reject resolution 1, page-2

I agree SG.

Its important shareholders recognise what is happening here and WHAT you are rejecting!

You are not rejecting the placement of the 21m shares as they were under the 15% rule and have been placed. There is no going back there. Paterson's have those shares.

What you are effectivley loosing if you vote in favour of point 1 is your right to vote on any future placements under the 15% rule in the next 12 months.

Why does the current board want the right to place more shares under the 15% rule to whoever they want when they want at what price they want without your approval in the next 12 months? All this after a placement to Paterson's, a underwriting issue to Paterson's and now another underwriting issue to Paterson's??

Because they want to place another 15% of the company to...yes you guessed it...Paterson's. imo

Reserve your right to vote on any placements in the future and to stop this monopoly of the company!

Read carefully imo.



1. RESOLUTION 1: Subsequent Approval of an Issue of Securities

1.1 Background to Resolution 1
On 28 March 2011, the Company issued and allotted 21,109,194 fully paid ordinary
shares in the capital of the Company to clients of Patersons Securities Limited that
met the definition of sophisticated and institutional investors at an issue price of $0.07
per share in accordance with its discretion under ASX Listing Rule 7.1 (?the
Placement Shares?) to raise approximately $1,477,644 as announced to the ASX on
28 March 2011 (?the Placement?).

1.2 Shareholder Approval
The Board seeks shareholder approval for the issue of the Placement Shares
pursuant to ASX Listing Rule 7.4 in order to reinstate the Company?s capacity to
issue up to 15% of its issued capital to enable the Company to consider additional
funding initiatives over the next 12 months consistent with the provisions of ASX
Listing Rule 7.1 and the Corporations Act 2001.

1.3 ASX Listing Rules
ASX Listing Rule 7.1 imposes a limit on the number of equity securities (including
ordinary shares) that a company can issue or agree to issue without shareholder
approval. Generally, a company may not, without shareholder approval, issue in any
12 month period, more than 15% of the number of shares on issue 12 months before
the date of the issue.
Accordingly, pursuant to ASX Listing Rule 7.1, the prior approval of shareholders was
not required to issue the Placement Shares because those shares, when aggregated
with the shares issued in the previous 12 months (other than the shares issued with
Shareholder approval), did not exceed 15% of the number of shares on issue at the
commencement of that 12 month period.
ASX Listing Rule 7.4 provides that where a company in a general meeting
subsequently approves a previous issue of securities (and provided that the previous
issue did not breach ASX Listing Rule 7.1), those securities will be deemed to have
been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

1.4 Terms of the Placement and the Placement Shares
ASX Listing Rule 7.5 sets out a number of matters which must be included in a notice
of meeting seeking an approval under ASX Listing Rule 7.4.
Accordingly, for the purposes of ASX Listing Rule 7.5, the following information is
provided in relation to the Placement and this resolution:
(a) a total of 21,109,194 fully paid ordinary shares in the capital of the Company was
issued and allotted under the Placement (?the Placement Shares?).
(b) the Placement Shares represented approximately 14.99% of the Company?s fully
paid ordinary share capital on issue as at the date of their issue;
(c) the Placement Shares were issued at an issue price of $0.07 per share;
(d) the Placement Shares ranked equally in all respects with the fully paid ordinary
share capital of the Company on issue as at the date of their issue;
(e) the Placement Shares were issued to clients of Patersons Securities Limited that
met the definition of sophisticated and institutional investors;
(f) the funds raised by the Placement were, or will be, used for exploration and
drilling in the Company?s coal tenements in the Surat and Bowen Basins in order
to develop the Underground Coal Gasification business activities of the Company;
and
(g) a voting exclusion statement has been included in the Notice of Extraordinary
General Meeting.

1.5 Reasons for Shareholder approval
The Company?s capital base is essential to its ability to manage its business.
The requirement to obtain Shareholder approval for an issue (and the need to
convene a special meeting to do so) before the issue could limit the Company?s ability
to take advantage of opportunities that may arise to raise equity capital.
No decision has been made by the Board to undertake any further issue of equity
securities in the event that approval is received from Shareholders in respect of
resolution 1 (besides the Pro-rata Option Issue announced 16th August 2011). The
Board will only decide to issue further equity securities if it considers it is in the best
interests of the Company to do so. This may depend, among other things, on the
capital position of the Company and on conditions in domestic and international
capital markets.
Notwithstanding an approval by Shareholders of the proposed resolution, any future
equity raisings would remain subject to the 15% limit set out in ASX Listing Rule 7.1,
but the securities would not be included in the number of shares that can be issued
without Shareholder approval.

1.6 Board Recommendation
The Board considers that the approval of the issue of the Placement Shares
described above is beneficial for the Company as it provides the Company with the
flexibility to issue up to the maximum number of shares permitted under ASX Listing
Rule 7.1 in the next 12 months (without further Shareholder approval), should it be
required.
Accordingly, the Directors unanimously recommend that Shareholders vote in favour
of resolution 1.