Metrocoal Limited A.C.N
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METROCOAL LIMITED A.C.N. 117 763 443 EPC 1164 “Wandoan West” SURAT COAL PROJECT ANNUAL REPORT FOR THE SEVENTH YEAR PERIOD 12/12/2013 to 11/12/2014 TENEMENT HOLDER: METROCOAL LIMITED MANAGER: METROCOAL LIMITED AUTHORS: N. VILLA MAP SHEETS: 1: 250 000 Roma SG55 12 1: 100 000 Wandoan 8845, Guluguba 8945 COMMODITIES: COAL GEOGRAPHIC COORDS: 26° 12'S / 149°48'E DATE: 12 January 2015 TABLE OF CONTENTS 1. 1. SUMMARY ....................................................................................................................................... 4 2. INTRODUCTION ............................................................................................................................... 5 3. LOCATION, ACCESS & SETTING ....................................................................................................... 6 ENVIRONMENTAL CONSIDERATIONS ................................................................................................. 6 Endangered Regional Ecosystems ................................................................................................... 7 Other Environmentally Sensitive Areas .......................................................................................... 7 Heritage Sites .................................................................................................................................. 8 Non-indigenous Heritage ................................................................................................................ 9 RECENT MINING HISTORY AND COAL UTILISATION .......................................................................... 10 4. TENURE ......................................................................................................................................... 11 TENEMENT RESTRICTIONS ............................................................................................................ 12 NATIVE TITLE ................................................................................................................................. 12 OVERLAPPING COAL SEAM GAS TENURE (PART 711 OF THE MRA).............................................. 12 RELINQUISHED SUB-BLOCKS ......................................................................................................... 12 5. GEOLOGICAL SUMMARY ............................................................................................................... 13 6. PREVIOUS EXPLORATION .............................................................................................................. 19 7. WORK COMPLETED BY METROCOAL IN THE SEVENTH YEAR OF TENURE .................................... 20 COMPLIANCE STATEMENT FOR PROGRAM OF ACTIVITIES........................................................... 20 2014 Drilling Program ....................................................................................................................... 20 Planning......................................................................................................................................... 20 Landholders ................................................................................................................................... 20 Cultural Heritage ........................................................................................................................... 21 Environmental Management Plan - Site Works and Rehabilitation ............................................. 21 Gas Management Plan .................................................................................................................. 22 Drill Rig .......................................................................................................................................... 22 2014 Results ...................................................................................................................................... 23 Geological Model & Resource ........................................................................................................... 23 Economic Potential of EPC 1164 Wandoan West ............................................................................. 23 8. PROPOSED EXPLORATION PROGRAMME FOR YEAR 8 .................................................................. 24 9. REFERENCES .................................................................................................................................. 25 10. APPENDICES & ENCLOSURES ........................................................................................ 26 Annual Report 1/12/14 EPC 1164 “Wandoan West” P a g e | 2 Appendix 1 ........................................................................................................................................ 26 Bundi Geological Model .................................................................................................................... 26 Appendix 2 ........................................................................................................................................ 27 Environmental Permit ....................................................................................................................... 27 Enclosure 1 ........................................................................................... Error! Bookmark not defined. Drill Hole Plan ....................................................................................... Error! Bookmark not defined. Note: In accordance with Section 13B(c) of the Mineral Resources Regulation 2003, the program of activities for the permit was complied with during the reporting period. Compilation of all geological information and field visits are listed in the Program of Works for Year 3. Expenditure on the tenement has been met. Annual Report 1/12/14 EPC 1164 “Wandoan West” P a g e | 3 2. SUMMARY MetroCoal Ltd holds a 100% interest in Exploration Permit for Coal (EPC) 1164 ‘Wandoan West’, which forms part of the Surat Project along with, EPC 1251 Wandoan West 2 , EPC 1165 Columboola, EPC 1166 Dalby West, EPC 1167 Roma North, EPC 1609 Wandoan West 3 and EPC 2234 Wandoan West 4. MetroCoal Ltd is a listed company on the ASX (Code MTE) with Balanced Property Pty Ltd as the majority shareholder at the time of this report. The tenement is managed by MetroCoal Ltd. The Surat Project lies at the northern end of the Surat Basin in South East Queensland. MetroCoal is targeting the Juandah and Taroom Coal Measures within the Jurassic Walloon Sub-group. These coal measures contain all known economic coal deposits known in the Surat Basin. The tenement strategically covers the Juandah Coal Measures immediately down dip of the identified resources of the Wandoan Deposits, Elimatta and Woori (nee Guluguba) Deposits. Wandoan West EPC 1164 consists of 215 sub blocks located in an arc south west of Wandoan. The tenement strategically covers the Juandah Coal Measures at or about 100 to 150m depth immediately down dip of the identified resources of the Wandoan deposits. The tenement is non-contiguous in shape, but ideally augments EPC 1251 Wandoan West 2 and EPC 1609 Wandoan West 3, and these tenements are explored in conjunction. MetroCoal’s exploration philosophy with respect to these tenements is to identify coal seams suitable for conventional mining. The objective of the seventh year’s work was to further develop the coal resource model(s) and potential mining layout for the future underground longwall mining. Year 7 (current year), saw no field program take place however the integration of the previous year’s field studies and data comprised the main activities for the current year. The overall purpose of last year’s program is to work toward the submission of an Environmental Impact Statement and Mining Lease Application. MetroCoal will continue to focus on the development of the Kogan and Macalister Seams which are proving to constitute the key seams for the potential mine. The project area is located 20km from the Wandoan rail head and proximal to the future proposed expansion of the Queensland Rail Service (in this case the Surat to Gladstone Link) and associated infrastructure which would enhance the economic viability of coal resources within the permit area. Annual Report 1/12/14 EPC 1164 “Wandoan West” P a g e | 4 3. INTRODUCTION MetroCoal Ltd holds a 100% interest in Exploration Permit for Coal (EPC) 1164, Wandoan West. The tenement is located proximal to other resources in the Surat Basin and covers the highly prospective Juandah and Taroom Coal Measures. EPC 1164 was granted on the 12th December 2007 for a period of three (3) years and in 2010 it was extended for a further 2 years. It has been granted a further 5 years, with this current year being the 7th year of exploration and development. EPC 1164 forms the Surat Project along with EPCs 1166 Dalby West, 1167 Roma North and 1251 Wandoan West 2, EPC 1609 Wandoan West 3 and EPC 2234 Wandoan West 4. (Columboola EPC1165 has since been disassociated with the Surat Project, as of mid-2011, and is now its own Project under the Columboola JV with SinoCoal). Wandoan West was considered attractive for exploration as it covers the down dip extensions of the sub cropping Juandah Coal Measures identified at the Wandoan, Elimatta and Woori (Guluguba) Deposits. Exploration work completed to date has been a literature review, data compilation, and 6 annual drilling programs, comprised of chipped and part core holes. A geological model has been established and resources of totals in Table 1 from with EPC 1164, EPC 1251