COKAL LIMITED — Capital/Financing Update 2017

Jul 27, 2017

E info@cokal.com.au PO Box 7122, Brisbane QLD 4001 ABN 55 082 541 437 (ASX: CKA) www.cokal.com.au

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ASX ANNOUNCEMENT 28 July 2017

COKAL ANNOUNCES RESERVE STATEMENT FOR BUMI BARITO MINERAL (BBM) PROJECT

HIGHLIGHTS

• Coal Reserve estimate of 20.2Mt of openpit Run-of-Mine (ROM) for BBM, producing 16.9Mt of Marketable Reserves in accordance with the 2012 JORC Code.

• Comprised of 13.0Mt Proved and 7.2Mt Probable ROM Reserves, (totalling 20.2Mt ROM coal) for B, C, D and J Seams at US$150/tonne.

• Coal Reserves comprise 12.8Mt Coking Coal Product at US$150/tonne and 4.1Mt PCI Product at US$112.50/tonne (totalling 16.9Mt Product coal).

• B, C and D coking and Premium PCI (low Vol) products have premium qualities consisting low ash, low sulphur, low moisture and ultra-low phosphorus.

• Low Volatile PCI and medium to low Volatile Coking Coal suited to nearby Asian markets.

• Construction of BBM Anak close to completion, production expected in August, 2017.

• Planning to produce 10,000t per month of a Premium low Vol PCI product.

• JV Funding for BBM PCI project announced on 24 May 2017 is no longer required

Metallurgical coal group Cokal Ltd (ASX:CKA)( Cokal or the Company ) announced today the release of a Coal Reserve statement for economic openpit coal in the eastern portion of the Bumi Barito Mineral ( BBM ) coal project.

The total Reserve estimate 20.2Mt of Run-of-Mine (ROM) comprises 13Million tonnes (Mt) Proved Reserves, and 7.2Mt Probable Coal Reserves in accordance with the 2012 JORC Code (see Tables 1 and 2). A total Marketable Coal Reserve of 16.9Mt (US$150/t for coking coal and $112.50/t for PCI coal) has been confirmed as metallurgical coal from analyses conducted in an Australian laboratory.

The tables below demonstrate the sensitivity of the BBM project as a function of coking coal and PCI sale prices. The economic analysis of BBM’s Coal Resources indicated that with additional drilling to convert Inferred Resources to Indicated or Measured Resources, there is potential to delineate additional Coal Reserves.

The J Seam Reserves (5.5Mt Proved and 3.2Mt Probable Product coal) is 100% coking coal. In the case of Seams B, C and D, 3.0Mt Proved and 1.1Mt Probable is Coking Coal Reserves, while 2.4Mt Proved and 1.7Mt Probable is PCI Reserves.

Economic Reserves were determined by using the Definitive Feasibility Study which was prepared in 2014 by Resindo, and recently updated to reflect reduced fuel costs and depreciation of the Rupiah in November, 2016 (see ASX Announcement 2 November 2016).

Geotechnical analysis indicated that the pit slope angles of 75°, with 10m berms at every 45m depth, provided a safety factor of 1.59 which is above the minimum regulatory requirement.

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Table 1: BBM Coal Reserves by JORC Category

FOB Coking Coal Sale Price ($/Product tonne)	ROM Coal	ROM Coal	ROM Coal	Coking Product	Coking Product	Coking Product	PCI Product	PCI Product	PCI Product	Total Product Coal	Total Product Coal	Total Product Coal
	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob
	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)
110	7.9	2.7	10.6	4.7	1.3	6	1.8	1	2.8	6.6	2.3	8.9
120	9.8	4.2	14.1	6.2	2.3	8.5	2	1.2	3.3	8.2	3.5	11.7
130	10.4	4.7	15.2	6.6	2.5	9.1	2.2	1.4	3.6	8.7	3.9	12.7
150	13	7.2	20.2	8.5	4.3	12.8	2.4	1.8	4.2	10.9	6	16.9
180	14.7	11.1	25.8	9.8	7	16.8	2.4	2.3	4.7	12.2	9.3	21.5
210	15.2	12.3	27.6	10.2	7.9	18.1	2.5	2.4	4.9	12.7	10.3	23
240	15.9	13.7	29.6	10.6	8.9	19.5	2.6	2.6	5.1	13.2	11.4	24.7

Table 2: BBM Coal Reserves for Coking Coal Product

Coking Coal	Proved Reserves	Proved Reserves	Proved Reserves	Proved Reserves	Proved Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Total Proved + Probable Reserves
	Product Coal(Mt)					Product Coal(Mt)					(Mt)
	Seam				Total	Seam				Total	All Seams
Sale Price	J	D	C	B	Proved	J	D	C	B	Probable
$110.00	2.4	0.9	0.6	0.7	4.6	1	0.1	0.1	0.1	1.3	5.9
$120.00	3.2	1.2	0.8	0.9	6.1	1.3	0.3	0.4	0.3	2.3	8.4
$130.00	3.6	1.2	0.9	0.9	6.6	1.4	0.4	0.4	0.3	2.5	9.1
$150.00	5.5	1.2	0.9	0.9	8.5	3.2	0.4	0.4	0.3	4.3	12.8
$180.00	6.8	1.2	0.9	0.9	9.8	5.8	0.4	0.5	0.3	7	16.8
$210.00	7.3	1.2	0.9	0.9	10.3	6.5	0.5	0.5	0.3	7.8	18.1
$240.00	7.6	1.2	0.9	1	10.7	7.5	0.5	0.5	0.4	8.9	19.6

Table 3: BBM Coal Reserves for PCI Coal Product

PCI Coal	Proved Reserves	Proved Reserves	Proved Reserves	Proved Reserves	Proved Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Probable Reserves	Total Proved + Probable Reserves
	Product Coal(Mt)					Product Coal(Mt)					(Mt)
	Seam				Total	Seam				Total	All Seams
Sale Price	J	D	C	B	Proved	J	D	C	B	Probable
$82.50	0	0.7	0.7	0.5	1.9	0	0.3	0.3	0.4	1	2.9
$90.00	0	0.8	0.7	0.6	2.1	0	0.4	0.4	0.5	1.3	3.4
$97.50	0	0.8	0.8	0.6	2.2	0	0.5	0.4	0.5	1.4	3.6
$112.50	0	0.9	0.8	0.7	2.4	0	0.6	0.5	0.6	1.7	4.1
$135.00	0	0.9	0.8	0.7	2.4	0	0.8	0.6	0.8	2.2	4.6
$157.50	0	1	0.8	0.7	2.5	0	0.9	0.7	0.9	2.5	5
$180.00	0	1	0.9	0.7	2.6	0	0.9	0.7	0.9	2.5	5.1

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In the meantime, BBM Anak project continues towards completion of construction. The haul road from the mine site to the stockpile and the barge loading area has been cleared and formed. Drainage gutters and capping are under construction and expected to be completed shortly.

As previously reported, Timber Cruising, (otherwise known as TC in Indonesia, which is the evaluation of timber by the Forestry Dept,) was completed, as was land acquisition and compensation for all areas covered by the mine site, haul road, stockpile and barge loading area. Construction of the barge loading facility is close to completion and barges will arrive in the coming weeks.

Negotiations are well advanced for the sale of BBM Anak’s Premium low Volatile PCI coal with initial sales expected to be with domestic users such as mineral processing plants which currently import PCI coals from Australia and Vietnam.

The PCI coal in BBM Anak is included in the Reserves Estimation, and Cokal is confident that it will produce an attractive profit margin for the 10,000t per month production which is expected to commence sometime in August.

Pat Hanna, Cokal Director, said “Although Cokal and its shareholders have had to endure a long period (over two years) of a global downturn in the coal industry, at last we can see the light at the end of the tunnel. Very soon now, Cokal will generate an income from sales of its valuable metallurgical coal and we are confident we can achieve a substantial profit margin.”

Consequently, Cokal is considering not to conclude the agreement for a JV partnership with IAA as announced on May 24[th] , 2017. Development of the infrastructure for BBM Anak will form the basis of the infrastructure for the 0.5mt per annum (mtpa) BBM PCI project as both projects will use the same barge loading port, stockpile and haul road. Upgrading BBM Anak to BBM PCI will cost substantially less than the initial estimates.

Therefore, with the cash flow generated by BBM Anak, Cokal expects that it can develop the 0.5Mt per annum BBM PCI export project without third party funding.

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Coal Outcropping along the Haul Road

Haul Road Construction at BBM Anak

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PCI Coal (Seam D) Exposed at BBM Anak Mine Pit.

ENDS

Further enquiries:

Domenic Martino Chairman Mobile (Aus) +61 419 764 747;

About Cokal Limited

Cokal (ASX:CKA) is an Australian listed company with the objective of becoming a metallurgical coal producer with a global presence. Cokal has interests in four projects in Central Kalimantan, Indonesia considered prospective for metallurgical coal.

Forward Looking Statements

This release includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements in this release include, but are not limited to, the capital and operating cost estimates and economic analyses from the Study.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

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Forward looking statements are based on the company and its management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company’s business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company’s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company’s control.

Although the company attempts to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements.

Forward looking statements in this release are given as at the date of issue only. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

Competent Person Statement

The Total Coal Reserve estimate is based on information compiled by Robert de Jongh who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of ASEAMCO Pty Ltd. Mr de Jongh is a qualified mining engineer and 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 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

The Total Coal Resource estimate was announced on 29 January 2015, titled “Cokal announces updated JORC Resource Statement for Bumi Barito Mineral (BBM) Project”. The information in the report relating to Mineral Resources is based on information compiled by Yoga Suryanegara who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of Cokal Limited. Mr Suryanegara is a qualified geologist and 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 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the announcement made on 29 January 2015 and that all material assumptions and technical parameters underpinning the estimates in the announcement made on 29 January 2015 continue to apply and have not materially changed.

The information in this report relating to exploration results is based on information compiled by Patrick Hanna who is a fellow of the Australasian Institute of Mining and Metallurgy and is a consultant (through Hanna Consulting Services) to Cokal Limited. Mr Hanna is a qualified geologist and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking, to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

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