Our other projects namely Hodgson Vale and Ashford had minimal...

Our other projects namely Hodgson Vale and Ashford had minimal funds allocated
during the year, since the key projects of Ferndale, Vickery South and Oaklands required
all available resources in both management time and funding.
As a result, your board decided to arrange to divest these assets into another vehicle,
initially as a 100% subsidiary of Coalworks, but ultimately into a separately listed
company under reorganisation, which would raise funds for proper exploration and
development. The reorganised listed company is to be renamed Orpheus Energy
Limited (Orpheus), with IPO planned for March 2011.
Coalworks will remain a significant shareholder in Orpheus. Of importance, the board
has agreed to offer all existing shareholders potentially a bonus issue, the ratio of course
to be finalized. This would be the companys first dividend to shareholders.
In addition, Coalworks shareholders will receive a priority share allocation
Apart from these Australian assets, Orpheus has entered into a strategic alliance with
Mega Coal International in Indonesia to jointly develop export coal mines. Our criteria in
the acquisition of Indonesian coal assets have been;
1. A sound and trustworthy partner, with coal mining experience
2. Clean title, fully in compliance with Indonesian mining laws.
3. Low capital cost projects
4. Low operating costs.
5. Close proximity to barge loading and port areas,
6. Readily saleable qualities.
Orpheus intends to acquire and bring Indonesian coal projects into early production
through this strategic alliance with its Indonesian partner, who are already producing and
exporting.