GULLEWA LIMITED — Capital/Financing Update 2012

May 23, 2012

ALLEGIANCE COAL LIMITED LISTING

Allegiance Coal Limited have advised us that they will be mailing the attached letter to their shareholders today (24 May, 2012).

We have received queries from shareholders regarding the significant rise in the share price of Gullewa Limited (GUL) today. We have been made aware of an article by David Haselhurst writing as the "Speculator" in Alan Kohler's privately circulated Eureka Report on Gullewa Limited and the soon to be listed Allegiance Mining Limited (AHQ).

AW Howland-Rose MSc, DIC, FGS, FIMMM, FAusIMM, MAICD, FAIG, CEng Chairman

For any enquiries :

AW Howland-Rose 02 9397 7555

S R e e a S e

А

24 May, 2012

ASX Code: GUL

ABN 30 007 547 480 Level 8 49-51 York Street Sydney NSW 2000 Australia

Tele: +61 2 9397 7555 Fax: +61 2 9397 7575

www.gullewa.com info@gullewa.com

23 May, 2012

Dear Shareholder

The Board and Team at Allegiance Coal Limited are delighted to welcome you as a fellow shareholder following the successful raising of \$7m in our Initial Public Offering ("IPO"). We appreciate the strong vote of confidence that you have placed in our Exploration Portfolio and the Allegiance Team led by our highly qualified and experienced Managing Director, Colin Randall.

The Company now expects to list on the Australian Securities Exchange on Tuesday 29 May, 2012.

Our planned drilling programme at Back Creek (Surat Basin) will commence on 7 June, 2012 and the plan is to drill some 32 holes (the commencement of the program was delayed by the statutory requirements associated with the IPO). The objective of the Back Creek dilling programme is to define a JORC compliant resource by the Fourth Quarter. You will recollect that the exploration target⁽¹⁾ is 60Mt to 80Mt of shallow open-cut thermal coal. Drilling of some nine drill holes on our Kilmain Project (Bowen Basin) will commence in September, 2012 where the target is 100Mt to 200Mt of low ash thermal and coking coal is the target ⁽¹⁾. A JORC compliant resource is expected early in 2013.

We plan an active exploration programme on other area and will now pursue all opportunities such as joint ventures, farm-ins and farm-outs to accelerate the advancement of your company's interests.

I am particularly pleased that so many of you have supplied us with your email address. All too often Stock Exchange Announcements ("ASX") are not seen by shareholders. We will email all ASX announcements to you shortly after release to the ASX. Those of you who have not provided your email address and wish to be kept up to date on your company's progress, please inform us soonest. Of course, you can cancel your information stream at any time.

All of us at "Team Allegiance" look forward to keeping you informed on our progress.

Best regards

Tony Howland-Rose MSc, DIC, FGS, FIMMM, FAusIMM, MAICD, FAIG, CEng Chairman

This exploration target is conceptual in nature and there has been insufficient exploration to determine a mineral resource $(1)$ and it is uncertain if further exploration will result in the determination of a mineral resource.

Our website is: Our email address is:

www.allegiancecoal.com info@allegiancecoal.com

Allegiance Coal Limited ABN: 47 149 490 353

Business Office: Ph: (02) 4925 2644; Fax: (02) 4926 3871 Postal Address: PO Box 683, Newcastle NSW 2300 Street Address: First Floor, 42 King Street, Newcastle NSW 2300 Registered Office: Ph: (02) 9299 5007; Fax: (02) 9299 5006 Postal Address: GPO Box 2703, Sydney NSW 2001 Street Address: Level 13, 49-51 York Street, Sydney NSW 2000