Ann: Acquisition of Coal Project Mongolia , page-3

50 to 100 million tonnes thermal coal
Calorific value rangeQdaf 6200 to 6800 kcal/kg1






? Strong Infrastructure Characteristics: The deposit is 120kms south of
Mongolia?s capital, Ulaanbaatar in an area with a number of operating coal mines.
It is 6 kms from existing rail infrastructure providing low cost transport access to
the key markets of China, South Korea and Japan. The licence is located adjacent
to two of Peabody Resources licenses which are being actively explored.
? Low Risk Transaction Structure and Development Profile: The transaction has
been structured as an option to acquire the Nuurst coal deposit following
completion of a 3 month drilling and due diligence program. Drilling will
commence as soon as local approvals have been received with an initial focus on
extending and confirming historical drilling results. The purchase price (prior to
additional investment in drilling) equates to 3 cents/ tonne (based on the low end
of the exploration target).
? Local Execution Capability: Local Mongolian infrastructure has been
established including consulting geologists and business advisors (legal and
financial). Drilling equipment and experienced drill crews are on standby to
commence due diligence drilling and proceed to defining a JORC compliant
resource. The TVN team continues to review a live pipeline of thermal and coking coal opportunities.