callum v kate, page-7

Macro20,

The reason for the wording “is possibly” is because the entire deposit has not been drilled yet. The company cannot say definitively that it is better quality until they finish drilling. I think the chances that the rest of the deposit is actually better than the latest results are very high.

The reason why they mentioned the higher than expected ash and sulphur levels is because they previously announced lab data from the Maddingley mine part of the resource which had lower ash and sulphur levels. This means that levels differ throughout the deposit. They said in announcement that the coal could be washed and blended to reduce these levels substantially as these techniques are quite common in the industry and as the coal is in a slurry form prior to the Exergen treatment this would be very economical to do.

Does this clarify things?