Celsius Resources Limited — Investor Presentation 2013

Jul 22, 2013

Celsius Coal Ltd Date of Lodgement: 23/7/13

Title: “Company Insight – Exploration, Project Timeline & Quality”

Highlights of Interview

• Outlines objectives of 2013 exploration program including timetable & costs.

• Quality of coal excellent & explains mining method with very low start-up capital.

• Scope of project - intial 500-600ktpa to generate $15-25 million pa EBITDA, then increase to 5-7mtpa - & most infrastructure already in place.

• Explains process of locking in customers. Expecting margins of $30-40 per tonne on initial operation & up towards $70 per tonne on larger operation.

• Successfully operating in Kyrgyz Republic which is supportive of mining.

• Celsius is included in strategic plans of the country for economic development.

• Will know more with the results of the 2013 exploration season, but should be mining by 2015. Has advantage of modular development & low capital.

• Believes Celsius is significantly undervalued.

Introduction

Celsius Coal Ltd is focused on developing coking and thermal coal deposits in the Kyrgyz Republic.

Celsius owns 80% of its Uzgen Basin Coking Coal Project (comprising: Kargasha; Kokkia; and Min Teke), which cover an established Soviet-era coking coal resource. It also owns 90% of its Alai Range Projects (comprising: Sary Mogol and Bel Alma).

Record of interview:

companyinsight.net.au

Celsius Coal Limited (ASX code: CLA; market cap of ~$34m) released a Company Insight on 11 April 2013 which gave an overview of your Uzgen Basin Coking Coal in the Kyrgyz Republic just over the border from Xinjiang Province, China and included discussion on your maiden Inferred Resource. Getting into some specifics, now you have just announced your 2013 exploration program what are the details, timetable, costs and main objectives?

Executive Chairman, Alex Molyneux

We started our northern summer physical program in June, with site preparation works, including improving road access to areas not covered in the 2012 program. Now drilling has commenced as well. This year we will have a number of core drill rigs operating. We’re planning up to 15 holes for between 4,000 and 5,000 linear metres of drilling. That’s a program you could say is roughly 50% to 100% larger than last year’s program. The 2013 physical program should complete in October and cost around $8 million.

Because of the success of the 2012 program in defining a very large 255 million tonne JORC Resource, our main objective for 2013 is really to tie down an accelerated plan to mine. We will be moving some areas of Resource into the Indicated classification and also acquiring data for environmental baseline mining studies. There will also be bulk samples taken, which will give us the data we need on coal quality to get an off-take agreement.

Another objective of our 2013 program is to cover areas of the Tuyuk and Kargasha licenses that were not covered in the 2012 program so we expect a good increase in overall resources as well.

companyinsight.net.au

How would you describe the quality of the geology and the coal? What mining method is envisaged?

Executive Chairman, Alex Molyneux

The quality of the coal is excellent. We have good coking properties and it’s low in any deleterious properties like sulphur, phosphorus, ash etc. We certainly have coal that is marketable as a premium coal to the steel industry and cement industry.

What’s interesting about our project is that the geology offers many different mining options in different locations. We are also quite advanced at looking at such options because we have lots of historical data on this deposit to complement our modern work.

Right now we are finalising a scoping study, which we will publish some details of in the next few weeks. What we know is that in the very long run, we will have a combination of underground and surface mining, which is fairly common… but what is really important is that it looks like our surface options, where we can start are very low in capital expenditure and cost. We have one option to start mining in one area with an augur mining operation. It looks like it can produce coal for less than $10 per tonne with very lean capital.

companyinsight.net.au

What scope of project do you envisage? What type of Resource are you hoping to achieve to support that scope of project? What infrastructure is required to get your product to market?

Executive Chairman, Alex Molyneux

I guess if I have to say what is the least understood point about Celsius Coal, it would have to be the answer to this question. When we look at peer companies like Aspire Mines in Mongolia or Cokal in Indonesia or Tigers Realm Coal in Russia their mine plans need to be a certain size to provide economic returns above the required infrastructure or transport capacity they need to put in place. In a fickle market environment, it’s harder to justify those situations. Celsius does not have that problem. We have what I call a resource and location that supports modular development. A 500,000 – 600,000 tonne per year augur mining operation could cost less than $20 million in capital for us because that coal can be distributed to customers by truck on the existing nearby road network. That kind of operation could generate $15 to $25 million of EBITDA each year.

Our resource of 255 million tonnes is already enough to sustain the larger options for mining here (which might be around 5 to 7 million tonnes per year). However, it’s likely the resource will grow towards 400 million tonnes. By the way, our resource is certainly larger than most coking coal peers even with larger market caps when you realize our coal is relatively more mineable!

We do not need much infrastructure. Our mine is 40 kilometres off the nearest main highway and using such highways to distribute coal is commonplace in our part of the world. Furthermore, a new railway has been proposed as a project sponsored by the Chinese Government, which will come even closer to our Uzgen Basin Coking Coal Project.

companyinsight.net.au

Do you think you will be able to lock in customers relatively easily? Can you give an update on expected selling prices and the operating costs from mining through to delivering the coal to customers?

Executive Chairman, Alex Molyneux

The customers need some more information about the coal, which we are getting through the 2013 program. We already have a lot of interest though having visited most of the key end users in neighboring Xinjian, China a few times. Coking coal prices in Xinjiang are higher than seaborne prices at the moment, reflecting the scarcity of the commodity there.

It’s still early days but taking everything into account, I would expect the more rudimentary augur operation to generate margins of around $30 to $40 per tonne. Once we build the larger operation, that could generate margins up towards $70 per tonne for washed coking coal product.

companyinsight.net.au

Some Australian companies such as Kentor Gold Limited have found it difficult to get projects in the Kyrgyz Republic into production. Can you outline the political, social and legislative environment for your project?

Executive Chairman, Alex Molyneux

To us we have had no problem. The national government is very supportive. As a reflection of their positive policies towards the minerals industry, Kyrgyz won the 2013 Asia Mining Club Country of The Year award. Celsius is included in the strategic plans of the country for economic development and as such should be granted government support.

Some companies have had problems in the past with local community issues in Kyrgyz Republic. This is something we try to manage very carefully to make sure the community is engaged and recognizes the benefits of our work.

companyinsight.net.au

What is your current timeline to get the project into production including the main future milestones? Why do you have a timetable and asset quality advantage over other coal projects?

Executive Chairman, Alex Molyneux

We will know more with the results of the 2013 season but we should be mining by 2015.

Our project can be developed in a modular way as I said previously. Our key advantage is that for extremely low capital expenditure, we can be generating operating cash flows for shareholders. It’s a value almost all our peers do not have.

Our likelihood and timeline for development is more certain because we won’t need to hang around for the world to change to get moving, which wouldn’t be the case if we needed hundreds of millions or billions to get started.

companyinsight.net.au

How would you value the project - as an indication for current and prospective shareholders?

Executive Chairman, Alex Molyneux

Well on an enterprise value per resource tonne for coking coal projects, we are at a discount. We should be at a premium owing to our lower risk proposition. Certainly Hartley’s agrees in their broker research (see our Celsius Coal website). When we put our scoping information out in a few weeks, people will be able to count the dollars and cents more clearly and the penny will drop!

companyinsight.net.au

Thank you Alex.

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