hut Creek project are anticipated to provide substantial additional tonnes to the resource estimate. The deposit is approximately 1.0 kilometre wide from east to west and to a depth of approximately 120 metres. The continued expansion of the Company’s coal resource base and recent acquisition of a 51% interest with the Collingwood and Taroom projects provide excellent scope for future development of multiple satellite operations with mining planned to commence coinciding with the new rail and port infrastructure slated for 2013/14. In total, 1192.3 Mt of JORC thermal coal resources has currently been delineated across the Company’s Surat Basin and Kingaroy projects, comprised from Juandah and Taroom Coal Measures of the Walloon Sub-Group, both of which sub-crop in the area.

NSW Projects

On 24 December 2010, Cockatoo Coal completed the acquisition of development and exploration assets located in NSW and Queensland from Anglo American plc ('Anglo'). The NSW projects are:

* Bylong, Western Coalfield, NSW - estimated in-situ 423Mt (150Mt Indicated and 273Mt Inferred) PCI/thermal coal resources.
* KEPCO has acquired 100% of Anglo Coal (Bylong) Pty Ltd from Anglo and granted a 3 year call option for a 30% interest to Cockatoo.
* SuttonForest, Sydney Basin - 115Mt Indicated export grade metallurgical/thermal coal resource.
* POSCO has acquired 100% of Anglo Coal (Sutton Forrest) Pty Ltd from Anglo and Cockatoo has purchased a 30% interest from POSCO.

Cockatoo has been appointed as the manager of both projects and is currently establishing full project teams to undertake exploration, evaluation and development activities. Due to the timing of completion of the acquisition of these projects, limited activities were undertaken during the quarter.

Mine For

coal

Location of operation(s)

Queensland, New South Wales

Australian Basins

Bowen, Surat

Address

Level 2, 66 Hunter Street
SYDNEY, NSW, AUSTRALIA

Phone

(02) 9300 3333

Email

Website

http://www.cockatoocoal.com.au

Last Updated

15/04/2011