RAIDEN RESOURCES LIMITED — Interim / Quarterly Report 2014

Feb 27, 2014

ASX Announcement

Friday 28 February 2014

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H1 FY14 Results Announcement

	H1	H2	H1
	FY14	FY13	FY13
NPAT	($2.233)	($6.658m)	$0.594m
EBITDA	$0.946m	($3.203m)	$4.050m
Underlying NPAT	($2.233m)	($1.933m)	$1.799m
Underlying EBITDA	$0.946m	$1.215m	$5.000m
Underlying EBITDA Margin	2.8%	3.2%	10.7%
Sales Revenue	$33.841m	$38.364m	$46.539m
Operating Cash Flow	($2.646)m	($0.973m)	$9.177m
Earnings per Share (based on the number-of shares at 31 December 2013)	(1.2)	(4.3)	0.4
Dividend per share	Nil	Nil	Nil

SubZero Group Limited (ASX:SZG) today reported a statutory net loss after tax for the half year ended 31 December 2013 of $2.233m.

Underlying EBITDA of $0.946million was outside the range provided by the Company in its trading update provided on 29 January 2014. Since the announcement the Directors and management have become aware that an invoice requested by a customer in December is for work to be carried subsequent to half-year end and have deferred the booking of that invoice to the second half.

Market conditions in the six months ended December 2013 continued to be soft. Although coal production continues to operate at record levels in the Hunter Valley with high equipment utilisation, customers have maintained tight controls over expenditure in order to conserve cash and improve profitability. As such revenue for the Group was softer than in the previous six months. Commensurate with these market conditions, SubZero has been maintaining tight cost controls and conserving cash.

During the period SubZero continued to be awarded new contracts as well as the roll over of current contracts. In order to support this growth SubZero has increased levels of inventory and work in progress. However, the deferral in start dates of planned contracts continues to adversely impact revenue and the ability to recover these sunk costs in a timely manner. Wet weather in late November also negatively impacted on operations.

SubZero occupied its major facility in Muswellbrook, the largest climate controlled workshop in the Hunter Valley. During the six months we have continued to improve our safety systems and training programs for our personnel. We have re-structured our management team and continue to refine our processes further. A review of our future business systems requirements has been undertaken and the Board has approved a $1.2m investment over the next 2 financial years for the replacement of the Company’s existing business and IT platform. From an equipment and personnel perspective, SubZero is well positioned with the capacity and capability to meet its customer’s current and future needs.

ABN 68 009 161 522 PO Box 561 Muswellbrook NSW 2333 | P 02 6540 9400 | F 02 6540 9444 | www.subzeroservices.com.au

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Clear indications from customers support our outlook that with the reduction in capital expenditure on new equipment and high levels of production, maintenance expenditure will increase over the balance calendar 2014 and beyond.

Cash Flow and Borrowings

Gross debt at 31 December 2013 was $14.1m, a reduction of $2.693 from 30 June 2013. The debt is represented by finance leases for equipment of $9.919m, $3.304m for the factoring of invoices and $0.893m from loans. During the period the Company raised net proceeds of $8.111m from the placement and rights issue completed on 6 December 2013.

Operating cash flow for the period was ($2.646m.) Free cash flow was $0.920m.

The Company expects to have new debt facilities in place by the end of March 2014, having received credit approval from a major Australian investment bank.

Update and Outlook

In November the Company reported its intention to acquire up to 49% of four properties occupied by SZG but owned by the CEO, Scott Farrell. The Board is now reviewing a number of options including acquiring up to 100% of these properties by way of a script and debt repayment deal. Any proposal will be subject to shareholder approval and will be undertaken to strengthen the balance sheet.

SZG expects Hunter Valley coal production will continue to increase based on the historical capex spend and the prevalence of “take or pay” contracts. SZG CEO, Scott Farrell, said “Whilst our customers remain focussed on efficiency cost improvements and cash preservation, deferral of maintenance is starting to impact production equipment reliability and operational efficiencies. The inevitable increase in maintenance spend will positively impact SZG’s performance given we have maintained capability and capacity. In recent days we have experienced a significant increase in orders and we expect this to result in a solid increase in revenue in the next three months”

The company is maintaining FY14 guidance with a bias to the lower end of the range subject to work flows normalising as the expected maintenance “up tick” occurs. There is no change to FY15 guidance.

For more information contact:

Scott Farrell

Managing Director P: +61 2 6540 F: +61 2 6540 9444 M: +61 438 251 699 E:sfarrell@subzeroservices.com.au

About SubZero Group Limited

The SubZero Group carries on an established mining service business based in the Hunter Valley, New South Wales. Its clients are almost exclusively involved in the Hunter Valley thermal coal mining industry. SubZero Group’s services include Mechanical Support (on and

ABN 68 009 161 522 PO Box 561 Muswellbrook NSW 2333 | P 02 6540 9400 | F 02 6540 9444 | www.subzeroservices.com.au

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off-site mining machinery support), Structural Support (on and off-site engineering support) and Production Support (mining production support). SubZero has a presence in over 25 coal mines and over 90 clients including Rio Tinto, BHP Billiton and Xstrata. Further information can be found at the SubZero website: http://subzeroservices.com.au/

ABN 68 009 161 522 PO Box 561 Muswellbrook NSW 2333 | P 02 6540 9400 | F 02 6540 9444 | www.subzeroservices.com.au