Celsius Resources Limited — Investor Presentation 2013

Sep 9, 2013

PREMIUM COKING COAL FOR CHINA AND CENTRAL ASIA

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The information contained in this presentation (“Presentation”) has been prepared by Celsius Coal Ltd (“Company” or “Celsius” or “CLA”) and is being communicated for general background informational purposes only. The information contained in this Presentation is subject to updating, completion, revision, verification and further amendment. Neither the Company, nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed.

Information contained in this Presentation is the property of the Company. It is made available strictly for the purposes referred to above. Neither the communication of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction. This Presentation does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company, nor shall it, or the fact of its communication, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever with respect to such securities This Presentation is not to be communicated to any other person or used for any other purpose and any other person who receives communication of this Presentation should not rely or act upon it. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the attendee with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation that may become apparent either during, or at any time after this Presentation.

The Information in this Presentations which relates to Coal Resources, Exploration Targets and Exploration Results should be read in conjunction with the Competent Persons statements on page 42 including the relevant disclaimers. The use of the terms Coal Resources, Exploration Targets and Exploration Results is consistent with their definitions in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and references to these terms are made with these definitions in mind.

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Uzgen Basin Coking Coal Project

Kargasha Kokkia Min Teke Alai Range licenses Sary Mogol Bel Alma

– Licenses containing JORC Resources

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Goal

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 Become leading Central Asian coking coal supplier to growing Xinjiang Province (China) steel industry and take advantage of increasing demand for other coal types in the region (Kyrgyz, Tajikistan and Uzbekistan)

• Understand the coal resources in terms of market positioning

Objectives

• Invest in most prospective assets (eg, Uzgen Basin Coking Coal Project)

• Consider acquisitions & disposals in light of other objectives

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2013 Uzgen Basin Coking Coal Project specific

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• Identify highest value, lowest cost coal in the area – Kokkia is the focus for 2013 given potential for an open-pit resource and higher value product

• Bulk coke strength testing to progress off-take agreements

• Move forward with ‘quick’ production start up project (targeting open pit & auger mining)

 Extend overall resources

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Summary of coal Resources (Uzgen Basin Coking Coal)[1 ]

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Inferred Total
Kargasha 230 230
Kokkia 25 25
Min Teke – –
Total 255 255
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Total targeted tonnages (including exploration targets)[2 ]

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Resources Expl. target Total
Uzgen Basin Coking Coal 255 55 – 110 310 - 365
Alai Range – 20 – 51 20 – 51
Total – 75 – 161 330 – 411
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Notes: 1. Please refer to the Competent Persons Statement on slide 42 relating to these Coal Resources. 2. The information on this slide relating to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves.

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Chinese coking coal classification system

China’s benchmark (Shanxi Liulin – 2012 China pricing US$190-240/t)

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Fat (FM) Gas fat (QF)
85
1/3
Coking (JM) Gas
coking
65
60
Anthracite
50
Lean
1/2 caking
35
30
20
Meager Weakly caking Long flame
lean
5 Meager Non-caking
0 10 20 28 37 50
Volatile matter (% daf)
Caking Index (G)
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Australian benchmark premium hard coking coal (Goonyella – 2012 seaborne pricing US$165225/t)

Standard coking coal (Canadian coals – 2012 seaborne pricing US$145-200/t)

Semi-soft coking coal (Xinjiang Fukang – 2012 China pricing US$150-200/t)

Kokkia/Kargasha potential coking coal (non-JORC, statistical assessment only)

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Coal market review

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Xinjiang Province China, basic facts

• Population: 22m

• GDP/capita: US$4,600 (1/3-1/2 coastal levels)

Xinjiang development and infrastructure

• Xinjiang has been highlighted as a special case for policy-led growth initiatives

• Total of RMB 2.1tn (US$333bn) to be spent to 2020 for infrastructure

• Kashgar (south west Xinjiang) has been established as a new Special Economic Zone to promote Central Asia trade

• Development goals by 2015 require:

• 170,000km of new roads

• 8,200km of new rail

• 22 new airports

Steelmaking goals by 2015

• Produce 22mtpa steel by (i.e., more than double current levels)

• 10mtpa of special steel production

• Improve blast furnace efficiency – shut blast furnaces smaller than 400m[3 ]

• Only 2% of Xinjiang’s coal is coking

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• 20+ potential customers identified – five visited as priority targets

• High sales potential for Celsius coking coal

Key learnings

• Higher coke strength (CSR) coals will have greater price premium

• Kashgar area of special interest due to even greater transport advantage for Kyrgyz coal vs. any Chinese available coking coals

• Keep customers informed about new data (ie, new exploration results and mine planning etc.)

• Send samples to customers and independent testing facility

Next steps

• Customer site and logistics visits (commencing September 2013)

• China trial cargo

• Validate value in use of Celsius coal to each end customer based on product spec and individual blend requirement

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Crude steel production (Mt)
22.5
12.0
Aletai
Takeshiken
2012 2015e Alashankou
Karamay
Laoyemiao
Yining
Changji
Torugart URUMQI Hami
Irkeshtam
Kizilsu
Aksu
Turpan
Kashgar
Bayingol
Hotan
Steel Plant
Coking Plant
Project in progress
Celsius Coal deposit
Border
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Source: China 12[th] five year plan; Sxcoal; Bryanston research

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Tianyuan Coking Co., owned by Shougang I&S (60%)

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Tianyuan Coking Co., owned by Shougang I&S (60%) Baosteel Bayi I&S
Aletai
Takeshiken
Alashankou
Karamay
Laoyemiao
Shandong Steel in Kashgar
Yining
Changji
Torugart URUMQI Hami
Irkeshtam
Kizilsu
Aksu
Turpan
Kashgar
Bayingol
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Coking coal supply / demand gap[1 ]

Prime coking coal supply / demand gap

PCC Production (Mt) PCC Demand (Mt)

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PCC
1/3CC 19.0
18.4
Gas coal
Fat coal 16.6
Lean coal
11.5
7.8
3.9 3.8 4.0 4.1 4.2
2008 2009 2010 2011 2012
Supply vs Demand (Mt)
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7.0
6.8
6.1
4.2
2.9
0.2 0.2 0.2 0.2 0.2
2008 2009 2010 2011 2012
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1. Assuming coal blend mix: PCC 37%, 1/3CC 30%, gas coal 25%, fat coal 5% and lean coal 3%. Source: Sxcoal, Bryanston research

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Xinjiang premium coking coal price vs. seaborne quarterly hard coking coal benchmark price

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350
Quarterly Contracted HCC Price (USD/t)
Xinjiang PCC Price (USD/t)
300
250
200
150
100
50
Forecast 
0
Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16
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Source: Sxcoal, Bryanston research, Analyst Consensus HCC Pricing, Bloomberg

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Kazakhstan – thermal coal price US$65-90/t

Bishkek / Talas market – US$65105/t

Jalalabad / Osh market – thermal coal price US$110-140/t

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Tajikistan – thermal coal price US$130-160/t

All local indicators show an upward pressure on pricing

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• Growth opportunities driven by supply shortfalls in regional electricity and gas markets combined with continued growth in cement use

• Kyrgyz Republic – challenges in supplying certain regional thermal coal markets

  • growing cement industry

• immediate potential to displace Kazakh imports

• Uzbekistan – changing gas market mean significant potential for coal to grow in domestic electricity supply

• Tajikistan – major planned expansion in cement manufacturing

• Celsius needs early production capacity and also a mixture of products to take advantage of these market opportunities

• Cement industry is paying a premium for high calorific value coal and is expected to grow its appetite for high volatile matter coal

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• Major problems in the local electricity market

• Hydro electricity mainly for export – located away from Kyrgyz demand

• Increasing local demand for electricity

• Fuel oil plants expensive to run

• Larger and more modern cement plants proposed to grow industrial usage

• Government strategy to become self-sufficient for coal – including resolution to eliminate coal imports from Kazakhstan (c. one million tonnes per year)

• Relatively moderate ranked coals (ie, 5,500-5,800Kcal/kg) sell domestically at US$65-140/t making Kyrgyz Republic a high value market (higher than seaborne)

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Logistics

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Existin K r z road ex ort routes to China g y gy p

Export route for Uzgen Basin coking coal

• Uzgen Basin coking coal to Osh (130km)

• Osh to Irkeshtam border crossing (255km)

• Cost to border approximately US$10/t

• Border to Kashgar, nearest major market (231km) – approximately US$5-6/t plus US$4-5/t border crossing costs

• Alternative via Naryn / Torugart (465km to border)

Irkeshtam border crossing

Export route for Alai Range coal

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• Sary Mogol or Bel Alma to Irkeshtam border crossing (110-160km)

• Irkeshtam to Kashgar (231km)

• Costs: US$4-7/t to border plus US$4-5/t border crossing costs plus US$10/t to Kashgar

• Sary Mogol coal sales to Osh at present

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• Distance from Uzgen Basin Coking Coal Project to Torugart border crossing reduced to 300km

• Estimated transport cost to border US$8/t

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 Additional route options proposed

• Kashgar – Irkeshtam – Osh – Andjian

• Kashgar – Torugart – Balykchi – Kara Keche – Jalal-Abad

• Both equally beneficial for Uzgen Basin Coking Coal Project

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Bishkek
Kargasha
Uzbekistan Osh Kargasha
Torugart
China
Uzbekistan
Osh
Torugart
Irkeshtam
Tajikistan China
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 Status of current negotiations

• Feasibility study for both route options completed by China Road & Bridge Corp.

 Funding under negotiation – firm commitment but timing & final package to be finalised

• North-South link option being preferred by Kyrgyz and Tajikistan governments:

  • Russia expressed interest to fund that option

• EBRD expressed an interest in participating in funding either option

• Chinese targeting commencement of construction 2015

• Celsius’ operations have been factored into Kyrgyz Government five year development plan for 2013 – 2017 – this is an important recognition of Celsius activities as being strategically important & to secure Kyrgyz Government support for railway access

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2013 – 2014 program

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• Independent concept mining study done based on the 2012 geological/resource model

• Vulcan resource model used

• Goal of study was to:

• Identify key areas prospective for mining

• Determine split between tonnages for surface mining vs. underground

• Consider mining methods & costs (including capital) to understand which to prioritize

• Consider coal washing options

• Define optimum production rates and potential mine life

• Start to feed in customer product requirements into planning

• Assess potential transport options

• Overall aims were:

• Work out likely first mining areas

• Use the information to create a focused 2013/2014 work program to accelerate the project for early production

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• Three mining methods: auger mining; open-pit; & underground

• Potential for 30-year overall mine life

• Various production rate options considered

• Plan is not optimized & includes prospective mining areas outside of the original maiden

• JORC Resource area

  • Auger mining potential has been confirmed for a low capital expenditure / low cost immediate start up operation

  • Kokkia has potential for large open-pit operations & has been the focus of 2013 drilling. It is expected to attract additional technical work & planning in 2014.

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Kargasha Project Area

Kokkia Project Area

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Mining layouts including open pit, underground & auger

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• Previous work focused on Kargasha, 2013 program will focus on:

• Potential of Kokkia – work includes drilling & mapping

 Likely best near-term value proposition

• Accelerated surface mining start up potential

 Tuyuk area of Kargasha license which has potential to add higher quality coal

 In addition, focus of current work program will be:

 Continue to optimize Kargasha:

• Add large diameter drill holes to collect samples for coke strength testing

 Know our product price points more accurately

 Data to lead into securing off-take agreements

• Collection of data for mining study:

• Geotechnical

• Environmental

 Increase overall inferred resources

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• Better define geological understanding & likelihood of commercial, high-margin production

• Extend resources where possible

• Non-JORC resource assessment

• Conceptual mine plans for shorter and longer term

• Understand market positioning

• Assets that do not pass certain economic hurdles may be disposed of

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• Our ‘first mover’ knowledge of local coal geology and coal market potential puts us at a great advantage to assess new projects

• Some potential to secure additional near-term (albeit smaller scale) production projects in Kyrgyz Republic

• Additional high-value coal types available such as anthracites that may be very profitable but also may have blending synergies with our existing assets

 Consider potential for other coking coal targets

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Quick start augur mine

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• Concept study highlighted the potential for auger mining (as used at Yarabee mine in Queensland)

• Celsius identified a concept for a 500-600ktpa ‘starter mine’ potential for 7-8 years initial mine life from small selection of Kokkia/Kargasha

• Conceptual benefits are:

• Quick to production – 10 months lead time on major equipment

• Low capital spend – US$20-25 million (US$10-12 million for augers and remainder for surface infrastructure and ancillary equipment)

• Low cash costs – <US$10 per tonne at the mine gate

• Focus within Celsius now to move to feasibility of a ‘quick start’ auger operation (or alternative high-wall miner) in this 2013/14 work season

• Auger mining would generate near-term cash flow and de-risk the larger project for openpit and underground mining

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Government and community

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• Celsius’ operations have now been factored into the five-year Kyrgyz Government

• development plan for 2013-2017

  • Means agencies are to prioritize support of Celsius’ activities

• Strong relationships with key agencies and ministries

• Plan to exceed all statutory obligations

• Working ‘hand-in-hand’ with Kyrgyz Government on activities to support & promote the industry in the country

  • Promotion of Kyrgyz as a destination for mining investment

  • Support for development of good legislation and regulation

  • Leading skills development in country

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 Recognize the community as having a significant bearing on development

 Early engagement strategy

• Investment already underway

• Provision of winter coal to communities

• Bridge and road building

• Contributions to local healthcare and schooling

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Recently constructed bridge over the Kargasha River

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Milestones and strategies

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• 2013 drilling completed by October – analytical data December

 Bulk sample testing completed December 2013 – off-take agreements soon after

 Revised resource estimation March 2014

• Environmental baseline studies

2013-2014

• Auger/high wall mining feasibility – go/no go decision around March 2014

 Kokkia open pit pre-feasibility

• Positioning thermal resources

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2014-15

 Acquisition additional production capacity & new exploration

• Auger/high wall mining trial production

• Development/disposal thermal resources

 Detailed drilling indicated/measured resource Kokkia/Kargasha

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• Finalize feasibility for 3-5mtpa integrated coal mine

• Ramp up ‘starter’ auger/high wall mining operation

2015-17

 Progress integrated mine start-up with initial focus on open pit mining

• Tran-Asia Railway construction due to commence (2015)

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Celsius Coal Limited

Registered Office: Level 1, 12 Kings Park Road, WEST PERTH, WA, AUSTRALIA, 6005

Telephone: +61 8 9226 4500 Facsimile: +61 8 9226 4300 Website: www.celsiuscoal.com.au

Email: info@celsiuscoal.com.au

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The information in this announcement that relates to Coal Resources is based on information compiled by Dr Gavin Springbett, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Springbett is acting as a consultant to Celsius Coal Limited and is an employee of G&S Resources. Dr Springbett has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Springbett consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Exploration Results is based on information compiled by Dr David Hornsby, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Hornsby is acting as a consultant to Celsius Coal Limited and is an employee of Gallagher Consulting Services Pty Ltd and is a member of The Minserve Group Pty Ltd. Dr Hornsby has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”). Dr Hornsby consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information in this Presentation that relates to Exploration Targets is based on information compiled by Alistair Muir, Technical & Operations Director of Celsius Coal Limited, and a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Muir has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Muir consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.

[Exploration Targets ]

It is common practice for a company to comment on and discuss its exploration in terms of target size and type. The information in this announcement relating to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. Hence the terms Resource(s) and Reserve(s) have not been used in this context in this announcement. The potential quantity of coal presented in this announcement as Exploration Targets are conceptual in nature. It should be noted that there has been insufficient exploration to define a Mineral Resource which complies with the JORC code, and it is uncertain if further exploration will result in the determination of a Mineral Resource. Celsius Coal Limited intends to carry out an exploration programme to systematically test the Exploration Targets for each of the Prospects.

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