Anda di halaman 1dari 26

A NOVADX COMPANY

July 2010

Confidential Information - Not for Public Distribution 1


FORWARD LOOKING STATEMENTS

This PowerPoint presentation includes certain statements that constitute “forward-looking statements” within the
meaning of Section 27A of the United States Securities Act of 1933 and Section 21E of the United Sates
Securities Exchange Act of 1934. These statements appear in a number of places in this PowerPoint presentation
and include statements regarding our intent, belief or current expectation and that of our officers and directors.
Such forward –looking statements involve known and unknown risks and uncertainties that may cause our actual
results, performance or achievements to be materially different from any future results, performance or
achievement expressed or implied by such forward-looking statements. When used in this PowerPoint
presentation, words such as “believe”, “anticipate”, “estimate”, “project”, “intend”, “expect”, “may”, “will”, “plan”,
“should”, “would”, “contemplate”, “possible”, “attempts”, “seeks” and similar expressions are intended to indentify
these forward-looking statements. These forward-looking statements are based on various factors and were
derived utilizing numerous assumptions that could cause our actual results to differ materially from those in the
forward-looking statements. Accordingly, you are cautioned not to put undue reliance on these forward-looking
statements Forward-looking
statements. Forward looking statements include,
include among others,
others statements regarding our expected financial
performance in future periods, our plan of operations and our business strategy and plans or budgets.

We assume no obligation to update or to publicly announce the results of any change to any of the forward-looking
statements contained or incorporated by references herein to reflect actual results, future events or
de elopments changes in assumptions
developments, ass mptions or changes in other factors affecting the forward-looking
for ard looking statements.
statements

Unless indicated otherwise within this presentation, no work has been done to classify the coal resources
mentioned in this presentation as a current resource estimate as defined in section 1.2 and section 1.3 of NI 43-
101 and is treated as an estimate only and therefore cannot be relied upon.

Confidential Information - Not for Public Distribution 2


INTRODUCTION

MCoal Corporation is a Nevada based, wholly‐owned subsidiary of Novadx Ventures


Corp. (TSX‐V: NDX / OTC: NDXFF) focused on acquiring and operating high‐value,
specialty coal projects in the Appalachian coal district of the United States. MCoal
recently commenced production at the Rosa Mine, a metallurgical coal mine
located in Alabama. MCoal is currently ramping production to 10,000 tons per
month at a selling price of US$150 per ton.
ton

MCoal entered into letters of intent, subject to financing to make three acquisitions:
the operating Flatwoods Mine located in Kentucky, currently producing 23,000
ton per month of a high quality stoker coal selling at an average price of US$80
per ton, the fully permitted and bonded Rex No.1 Mine located in Tennessee with
32.2 million tons of measured and indicated and 27.6 million tons of inferred
resources off a coall suitable
i bl for
f theh silicon
ili metall market
k and,
d the
h Dade
D d Project
P j
located in Georgia with historic resource estimates of 172M tons of primarily
metallurgical coal in place.

MCoal requires $40 million in equity financing to complete these acquisitions.

Confidential Information - Not for Public Distribution 3


MCOAL’S LONG TERM GOAL

Continue implementing its acquisition growth strategy to become a recognized


producer of high quality, specialty coals sold to multiple industrial coal markets
including:

Metallurgical Coal:  Customers purchasing Rosa Coal for $150 per ton
• Made into coke which is sold to steel foundries who combine it with iron ore and other materials to make 
steel
• The source of carbon which gives steel its strength.  For every ton of steel produced, typically 0.6 of a ton 
of metallurgical coal is required. 

p g $ p
Activated Carbon: Customers purchasing Rosa Coal for $150 per ton
• Uses include: gas purification, gold purification, metal extraction, water purification, air filtering and  
sewage treatment

Silicon Metal: Customers paying up to $190 per ton for a sized product
• Specialty coal used in manufacture of silicon metal for photovoltaic cells, silicon chips and alloyed metals

Industrial Stoker Coal: Customers purchasing Ikerd coal for between $70 to $100 per ton
• A high quality and highly valued, specialty thermal coal product that is primarily sold to the food industry 
and to other customers in the cement, paper and utility businesses. 

Confidential Information - Not for Public Distribution 4


MCOAL’S SHORT TERM GOALS

• Complete $40 million financing and list MCoal on TSX.

• Increase production of specialty coal products from a projected 175,000 tons in 
2010 to 800,000 tons in 2011 and 1,000,000 tons in 2012;

• Increase revenue from a projected $17 million in 2010 to $100 million in 2011 and 


$143 million in 2012;

• Prove up over 100 million tons of NI 43‐101 compliant specialty coal resources by 
the end of 2011; and

• Continue evaluating and acting upon a pipeline of additional high quality coal 
acquisition opportunities that complement the current portfolio of projects.

Confidential Information - Not for Public Distribution 5


EXPERIENCED MANAGEMENT TEAM

• Neil MacDonald ‐ President/CEO Novadx, CEO MCoal


– 18 years as an investment banker with Raymond James Canada and Blackmont Capital Corp.
– a member of the TSX Venture Exchange local advisory committee.

• Robert Payne ‐ Chief Operating Officer, MCoal


– 24 years of direct and senior experience in both underground and surface coal mine development, construction,
operations and management with a B.S. Mine Engineering degree in 1986 from the University of Alabama .
– Previously with Drummond Coal Corp he is highly respected in the local mining community.

• Mark Reynolds – Director of Coal Marketing, MCoal


– 25 years’ experience in mining and transport operating logistics, instrumental role in the founding of Western Canadian
Coal Corporation
– 17 years’ experience in project finance as a stock broker

• Fred Beane – Consultant, Land acquisition & Coal Marketing , MCoal


– 30 years’ experience in the Appalachian coal industry, has assembled and arranged MCoal’s projects portfolio .
– responsible for extending land position and arrange preferential coal marketing contracts

• J.
J Doyle
D l Crump
C – Rosa
R Mi Supervisor
Mine S i , MCoal
MC l
– 35 years’ experience in coal mining operations and coal transportation in Alabama
– Local to the area, and has many contacts within the coal mining community.

Confidential Information - Not for Public Distribution 6


MANAGEMENT TEAM (CONTINUED)

• Phillip Prince – Property Acquisition and Land Manager , MCoal


– With 16 years’ of experience abstracting, researching and analyzing land and mineral titles.
– Is responsible for negotiating acquisition agreements of surface mining rights for MCoal.

Proposed acquisitions will complement existing management with highly


experienced individuals local to the area including:

• Frank H. Ikerd III – Managing Member, Ikerd Group of Companies


– Frank H. Ikerd III is the third generation Coal mining executive with over 40 years of direct coal mining experience as
owner/operator.
– an established member of the Kentucky community, with extensive relationships across many business sectors.
– Sold previous coal mining company to Peabody.

• Tim Webb – Managing Member, Tiacme, LLC


– 30 years’ of experience as a mining consultant and owner/operator of several coal companies.
– a highly respected mining engineer with global experience (US, UK, Mexico) in underground coal mining.

Confidential Information - Not for Public Distribution 7


TOTAL POTENTIAL COAL RESOURCES
Rosa Mine (Alabama) – Owned and operated ($65 cash cost per ton)
– Operating Mine with an estimated 6.2 million tons  measured and indicated 
and 2.0 million tons of inferred coal resources. 
– NI 43‐101 compliant proven coal reserve of 652,000 tons

Flatwoods Mine (Kentucky) – Acquisition ($52 cash cost per ton)
– Operating mine with an estimated 7.13 million tons  of coal resources. 
– Significant expansion potential

Rex No 1 Mine (Tennessee) Acquisition ($68 cash cost per ton)


Rex No 1 Mine (Tennessee) – Acquisition ($68 cash cost per ton)
– Permitted and bonded mine  with an estimated 32.2 million tons measured 
and indicated and 27.6 million tons of inferred  coal resources
– significant expansion potential 

Elk M
Elk Mountain, Little Bushy Creek and Buncomb
i Li l B h C k d B b (Kentucky) ‐
(K k ) Acquisition
A iii
– 3.38 million tons across additional three permitted  and bonded but idle 
mines.

Dade Project (Georgia) – Option to Purchase Mineral Rights.
– historical resources estimates of 172 million tons of met and thermal coal
– historical indication of over 200 million tons of iron ore.

Total potential in situ coal resources
p of over  250 million tons1
with expansion potential 

Confidential Information - Not for Public Distribution 8


ROSA MINE ‐ ALABAMA

• currently 100% owned producing mine; previous investor has a right to convert 
investment into a 25% JV interest.
• grass roots project started in October 2008.
• commenced surface production of metallurgical coal on April 19, 2010.
• 652,000 tons of proven 43‐101 compliant reserves with an estimated 8.2 million 
tons of coal in place.
f l l
• currently selling to domestic customers in the coking coal and activated carbon 
businesses at an average price of US$150 per ton. 
• e panding prod ction from a projected 45 000 tons in 2010 to 140 000 tons in
expanding production from a projected 45,000 tons in 2010 to 140,000 tons in 
2011 and 300,000 tons in 2012 through 3 mining phases.
• currently permitting onsite coal processing facility to increase quality control and 
reduce production costs.
reduce production costs. 

Confidential Information - Not for Public Distribution 9


ROSA MINE ‐ ALABAMA

• Calvert & Marsh Coal Co. Inc. of Oneonta, Alabama mined the Rosa coal seam
using “rim cut” strip mining techniques from 1965 to 1978 and sold the Rosa coal
to two existing coking facilities in Birmingham.
• Only the fringes of the mountains overlaying the Rosa coal seam were mined,
leaving behind a stripped high‐wall ideally suited for auger mining and a large
underground
d d reserve.

Confidential Information - Not for Public Distribution 10


MCOAL’S THREE PHASE ROSA MINE PLAN

10 Year mine life planned over three phases

Phase 1: Auger Mining


Phase 2: Auger and Strip Mining
Phase 3: Underground Mining

Confidential Information - Not for Public Distribution


11
ROSA MINE – ALABAMA

Rosa Coal Quality
Washed
Washed (Dry Basis)
Total Moisture % 8.0
Ash %
Ash % 1.7 1.8
Volatiles % 25.1 27.2
Fixed Carbon % 64.7 70.3
Sulphur % 0.61 0.66
BTU/lb 14 000
14,000 15 200
15,200

Free Swelling Index 9
Hardgrove Index 67

Confidential Information - Not for Public Distribution 12


REX NO.1 MINE ‐ TENNESSEE

• LOI signed with Tiamce LLC to acquire the Rex  No. 1 Mine in consideration of US$2,500,000 


in cash plus US$2,500,000 payable in shares at a 10% discount to the financing price.
p p y gp
• Fully permitted and bonded underground coal mine encompassing 31,000 acres ready to 
commence production of high quality coal primarily for the silicon metal industry.
• The Rex Coal seam has (since 2004) been in demand by silicon metal foundries due to its high 
quality and low iron and titanium content
quality and low iron and titanium content.
• Silicon metal coal typically sells at $190 per ton for a sized product.
• Current resource estimate of 32.2 million tons measured and indicated and 27.6 million tons
inferred resources in place with an estimated recoverable of 30 million tons.
• commencing production in January 2011.
• expanding production from 300,000 tons in 2011 to 500,000 tons in 2012 with and expected 
mine life of over 25 years
• An NI 43‐101 compliant resource report has been initiated
An NI 43‐101 compliant resource report has been initiated.

Confidential Information - Not for Public Distribution 13


REX NO.1 MINE RESOURCES

Rex Coal Quality

As received Washed  
(Dry Basis) (Dry Basis)

Ash % 4.88 1.90

Volatiles % 38.31 39.25

Fixed Carbon % 56.81 58.85

Sulphur % 0.92 0.77

BTU/lb 14,358 14,850

Iron Oxide % 0.55 0.24

Titanium Oxide % 0.046 0.007

Confidential Information - Not for Public Distribution 14


IKERD MINING LLC ‐ PROPERTIES

• LOI signed with Ikerd Mining LLC to acquire the Flatwoods, Elk Mountain, Little Bushy Creek 
and Buncomb Mine assets in consideration of US$14,000,000 in cash and assuming 
US$10,000,000 in mining equipment debt financing.
$ d b f
• LOI signed with Ikerd Terminals LLC and Ikerd Transportation LLC to acquire all assets 
associated with a coal transportation, processing and rail load out facility (Norfolk & Southern 
Rail) that has been operating for over 60 years in consideration of US$2 million in cash plus 
US$2,000,000 payable in shares at a 10% discount to the financing price.
• The transaction provides MCoal with a turn key fully operational  and profit generating coal 
mine producing and average of 23,000 tons of high quality industrial stoker coal at an average 
p
price of $80/ton. 
$ /

Confidential Information - Not for Public Distribution 15


IKERD MINING LLC

• Flatwoods Mine – Production 
– Coal is mined at the Flatwoods and Dry Branch Mines (collectively referred to as 
“Flatwoods”), in Clay County, Kentucky 
– Commenced production of high quality industrial stoker coal in April 2008
– Coal is surface mined at a low 8:1 strip ratio on the Hazard 5a and by using contour and 
auger mining methods on the Hazard 4 seam.
auger mining methods on the Hazard 4 seam. 
– 3.35 million tons of permitted reserves plus an additional 3.78 million tons of lease 
controlled reserves in place.
– Exploration and leasing of additional resources in the immediate area is ongoing.
– Expanding production from 300,000 tons in 2010 to 420,000 tons in 2011.
– The industrial stoker coal produced is high quality and sold primarily to the food 
processing customers. Other customers include cement, paper and utility businesses.  

Confidential Information - Not for Public Distribution 16


IKERD MINING LLC

Hazard 5A Coal Quality:
As received As Received
(Dry Basis)
Total Moisture % 4.15
Ash %
Ash % 8.07 8.42
Sulphur % 0.72 0.75
BTU/lb 13264 13839

Confidential Information - Not for Public Distribution 17


IKERD MINING

• Elk Mountain, Little Bushy Creek and Buncomb Mines ‐ Idle


– 3
3 additional fully permitted and bonded properties located in Clay, Knox and Owsley 
additional fully permitted and bonded properties located in Clay, Knox and Owsley
counties respectively in Kentucky.
– encompass an aggregate 559 coal acres with exploration and leasing of additional 
acreage ongoing. 
– an aggregate of 3,412,240 tons of reserves in the Hazard 5A, Hazard 4, Blue Gem and 
t f 3 412 240 t f i th H d 5A H d 4 Bl G d
Jellico seams.
– coal mining permits are getting harder to obtain and these 3 projects offer MCoal an 
excellent opportunity for future expansion.

Confidential Information - Not for Public Distribution 18


DADE COUNTY EXPLORATION ‐ GEORGIA

• in final stages of negotiating an option to acquire all mineral rights to approximately 21,000 
acres located in Dade county in Georgia.
• option cost is $75,000 for 18 months
• option exercise price is US$5 million payable US$2.1 million in cash and the balance in shares 
at the share price when the option is exercised. 
• mineral rights include four seams Aetna (low vol met coal), Dade (mid vol
mineral rights include four seams, Aetna (low vol met coal) Dade (mid vol met coal), 
met coal)
Rattlesnake (mid vol met coal) and the Mill Creek (thermal coal) which where discovered in 
the mid to late nineteenth century
• historical resource of and aggregate 172 million tons:  112 million tons of metallurgical coal 
and 60 million tons of thermal coal
and 60 million tons of thermal coal.
• exploration and delineation of 43‐101 mineral resource by end of 2011.

Confidential Information - Not for Public Distribution 19


DADE PROJECT COAL QUALITY BY SEAM

Aetna Dade Rattlesnake Mill Creek


(As Received)
(As Received) (As Received)
(As Received) (As Received)
(As Received) (As Received)
(As Received)
Coal Category Metallurgical  Metallurgical  Metallurgical  Thermal
Historica Resource Estimate 23 M 50 M 39 M 60 M

Total Moisture %  8.39 5.52 0.92 0.92


Ash %  2.51 3.64 4.84 12.18
Volatiles %  22.40 25.63 27.98 22.30
Fixed Carbon %  66.70 65.21 66.26 64.60
Sulphur %  0.73 0.94 0.98 0.72
BTU/lb  14,386 14,357 Unknown 13,761

Free Swelling Index  9 9 Unknown NA
Hardgrove Index  88 83 Unknown NA

Confidential Information - Not for Public Distribution 20


PRO FORMA FINANCIAL PERFORMANCE

$180 
ons
Millio $160
$160 
$140 
$120 
$ 00
$100  Revenue
$80  EBITDA
$60  Net Income
$40 
$20 
$‐
2010
(6 months) 2011 2012 2013
Revenue $ 16,570,000 $ 101,564,000 $143,541,000 $ 158,031,600
EBITDA $ 3,875,071 $ 43,774,000 $ 60,459,497 $ 61,046,613
Net Income $ 1,697,543
1 697 543 $ 25
25,913,877
913 877 $ 35,930,914
35 930 914 $ 35,899,004
35 899 004

Confidential Information - Not for Public Distribution 21


FINANCING REQUIREMENT

Description Cash
Acquisition of Ikerd mining assets $16,000,000
Acquisition of Tiacme LLC (Rex No. 1 Mine) $2,500,000
Rex No. 1 Mine development and start‐up $10,000,000
Dade Project option $75,000
Exploration of Dade Project $1,000,000
Rosa Wash Plant $3,000,000
Sub total
Sub total $32 575 000
$32,575,000
Working Capital $7,425,000
Total Funding Requirements $40,000,000

Confidential Information - Not for Public Distribution 22


PROPOSED SHARE STRUCTURE

Pricing Range
$1 50
$1.50
# Shares %

MCoal shares outstanding (Post Split) 26,427,650  46.8%


Shares to be Issued on closing 
acquisitions at 10% discount 3,333,333  5.9%

Total shares O/S pre financing
/ p g 29,760,983 
, , 52.7%

Financing (US$40,000,000) 26,666,667  47.3%

Total shares O/S post financing


Total shares O/S post financing 56 427 650
56,427,650  100 0%
100.0%

Market Cap $84,641,000

Confidential Information - Not for Public Distribution 23


NPV OF FREE CASH FLOW (PRE FINANCING)

Discount Rate NPV NPV/Share


8% $ 188,213,260  $7.12
10% $ 165,846,637 
165 846 637 $6 28
$6.28
15% $ 122,109,460  $4.62
20% $ 90,806,406  $3.44
25% $ 67,798,884 
67,798,884 $2.57
30% $ 50,480,221 $1.91
34% $ 39,750,000 $1.50 

Confidential Information - Not for Public Distribution 24


MCOAL VALUATION METRICS

Comparable Analysis
Current  Shares    Market NAV (8%)  Premium 
Industry Specific  Symbol Share  O/S Cap per        (Discount) to  P/E P/CFPS EV/EBITDA
Comparable Stocks Price (millions) (00,000’s) share NAV
2011 2012 2011 2012 2011 2012
Grand Cache Coal GCE T $5.80  96.5 $560  $5.08  14.2% 4.1  3.8  3.6  3.8  2.8  2.6 
Teck Resources TCK.B T $35.60  589.1 $20,972  $46.40  ‐23.3% 7.3  8.5  4.8  5.3  2.6  3.0 
Western Coal WTN T $4.22  251.0 $1,059  $4.48  ‐5.8% 3.8  3.8  3.0  2.9  2.1  2.1 

Average ‐5.0% 5.0  5.4  3.8  4.0  2.5  2.6 

MCoal Corp $1.50  56.4 $84.6 $3.13 ‐52.1% 3.3 2.4 2.8 1.9 0.9 0.5

Confidential Information - Not for Public Distribution 25


FOR FURTHER INFORMATION

Please Contact:

Neil MacDonald
President/CEO Novadx and CEO MCoal
Email: nmacdonald@novadx.com
Office: +1 (604) 633-2776 ext 23
Cell: +1 (604) 721-2600

Gavin McMillan
Corporate Communications/Development
Email: gmcmillan@novadx.com
Office: +1 (604) 633-2776 ext 30
Cell: +1 (604) 613 8655

Or visit our website at: www.novadx.com

Confidential Information - Not for Public Distribution


26