EPC1318RidgelandNorth

GeologicalReport January2011

EPC1318RidgelandNorth(Application)

Preparedby: GeoConsultPtyLtd

For: QueenslandCoalCorporationPtyLtd.

POBox3324,Newstead,Qld4006 Phone:(07)38517400Fax:(07)38517499

EPC1318RidgelandNorth ExecutiveSummary
ThreedistinctcoalexplorationtargetsarepresentinEPC1318; 1) PermianBandannaFormationcoalseams,asapotentialcokingcoalproduct. 2) EarlyJurassicBoxvaleMembercoalyunit,asapotentialthermalcoalproduct. 3) ReidsDomeBedscoals,asalowyieldsemisoftcokingcoalproductorexportthermalproduct. ExplorationTargets:
Conceptual ExplorationTarget TargetCoal Product CoalSeam/Formation EstimationBasis
Surface300mdeep,avseamthickness=10m,possiblelateralextent= 2 50km ,RD=1.5 SBEAandCSGwelldepthranges,avseamthickness=4m,possible lateralextent=70km2,RD=1.5 SBEA&CSGwelldepthranges,avseam=4m,possiblelatextent; 2 west=80km2/east=140km ,RD=1.5 150400mdeep,avseamthickness=20m,possiblelateralextent= 50km2,RD=1.5

600700Mt* 350450Mt* 1,1001,300Mt* 1,2001,400Mt*

Opencut,potential thermalcoalproduct Underground,potential cokingcoalproduct Underground,potential cokingcoalproduct Opencut,potentialsemi softcokingcoalproduct

BoxvaleSandstoneMember BandannaFm.500600m BandannaFm.6001000m ReidsDomeBedsCoal

* These exploration targets are conceptual in nature, there has currently been insufficient exploration to define a Resource. It is uncertain if further exploration will result in determination of a resource. Geological modelling and or drilling is required to establish a coal resource. Nb. Uncertainty regarding the naming and correlation of Boxvale St and Reids Dome Beds coals is noted. They may be the same target or represent 2 distinct targets.

BoxvaleSandstone MemberTarget

ReidsDome BedsTarget

BandannaSeam Target500600m

BandannaSeam Target6001000m

Exploration Targets Figure. Tenement area (white outline), with depth to top of Bandanna Formation (contours), Bandanna Formation exploration target area 500600m deep (dark green outline), Bandanna Formation exploration target areas 6001000m deep (light green outline), Boxvale Sandstone Member coals exploration targetarea(lightblueoutline),ReidsDomeBedscoalstargets(darkblueoutline).

DataSummary:
InformationType WithinTenure AssociatedtoTenure

Drilling WirelineDensity 2DSeismic

60holes 1015logs 100150linekms

100+holes 50+logs 200+linekms POBox3324,Newstead,Qld4006 Phone:(07)38517400Fax:(07)38517499

Nb. Information regarding data locations, quality and results are presented in report under previous exploration.

EPC1318RidgelandNorth

Exploration Targets Figure. Tenement area (white outline), with depth to top of Bandanna Formation (contours). Left: Boxvale Sandstone Member coals exploration target 600700Mt (light blue area). Middle: Bandanna Formationexplorationtarget,500600mdeep350450Mt(darkgreenarea),6001000mdeep1,1001,300Mt(light greenoutline).Right:ReidsDomeBedscoals1,2001,400Mt(darkbluearea)

Geoconsult Pty Ltd has undertaken research into the coal potential of noncompetitive application EPC1318 for Queensland coal Corporation Pty Ltd. EPC1318 is located 20 km northeast of Injune Queenslandandcoversanareaof450km2ofmainlyplainscountry. There are no competing mining leases over the EPC. Three mineral exploration tenements overlap the central portion. Two petroleum leases overlap the eastern portion and one petroleum exploration title overlapsinthewest.ThecentralsouthiscoveredbyconstrainedareaDoonkumaStateForest.

The principle tectonic units are the Comet Platform (to the east) and Denison Trough (to the west). Sediments on the Comet Platform are gently dipping and were deposited in a stable environment. The Denison Trough is more structurally disturbed and represents a more unstable depositional environment.ThesedimentsregionallyplungetothesouthandontheCometPlatformdipgentlytothe east towards the Taroom Trough. They extend stratigraphically from the Jurassic Hutton Sandstone to the Permian Reids Dome Beds. Coal seam development is most pronounced in the Early Jurassic BoxvaleSandstone,theLatePermianBandannaFormation,andtheEarlyPermianReidsDomeBeds. ThirtyCSGandtwopetroleumexplorationwellshavebeendrilledwithintheEPC,mainlyintheeastand south. GSQ Taroom 1111A was drilled just outside the EPC in the far south, Otter Exploration drilled ten holes on and south of the EPC, BMA explored extensively to the immediate south of the EPC. 100 150linekmofseismicisrecordedintheEPC. CSGandpetroleumwellsestablishedverydeepthickintersectionsoftheBandannacoalinthewestand east. CSG Kingston 1 well intersected a 5.1m coal seam at 550m near the centre. Coal intersections in Taroom 1111A were interpreted as within the Reids Dome Beds. 5.1m and 12.5m seams were intersected at 298m and 426m respectively. BMA interpreted the coal to the south as within the Reids DomeBedsanddefinedtheRidgelandCoalDeposit. Definitive coal quality data is lacking. The Geology of Australian Coal Basins volume indicated a Bandanna Seam washed coal quality of ash 710%, volatiles 2732% and Rvmax of 0.560.61. Otter Exploration composited a 22m seam section from the Boxvale Sandstone. The composited 22m seam, raw coal analysed: ash 55%, moisture 1.32.3%, volatiles 1725%. There is no washability data to hand butwashingofthesestonebandedseamsmayproduceamarketableproduct.

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EPC1318RidgelandNorth Introduction Queensland Coal Corporation Pty Ltd commissioned GeoConsult Pty Ltd in January 2010 to compile and report on geological data related to EPC1318 relevant to coal exploration. This work has involved researching geological maps, reports and company exploration data from Geoscience Australia and the Department of Mines and Energy, Queensland. The data sources reviewedaresummarisedinTable1.
Table1Datasources

Information
Mining&Tenure
Currentandhistoricalexplorationtenements Queenslandcoaldeposits Miningandproductionstatistics

Source
IRTM(InteractiveResourceTenementMap);EPCs,ML,MDLs, ATPs,PL, DepartmentofMinesandEnergy,Queensland DepartmentofMinesandEnergy,Queensland

Geology
QueenslandGeology BowenBasinGeology RegionalGeology QueenslandCoalGeology

GSQPublication383 QueenslandGeology1:2,500,000mapand notes GeoscienceAustralia,CSIROgeologicalmap2008andsuper model2000 GSQ1:250,000geologicalmappingsheets GeologyofAustralianCoalBasins,QueenslandCoals14th edition,

Exploration
Queenslandregionaldrilling Historicalcompanyexploration QPEDPetroleumexploration WaterboreInformation

IRTM(InteractiveResourceTenementMap);GSQstratigraphic drilling,petroleumandgaswells,DMEcoaldrillholes. QDEX(Queensland DigitalExplorationReportingSystem)Coal tenementrelinquishmentreportsetc. QueenslandPetroleumandGaswelldata Queenslandwaterboredatabase

Topography&Infrastructure
Topographicmaps Digitaltopographicsurface Landholderinformation

GeoscienceAustralia1:250,000sheets GeoscienceAustralia9grid Cadastraldatabase,RP Database

EnvironmentandNativeTitle
EnvironmentalInformation CulturalHeritageandNativeTitle

EPAwebsite http://www.epa.qld.gov.au EPA/IRTM http://www.epa.qld.gov.au

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EPC1318RidgelandNorth LocationandGeographicSetting EPC1318islocated20kmnortheastofthetownshipofInjuneinQueenslandandcoversanarea of approximately 450km2. Figure 1 shows the location of EPC1318 in relation to other coal explorationtenuresinQueensland.

Figure1RegionallocationmapofEPC1318.Tenementarea(orangefill),Queenslandscoalexplorationtenure (lightgreyfill),Queenslandsmineraldevelopmentlicences(mediumgreyfill),Queenslandsminingleases(dark greyfill),townships(blackdots),rail(blacklines),coalterminals(shipsymbols).

Figures 24 satellite image, topographic, cadastral maps illustrate the geographic setting, and densityofruralproperties.
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EPC1318RidgelandNorth The country in western section of the EPC is flat reflecting the underlying flat to gently dipping HuttonSandstone(CR8591).Theeasternsectionismoreundulatingandpartlydissectedwhere the Boxvale Sandstone Member of the Jurassic Evergreen Formation tends to form scarps (CR8591).

Figure2LandsatsatelliteimageofEPC1318.Tenementarea(orangeoutline),roads(redlines),creeks(bluelines), homesteads(blackdots).FullsizemapinAppendix1.

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EPC1318RidgelandNorth

Figure 3 Topographic map of EPC1318. Tenement area (orange outline), topographic contours (brown lines), roads (red lines), creeks (blue lines), homesteads (black dots), native vegetation (green fill). Full size map in Appendix1.

Figure 4 Cadastral map of EPC1318. Tenement area (orange outline) and cadastral boundaries (grey lines) with lotandplannumbers(greytextlabels).FullsizemapinAppendix1.
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EPC1318RidgelandNorth Geology Figure 5 displays the geological mapping which has been compiled and reviewed as part of the exploration work conducted in the EPC1318 area. Geological maps used include CSIRO 2008 BowenBasinGeology,GSQ1:250,000geologicalmapsheets(Taroom,Eddystone).

Figure5GeologicalmapsofEPC1318.Left)GeologicalsurveyofQueensland1:250,000scaleseriesgeological mappingwithtenement(orangeoutline),completemaplegend(http://www.geoscience.gov.au/bin/mapserv36? map=/public/http/www/geoportal/250/index.map&mode=browse&layer=map250&queryon=true).Right)Bowen BasingeologicalmappingbyCSIROin2008withtenementarea(orangeoutline),majorfaults(blacklines),folds (bluelines)completemaplegendcanbelocated(http://www.csiro.au/products/BowenBasinMap.html).

The regional geology of EPC1318 includes the southern part of the PermianTriassic Bowen BasinwhereitisoverlainbyMesozoicsedimentsoftheSuratBasin(Table2). The distribution of rock units at surface is controlled by the south plunging Mimosa Syncline in thedistanteast(nearTaroom),thesoutheasterlyplungingextensionoftheCometRidgealong the eastern perimeter of the EPC and the southern Denison Trough in the west. The Arcadia Anticline along the eastern perimeter of the EPC locates the western edge of the Comet Platform. A Graben structure trending NWSE across the central west of EPC is shown on the 2008CSIROBowenBasingeologymap.

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EPC1318RidgelandNorth

Table2StratigraphicframeworkofEPC1318.Geologicalsequenceswithcoaltargetsareshown(orangearrows).
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EPC1318RidgelandNorth CurrentMiningandExplorationTenure EPC1318wasappliedforon30thMay2008byQueenslandCoalCorporationPtyLtd.Atthetime of this report the EPC was under noncompetitive application. The EPC covers 145 subblocks over an area of approximately 450km2. Figure 67 shows the current exploration, mining and petroleumtenuresassociatedwithEPC1318. No current coal mining leases are present in the vicinity of the EPC. Mineral development licence applications MDL446 and MDL447 (Winzil Energy) are adjacent to the EPC to the northwest.Atthetimeofthisreport,surroundingExplorationPermitsforCoalareheldbyBHP Coal Pty Ltd (EPC851, EPC1277), Tilox Resources Pty Ltd (EPC1110), Winzil Energy Pty Ltd (EPC1435) and Argos Qld Pty Ltd (EPC1190). Of these the BHP Ridgeland deposit is potentially themostsignificant. No current mineral mining leases or mining claims are present in the vicinity of the EPC. Three mineral exploration tenements partially overlap EPC1318; granted EPM18693 in the south (RidgeExplorationPtyLtd),applicationEPM18326inthecentre(Foster,Shirley)andapplication EPM18689inthenorth(RidgeExplorationPtyLtd). PetroleumLeasesPL90andPL91(SantosTogaPtyLtd)overlaptheeasternportionofEPC1318. Associated petroleum pipeline leases also cross the EPC. Petroleum exploration area ATP337 (SantosQNTPtyLtd)overlapsthewesternportionofEPC1318. A corridor in the central south of EPC1318 is covered by constrained area Doonkuna State Forest.ThenortheastperimeteroftheEPCisadjacenttosterilelandareaNationalPark.

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EPC1318RidgelandNorth

Figure 6 Coal tenure associated with EPC1318. Tenement area (orange outline), mineral development licences (Winzil Energy MDL applications blue fill), exploration permits for coal (grey fill) with EPC number and holder (grey text), sterile land area (national park green fill). BHP Ridgeland coal deposit is located on EPC851 to the south.FullsizemapinAppendix1.

Figure 7 Left) Mineral tenure associated with EPC1318. Tenement area (orange outline), exploration permits for minerals (light orange fill) with EPM number and holder (brown text). Right) Petroleum and gas tenure associated with EPC1318. Tenement area (orange outline), production leases (yellow fill), exploration permits (light yellow fill),petroleumpipelineleases(bluelines).FullsizemapsinAppendix1.

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EPC1318RidgelandNorth PreviousCoalTenure Coalexplorationintheapplicationareainthepasthasbeensparse.HistoricEPCsarerecorded overlappingEPC1318duringthe1970s,1980s,2000sand2010s.Figure8showsthelocationof historicalEPCtenuresassociatedwiththearea.NoEPCswereheldduringthe1990s. ThecompanyreportsassociatedwiththeEPC1318aresummarizedinTable3. 1970s 1980s

2000s

2010s

Figure8Previousexplorationpermitsforcoal,bydecade,nearEPC1318.Tenementarea(orangeoutline),1970s EPCs (blue), 1980s EPCs (green), 2000s EPCs (greenbrown), 2010s EPCs (brown). Previous coal exploration within thetenureoccurredinthe1980s.FullsizemapsinAppendix1.

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EPC1318RidgelandNorth
Table3HistoricalExplorationReports(selectedlist)
EPC1318DataReview
Co a l Exp lo ra tion Re p orts De c a d e 1980 1980 1980 1980 1980 1980 1980 1980 1980 1970 1970 1970 1970 1970 1970 1970 1970 1970 1970 1970 1970 T e nu re EPC279 EPC279 EPC279 EPC279 EPC279 EPC279 EPC347 EPC347 EPC385 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 EPC259 CR Nu mb e r Re po rt T itle 8591 8592 9504 9505 10782 10783 9647 10349 10972 11004 7518 7993 8136 8357 9125 10646 11298 11299 12222 12344 13083 GEOLOGICAL REPORT AND PROPOSED DRILLING PROGRAMME, A- P 279C, ARCADIA. HALF YEARLY REPORT FOR PERIOD ENDED 26.12.80. A- P 279C, ARCADIA, REPORT ON AREAS RELINQUISHED ON 26.12.1980. A- P 279C, ARCADIA, 6 MONTHLY REPORT FOR THE PERIOD ENDED 26.6.1981. A- P 279C ARCADIA, REPORT ON AREA RELINQUISHED ON 26.12.81. A- P 279C, ARCADIA, SIX MONTH REPORT FOR PERIOD ENDED 26.12.82. A- P 347C, FAIRVIEW, SIX MONTHLY REPORT FOR PERIOD 30.03.81- 30.09.81. EPC 347, FAIRVIEW, FINAL REPORT FOR PERIOD 30/9/81- 23/2/82 SIX MONTHLY REPORT FOR THE PERIOD 17.02.82- 16.08.82, A- P 385C, WESTGROVE (R8257). A- P 259C, MERIVALE REPORT ON AREA RELINQUISHED FROM 26.04.82. A- P 259C MERIVALE, SIX MONTHLY PROGRESS REPORT FOR PERIOD 27.4.1979- 26.10.1979. A- P 259C MERIVALE, SECOND SIX- MONTHLY PROGRESS REPORT FOR PERIOD 27.10.79- 27.4.80. A- P 259C MERIVALE, REPORT ON AREA RELINQUISHED 26.4.80. A- P 259C, MERIVALE, THIRD 6 MONTHLY REPORT FOR PERIOD 27.4.80- 26.10.80. A- P 259C MERIVALE, SIX MONTHLY PROGRESS REPORT FOR PERIOD 27.10.1980- 26.4.1981. A- P 259C, MERIVALE, SIX MONTHLY PROGRESS REPORT FOR PERIOD 27.10.81- 16.04.82. A- P 259C, MERIVALE, REPORT ON AREA RELINQUISHED FROM 15.07.82. GEOLOGICAL EVALUATION OF A- P 259C, MERIVALE. A- P 259C, MERIVALE, 6 MONTHLY PROGRESS REPORT FOR PERIOD 27.10.82- 26.04.83, (REPORT 1983- 51). A- P 259C, MERIVALE, REPORT ON AREA RELINQUISHED FROM 26.04.83. A- P 259C, MERIVALE, SIX MONTHLY PROGRESS REPORT FOR PERIOD 27.10.83- 26.04.84 (1984/30). O BJECT ID 2 2 2 2 2 2 70 70 108 180 180 180 180 180 180 180 180 180 180 180 180

P e tro le u m Exp lo ra tion Re p orts (In c o mp le te list) De c a d e 2000 2000 2000 2000 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1990 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 T e nu re EPP805 EPP805 EPP805 EPP805 EPP490 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP526 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 EPP337 CR Nu mb e r Re po rt T itle 43772 44317 44401 49201 23086 27933 28291 28292 28293 29067 29069 29070 32252 33934 33938 33999 34753 37233 37328 37683 38429 38570 38660 39238 39421 39945 45543 45544 51879 12761 13121 13578 14413 14523 14591 14593 16920 16995 17350 19107 21198 22625 23889 24005 24805 24862 25343 28835 31091 31867 31868 31869 32880 43691 A- P 805P, PRODUCTION TESTING REPORT FOR DONGA 3 TO 30/6/06 A- P 664P, 706P, 805P, 807P, 809P, COMBINED RESERVES REPORT FOR THE SIX MONTH PERIOD ENDING 30/6/06 EPP 805, OIL DONGA 3, WELL COMPLETION REPORT A- P 805P, DONGA, ANNUAL REPORT FOR PERIOD 1/9/06 TO 31/8/07 EPP 419, 490, COMET RIDGE METHANE PROJECT, OVERVIEW & TECHNICAL SUMMARY EPP 526, TPC FAIRVIEW 2, WELL COMPLETION REPORT EPP 526, TPC FAIRVIEW 5, WELL COMPLETION REPORT EPP 526, TPC FAIRVIEW 6, WELL COMPLETION REPORT EPP 526, TPC FAIRVIEW 7, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 9, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 11, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 12, WELL COMPLETION REPORT A- P 526P, PL 92, TPC COMET RIDGE 1998C, FINAL SEISMIC SURVEY REPORT A- P 526P, TPC DAWSON 3, WELL COMPLETION REPORT A- P 526P, TPC DAWSON 2, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 54, WELL COMPLETION REPORT A- P 526P, TOG CLEMATIS CREEK 1, WELL COMPLETION REPORT A- P 526P, TOG PLANET DOWNS 1, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 33, WELL COMPLETION REPORT A- P 526P, TOG CLEMATIS CREEK 3, WELL COMPLETION REPORT A- P 526P, TOG CLEMATIS CREEK 2, WELL COMPLETION REPORT A- P 526P, TOG LYND RANGE 1, WELL COMPLETION REPORT A- P 526P, TOG BEDOURIE 1, WELL COMPLETION REPORT A- P 526P, TOG MOUNT ALDIS 2, WELL COMPLETION REPORT A- P 526, PL 90, 91, 92, 99, 100, PETROLEUM RESERVES REPORT FOR THE SIX MONTH PERIOD ENDING 30/6/05 A- P 526P, TOG DEEP CREEK 1, WELL COMPLETION REPORT A- P 526P, TPC FAIRVIEW 14, WELL ABANDONMENT REPORT A- P 526P, TPC FAIRVIEW 15, WELL ABANDONMENT REPORT A- P 526P, PARTIAL RELINQUISHMENT REPORT FOR PERIOD ENDING 31/10/07 RA- P 337P, AAR COWLEY 1, WELL PROPOSAL REPORT YELLOWBANK FIELD STUDY, A- P 337P. A- P 337P, AAR WESTGROVE 6, WELL COMPLETION REPORT BRIEF PALYNOLOGICAL REPORT ON AAR YELLOWBANK 1, A- P 337P, (REPORT NO. 265/1). PALYNOLOGICAL REPORT ON AAR MAINTOP 1, A- P 337P, (REPORT NO. 241/1). AAR TRIBUNE 1, PROGNOSIS REPORT, A- P 337P, QLD. AAR LOWESBY 1, PROGNOSIS REPORT, A- P 337P, QLD. DENISON TROUGH PROSPECTS AND LEADS INVENTORY, A- P 337P, QLD, (CSR REPORT NO. A1072). TOP OF MANTUAN REFLECTOR TWT STRUCTURE MAP, A- P 337P, DENISON TROUGH, QLD, (REPORT A 1100). A- P 337P, PARTIAL RELINQUISHMENT REPORT. A- P 337P, DENISON TROUGH, MARENGO SEISMIC SURVEY, FINAL REPORT A- P 337P, AGL MOUNT HUTTON 1, POST DRILL APPRAISAL EPP 337, CQN WARRINILLA 6, GEOLOGICAL PROGNOSIS EPP 337, AGL REBEN DOWNS 1, GEOLOGICAL & DRILLING PROGRAMME A- P 337P, DENISON TROUGH, SEQUENCE STRATIGRAPHY OF THE ALDEBARAN SANDSTONE GROUP A- P 337P, AGL CHESNEY 1, WELL COMPLETION REPORT A- P 337P, AGL REBEN DOWNS 1, WELL COMPLETION REPORT A- P 337P, YOOTHAPPINNA EXPERIMENTAL MINI- SOSIE SURVEY, FINAL REPORT A- P 337P, SPO KIA ORA WEST 1, WELL PROPOSAL REPORT A- P 337P, 451P, 553P, SPO SD95, SPO SD95B, FINAL ACQUISITION AND PROCESSING REPORT A- P 337P, SSL YANDINA 2, WELL PROPOSAL REPORT A- P 337P, OCA RIGEL 1, WELL PROPOSAL REPORT A- P 337P, OCA YANDINA 3, WELL PROPOSAL REPORT A- P 337P, BRIEFING MATERIAL DENISON TROUGH A- P 337P, SSL MIRA 1, WELL ABANDONMENT REPORT Pre- 1980 Reports ommited from table (>50 reports) O BJECT ID 95 95 95 95 23 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71

Min e ra l Exp lo ra tio n Re p orts (Inc o mp le te list) De c a d e 2000 2000 1960 1960 1960 1960 T e nu re EPM13666 EPM16865 EPM672 EPM425 EPM425 EPM425 CR Nu mb e r Re po rt T itle 0 0 2999 2460 2459 2461 Report not loc ated Report not loc ated REPORT ON AN AERIAL PROSPECTING CAMPAIGN CARRIED OUT IN QLD, 17.06.69- 6.11.69, A- P 672M, BOWEN BA INJUNE PROFILES 1- 54. FINAL REPORT ON A- P 425M INJUNE AREA, QLD. INJUNE AREA AERIAL PHOTOS FILED IN AIR PHOTO LIBRARY (REPORT MISSING FROM CR COLLECTION) O BJECT ID 464 2392 516 270 270 270

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EPC1318RidgelandNorth PreviousExploration Several phases of early geological investigation and exploration have been conducted over the EPC1318 region. Early exploration in the region was contacted by Oil Search Limited which drilledanexplorationwell(OLS2HuttonCreek)inthe1930stoadepthof1429m.Severalcoal seamswererecordedinthePermiansequenceabove500m(GSQPublication299). Australian Associated Oil fields N.L drilled petroleum exploration well Kia Ora 1 to a depth of 1655m, in the area in 1966 (CR2005). Coal was intersected in the Jurassic and Permian strata. The coal in the Permian was intersected at depths greater than 780m. Jurassic coal was intersected in the lower part of the Hutton Sandstone and the upper part of the Evergreen Formationatdepthsrangingfrom91mto161m. In 1975/76 the Queensland Mines Department drilled Taroom 1111A stratigraphic bore to a depth of 1206m, close to OLS 2 Hutton Creek (QGMJ 78[914]). Four coal seams were intersected from 280m to 600m, the 2 thickest intersections were 12.5m and 5.1m. Wireline logsandcoressamplesofthePermiancoalseamsweretakenandanalysed. Otter Exploration NL and Allstate Exploration NL explored the region for opencut coal on EPC279between1979 and1982(CR10783). Theinitialprogramcomprised24drillholestotest the Middle Jurassic Walloon SubGroup coals located to the south of EPC1318. Results were disappointing with coal intersections typically less than 0.2m thick (CR8592). A follow up program of 10 drillholes (ARseries) and 18linekm of seismic were completed to test Early Jurassic Evergreen Formation coals and Permian Coals. Best results were obtained from drillhole AR10 located approximately 5km south outside EPC1318. A coaly intersection 22m thick at 160m depth was intersected in the Boxvale Sandstone. The Boxvale Sandstone Member coaly unit observed in drillhole AR10 was correlated to several holes within EPC1318 (Figure9). Between 1981 and 1982 AGIP Australia explored the region for opencut coal on EPC347 (CR10349). An initial 28 drillhole program (FVseries) was conducted to investigate the coal development in the Evergreen Formation. Results were generally disappointing however coal bandsandstringersarenotedinthegeologistslogsinmostdrillholes.Densitywirelinelogsare avalible for most holes. Exploration then focused on the Permian Bandanna Formation on the crest of the Arcadia Anticline where corehole FV10 was drilled and density logged. The Bandanna Formation was found to be 480m deep with thin and split coal seams. The bestcoal seam intersection was 1.38m thick at 547m deep with ash of 16.6% and RD of 1.43. Figure 10 showsaschematiccrosssectionwhichsummarisestheirfindings. Santos Ltd drilled Kia Ora West 1 petroleum exploration well within EPC1318 in 1995 (CR29047). A Bandanna Formation coal seam, 4.5m thick, was intersected at 796m deep. A significant carbonaceous and coaly interval was also intersected in the Staircase Formation depthsbetween1350mand1600m.
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EPC1318RidgelandNorth

Figure9PreviousexplorationresultsfromEPC279OtterExplorationNL.BoxvaleSandstoneMembercoals(black shade) correlated between ARseries drillholes across EPC1318. Drillhole locations in relation to EPC1318 (orange outline)shownininset.

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EPC1318RidgelandNorth EPC1318

Figure 10 Previous exploration results from EPC347 AGIP Australia. Regional structural schematic crosssection EW. Location of EPC1318 (orange outline) with Blackwater Group (black & white striped fill, Back Creek Group (dashedfill).SectionextendsfromtheNebineRidge(west)toTaroom(east).

From the 1990s onwards the exploration focus in the area shifted to the CSG (coal seam gas) potentialoftheBandannaFormation.In1999OCAdrilledKattanga1andKingston1CSGwells in the west of EPC1318. TriStar Petroleum, TOGA and Santos have extensively drilled the FairviewGasfieldontheeasternsideofEPC1318.Approximately30CSGwells(Fairviewseries) are within or immediately adjacent the EPC. These wells show Bandanna Formation coal seam intersections ranging from 2m to 6m thick, at depths between 500m and 900m. Figure 11 shows the wireline density profile of the Kingston 1 well, 5.1m Bandanna Seam intersection at 550mdepthinthecentreofEPC1318. In 2004 BMA began exploration of the Ridgeland Deposit adjacent to the south of EPC1318 (BBS05paper presentation, 2005). They have reviewed the earlier drilling and seismic data in the area and reinterpreted 2 southerly Boxvale Sandstone coal intersections as Reids Domes Beds.InitialBMAexplorationcomprised10drillholes,photogeologicalandpalynolgicalstudies whichreportedlyhaveconfirmedtheirinterpretations.Drillholeshaveintersectedthick(+10m) coalseamsatdepthsof100mto300m(Figure12).ItissuggestedbyBMAthatanupliftedblock ofPermiansedimentshasraisedtheReidsDomeBedstoshallowdepthspriortothedeposition of Jurassic sediments. The deposit is said to be dipping at 15 degrees to the northeast. Based on their preliminary findings they have estimated open cut coal resource for semisoft coking coalproductof200Mt.Figure13showsthegeologyandholelocationsonEPC851.
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Figure11Kingston1CSGwellBandannaFormationcoalseamwirelinedensityprofile.Coalintervalidentifiedby lowdensityresponse(blackgradientfill)showsseam5.1mintersectionwithoutbands.Insertshowsthelocationof Kingston1well(yellowdot)inrelationtotenementarea(orangeoutline)

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Figure 12 Previous exploration results from EPC851 BHP Ridgeland Deposit. Graphic log and geophysics from holesRDG50006,located2kmoutsidethesouthernboundaryofEPC1318.

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EPC1318

Figure 13 Previous exploration results from EPC851 BHP Ridgeland Deposit. Location of adjacent EPC1318 (orangeoutline)withseismic(purplelines),andBHPexplorationdrillholes(reddots).
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EPC1318RidgelandNorth Figure 14 shows the location of drillholes associated to the EPC1318 area. A total of 60 drillholes are recorded within EPC1318. These holes comprise; 10 drillholes from QDEX coal exploration reports, 31 CSG wells, 2 petroleum wells and 17 waterbores. In addition 1 GSQ stratigraphic bore and 2 DME stratigraphic bores of significance are located with 5km but outsidethetenement.

Figure14Drillholelocationmap.Tenementarea(orangeoutline).DrillholesfromQDEXcoalexplorationreports (reddots),GSQDMEstratigraphicbores(maroondots),petroleumwells(aquadots),CSGwells(yellowdots)and waterbores(bluedots).FullsizemapinAppendix1.

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EPC1318RidgelandNorth Geophysics Approximately 20 seismic surveys lines (equating to near 150 linekms) are recorded on the IRTM system in the vicinity of EPC1318 (Figure 15). No seismic lines are recorded in the IRTM crossing the Ridgelands Deposit to the south of the EPC. Seismic over the Ridgeland Deposit hasbeennotedontheEPC851explorationsummary.

Figure 15 Seismic Lines and Geophysical Surveys. Tenement (orange outline), IRTM seismic lines (grey lines), EPC851seismiclines(greenlines),geophysicalsurveys(bluefill).FullsizemapinAppendix1.

TheseismichorizoncorrelationSBEAdatasetextendsacrossEPC1318.Figure16showstheB70 depth to the top of Bandanna Formation (redshallow ~500m, yellowdeep ~1500m) and the S20depthtothebaseofEvergreenFormation(redshallow~surface,yellowdeep~500m).

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Figure16SBEAdatasetimagesB70andS20.Left)B70,depthtotopofBandannaFormationwithtenementarea (whiteoutline),major100mcontours(thickblacklines),minor10mcontours(thinblacklines).Right)S20,depthto thebaseoftheEvergreenFormation(indicatingapproximateBoxvaleSandstonedepth)withtenementarea(white outline), major 100m contours (thick black lines), minor 10m contours (thin black lines). Full size maps in Appendix1.

Regionalgravity,magneticsandternaryimagesarepresentoverEPC1318(Figure17).BMAhas alsoruntheFalconairbornegravityoverEPC851in2007whichremainsclosedfile.

Figure17Regionalgeophysicalimages.Left)Gravityimagewithtenementarea(whiteoutline),lowgravity (blues),highgravity(reds).Centre)Totalmagneticintensityimagewithtenementarea(whiteoutline).Right) Ternaryimageswithtenementarea(whiteoutline).FullsizemapsinAppendix1.

CoalQuality ThecoalqualitydataonthePermianBandannaSeamislimited.TheGeologyofAustralianCoal Basins indicates a washed coal quality of ash 710%, volatiles 2732% and Rvmax of 0.560.61. ItappearthatthisresultistakenatorneartheRollestonCoalDeposit.Thesequalityvaluesare comparable to the shallow Permian, seam 1 of Taroom 1111A ie. raw ash 818%, CSN greater than 3 (probable increase with depth), RvMax 0.51.0 from surface to 1200m. Table 4 shows thecoalqualityresultsfromTaroom1111A.

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Table4CoalqualityanalysesresultsforTaroom1111A.

The coal quality data on the Jurassic Boxvale Sandstone Member coals is also limited. The closest comparable quality results come from the Otter Exploration drillhole AR10, located outside the EPC 5km to the south. Composited raw coal quality analyses for an entire 22m intervalshowedAsh55%,Moisture1.32.3%,Volatiles1725%(Table5).Thesecoalsarehighly stone banded. It has been noted that BMA has reinterpreted this intersection to be Reids Dome Beds. Coal quality data from the BMA drilling is summarised in Table 6. The Reids Dome Beds coals are exemplified by the Cullinlaringo deposit south of Emerald. Excluding stone bands the coal is low ash, low sulphur, high volatile bituminous and high hydrogen. Both the JurassicandtheReidsDomeBedscoalsarehighlybanded.
Table5CoalqualityanalysesresultsforBoxvaleSandstoneMemberfordrillholeAR10.

Ash (%) 9 VolatileMatter (%ad) 36 Sulphur (%ad) 0.90 Phosphorous (%drybasis) 0.050 CSN 3

Table 6 Selectively mined and washed, potential product coal quality determined for Reids Dome coals from BMAexploration(BowenBasinSymposiumconferenceproceedings,2005).
Vitrinite (%) 70 RoMax (%) 0.600.80

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EPC1318RidgelandNorth ExplorationTarget ThreedistinctcoalexplorationtargetsarepresentinEPC1318; 1) PermianBandannaFormationcoalseams,asapotentialcokingcoalproduct. 2) EarlyJurassicBoxvaleMembercoalyunit,asapotentialthermalcoalproduct. 3) ReidsDomeBeds,asalowyieldsemisoftcokingcoalproductorexportthermal product. The primary exploration target would be the Permian Bandanna Formation which has been relatively well defined by CSG drilling. Initial exploration drilling should be directed to the region around Kingston 1 well (outside PL), where thick (5m) seam development is present at depths less than 600m or in the east towards the top of the Arcadia Anticline, near existing Fairview drilling (inside PL). The GSQ hole Taroom 1111A implies that the Bandanna coals are missing from the section to the south of the EPC. Hence, if the GSQ interpretation is correct thereisapotentiallimittotheBandannacoalsinthefarsouthoftheEPC.Thesouthernlimitis potentially accompanied by faulting which may have raised sections of the Bandanna Coals to shallow depths beneath Jurassic cover. The GSQ interpretation supports the interpretation of theBMARidgelandDepositthattheReidsDomeBedsunderlieJurassicsedimentsinthesouth. TheBandannaFormationexplorationtargetshavebeencalculatedseparatelyasshallowerthan 600mandatdepths600mto1000m.LocationoftheexplorationtargetsareshowninFigure18 andsummarisedinTable7. A secondary target would be the Jurassic Boxvale Sandstone coaly unit established by Otter Exploration. Initial drilling should focus on defining lateral continuity between the intersection recorded in Kia Ora 1 (within the EPC), AR10 (south of the EPC) and the other AR series drillholes. SBEA depth to base of Evergreen Formation gives an indicative depth range of surface to 300m, which is supported by intersections in Kia Ora 1 and the AR series drillholes. LocationoftheexplorationtargetisshowninFigure18andsummarisedinTable7. Recent exploration work by BMA suggests that the Early Jurassic coaly unit to the south of EPC1318 may actually be Early Permian Reids Dome Beds. As such, another secondary exploration target would be the Early Permian Reids Dome Beds coals. Such a target maybe present in an upthrown horst of Permian sediments, and concealed beneath Surat Basin cover. Orientation and extent of the target is poorly understood and is based on the implied BMA Ridgeland Deposit (Refer to previous exploration section). Depth ranges (150m400m) are based on the depth to base of Precipice Sandstone. Location of the exploration target is shown inFigure18andsummarisedinTable7.

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Table7ExplorationTargets

Conceptual Exploration Target

600700Mt* 350450Mt* 1,1001,300Mt* 1,2001,400Mt*

TargetCoal Product
Opencut,potential thermalcoalproduct, washedfromshallow thickhighashseam Underground, potentialcokingcoal product Underground, potentialcokingcoal product Opencut,potential washedsemisoft cokingcoalproduct

CoalSeam/ Formation
BoxvaleSandstone Member BandannaFm.500 600m BandannaFm.600 1000m ReidsDomeBedsCoal

Coal Quality Type

Raw:Ash55%, Moisture1.32.3%, Volatiles1725% Washed:Ash710%, volatiles2732% Rvmaxof0.560.61 Washed:Ash710%, volatiles2732% Rvmaxof0.560.61 Raw:Ash818%, CSN>3

EstimationBasis
Surface300mdeep,avseamthickness=10m, 2 possiblelateralextent=50km ,RD=1.5 SBEAandCSGwelldepthranges,avseam thickness=4m,possiblelateralextent= 2 70km ,RD=1.5 SBEA&CSGwelldepthranges,avseam=4m, possiblelatextent;west=80km2/east= 2 140km ,RD=1.5 150400mdeep,avseamthickness=20m, possiblelateralextent=50km2,RD=1.5

* These exploration targets are conceptual in nature, there has currently been insufficient exploration to define a Resource. It is uncertain if further exploration will result in determination of a resource. Geological modelling and or drilling is required to establish a coal resource. Nb. Uncertainty regarding the naming and correlation of Boxvale St and Reids Dome Beds coals is noted. They may be the same target or represent 2 distinct targets.

BoxvaleSandstone MemberTarget

ReidsDome BedsTarget

BandannaSeam Target500600m

BandannaSeam Target6001000m

Figure 18 Exploration Targets Figure. Tenement area (white outline), with depth to top of Bandanna Formation (contours),BandannaFormationexplorationtargetarea500600mdeep(darkgreenoutline),BandannaFormation exploration target areas 6001000m deep (light green outline), Boxvale Sandstone Member coals exploration targetarea(lightblueoutline),ReidsDomeBedscoalstargets(darkblueoutline).

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Figure 19 Exploration Targets Figure. Tenement area (white outline), with depth to top of Bandanna Formation (contours). Left: Boxvale Sandstone Member coals exploration target 600700Mt (light blue area). Middle: Bandanna Formation exploration target, 500600m deep 350450Mt (dark green area), 6001000m deep 1,100 1,300Mt(lightgreenoutline).Right:ReidsDomeBedscoals1,2001,400Mt(darkbluearea)

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Appendix1: Maps

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