COAL - MORETON ENERGY COAL PROJECT FARM-IN Highlights • Farm-In tenements cover four known coal-bearing project areas in the Moreton Basin near Beaudesert. (The former Strathnaver Colliery, the Veresdale Scrub Deposit, the former Stansfield’s Colliery, and the Albert River Prospect). The location of these tenements is shown in Figure One on page three. The tenements are currently under application. • All four projects are located close to the railway to Brisbane. There is good road access and proximity to the Port of Brisbane. 2 • The tenements are prospective for coal (Powell Duffryn, 1949), include the Walloon Coal Measures, and remain under-explored. • A thermal coal deposit exists at Veresdale Scrub. Previous exploration indicates that there is potential to extend the deposit. • Core drilling indicates that this deposit includes coal with high calorific value and low sulphur that might, in addition to conventional uses, also be suitable for coal-to-liquids and coal-to-gas applications. (Source: Queensland Department of Mines and Energy (“DME”) Open-File Report 24297) • The former Strathnaver Colliery is located close to Bromelton; which has been nominated as a future State Development Area for heavy industries. • These projects offer what the Company considers to be an exciting opportunity to expand into the coal/energy sector.
Coal Quality The Veresdale Scrub Deposit has eight partly cored drill holes. Information gained from these holes indicated a typical Walloon Coal, with high volatile content, high raw ash and low total sulphur. The average quality results from laboratory testing reported by New Hope Collieries (1992), based on a 15% ash product, are as follows: Total Sulphur 0.6% Yield 65.4%* Inherent Moisture 5.2% Specific Energy 6540 Kilocalories/Kilogram (Source: DME Open-File Report CR24297) * However, actual yield will be determined by further test work and is likely to be within the industry range of this type of coal which is typically 50%-55%.
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