Queensland Energy Resources Limited Commercial and in Confidence

STUART PROJECT

EXPLORATION PERMITS (MINERALS) 3215 & MINERAL DEVELOPMENT LICENCE 177 and 225

ANNUAL REPORT FOR THE PERIOD 1st November 2007 to 31st October 2008

Queensland Energy Resources Ltd

APPENDIX 3

Modified Fischer Assay Procedure

November 2008

Distribution Electronic Copy (tab DME Brisbane delimited text) Electronic Copy (tab QER Brisbane delimited text)

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 1

Queensland Energy Resources Limited Commercial and in Confidence

TABLE OF CONTENTS

1 SCOPE ...... 3 2 SAFETY & PRECAUTIONS...... 3 3 ASSOCIATED DOCUMENTS...... 4 4 REQUIREMENTS...... 4 4.1 Equipment 4 4.2 Reagents 4 5 PROCEDURE...... 5 5.1 Pre-Start Checks 5 5.2 Filling Retorts 6 5.3 Assembling Glassware 7 5.4 Connecting Glassware to the Retorts 7 5.5 Operating MFA Bench 8 5.6 Removing and Weighing Glassware after Retorting Process 10 5.7 Weighing Retort for Final Weight and Coking Tendency Analysis 12 6 CALCULATIONS ...... 12 7 REPORTING ...... 13 8 APPENDICES ...... 15 8.1 Modified Fischer Assay Apparatus 15 8.2 Control Panel, Main Power Switch, Control Power Switch & Emergency Stop Button on MFA Bench - 16 - 9 REFERENCES ...... - 16 -

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 2

Queensland Energy Resources Limited Commercial and in Confidence

1 SCOPE This procedure follows ASTM D 3904-90, Oil from Oil Shale (Resource Evaluation by the Fischer Assay Procedure) and determines the amount of oil, water and spent shale obtained upon heating of a representative oil shale sample that has been crushed to an appropriate size. The amount of gas evolved is calculated from data obtained from following this procedure. The coking tendency of shale is also determined by this procedure.

2 SAFETY & PRECAUTIONS • Safety glasses must be worn at all times in designated areas. • Latex examination gloves must be worn when handling the shale samples. • The exit fan must be turned on and working when running the Modified Fischer Assay (MFA) bench to extract the gases produced during retorting. • Heat resistant gloves capable of protecting against 500oC must be worn when removing the retorts after a MFA analysis run. • Take care when assembling and disassembling the glassware to prevent breakages and cuts and inspect before use. Wearing leather gloves or similar is recommended when assembling glassware. • During the MFA run the glassware may drop off from the rubber stopper on the retort stem. Wearing leather gloves or similar is recommended when fitting the glassware back on to the rubber stopper on the retort stem as the stem of the retort gets hot during the MFA run. • Leather gloves should be worn when handling the slide hammer to minimise injury from pinch points. • If there isn’t sufficient extraction, a dust mask must be worn when packing or emptying the retorts due to the dust created from the oil shale and/or spent shale. • In the event of an emergency, the MFA bench is fitted with an emergency stop button which will shut down the bench causing it to trip. The MFA bench can be re started once it is confirmed the bench is operating correctly. If the Main Power switch has flicked to ‘Trip’, the switch must be turned to the left to ‘Reset’ and then switched to ‘On’. • Acetone and Toluene are flammable liquids. Acetone and Toluene must be stored in the flammable storage cabinet when not in use. Labelled wash bottles must be used for dispensing Acetone and Toluene in the laboratory. Inhalation of vapour and contact with skin and eyes should be avoided. The relevant MSDS should be consulted prior to handling these chemicals. All Acetone and Toluene waste must be contained in safety containers located in the fume cupboard and once full, the waste is transported to Transpacific for disposal as per LP 1.1 Laboratory Management Procedure. • Do not leave the MFA bench unattended when it is running the ASTM method or when the antifreeze/water solution is circulating through the tray. 2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 3

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3 ASSOCIATED DOCUMENTS • LP 1.1 Laboratory Management Procedure • LP 2.2 Laboratory Database Procedure • LP 3.1 Shale Sample Preparation – Splitting Procedure • LP 3.2 Laboratory Sample Management Procedure • LP 4.3 Density by Digital Density Meter Procedure • LP 4.4 Centrifuge Operating Procedure • LF4201 Oven Dried Moisture in Shale & Modified Fischer Assay Worksheet

4 REQUIREMENTS

4.1 Equipment • MFA bench (including ovens) with controller • VWR recirculation chiller, 1/3 HP Model 1173MD • Aluminium retorts with vent tube and 4 discs • Slide Hammer for tamping retort plug before retorting and removing plug after retorting • Steel Rod used with slide hammer to remove retort plug • Glassware – Insulated Allihn Condensers, Y Adapters, 100mL Centrifuge Tubes, Glass Beads 3mm • Rubber insulating electrical tape for wrapping Y adapters • Rack to hold centrifuge tubes and Y adapters • Rubber Stoppers, Retort Stems 25mm Bottom 29mm Top 25mm Height, Centrifuge Tubes 16mm Bottom 19mm Top 19mm Height • Cork Borer or similar tool to bore holes in rubber stoppers • Trolley for cooling hot retorts • Mettler Toledo Balance, 8100g capacity • Mettler Toledo Balance, 610g capacity • Holder for centrifuge tube and Y adapter assembly when weighing • Heat resistant gloves rated for 500oC • Drying tubes filled with silica gel • Kim Wipes • Latex Examination Gloves • Spatula • Screwdriver • Safety cans to collect Acetone and Toluene waste

4.2 Reagents • 50% Antifreeze/Water solution for chillers • Alconox detergent, Acetone and Toluene for cleaning glassware • Stopcock grease

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 4

Queensland Energy Resources Limited Commercial and in Confidence

5 PROCEDURE

5.1 Pre-Start Checks • Turn the MFA bench on by switching the Main Power switch to On. This will start the chiller running automatically. Switch the Control Power switch to On. This will start the exhaust fan running automatically. Refer to Appendix 8.2 for a photo of the control panel on the MFA bench showing the power switches, touch screen and emergency button. Refer to the chiller operating manual for further operating instructions. • Once the touch screen lights up, select the Bench Control button.

Figure 5.1: Main Screen

• When the temperature appears in the Cooling Water Input and the Cooling Water Output, start the pump by pushing the Start button under Cooling Pump Control. NOTE: The pump must be started as soon as possible to start the Antifreeze/Water solution circulating through the chiller otherwise the chiller will run dry and may be damaged.

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 5

Queensland Energy Resources Limited Commercial and in Confidence

Figure 5.2: Bench Control Screen • Enable the ovens by pressing the Main button on the touch screen (Figure 5.2) and selecting the Disabled button for each oven (Figure 5.1) which will Enable each oven allowing them to be used. • Wait until the chiller gets down to 3oC before opening the inlet valve on the tray. The temperature can be read by pushing the Bench Control button (Figure 5.1). • Set the flow so the tray fills up, regulating with the inlet and exit valve to ensure there is no overflow. • Check there is sufficient grease on the bottom fitting of the condensers to prevent leakage in use and facilitate separation. If there isn’t sufficient grease use silicone free laboratory grease and apply a light coat completely around the condenser fitting.

5.2 Filling Retorts • Record data on LF4201 Oven Dried Moisture in Shale & Modified Fischer Assay Worksheet including sample identification, sample date, sample time, retort number, oven position, centrifuge tube number, technician’s name and current date. • At ambient temperature, obtain a tare weight to the nearest 0.1g for the empty retort, four discs, vent tube, and retort plug. Record on LF4201. • Obtain labeled sample bag containing representative shale sample requiring MFA analysis. Refer to LP 3.2 Laboratory Sample Management Procedure for process of analysing samples. • Before filling the retort with the shale sample, place the vent tube in the middle of the retort.

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Queensland Energy Resources Limited Commercial and in Confidence

• Using the first two fingers of one hand, cover the top of the vent tube and the retort stem hole to prevent sample from collecting in those areas. • Obtain the sample and pour 1/5 of the sample into the retort, smooth with spatula and place first disc on top of that layer. NOTE: A dust mask must be worn if there isn’t sufficient extraction when packing the retorts due to the dust created from the oil shale. • Tamp top of disc with spatula to pack shale. • Repeat the process, ending the last layer of shale on top of the last disc. • Place the retort plug in the top of the retort. • Situate the slide hammer on top of the retort plug and with a small amount of force, tamp the retort plug. NOTE: Wear leather gloves to minimise injury from pinch points. • Test to ensure the plug is tightly sealed by picking the retort up by the plug itself. NOTE: This is a safety issue as escaping gas could cause a small fire at the top of the retort. • Blow the dust off the top of the retort. • Weigh the loaded retort to the nearest 0.1g recording mass on LF4201. • Place the retort in the oven unit ensuring the thermocouple is properly seated in the bottom of the retort. • Close the oven lid.

5.3 Assembling Glassware • Only use dry, clean, acetone rinsed glassware. • Assign one set of glassware per retort. Keep in order. • Check to make sure the Y adapter has 2.5 – 4cm of 3mm glass beads in the chamber that connects to the Allihn condenser. • Check the rubber insulating tape on the Y adapter for wear and for a good fit into the centrifuge tube. Replace the tape as required. • Carefully fit the Y adapter into the centrifuge tube, making sure the connection is snug. • Weigh the Y adapter and centrifuge tube as a unit to the nearest 0.01g and record on LF4201. NOTE: Tare the designated holder used to support the centrifuge tube and Y adapter assembly before weighing assembly. • The glassware is now ready to be connected to the retorts that are in the ovens.

5.4 Connecting Glassware to the Retorts • Raise the tray, leaving enough room for easy placement of glassware. • Release the Allihn condensers from their upright position by lifting the locking pin and lowering the condenser. Ensure the locking pin is in place.

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Queensland Energy Resources Limited Commercial and in Confidence

• If there is excessive condensation on the outside of the condensers and dripping from the inside of the condensers, perform an acetone rinse of the condensers before connecting glassware. This will remove water from the condensers that may be collected in the centrifuge tube and be counted as water extracted during the MFA analysis giving a false result. • Connect each exhaust tube to each condenser to draw off any gas produced during retorting. Ensure the exhaust tubing is free from blockages. • Check the glassware is arranged in the right order for the corresponding retorts. • Loosely place the condenser into the top of the Y adapter while at the same time positioning the rubber stopper on the retort stem into the angled opening. Refer to 8.1 Modified Fischer Assay Apparatus for the correct alignment of the glassware to the retort. NOTE: Wearing leather gloves is recommended when assembling and seating the glassware to avoid injury to hands. • Before firmly seating the condenser and the stopper, centre the glassware as much in the middle of the tray as possible to allow the highest level of Antifreeze/water mix surrounding the centrifuge tube. • Make sure all connections are tight; condenser, rubber stopper and thermocouple situated in the hole on the bottom of the retort. • Check the level of the Antifreeze/water mix is adequately high and flowing. • Make sure the tygon tubing from the condensers are free of air and the Antifreeze/water mix is flowing properly. • Glassware may fall off from the rubber stopper on the retort stem during the MFA run. If this happens, refit the glassware onto the rubber stopper and ensure the condenser is firmly seated. Wear leather/heat resistant gloves as the retort stem may be hot depending on how long the MFA run has been running for.

5.5 Operating MFA Bench • Complete 5.1 Pre Start Checks before commencing the following steps. • Once retorts have been placed in the ovens and the glassware is assembled, the run can begin. • Select each oven via the touch screen control panel, select analysis standard ASTM Enable, then select Start. The oven light on top of the bench will be lit with an orange/red colour once the oven has started and an amp reading should be visible.

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 8

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Figure 5.3: Oven One Touch Screen

• Monitor the progress of the MFA run. • The ampere readings usually read around 6 amps while the temperature rises to 500oC. They can, however, call for more current or cut back to 0 amps suddenly. Press Bench to observe the ampere reading for the ovens (Figure 5.4). NOTE: If any ovens are observed calling continuously for current, check that position. Make sure the retort is seated well on top of the heating elements and the thermocouple is making a good connection. Ensure the retort is not sweating beads of aluminium. Monitor and abort if necessary by turning that oven off using the touch screen control panel.

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 9

Queensland Energy Resources Limited Commercial and in Confidence

Figure 5.4: Bench Touch Screen

• The MFA program will be automatically completed. NOTE: There is an approximate 50 minute ramp time and a 40 minute soak time before the program will complete. The completion of the run will be indicated by a green light. • If there is a malfunction of a single oven, turn that particular oven position off and continue with the run. • If the entire run must be discontinued, press Stop on each oven. • After checking the retorts are seated, thermocouples are inserted and glassware is firmly connected, the run can be restarted by pressing Start for each oven. • At the end of the run, turn each individual oven off by pressing the Stop button. This will be indicated by the once green light no longer being lit. • Turn the cooling pump off. • Turn the control power off. • Turn the main power off. • Make sure the glassware is still firmly attached before lowering the tray to allow easy removal of glassware.

5.6 Removing and Weighing Glassware after Retorting Process • Ensure while dismantling glassware from the retorts that they stay in order. • If the condensers are dripping with condensation wipe down excess condensation before disconnecting glassware. 2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 10

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• Hold the Y Adapter against the retort stem to allow any drops of oil still contained in the retort stem to drain into the Y Adapter. • Initially wipe the Antifreeze/water mix from each centrifuge tube with Kim Wipes before rinsing each tube with Acetone several times, drying thoroughly with Kim Wipes to remove any trace of Antifreeze. • Leave the glassware in the rack for at least 10 minutes to warm up to ambient temperature before weighing. • Open oven lids and lift each retort out of the oven using heat resistant gloves, placing the retorts on the trolley for cooling. • Wheel trolley into cooling area and attach a drying tube on each retort stem to prevent moisture from being collected inside the retort. NOTE: If the silica gel has turned from orange to green the silica gel needs to be dried in the oven at 105oC for approximately 1 hour. • Turn the fan on aiming air flow at hot retorts on trolley to speed up cooling process. • Weigh the distillate, centrifuge tube and Y adapter to the nearest 0.01g and record on LF4201. • Separate the Y adapter from the centrifuge tube. Occasionally a drop of water may remain on the stem of the Y adapter. Drain this drop into the centrifuge tube by holding the Y adapter stem vertically against the inside of the mouth of the centrifuge tube. • Cork the centrifuge tube to prevent evaporation while heating the distillate to 60oC in the water bath for 10 – 15 minutes. • While waiting to centrifuge the distillate, the Y adapters can be cleaned using Toluene first, hot water and Alconox, rinsing well with water and ending with a thorough Acetone rinse. NOTE: Acetone and Toluene waste must be collected in the designated safety container in the fume cupboard. Only oily and detergent wastes are allowed to be disposed of down the sinks as all lab sinks drain to the oily waste pond. NOTE: Rinsing with Toluene may not be required if the oil is removed easily with hot water and Alconox. • Centrifuge the centrifuge tube and distillate at 2000rpm for 10 minutes at 50oC. Refer to LP 4.4 Centrifuge Operating Procedure for operating instructions. • Read the volume of water to the nearest 0.05mL (if possible) and record on LF4201. NOTE: If the interface is indistinct, scrape the inside of the tube with a small wire, reheat and centrifuge. • Read the volume of the distillate to the nearest 0.05mL (if possible) and record on LF4201. • Measure the density of the oil at 60oC. Refer to LP 4.3 Density by Digital Density Meter Procedure for operating instructions. • The oil and water generated from the assay must be emptied into the fume cupboard sinks and washed down with plenty of water.

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 11

Queensland Energy Resources Limited Commercial and in Confidence

• Clean centrifuge tubes by following the same cleaning process used for the Y adapters. • After the final MFA run for the shift clean the condensers with a hot water rinse followed by a toluene rinse. The water waste can be disposed of down the fume cupboard sink and the toluene waste must be contained in the safety container in the fume cupboard.

5.7 Weighing Retort for Final Weight and Coking Tendency Analysis • When the retort is cool, wheel the trolley to the balance and remove the drying tube. • Weight the entire retort including stem rubber stopper and its contents to the nearest 0.1g. • Remove the retort plug using the Slide Hammer and Steel Rod. NOTE: Wear leather gloves to minimise injury from pinch points. • Pour the contents into a shallow tray, noting the Coking Tendency from the choices below. Record on LF4201.

Pours easily from retort; no conglomeration noted – NONE Requires a spatula for complete removal of shale from retort – SLIGHT Partially fused, difficult to remove shale from retort – MODERATE Completed fused, very difficult to remove shale from retort – HEAVY

• Thoroughly scrape stray pieces of shale from retort. Skew the vent tube and discs on the screwdriver and vigorously tap them to relieve them of fused shale. Use the screwdriver to clean the stem of the retort. Vacuum the inside of the retort to ready the retort/s for the next analysis. • Spent shale is disposed of into the labeled bucket in the laboratory. Once the bucket is full it is emptied into the skip on the Western side of the laboratory. When the skip is full, mining personnel are contacted to return the shale waste to the mine.

6 CALCULATIONS Data is taken directly from LF4201 and entered into AcQuire. AcQuire performs all required calculations. The results are accepted by the person who performed the analysis followed by a secondary check for errors by another laboratory team member before being committed. Refer to LP 2.2 Laboratory Database Procedure.

Mass Sample (g) = Mass Retort + Sample (g) – Mass of Retort (g)

Mass Distillate (g) = Mass Centrifuge Tube, Adapter & Distillate (g) – Mass Centrifuge Tube & Adapter (g)

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Mass Dry Shale (g) = Mass Sample (g) – Mass Water (g) (ie. Volume of water converted to mass assuming density is 1.0 g/mL)

Mass Oil (g) = Mass Distillate (g) – Mass Water (g) (ie. Volume of water converted to mass assuming density is 1.0 g/mL) Volume of Oil, (mL), 15oC = Mass of Oil (g) Density of Oil (g/mL), 15oC

Mass Spent Shale (g) = Mass Retort + Spent Shale (g) – Mass Retort (g)

Density of Oil (g/mL) 15oC = Density of Oil (g/mL) 60oC x 1.0357

Retort Water, Mass % = Mass Water (g) x 100 Mass Sample (g)

Oil, Mass % = Mass Oil (g) x 100 Mass Sample (g)

Spent Shale, Mass % = Mass Spent Shale (g) x 100 Mass Sample (g)

Gas + Loss, Mass % = 100 – Spent Shale % - Oil % - Retort Water %

Oil Yield, LT0M, 15oC = Volume of Oil (mL)15oC x 1000 Mass Dry Shale (g)

Yield by Mass (L/t) = Volume of Oil (mL)15oC x 1000 Mass Sample (g)

Yield by Volume (L/t) = Total Volume Distillate (mL) – Volume Water (mL) x 1000 Mass Sample (g)

Yield Repeat = IF(ABS(Yield by Mass (L/t) – Yield by Vol (L/t))>10, “repeat”)

Gas + Loss Repeat = IF(ABS(Mass Sample (g) – Mass Spent Shale (g) – Mass Oil (g) – Mass Water (g))>10,”repeat”)

7 REPORTING MFA results are reported to the nearest 0.01 LT0M.

Repeatability of oil – Duplicate results by the same operator should not differ by more than 1.0 gal/ton.

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Reproducibility of oil – Results from two different laboratories should not differ by more than 2.0 gal/ton.

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8 APPENDICES

8.1 Modified Fischer Assay Apparatus

2008 Stuart Annual Report EPM 3215, MDL 177, MDL 225 15

LP 4.2 Modified Fischer Assay Procedure

8.2 Control Panel, Main Power Switch, Control Power Switch & Emergency Stop Button on MFA Bench

Control Panel Touch Screen

Main Power Switch

Control Power Switch

Emergency Stop Button

9 REFERENCES • ASTM D 3904-90, Standard Test Method for Oil from Oil Shale (Resource Evaluation by the Fischer Assay Procedure), 1990 • EPEC, Operation and Maintenance Manual Including Parts List, EPECO Assay Bench Model 07-1195 • PolyScience, Operators Manual Refrigerated Recirculating Chillers, 2007

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