Stodd, thanks for your response and questions. There are a few...

Stodd, thanks for your response and questions.

There are a few items to address and apolgies I didn't respond sooner as I have quite a few projects on my plate, it's after 10pm and still in the office!

In regards to your queries:

Looking at costs:

Firstly, yes these calculations have been done in my own personal time and were not copied from somewhere. The calculations are a fraction of the overall conceptual model I maintain which covers coal, oil, gas and helium and is updated on a regular basis as new data comes to light. At this stage of the company's development clearly all figures are highly speculative (which I had noted) and most is based on extrapolation. The rail transportation and volume charts in my earlier post are not intended to be an accurate feasibility of +/- 50% for that matter due to a range of unknown/unquantifiable data inputs and requirements. Even so it would take an 800 page report for a feasiblity. However the figures do take into consideration basic concept modelling strategies based on my knowledge, and also make an allowance for anticipated costs associated with extraction, beneficiation, transportation, commodity value, tax rates etc all at conceptual high level. As stated in my post it does not factor in CAPEX of certain infrastructure aspects, and I had also noted the that the beneficiation is also subject to the final properties of the coal. These are all key risks, and more.

When undertaking calculations, for relevant factors I utilised the probable rate. The probable rate or P90 estimate, as you would appreciate (but others may not be aware of) is the statistical analysis method of setting the expected rate and a distribution of expected minimum and maximum variations to the rate. Several hundred iterations of randomly selected normal distributed values between the minimum and maximum rates are then run. A probablistic cost curve (or S-Curve) of results then indicate the P90 value, ie the cost estimate value with a 90% certainty the estimate will be below this value. On top of this rate I then added 30% on some aspects for the coal model (ie NTK rates). Why I went into this detail at this stage is anybodys guess, maybe I just enjoy it and this method was easier given the base data from other feasibilities I've undertaken. Different models are applied pending the circumstance. Having both lead teams and worked on a range of major infrastructure projects, feasibility studies/CBA's in infrastructure and resource projects (though being iron ore), and undertaken estimation work on projects in excess of $6B final constucted value, I've drawn a line on valuation inputs as a range of factors could be implemented but add no value at the conceptual stage. We're still an explorer and in general I do this for my own use only as I don't have to explain in detail every aspect of my anaylsis to others.

In regards to the rail transportation of coal:

Transportation in itself is not usually undertaken for it's own sake as clearly it's demand driven. If the demand and resource is there, partners with deep pockets may be interested in funding the capex requirement, and this I believe is the premise the company has for for exploration for coal in the area. Keep in mind, beneficiated coal is a value added product and can have anywhere from 30% to 90%+ higher energy content than the lower rank coals it was processed from. The higher energy content, coupled with higher density and lower volume lead to cheaper transportation costs, which has siginficant implications on feasbililty outcomes. Ie - not only do you increase the value of the product, more can be transported (pending the type of wagon's utilised and permissible line axial load, say around 24t). By my calculations, for the company to transport say 14 Mtpa of standard non briquetted coal, it would require the loading of 6 train rakes per day of around one train every four hours. Should the capacity of a single loading track of the loader facility be insufficient to load at the 4 hour rate then two loading spurs would be required and this would further increase capex costs. To get to the 30 Mtpa we double the amount of trains to say 12 at 2 hour rates or add additional spurs (once again more capex).

Line utliisation, wagon type and tonnage (say 80t for namesake - though Downer EDI are manufacturing 105t for QLD narrow gauge 3f 6in), the load/tare ratio, haulage length etc all contribute to the economics. In addition other aspects like increasing axial load by 10% can create payload increases of 1.5x the axial load at this level, being 15%. Further efficiences can be gained in electric traction due to the reduction of wagons to transport the tonnage but upfront capex is once again higher. In addition to this, at 13 Mtpa (the international standard for electrification) there are other potential transporation benefits. Anyway this is getting a little off course but put simply there are so many factors to consider here, and in my transportation calculations I utilised baseline data and added in what I believe are achievable efficiencies to the total haulage rate.

On coal mining:

Regarding queries surrounding the coal extraction, maximum depths for coal mining in an opencut scenario in this location could be up to 300m though there are a handful of mines around the world with opencuts to depths of around 400m. Benching in an open cut is subject to the conditions and could be anywhere from from say 50-350 odd metres wide with a bench providing acess to say 15m highwall, it all depends.

Extraction below this depth would most likely lead to underground mining hence exponential costs which is impractical out in the Pedirka. Selection of the most economical/technically feasible will be dependent on a range of factors including the thickness and quality of the seams, configuration/how deep the seams are from the surface and the characteristcs of the overburden that has been encountered.

Now the reason I had posted the chart with area and thickness up to the probable maximum is because I had modelled it over the potential sq km acreage that could be underlain. Yes, of course I could undertake the same exercise for any basin around the country and it comes down to what can be physically extracted (common sense), but this chart was provided for information, specific to the Pedirka on coneptual high level tonnages across the different sq km position. We still do not know the complete geology in the Pedirka and as the company delineates it they may find some form of basin tilting whereby seams thicken to the outer edges (not necessarily thickest in the centre), and we may also find that seams are either closer to or deeper from the surface than expected. There are lots of unknowns as the Pedirka is vast and sparsley explored, so at this point the chart was kept simple - potential underlain area multiplied by a range of thicknesses in 20m increments up to 140m (which is what the company has stated as maximum seams >1m in thickness) and then finally multipled by the relative density of the coal which is applied at 1.346 given the sub-bituminous ranking encountered. So thus the basis for the chart is potential sq km area, potential thickness and potential tonnage which is somewhat easy to cross reference.

See the numerical data below:

Now should the company encounter an average of 20m net seams greater than 1m over 5000sqm this would total a tonnage of approximately 135 Bt. Divide this by 5 for 1000sqm and you get approximately 27 Bt. The company believes over 15000km could be underlain and the the chart simply provides a simple and conceptual graphical reference. Say hypothetically they find the coals nearer to the surface towards the outer edges which allows shallow strip mining, strip mining would allow anywhere from 50- 95% recovery rate of the coals and further decrease the extraction costs.

My initial interpretation is that anything coal related for CTP in terms of mining and beneficiation is that it must be on a very large scale and have the ability to ramp up quickly to full production. It is extremely easy for the company to come unstuck chasing this strategy without BIG partners willing to commit and push the strategy ahead. Low coal tonnage transportation will not work and have negative financial implications. In the case of GTL or CTL they could potentially set up a small plant and bulk liquid carry a value added product out until a larger GTL facility is set up but this again has extensive costs. Going down the path of delineating a JORC compliant 1 TCF of gas at 3P level would possibly require 40 wells, 25 flow tested and 15 cored and even then you would need to ensure the gas is going to flow.

At this early stage for CTP, the resource seems there but there are challenges to get it to market which are clearly evident. The key opportunities CTP as a company requires is an increase in demand from overeas, a lack of international supply, the continuation of changing attitudes towards standard coal extraction and processing methods and other opportunities to add value from the resource given the current resource in it's existing form is uneconomic. The main issues moving forward are the upfront capex, financial position, partnering, competition with other modes, and technological advances which may be adopted and make other deposits closer to demand markets more economically attractive.
Hope that answers the query.

PS. Superwealthy, the EWLP is the largest feasiblity ever undertaken with $150m contributed by a range of steel mills and private consortia throughout Asia. It was first suggested by Lang Hancock in the 70's and only now is being investigated.

I am not trying to scream blue sky like you and others may suggest, just providing thoughts which is what a forum is about. Like many I am down a significant amount on this so far (not just on paper) but try to keep a logical attitute instead of letting emotions control decisions.