COKAL LIMITED — Capital/Financing Update 2018

Sep 20, 2018

T +61 2 8823 3179 E info@cokal.com.au Level 5, 56 Pitt Street, Sydney NSW 2000 ABN 55 082 541 437 (ASX: CKA) www.cokal.com.au

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ASX ANNOUNCEMENT / MEDIA RELEASE 21 September 2018

PT BBM Signs Key Principles of Agreement with BMA Group for Operational Partnership

Highlights:

• § BMA Group proposes to fund construction of PCI and Coking Coal operations at BBM Project, subject to final agreement. Funding from BMA Group’s own resources.

• § First coal expected in December 2018

• § BMA Group and Cokal will co-manage development of the BBM Project

• § BMA Group to advance US $2m to Cokal to underpin their intention to proceed with this transaction. US $1m has been received (prepayment of profit share)

• § Aahana BBM PCI Project funding still on foot, pending binding proposal from BMA Group

• § Domain BBM Coking Coal Project funding still on foot, pending binding proposal from BMA

Cokal Limited (Cokal ASX:CKA, “Cokal” or “the Company”) is pleased to announce that PT Bumi Barito Minerals (BBM), which is 60% owned by Cokal and holds the BBM Project, has signed a Key Principles of Agreement with BMA Group (PT Bara Mineral Asri and its affiliates) to develop and operate PCI and Coking Coal production.

After recent discussions, BMA Group has decided to fast-track investment into developing the BBM Project. A non-binding Key Principles of Agreement has been prepared and signed by both parties and a site visit by technical teams from both companies was conducted last week. The Key Principles of Agreement anticipates that the funding structure will be on a joint venture or profit sharing basis. These key principles will form the basis of a binding agreement, which is now being negotiated between BMA Group and Cokal. Negotiations continue and there is no certainty that a final, binding agreement will be reached.

BMA Group have commenced a due diligence process, and pending the outcome, will begin moving equipment to site to prepare haul roads, a new barge loading port and infrastructure to commence mining the PCI coal. Cokal is well aware of BMA’s standing in the Indonesian coal production market. Cokal’s due diligence on BMA has satisfied Cokal that BMA have the resources and the financial capacity to complete this project. This due diligence is backed-up by the substantial projects that BMA and its affiliated companies already operate in Indonesia. The cost of construction is as outlined in the Company’s Feasibility Study updated in November 2016 and released to the market on 2 November 2016.

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BBM-BMA Group Partnership Scheme

Subject to completion of satisfactory due diligence, BBM and BMA Group will enter into exclusive Operational Partnership Agreement whereby BMA Group will invest in infrastructure and mine development. BMA Group will also provide mining services to BBM to mine, haul and bring the coal to barges, and further to market and deliver to buyers.

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Director Pat Hanna (far right), Chief Geologist Yoga Suryanegara (2[nd] from right) and BMA Group’s Technical Team on Site at BBM Anak Mine

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Cokal’s Team on site at Krajan Camp (BBM) with CEO Jim Coleman (far right).

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It is proposed that BMA Group start construction of haul roads and barge loading jetty. The first coal is expected to be mined in December 2018. Following this initial target, it is proposed that BMA Group continue construction of additional infrastructure for production of PCI and Coking Coal.

Meanwhile, BMA Group will provide advances totalling US $2million to BBM as coal offtake prepayment to assist BBM funding its working capital. To date, Cokal has received US $1million.

About PT Bara Mineral Asri

BMA Group is comprised of PT Bara Mineral Asri and its affiliates who have substantial experience in coal trading and mining in Indonesia. PT Bara Mineral Asri is a coal trading company, supplying domestically in Indonesia and in Asia and Europe. Coal is sourced from all over Indonesia, from Kalimantan and Sumatra. BMA Group has assisted BBM to sell all its coal from initial production.

The arrangement with BMA Group now gives Cokal several options as to the funding of its flagship BBM Coking Coal and PCI projects alongside the Aahana and Domain proposals. BMA Group’s expertise, industry connections, funding strength and the speed at which BMA Group have executed their preliminary due diligence and funding have put BMA Group in the strongest position to close this funding proposal.

Cokal’s CEO, Mr Jim Coleman, was pleased with the co-signing of the Key Principles of Agreement saying “This agreement is very positive for Cokal as it allows the Company to move forward quickly and develop mining pits at the BBM Project. We intend to start with the PCI production and quickly ramp up production within 12 months to include Coking Coal.”

Jim went on to say “I have met with BMA Group management in Jakarta and after conducting a site visit to the BBM Project with their technical people, I feel confident BMA Group will make the perfect partner for Cokal in developing the BBM Project as they bring a wealth of knowledge of coal mining in Indonesia.”

ENDS

Further enquiries:

Domenic Martino Non-Executive Chairman Tel: +61 2 8823 3177 E: dmartino@cokal.com.au

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.

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