HELIOS ENERGY LTD — Capital/Financing Update 2013

Jun 18, 2013

ASX:NHO 19 June 2013

Directors & Management

Gary Steinepreis Non Executive Chairman

Michael Placha Managing Director

Carl Coward Non Executive Director

Mark Sanders Non Executive Director

Investment Highlights

High quality fully permitted thermal coal project

Experienced and proven management team

20 year mine life | 2 Mtpa | High margin project

Existing logistics with spare capacity

Port allocation secured

Registered Office

Level 1, 33 Ord Street West Perth WA 6005 Australia T: +61 8 9420 9300 admin@newhorizonminerals.com.au

**Kinney

Coal
Project
Study
Cuts
CAPEX
to
Achieve First
Production
by
63%**

Highlights:

• Independent
  evaluation
  of
  PFS
  capital
  expenditures
  completed

• Phased
  development
  allows
  production
  and
  market
  development
  with reduced
  up-­‐front
  capital

• Developmental
  CAPEX
  reduced
  to
  $23
  million
  from
  $63
  million
  for
  a single
  CM,
  raw
  coal
  screened
  product
  operation

New
Horizon
Coal
Ltd
(ASX: NHO, the Company )
is
pleased
to
announce
positive results
from
its
comprehensive
review
of
capital
expenditures
( CAPEX ) proposed
in
its
Pre-­‐Feasibility
Study
( PFS )
for
the
Kinney
Coal
Project,
Utah,
USA (the Project ).
The
study
suggests
a
phased
development
of
the
Project
and other
cost-­‐savings
would
reduce
start-­‐up
CAPEX
by
US
$40
million.

The
study
was
completed
by
John
T
Boyd
Company
( JT
Boyd ),
an
internationally recognised
evaluator
of
mining
project
economics
and
author
of
the
Kinney
Coal Project
PFS.
JT
Boyd
analysed
potential
up-­‐front
CAPEX
savings
through
a phased
development
schedule,
which
reduces
start
up
capital
to
commence coal
production
at
the
Project.
The
review
identified
three
areas
for
potential CAPEX
reductions:
defer
surface
infrastructure
and
coal
wash
plant construction,
defer
unit
train
rail
loading
facility
construction
and
evaluate mining
equipment
sourcing.

The
PFS,
released
in
November
2012,
assumed
new
and
wholly-­‐owned equipment
for
all
capital
expenditures
and
facilities
related
to
the
Kinney
Coal Project.
To
minimize
initial
capital,
this
reduced
operations
scenario
assumes mining
equipment
is
purchased
on
the
used
(surplus)
equipment
market
and build/acquisition
projects
are
reduced
in
scale
in
order
to
defer
capital
spending on
the
Project.
The
results
of
this
study
will
be
incorporated
into
the
economic model
of
the
Bankable
Feasibility
Study
( BFS ),
which
will
be
completed
by
JT Boyd
and
is
scheduled
for
release
in
late
2013.

**Phased

Development**

The
PFS
proposed
developing
the
project
from
a
single
continuous
miner
( CM ) section
to
a
full
build
of
four
(4)
CM
sections
within
a
rapid
development
period of
three
(3)
years.
The
capital
expenditures
outlined
in
the
PFS
were
US $63
million
to
reach
initial
development,
including
all
surface,
coal
preparation plant
and
loadout
facilities,
and
US
$117
million
total
CAPEX
to
reach
full production
of
2
million
tonnes
per
annum
( Mtpa ).

Under
the
alternative
scenario
developed
by
JT
Boyd,
the
Project
would commence
with
a
single
CM
section
utilising
surplus
equipment,
which
would allow
NHO
to
develop
markets
for
the
product
with
significantly
less
initial capital.
The
phased
scenario
would
allow
the
Project
to
begin
production
with minimal
surface
infrastructure
and
would
defer
construction
of
an
NHO-­‐owned unit
train
loadout
in
favour
of
existing
facilities
located
within
approximately 70km
of
the
mine.
The
total
CAPEX
required
to
commence
production
under this
scenario
would
be
US
$23
million.
Additional
savings
of
up
to
$3
million could
be
realised
by
leasing
key
equipment
during
this
start-­‐up
phase.

**Managing

Director’s
Comments**

Commenting
on
the
impact
of
the
study,
NHO
Managing
Director
Michael
Placha
stated,
“We
are
very
pleased with
the
results
of
JT
Boyd’s
study.
This
alternative
path
to
production
will
allow
NHO
to
significantly
reduce
the capital
expenditure
required
to
commence
production
at
the
Kinney
Coal
Project.
The
phased
development schedule
will
allow
us
to
develop
markets
for
the
Kinney
Coal
Project’s
high
calorific,
low
sulphur
product
and
to increase
production
in
later
phases.”

**Surface

Infrastructure**

During
the
developmental
phase,
virtually
all
surface
facility
construction
would
be
deferred.
Simple
office
and warehouse
facilities
would
be
placed
on
site
and
a
basic
conveyor
and
truck
loadout
would
be
constructed.
Coal would
be
sold
on
raw
screened
basis
with
the
option
of
toll
washing
at
a
nearby
facility.

**Unit

Train
Rail
Loadout**

NHO
has
commenced
discussions
with
the
owner
of
a
rail
loadout
facility
located
within
60km
of
the
Kinney
Coal Project
as
an
alternative
to
NHO
constructing
a
new
loadout
facility
as
proposed
in
the
PFS.
The
facility,
which
has no
currently
operating
customers,
would
allow
NHO
to
load
coal
onto
a
choice
of
three
rail
carriers
from
its existing
stockpile
area.
A
second
existing
potential
loadout
facility
is
located
within
80km
of
the
Project.

Equipment

The
emergence
of
a
robust
secondary
equipment
market
in
the
United
States,
due
in
part
to
the
idling
of
mines
in the
Central
Appalachian
Basin,
allowed
JT
Boyd
to
include
used
equipment
as
a
CAPEX
reduction
strategy. Additionally,
JT
Boyd
identified
significant
opportunities
to
utilise
rental
equipment
for
coal
handling
and
surface operations,
resulting
in
additional
reductions
in
capital
spending.

Enquiries

**New

Horizon
Coal
Ltd**

Michael
Placha Telephone: +1
412
296
1473 Managing
Director Email: mplacha@wasatchnr.com Carl
Coward Telephone: +1
323
202
9318 Non-­‐Executive
Director +61
422
209
162 Email: ccoward@wasatchnr.com Robert
Gundelach Telephone: +61
8
9380
6885 Investor
Relations +61
451
896
420 Email: robert@nwrcommunications.com.au

**About

New
Horizon
Coal
Ltd**

New
Horizon
Coal
(“ NHO ”)
is
focused
on
becoming
a
producer
of
high-­‐quality
thermal
coal,
with
a
target
of becoming
a
mid-­‐tier
North
American
coal
mining
company.
Through
its
US
subsidiary,
Wasatch
Natural
Resources (“ WNR ”),
the
Kinney
Coal
Project
was
acquired
in
late
2011.
The
Kinney
Coal
Project
plan
involves
underground mining
of
two
major
coal
seams
using
multiple,
continuous
miner
sections
in
a
room
and
pillar
mining
operation. Entry
will
be
via
an
exposed
coal
seam
outcrop
within
the
already
permitted
area.

The
Kinney
Coal
Project
is
a
fully
permitted
thermal
coal
project
located
in
Utah,
USA.
The
Project
is
located
in
a mature
mining
region
which
has
historically
produced
more
than
30
million
tonnes
of
coal
annually.
The
Kinney Coal
Project
benefits
from
world-­‐class
infrastructure
including
three
class
1
rail
carriers
within
30km
of
the proposed
portal,
paved
roads
and
state
highway
maintenance
facility
directly
adjacent
to
the
mine,
and
an experienced
local
workforce.
Its
location
provides
access
to
the
domestic
utility
market,
with
six
power
stations located
in
the
vicinity
of
the
mine,
and
to
export
markets.
NHO
has
also
secured
a
3
Mtpa
port
allocation
with Texas
Deepwater
Industrial
Port
in
Houston,
Texas
and
is
currently
engaged
in
offtake
discussions
with
multiple traders
and
end
users
for
domestic
and
export
supply
agreements.

With
a
JORC
Resource
of
over
110
million
tonnes
and
average
coal
quality
of
over
6,800
kcal/kg
and
under
0.8% sulphur,
the
Kinney
Coal
Project
is
well
positioned
to
meet
demand
for
coal
in
the
US
domestic
and
export markets
with
a
high
heat,
low
sulphur
product.
The
Prefeasibility
Study,
confirming
the
Project’s
technical
and economic
viability,
was
completed
by
John
T
Boyd
Company
(“ JT
Boyd ”)
in
November
2012.
NHO
has
engaged
JT Boyd
to
complete
the
Bankable
Feasibility
Study,
with
completion
expected
by
the
end
of
2013.

**JORC

Resource
(thousands)**

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----- Start of picture text -----

||||||
|---|---|---|---|---|
|Measured|Indicated|Inferred|Total|
|Kinney
Coal
Project|10,382|37,170|7,193|54,745|
|Under
Application|1,548|26,156|28,113|55,817|
|Total|11,930|63,326|35,306|110,562|

----- End of picture text -----

**Coal

Quality
(air
dried
basis)**

==> picture [358 x 99] intentionally omitted <==

----- Start of picture text -----

||||
|---|---|---|
|Average
In
Situ
Coal
Quality|Hiawatha
Seam|UP
Seam|
|Moisture|4.02%|4.19%|
|Ash
Content|10.20%|8.12%|
|Fixed
Carbon|44.63%|46.51%|
|Volatile
Matter|41.15%|41.18%|
|Total
Sulphur|0.84%|0.75%|
|Calorific
Value|6,765
kcal/kg|6,856
kcal/kg|

----- End of picture text -----

**Competent

Person’s
Statement**

The
information
in
this
report
that
relates
to
coal
resource
estimate
and
underground
mine
plans
was
prepared
in conjunction
with
the
JT
Boyd
PFS.
Results
were
developed
by
a
core
team
of
JT
Boyd
professionals,
including Messrs.
John
L.
Weiss,
Paul
D.
Anderson,
and
Ronald
L.
Lewis.
Each
of
these
individuals
is
a
Registered
Member
of the
Society
of
Mining,
Metallurgical
and
Exploration
(SME),
and
has
sufficient
experience
to
qualify
as
a Competent
Person
as
defined
in
the
2004
Edition
of
the
“Australian
Code
of
Reporting
of
Exploration
results, Mineral
Resource
and
Ore
Reserves”.
JT
Boyd
consents
to
the
inclusion
of
information
prepared
by
JT
Boyd
in
this report.

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