BOWEN COKING COAL LIMITED - Capital/Financing Update 2021

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1 September 2021

ASX ANNOUNCEMENT

In Principal Agreement with Fitzroy for Access and Sharing of Infrastructure

TRANSACTION HIGHLIGHTS

Bowen Coking Coal Limited (“Bowen”) and Fitzroy (CQ) Pty Ltd (“Fitzroy”) have entered into an infrastructure sharing and cooperation Term Sheet which provides agreement in principle (subject to formal documents and approvals) allowing Bowen early infrastructure access to allow for the commencement of initial coal exports while mining approvals and infrastructure refurbishment are underway at Burton
Fitzroy to transfer 1Mtpa of permanent Dalrymple Bay Coal Terminal (“DBCT”) port access to Bowen
Fitzroy to provide Bowen with access up to 1Mt for calendar year 2022, to the Carborough Downs coal handling and preparation plant (“CHPP”) matched with existing port and rail capacity
Fitzroy to grant Bowen a first right of refusal to excess CHPP capacity at Carborough Downs, if available, for up to 1Mtpa from calendar year 2023 onwards
Bowen to provide Fitzroy with access to the excess capacity at the Mallawa haul road, accommodation camp, surface infrastructure and water supply at Burton Mine
Agreement in principle to extend Bowen’s Broadmeadow East open cut area to the south, into a designated portion of Fitzroy’s adjacent tenement in return for a royalty payment and allowing Fitzroy to mine under the Mallawa haul Road under similar terms
Potentially accelerates BCB’s transition from an explorer to a near term producer targeting initial production from the Burton complex (including Broadmeadow East) within 6 months (subject to approvals) and without significant capital expenditure
Transaction subject to Bowen completing the acquisition of New Hope’s 90% stake in the New Lenton Joint Venture (“NLJV”), NLJV approval as well as various other stakeholder consents.

Bowen Coking Coal Ltd (ASX: BCB) has taken another significant stride in its transition from an explorer to producer signing a term sheet with an agreement with Bowen Basin coking coal producer Fitzroy to share infrastructure and capacity.

Bowen Executive Chairman Nick Jorss said the agreement with Fitzroy was a great outcome. “While we set about recommissioning the CHPP, train load out facility, and haul road at the Burton Mine, the upside for

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Bowen is that we can connect our high‐quality coking coal from Broadmeadow East, Burton and Isaac River to strengthening global markets ahead of schedule without any large upfront expenditure.”

“Following on from our proposed Lenton JV acquisition, this deal accelerates our strategy to create the next independent coking coal producer in the Bowen Basin. We are working hard to supply global steel markets with our high‐quality coking coal as quickly as possible, noting steel prices are at record levels and coking coal prices are very attractive at present. This is a win‐win outcome as it unlocks considerable value for both parties in otherwise underutilised infrastructure. We welcome the opportunity to work closely together with Fitzroy in the future.” Mr Jorss said.

Close on the heels of announcing its pending acquisition of New Hope Coal’s 90% interest in the New Lenton Joint Venture, which owns the Burton Mine and New Lenton Project in the northern Bowen Basin, Bowen has agreed to provide Fitzroy with access to surplus capacity of the haul road, accommodation camp, surface infrastructure and water supply at Burton Mine for its future development projects. In return, Fitzroy will transfer 1Mt of its DBCT port access to Bowen on a permanent basis, provide Bowen with short term access to its port and rail capacity, as well as up to 1Mtpa access to its Carborough Downs CHPP.

Fitzroy has also agreed in principle to grant Bowen access to its Broadlea Mine surface infrastructure (abutting Broadmeadow East) including the office and laydown area, in reciprocation for access to Bowen’s Burton infrastructure including the workshop, office, communications and power infrastructure. This will significantly reduce the need for infrastructure related capital expenditure at Broadmeadow East.

Additionally, Fitzroy has agreed in principle to allow Bowen to extend the Broadmeadow East Project into a small part in the northern area of the contiguous exploration permit (EPC667)[1] , and allow for the mining lease ML70257 to be extended over that area in exchange for an agreed royalty payment. In addition, Fitzroy will be permitted to mine underground, below the Mallawa Haul Road from the adjacent Ironbark no 1 Mine, under a matching/similar royalty structure.

This proposed agreement will be subject to Bowen completing the Burton Mine and Lenton Project acquisition[2] from New Hope Corporation, approval from the New Lenton Joint Venture, various other stakeholder consents, as well as the execution of formal transaction documents. In the interest of timing for both parties, provision has been made for early access to some of the infrastructure prior to the completion of the Burton transaction, subject to approval by all relevant stakeholders.

The key transaction terms are summarised in Appendix A

1 Fitzroy’s EPC667 is subject to a pre‐existing royalty and production bonus arrangement with the former owners which would be transferred to Bowen upon acquisition.

2 See ASX Release 4 August 2021

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Figure1. Bowens’ Burton Complex (incl Broadmeadow East) and Fitzroy’s Carborough Downs Mine