Ann: AGM Presentation, page-2

Quite a few interesting items.

1.  Not a word about "hedging" in the entire presentation!  So we have gone from beating the drum on "risk reduction" at all levels...to not even talking about their loss on "hedging"?  On page 11, the presentation says "Seaborne market relies on high cost US supply >$170/t FOB.  That translates to NZ$250...which is about NZ$153/t margin.  Incidentally, BRL management earlier said NZ$160/t is "super high margin".  I guess they now suddenly saw the light and no longer talk about this being "super high" as the futures prices is higher than US$173 all the way out to Jan 2021.  Well...the damage has been done...let's hope  they go slow on that "hedging".

2. If they made NZ$28 million in the first quarter when coking  coal prices were lower than second quarter, how on earth does one forecast a lower EBITDA for  the second quarter?  The only explanation I can think of,  is that their "hedging" costs us money.  That also means that the Q3 and Q4  estimates have been massively low balled at NZ$20 million EBITDA.  Coking coal future prices are all above levels  seen  in the first quarter. So we should  really be somewhere between NZ$100 million  and NZ$112 million, assuming our experts have not lost even more  on "hedging" than it appears.

3. Court case: interesting tidbit that we only need to win on one of "number of grounds" to reverse the loss.  We will believe it when we see it.

4. Rotoaro.  Reserve is given as 2.3 million tons.  That suggests at least a 4 year mine  life at 621kt/year.  And what about the resources...are they of zero  value?  Even 50%  conversion to reserves should equal  another 5 years of mine life.  This is confusing.  They need to do a better job of explaining Waipuna West, Ruawaro and the rest of Rotowaro.

5. On Rotowaro, we are going  from 621kt/year to 400kt/year.  Why the drop? Looks like some big buyer did not renew their contract.

6. In an earlier presentation, we were being told that BRL would get 76% of the HCC price.  Now we are back to 80% (page 10).  Why the 4% difference?

7. In its Solid Energy incarnation, Stockton  used to produce 2+ million tons a year.  Somehow we are not able to that level  now.  Why is that?