help with coal quality, page-58

5hareholder,

Washing will probably not appreciably help in this case because, as you pointed out, the ash content is low and the photos show no stone bands so the ash is likely inherent.

Strange that the company did not report an F1.60 result. That would have answered the question of washing. Realistically they wouldn't even bother building a wash plant for this coal. Maybe they'd get the ash down a few percent but it wouldn't be worth it.

TTC,

Is it a case of all ok, or are they fudging the numbers by quoting the dry ash free number?

Quoting the DAF is fudging the numbers but the expected energy content was quoted DAF too so if you were expecting 6200kcal AR and bought on that basis you have made a mistake.

Note in the ann dated June 24, they say:

"An initial review of the physical data indicates that the Nuurst deposit would likely be amenable to open pit operations with mining costs potentially ranging from $10 - $20/ tonne of coal extracted. The coal price at the Chinese border is approximately $60/ tonne and seaborne thermal coal is currently selling at $120/tonne."

Technically true that seaborne thermal coal is $120/t, so it's not an outright falsehood, but it is extremely misleading. This coal will never get $120/t, because its energy content is 4000kcal, not 6000. It might get $35/t.

Likewise, quoting "Qdaf" is misleading to people who aren't familiar with coal assaying. You cannot say "this has the same Qdaf as Hunnu's coal therefore this coal is equally as good as Hunnu's." It's like saying a gold mine with 0.1g/t is the same quality as one with 10g/t, because when you take all the rock out they're both 100% gold. You need to look at the AR basis, which is 4000 for this coal and 5500 for Hunnu's.

Anyway, I know people won't want to hear this but this is domestic grade coal. It's basically a lignite, but one unusually high in volatiles. Moisture is okay for a lignite but fixed carbon is very low. Quality seaborne coal would be up around 60% FC, this is 22%.

Beneficiation won't help this coal much, and it won't get to 25MJ/kg except maybe by briquetting. The high volatiles might make this coal particularly well suited to CTL.