July 2010
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.
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.
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.
• 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;
• 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.
• 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.
Flatwoods Mine (Kentucky) – Acquisition ($52 cash cost per ton)
– Operating mine with an estimated 7.13 million tons of 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
• 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.
• 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.
10 Year mine life planned over three phases
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
Rex Coal Quality
As received Washed
(Dry Basis) (Dry Basis)
• 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.
$ /
• 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.
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
• 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.
Free Swelling Index 9 9 Unknown NA
Hardgrove Index 88 83 Unknown NA
$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
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
Pricing Range
$1 50
$1.50
# Shares %
Total shares O/S pre financing
/ p g 29,760,983
, , 52.7%
Market Cap $84,641,000
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
MCoal Corp $1.50 56.4 $84.6 $3.13 ‐52.1% 3.3 2.4 2.8 1.9 0.9 0.5
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