BOWEN COKING COAL LIMITED — Interim / Quarterly Report 2021

Apr 25, 2021

Quarterly Report

bowencokingcoal.com.au

Highlights

• Former Stanmore chief Nick Jorss appointed Executive Chairman to lead the Company’s transition to production

• Permitting process for Broadmeadow East is progressing according to plan

• New coking coal targets identified at Broadmeadow East

• Permitting on track for Isaac River Project

• Phase 2a Exploration Program commences at Hillalong with extensive seismic program ahead of pending drilling program.

• Sumitomo to invest a further $2.5m for an additional 5% holding in the Hillalong JV

• Encouraging outcomes from provisional coal quality and washability data with final product and yield analysis underway at Broadmeadow East

• Underground studies commenced to extend the life of mine at Broadmeadow East

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01 Bowen Coking Coal Limited Quarterly Report 31 March 2021

Projects

Broadmeadow East Coking Coal Project (ML 70257)

Located around 25km north-east of the coal mining town of Moranbah, Broadmeadow East is the Company’s most advanced project, which includes a granted Mining Lease and access to infrastructure.

Bowen Coking Coal’s (BCB) recent drilling campaign, conducted in parallel with final approvals, will fast-track the project’s path to production.

During the quarter, the Company completed its coal quality drilling program at the project resulting in the identification of two additional targets with the potential to extend the project’s opencut mine life. Drilling confirmed that the Leichhardt seam extends into the area south of the existing Measured Resource of the project, which sits within a granted Mining Lease and has a current JORC Resource estimate of 33 million tonnes (Mt)[1] . Two drill holes in this previously unexplored area encountered the Leichhardt seam at depths of 52m and 62m respectively and, importantly, identified a seam thickness of close to 4m.

A second target emanated from scout drilling which intersected the previously unexplored Vermont Lower (VL) and Girrah seams, The VL seam was intersected in two holes from as shallow as 36.1m. The cored section of the seam in hole CBQ0012 was 2.4m thick, which included a 0.5m thick tuff parting. The full Girrah seam was also cored and will undergo the same tests as the VL seam. Although these seams are traditionally higher in ash and therefore less attractive in the coking coal markets, the Company intends to test its potential for other applications such as blending.

Coal quality analysis is currently being completed on a plyby-ply basis however initial indications from the raw coal and preliminary washability analysis support our view that the lower section of the Leichhardt seam contains better coking properties and a higher yield. Final yield and potential product quality results are well advanced and is expected to be completed in coming weeks.

The results of the exploration program were incorporated into the geological model to support further mine planning, which will now include an extension to the proposed mine layout previously bound by the Measured Resource area*1 north of the power line. Potential studies have also commenced to understand the concept for a shallow, lowcost underground operation as a second phase of the project. Initial outcomes are very encouraging and warrant further investment into the Inferred area of the resource.

The Company is prioritising the major Environmental Authority (EA) amendment as it is on the critical timeline to get the Project “shovel ready”. No significant concerns have been identified in the work carried out to date. Further groundwater modelling work and the drilling of two additional water monitoring holes commenced shortly after the quarter’s end. Granting of the approval is expected in the second half of the year.

Discussions in relation to options for access to external infrastructure are progressing well and are planned to be in place for a proposed start of operations in the first half of next year.

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1 See Figure 1 overleaf and ASX release dated 24 June 2020 – Acquisition of Broadmeadow East Project & Capital Raising

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Figure 1. Locations of core holes of the 2020/21 exploration program at the Broadmeadow East Project

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Hillalong Coking Coal Project (EPC 1824 | EPC 2141)

Hillalong is located in the northern Bowen Basin approximately 105km west-southwest of Mackay. The tenement comprises 15 sub-blocks and is approximately 16km north-west of Glencore’s Hail Creek Mine.

BCB completed the first phase of the seismic program at Hillalong South and is now moving towards drilling the southern holes after reviewing the initial interpretation from the seismic program.

The program follows an agreement by farm-in partner, Sumitomo Corporation, to commit a further $2.5m to earn an additional 5% of the project, having already earned 10% of the project last year after spending $2.5m on Phase 1. Post the completion of Phase 2a, Sumitomo has the option to obtain an additional 5% (for a total interest of 20%) in the project by spending another $2.5m on Phase 2b exploration[2] .

The Phase 2a exploration program at Hillalong, which lies in close proximity to the large Hail Creek Coking Coal mine in the northern Bowen Basin, involves three drill holes in the northern area to extend the resource in the Rangal Coal Measures, and eight drill holes in the southern area to explore new resources and to test the existence of the Moranbah Coal Measures along the eastern margin of the project. A 37km seismic survey also forms part of the program.

The initial interpretation of the recently acquired seismic program in conjunction with historic exploration data provided valuable information for the next phase of exploration at Hillalong South. The planned location of the southern drill holes is being confirmed and drilling is expected to commence in the coming weeks. The seismic program in the north is expected to commence later in the year.

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Figure 2. Seismic equipment mobilising to site at the Hillalong Project.

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2 See ASX Release 11 December 2020, 4 May 2020 and 18 November 2019

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Figure 3. Summary of the Phase 2a exploration plan at Hillalong Project.

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Isaac River Coking Coal Project (MDL 444 | EPC 830 |MLA 7000062)

Isaac River covers an area of 14 km[2] in the Bowen Basin in Central Queensland, approximately 30 km west of Moranbah. The project is in close proximity to BMA’s (BHP Mitsubishi Alliance) Daunia Mine, and Peabody’s Moorvale West resource.

The project is advancing through the EA process with ongoing interaction between the Company and government.

Significant information to strengthen the application was shared by regional operators and is now being incorporated in the Company’s data. Approval is expected in the second half of the year. Discussions on access to third party infrastructure are ongoing in advance of a planned start to mining in the first half of 2022.

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Figure 4. Isaac River Project Mine layout.

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06 Bowen Coking Coal Limited Quarterly Report 31 March 2021

Corporate

Nick Jorss appointed Executive Chairman

Mr Jorss, previously a Non-Executive Director of BCB, accepted the position of Executive Chairman during the Quarter and will now lead the Company’s transition from a coal explorer to a mid-tier producer. Mr Jorss previously founded Stanmore Coal Limited and successfully led this Company from explorer to become a significant Bowen Basin coking coal producer. Following the change of role for Mr Jorss, the Company’s previous Chairman, Mr Neville Sneddon, will remain as a Non-Executive Director. In addition, Mr Blair Sergeant will move from his current executive role, to also remain on the Board as a NonExecutive Director, effective 1 May 2021. All other roles remain unchanged.

CFO Appointment

During the reporting period, the Company also announced the appointment of Mr Daryl Edwards as Chief Financial Officer. Mr Edwards is a Chartered Accountant with over 22 years’ experience in the mining and manufacturing industries. He has held various executive positions including CEO of a private Australian coal explorer Pioneer Coal and CFO and Head of Corporate Development for Universal Coal Plc (ASX:UNV) for over seven years, where he managed the commercialisation of the 4Mpta Kangala Colliery and the 3.3Mtpa New Clydesdale Colliery.

Other

BCB maintains its strong focus on business development and has continued to study opportunities which can either

supplement the Company’s existing portfolio of assets or deliver production earlier than the existing projects.

Discussions with regional producers are ongoing to maximise the use of regional infrastructure to reduce capital expenditure and lead time to first coal from the Broadmeadow East and Isaac River projects.

Cash Position

As at 31 March 2021, the Company held $4.4m cash at bank.

ASX Listing Rule Disclosure

Bowen Coking Coal confirms receipt of a cash call of $1.4m, which includes $0.5m relating to historical expenditure which has been recovered from Sumitomo (who are farming in to the project) following approval of Phase 2A of the Sumitomo Farm-In.

Cash receipts of $0.3m were received by the Company through the exercise of 9.2m options.

$0.7m was spent on the Broadmeadow East project relating to exploration, technical and environmental studies.

$225,582 was spent during the quarter to Related Parties, as reported in clause 6.1 of the ASX Appendix 5B (Cash Flow Report). This comprises directors’ fees, directors’ consulting fees (inclusive of GST) & associated superannuation totalling $178,344. A further $47,237 was paid for marketing services to a Company associated with a director.

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Metallurgical Coal Markets

Metallurgical coal market pricing continued to be impacted strongly by policy decisions during the quarter, in particular the ban of Australian coal exports to China. Domestic metallurgical coal prices in China have been in a tussle between forces trying to reduce pricing – such as maximising coal production, and demand reduction in the form of steel capacity restrictions in Tangshan and factors that have supported pricing in particular, persistent high levels of steel production in other provinces, COVID related impacts to Mongolian imports, and mine safety incidents.

Reserves in China do not support the production of low volatile hard coking coal, and it has been the significant volume of this particular type of coal that was being traded from Australia to China that has been slow to find alternative destinations in the seaborne market. Conversely, thermal, PCI and other grades of metallurgical coal have mostly been able to benefit from increased energy demand and trade flows have rebalanced, leading to

historically high relativities for these products to prime low volatile hard coking coal.

Trade flows in metallurgical coal continue to adjust, with further increases in Australian exports, primarily to India, whilst North American coals have increased their exports to China year on year to take advantage of the significant price arbitrage available in that market.

Global steel production continued to improve through the first quarter of 2021 as widespread stimulus measures supported industrial production. Demand from the majority of regions has returned to pre-COVID levels, and whilst steel margins are positive, demand is forecast to continue to be well supported. Independent forecasts continue to show growth in the seaborne market, in the near term through to 2025, with Australian exports expected to capture most of that growth.

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Key Upcoming Activities

Broadmeadow East (ML 70257)

Hillalong (EPC 1824 | EPC 2141)

Final yield, product options and specifications are being analysed by Bureau Veritas’ laboratory in Mackay. Results of this analysis will then be used to update the mine plans and to confirm key markets for the coal.

Water monitoring, testing and modelling are underway to support the EA amendment and approval process. Discussions on options for regional infrastructure access are expected to advance significantly during the next quarter as the Project advances through the EA process.

Drilling on the southern area of the Hillalong tenement will commence early in Quarter 2 after recently obtaining all approvals, clearances and the land access agreement. Following the initial interpretation of the recent seismic acquisition, the focus will now move to the infill drilling of Hillalong South and then to scout drilling in an area which has not been explored by recent owners to test the potential for high quality Moranbah coking coal measures.

Isaac River (MDL 444 | EPC 830 |MLA 7000062)

Underground mining studies are ongoing and initial discussions with mining contractors for the open cut area are expected to commence soon.

The key focus at Isaac River is on permitting and access to infrastructure with the key studies now being completed. Completion of permitting and a final decision to mine is targeted for the second half of this calendar year. Negotiations are underway regarding third party infrastructure access.

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09 Bowen Coking Coal Limited Quarterly Report 31 March 2021

Tenement Interests

As at 31 March 2021, the Company had interests in the following tenements (as required by Listing Rule 5.3.3).

1	Project Cooroorah	Tenement MDL 453	Location Queensland	Country Australia	Current Interest 100%	Change in holding -
2	Broadmeadow East	ML 70257	Queensland	Australia	100%**	100%
3	Hillalong	EPC 1824	Queensland	Australia	100%*	-
4	Hillalong	EPC 2141	Queensland	Australia	100%*	-
5	Carborough	EPC 1860	Queensland	Australia	100%	-
6	Lillyvale	EPC 1687	Queensland	Australia	15%	-
7	Lilyvale	EPC 2157	Queensland	Australia	15%	-
8	Mackenzie	EPC 2081	Queensland	Australia	5%	-
9	Comet Ridge	EPC 1230	Queensland	Australia	100%	-
10	Isaac River	MDL 444	Queensland	Australia	100%	-
11	Isaac River	MDL 830	Queensland	Australia	100%	-
Australia 12 MLA 7000062 Queensland Isaac River					100%	-

*10% transfer to Sumitomo has been processed in Q2 2021

**Legal completion of the transaction occurred in Q3 2020 and final transfer of the title occurred on 27 January 2021

The Board of the Company has authorised the release of this announcement to the market.

For further information contact:

Gerhard Redelinghuys CEO/Managing Director +61 (07) 3360 0837

Blair Sergeant Executive Director – Corporate Development +61 413 677 110 blair@bowencokingcoal.com

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About Bowen Coking Coal

Bowen Coking Coal is a Queensland based coking coal exploration company with advanced exploration assets. The Company fully owns the Isaac River, Broadmeadow East, Cooroorah, Hillalong and Comet Ridge coking coal projects in the world-renowned Bowen Basin in Queensland, Australia. The Company is also a joint venture partner in the Lilyvale (15% interest) and Mackenzie (5% interest) coking coal projects with Stanmore Coal Limited.

The highly experienced Board and management aim to grow the value of the Company’s coking coal projects to benefit shareholders. An aggressive exploration, development and growth focussed approach underpin the business strategy.

Directors:

Executive Chairman – Nick Jorss Managing Director & CEO – Gerhard Redelinghuys Executive Director: Corporate Development – Blair Sergeant Non-Executive Director – Neville Sneddon Non-Executive Director – Matt Lattimore

Company Secretary Duncan Cornish

ACN 064 874 620

ASX CODE BCB

Office location:

Australia (principal administrative office): Level 7, 167 Eagle Street Brisbane Qld 4000 Phone +61 7 3191 8413 info@bowencokingcoal.com.au

Website: www.bowencokingcoal.com.au

Listing Rule 5.23 Statement

All exploration results and Mineral Resources referred to in this quarterly report have previously been announced to the market by the Company in accordance with the requirements of Chapter 5 of the ASX Listing Rules and the JORC Code 2012, including as to the requirements for a statement from a Competent Person; and the relevant announcements have been referred to in the body of the quarterly report. The Company confirms that it is not aware of any new information or data that materially affects that information. In respect of the Mineral Resources, all material assumptions and technical parameters continue to apply and have not materially changed.

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Project Locations

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