Ann: Preliminary Final Report and Annual Report-NHC.AX, page-2

Finally, an optimistic comment from management, in the outlook extracted from the report:

New Hope Group Outlook

During the past year a material capital investment decision was made to invest a significant proportion of available cash funds into a 40% interest in the Bengalla coal mine located in the Hunter Valley, New South Wales. During the next financial year Bengalla should increase New Hope’s equity production of thermal coal by approximately 3.5 million tonnes to a total of approximately 8.9 million tonnes . New Hope is working with its joint venture partners and the Bengalla management team to improve operational efficiency and effectiveness at the Bengalla operation. The New Hope management team is focused on achieving the grant of the New Acland Stage 3 mining leases as expeditiously as possible in order to avoid the negative impacts of any delays in transition from mining Stage 2 reserves into Stage 3.

Bridgeport continues to seek opportunities to grow its production base. It is now the second largest conventional oil producer in Queensland. Following significant investment in seismic studies of its extensive exploration portfolio, Bridgeport is identifying drilling targets for oil exploration to take advantage of any increase in oil prices in future.

New Hope believes that Asia will continue to demand significant amounts of energy in order to continue its long term growth trajectory and that both coal and oil will be required in order to meet that demand. The high quality coals that New Hope produces will be demanded for many decades to come in particular in the growing economies of North Asia. New Hope has a significant suite of coal growth projects in the North Surat as well as at Lenton, Colton and Yamala. Unlike many of our competitors, New Hope has maintained its corporate capabilities in resource and project development during the downturn which has occurred in both coal and oil pricing over the past few years. We have refined our ability to operate safe low cost operations whilst maintaining excellent standards of mine rehabilitation. Having made the investments in both resources and corporate capability during the recent years of cyclical downturn the company is now in a prime position to take advantage of potential increases in future coal and oil prices.

Since 31 July 2016 prices for Australian thermal coal on the seaborne market have reached levels around US$70 per tonne. This represents approximately a 40% increase from the lows of just under US$50 per tonne which prevailed during the 2016 financial year.