BOWEN COKING COAL LIMITED — Capital/Financing Update 2017

Oct 9, 2017

==> picture [140 x 110] intentionally omitted <==

CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

NoteAssetsCurrent assetsCash and cash equivalents2Trade and other receivablesOther assetsTotal current assetsNon-current assetsExploration assets3Total non-current assetsTotal assetsLiabilitiesCurrent liabilitiesTrade and other payablesTotal current liabilitiesTotal liabilitiesNet assets/(liabilities)EquityIssued capital4ReserveAccumulated lossesTotal Equity	BowenCoking CoalLimitedUnaudited30-Jun-17$325,15331,731234,882591,766 --39,23361,92861,92861,928529,83842,064,761800(41,535,723)529,838	CokingCoal OnePty LtdUnaudited30-Jun-17$3,538-- 3,538 - -3,53844,77444,77444,774**(41,237) 1,000-(42,237)(41,237) **	Pro formaadjustmentsUnaudited30-Jun-17$3,858,645-(234,882)3,623,7633,816,8743,816,8743,816,874---7,440,6377,398,400-42,2377,440,637	Pro formaUnaudited30-Jun-17$4,187,33631,731-
				4,219,067
				3,816,874
				3,816,874
				8,035,941
				106,702
				106,702
				106,702
				7,929,238
				49,464,161800(41,535,723)
				7,929,238

1. Adjustments adopted in compiling the Pro Forma Historical Financial Information

The Pro Forma Historical Financial Information has been prepared by adjusting the Historical Financial Information to reflect the financial effects of the following pro forma transactions which are proposed to occur immediately before or following completion of the Offer:

• (i) The issue of 200,434,782 ordinary shares at $0.023 each to raise $4,610,000 before costs pursuant to the Offer; (ii) The payment of cash costs related to the Offer estimated to be $401,355 ($470,600 less costs of $69,245 reflected in accounts at 30 June 2017);

• (iii) The issue of 70,000,000 ordinary shares at a deemed price of $0.023 each and 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares to Cape Coal in consideration for the acquisition of all the shares in Coking Coal One Pty Ltd (‘Acquisition Offer’);

• (iv) The issue of 54,347,826 ordinary shares at a deemed price of $0.023 each to Australia Pacific Coal pursuant to the AQC Option Agreement (AQC Offer);

• (v) The payment of $350,000 and issue of 17,391,304 ordinary shares at a deemed price of $0.023 each to Acacia Coal pursuant to the AJC Option Agreement (AJC Offer);

==> picture [140 x 110] intentionally omitted <==

2. Cash and cash equivalents

2. Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents as at 30 June 2017Adjustments arising in the preparation of the pro forma statement offinancial position are summarised as follows:Cash held by Coking Coal One Pty Ltd held at 30 June 2017Proceeds from the Offer pursuant to the ProspectusCash costs associated with the Offer pursuant to this ProspectusCash payment on exercise of AJC OptionPro-forma cash and cash equivalents3. Exploration assetsExploration assetsCash and cash equivalents as at 30 June 2017Adjustments arising in the preparation of the pro forma statement offinancial position are summarised as follows:Transfer of Pre-acquisition and due diligence costs from prepaymentsAcquisition of Coking Coal One Pty Ltd assetsPro-forma exploration assets	Unaudited30-Jun-17$325,153	UnauditedPro-forma30-Jun-17$4,187,336
	-	325,1533,5384,610,000(401,355)(350,000)
		3,862,183
		4,187,336
		3,816,874
		-165,6383,651,236
		3,816,874
		3,816,874

Pursuant to the Prospectus, the Company will acquire 100% of the voting shares of Coking Coal One Pty Ltd, an Australian unlisted company, which is a joint venture participant in, or has the right to acquire, interests in several coal exploration projects, made up of 5 Exploration Permits for Coal (EPCs), 1 Mining Development Licence (MDL) and one Mining Licence Application (MLA).

The pro forma carrying values of the identifiable assets and liabilities of Coking Coal One Pty Ltd as at 30 June 2017 were:

==> picture [140 x 110] intentionally omitted <==

	Pro forma net assets
	on acquisition
	30-Jun-17
	$
Assets
Cash	3,538
Exploration assets	3,651,236
Liabilities
Trade and other payables	(44,774)
Total pro forma net assets	3,610,000
Total consideration of Acquisition	3,610,000

The Company will pay $350,000 cash and issue 141,739,130 ordinary shares as consideration for the Acquisition Offer, AQC Offer and AJC Offer. The fair value of the shares is calculated in accordance with AASB 2 with reference to the offer price of the shares of the Company under the Prospectus, which is $0.023 per share. The fair value of the ordinary share consideration given was therefore $3,260,000.

Performance Shares

In addition to the ordinary shares issued to acquire a 100% interest in Coking Coal One Pty Ltd, the Company will issue 13,000,000 Class A Performance Shares and 13,000,000 Class B Performance Shares to Cape Coal.

Each Class A Performance Share will convert into a Share on a one for one basis upon:

• i. the Total JORC-Compliant Resource Base being increased, following Completion, by delineation of a further 30,000,000 tonnes mineral resources of at least inferred category, or at least 30,000,000 tonnes of the Company’s existing mineral resources being upgraded to at least the next higher category, in accordance with the JORC Code, in each case on the Initial BCC Projects only, and

• ii. ii. the Company’s share price achieving a 30-day Volume Weighted Average Price (‘VWAP’) of at least $0.05, within 24 months of Completion.

Each Class B Performance Share will convert into a Share on a one for one basis upon:

• i. the Total JORC-Compliant Resource Base being increased, following Completion, by delineation of a further 50,000,000 tonnes mineral resource of at least inferred category, or at least 50,000,000 tonnes of the Company’s existing mineral resources being upgraded to the next higher category, in accordance with the JORC Code, in each case on the Initial BCC Projects only, within 24 months of Completion.

Currently there are no reasonable grounds in which to assess the likelihood of the Class A and Class B Performance Shares non-market milestones being met, resulting in the conversion of the Class A and Class B Performance Shares. Therefore, no adjustments have been made to the pro forma historical Statement of Financial Position based on the issue of the Class A and Class B Consideration Performance Shares. In accordance with AASB 2 Share based payments, the Company will be required to re-assess the probability of the non-market performance milestones being achieved at each reporting date up until expiry of the Class A and Class B Performance Shares.

For full terms of the Performance Shares refer to section 15.2 of the Prospectus.

==> picture [140 x 110] intentionally omitted <==

4. Issued capital

. Issued capital
Issued share capital as at 30 June 2017Adjustments arising in the preparation of the pro forma statement offinancial position are summarised as follows:Fully paid ordinary shares issued at $0.023 pursuant to the ProspectusShares issued to acquire a 100% interest in Coking Coal One Pty LtdShares issued pursuant to the AQC Option AgreementShares issued pursuant to the AJC Option AgreementCash costs associated with the Offer pursuant to the ProspectusPro-forma issued share capital	Number ofshares$127,312,89842,064,761
	200,434,7824,610,00070,000,0001,610,00054,347,8261,250,00017,391,304400,000-(470,600)
	342,173,9127,399,400
	469,486,81049,464,161