from the recent broker presentations in sydney

The big ticket items were imo ...


# Kingaroy 40MW followed by upgrade to 400MW has been rejigged to a confident, more commercial Stage 1 200MW intended to be powering into the grid by mid 2011 ie 2 yrs from mid next yr if all goes well ... Len is reasonably confident this can be the first delivered commercial ucg project in Australia ... the current DI funding package can deliver this project.

# Apparently, DI have an existing $500mill portfolio of energy projects in Qld (not discussed in the presentation) including Pacific CTL (a surface gasification to liquids concern) and are keen to be actively involved in Cougar's projects and to increase equity (stated at the presentation).

# Pakistan license to be granted within a few weeks (hopefully) and a drilling program will follow soon after .... Len concedes that Pakistan is a regulatory challenge but not to the extent that might otherwise be expected as there is a real and pressing need for indigenous power generating projects.

# Watch this space re the Victorian project ... Latrobe brown coal power stations are the dirtiest in Australia and the brown coal is amenable to syngas to electricity and to liquids (as in like Linc in Chinchilla) and the reserves are immense.

Other snippets ...

# Currently 70% equity in the Kingaroy project ... drilling to date confirms 2 by 10+m seams over an area of 4.5km2 which at 2mt/yr for 400MW is about 250mt or about FOUR times more than needed for 400MW ... why the effort to expand the JORC resource when supposedly the target project is 400MW? Keep an eye on this imo.

# Drilling at Cougar's 100% owned Wadoan Lease (further to the west from Kingaroy and still in the Surat Basin) is a near term goal.

# Current equity in the Victorian project is 50/50 with VCR P/L and includes access to about 400,000 hectares with seams of 10m to 70m thickness representing 200bt to 300bt of brown coal resource ... Len says Cougar can contribute significantly to Victoria's power production with this project, a very topical subject wrt Garnaut recommendations and has potential for a major syngas to liquids (assume diesel) project ... keep an eye on this imo.

# Cougar's licensing arrangement in Pakistan includes access to about 1bt of Thar coal.

# MOU with Cougar's technology provider Ergo Exergy is about to be upgraded to a fully licensed, multi project agreement within a few weeks or so (hopefully).

# The presentation material included a slide of active ucg projects in the world at present, including Australia (LNC, CXY, MEE) in Qld and/or Vic, South Africa (Eskom), China (Inner Mongolia), Pakistan (Cougar), Canada (Lasarus), Wyoming USA, New Zealand (Solid Energy) and India (Cougar) ... Cougar are involved in four of these and to my knowledge, Ergo Exergy are involved in at least six ... imo, thats a pretty good rap for team Cougar/Ergo.

# Len was at pains to stress the risk profile for Cougar's chosen syngas to electricity project at Kingaroy is low as the project is not breaking significant new ground ... Walker/Blinderman (Ergo) have previously successfully produced signicant ucg syngas in the region ... ucg fuelled power generation in the former Soviet Union has been in units of up to 150MW (thus 200MW is not a big leap) ... gas preparation equipment and combined cycle turbines are effectively shelf items ... funding arrangements to complete a 200MW Stage 1 project is in place.

Whilst a lot (but not all) of the above information is in current ASX releases, it looked and sounded convincing in a concentrated presentation of an hour or so imo.

Cheers
Dex