Road Show Presentation Cascade Coal A Company Making Transaction 23 February 2011

Transcription

1 Road Show Presentation Cascade Coal A Company Making Transaction 23 February 2011

2 Transaction Overview White Energy s Acquisition of Cascade Coal Strategic Rationale Cascade Coal - A Company Making Transaction Combination Rationale White Energy and Cascade Coal Combined Detailed Asset Overview The Cascade Coal Assets Page 2

3 Why Cascade Coal? 1 2 Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW 3 Purchase Price of A$486m for 100% of the Equity in Cascade Coal is Fair and Reasonable and at the Lower End of IE Valuation Range of A$459m to A$587m 4 Mt. Penny is Competitive with and Superior to Other Comparable Australian Thermal Coal Assets 5 Mt. Penny Open-Cut 1 is Being Fast Tracked to Production in 2013, and is well positioned with Existing Rail Connection to Port of Newcastle 6 Board/Management with Demonstrated Ability to Bring Coal Assets into Production Moolarben, Ashton, Ulan and United Page 3

4 Transaction Overview White Energy s Acquisition of Cascade Coal White Energy s Strategy White Energy is a Coal Technology and Coal Mining company. Coal Technology: Exclusive worldwide license holder of the patented BCB Coal Technology, a mechanical process which uses drying and briquetting to convert poor quality coal into a higher value product. Coal Mining: White Energy recently acquired South Australian Coal which was the foundation transaction for its stated strategy of acquiring quality coal assets to build a more diverse coal company. The company currently holds ~A$206m of cash on its balance sheet and has a market capitalisation of ~A$890m. Cascade Coal Cascade Coal owns two coal development properties in New South Wales: Mt Penny (EL7406): 174Mt export thermal coal resource (JORC) located in the Western Coalfields of NSW, suitable for open-cut development with potential for a future underground operation also. Glendon Brook (EL7405): 50Mt thermal / semi-soft coal resource (target) located in the Hunter Valley Coalfields of NSW, suitable for open-cut development. Mt Penny is anticipated to commence production in 2013 and initially build-up to 5.2Mtpa of ROM coal from Open-Cut 1, followed by Open-Cuts 2-4 contributing an additional 4.0Mtpa of ROM coal. This will bring total production to 9.2Mtpa of ROM coal, equivalent to 6.4 Mtpa of product coal, in Cascade Coal Transaction Summary On 30 November 2010, White Energy executed an option and exclusivity agreement to acquire all of the issued shares in Cascade Coal for A$486m plus assumed liabilities of A$14m (total EV of A$500m). On 23 December 2010, following the completion of initial due diligence, White Energy announced that it had exercised this option and both White Energy and Cascade Coal would continue finalising the terms of the Sale Agreement using best endeavours and good faith. On 14 February White Energy and Cascade Coal executed definitive agreements, with completion of the transaction subject to independent shareholder vote. Key Financial Terms of the Transaction Should the proposed transaction proceed White Energy will provide A$486m in consideration for 100% of the shares in Cascade Coal, comprising of: Cash: Cascade Coal shareholders may elect to receive up to 20% of their consideration in cash, subject to pro rata scale back if the total cash amount exceeds A$41 million; and Ordinary Shares: the remainder of the consideration will be provided in the form of White Energy Ordinary Shares issued at the lesser of A$3.85 per share and their VWAP for the 15 trading days immediately before completion of the proposed transaction, subject to a minimum issue price of A$3.50 per share Page 4

5 Transaction Overview (cont d) White Energy s Acquisition of Cascade Coal Related Party Transaction and Corporate Governance Due Diligence Undertaken Transaction Implementation Shareholder Approval Cascade Coal is owned by a group of investors including entities associated with current White Energy management and Directors including: Travers Duncan (Chairman), Brian Flannery (CEO), John McGuigan (Director), John Atkinson (Director), John Kinghorn (Director) who own ~12% each and together represent ~60% of the Cascade Coal. Due to the related party nature of the Cascade Coal transaction, White Energy established an Independent Board Committee ( IBC ) comprising of independent Directors Graham Cubbin, Vincent O Rourke and Hans Mende. The decision to proceed with the acquisition of Cascade Coal follows an extensive and rigorous due diligence exercise performed by the IBC in consultation with its external advisors. Subsequent to this diligence process, the IBC strongly believes that the transaction represents significant value, is a compelling opportunity and is in best interests of all White Energy shareholders. The IBC also engaged an Independent Expert, Deloitte Corporate Finance Pty Limited, to prepare a report on the proposed transaction including an opinion as to whether the acquisition of Cascade shares on the term proposed is fair and reasonable to White Energy shareholders not associated with Cascade Coal shareholders. This included an independent technical review by Behre Dolbear. The IBC commissioned and was provided with the following due diligence reports in assessing the Cascade Coal transaction Commercial Due Diligence Report (Citi) Technical Report (Minarco) Legal Due Diligence Report on Cascade (Freehills) Legal Due Diligence Report on White Energy continuous disclosure (Freehills) Tax and Accounting Due Diligence Report (Ernst & Young) White Energy and Cascade Coal have entered into a Share Sale Agreement under which White Energy will purchase all the issued shares in Cascade Coal. The proposed transaction is subject to various conditions, including White Energy obtaining all necessary shareholder and regulatory approvals. Certain Cascade Coal shareholders will execute a Support Deed under which they will provide certain warranties and indemnities in relation to Cascade Coal s business / assets and enter into agreements restricting the disposal of their ordinary shares for 12 months after issue. Shareholder approval for the proposed transaction is necessary under the ASX Listing Rules because: Cascade Coal represents an acquisition of an asset valued at 5% or more of the total value of White Energy s shareholder equity Cascade Coal is to be acquired from entities associated with Directors (and therefore related parties) of White Energy The transaction also involves White Energy issuing shares exceeding 15% of its issued ordinary share capital White Energy shareholders will receive Notice of Meeting (including an Explanatory Memorandum) to convene the shareholder meeting required to approve the Cascade Coal acquisition The Notice of Meeting will contain an independent expert s report prepared by Deloitte Page 5

6 Transaction Structure White Energy s Acquisition of Cascade Coal White Energy and Cascade Coal have common shareholders including the Chairman, CEO and 3 other Directors of White Energy. Currently this group hold ~24% of White Energy and ~60% of Cascade Coal, and will hold ~35% of White Energy should the transaction proceed. 24% Travers Duncan Chairman: White Energy Brian Flannery CEO: White Energy John McGuigan Director: White Energy Coal Technology Coal Mining Coal Technology Coal Mining John Atkinson Director: White Energy John Kinghorn Director: White Energy + SA Coal SA Coal 60% Mt. Penny Coal Glendon Brook Coal Page 6

7 Next Steps and Expected Timetable to Completion The Cascade Coal transaction is expected to complete in April Notice of Meeting and Explanatory Memorandum sent to shareholders Early March 2011 Time and date for determining eligibility to vote at the Meeting 7.00pm (Sydney Time) on Monday, 4 April 2011 Shareholder meeting to approve Cascade transaction 10.00am (Sydney Time) on Wednesday, 6 April 2011 Completion of Transaction (if approved by shareholder) April 2011 Page 7

8 Transaction Overview White Energy s Acquisition of Cascade Coal Strategic Rationale Cascade Coal - A Company Making Transaction Combination Rationale White Energy and Cascade Coal Combined Detailed Asset Overview The Cascade Coal Assets Page 8

9 Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company The acquisition of Cascade will further enhance White Energy s operational scale, market position and further diversifies White Energy s revenue base. Australian coal peers market capitalisation (A$m) 10,540 3,431 3,600 4, ,376 1,559 1,800 Northern Energy Cascade Cockatoo Bandanna White Energy - Pre White Energy - Post Gloucester Aston Whitehaven Macarthur New Hope Coal & Allied Source: IRESS as at market close on 22 February 2011 (White Energy closed at A$2.84 per share). Page 9

10 A Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW Extensive M&A activity in the Australian coal sector has resulted in limited availability of quality coal assets in the market. Consolidation has driven appreciating coal valuations and increased competition, making opportunities scarce. Key Coal Sector Trends Shortage of quality coal assets. Majors building tier 1 portfolios and divesting non-core assets. Foreign strategic investors (China/India/US etc) entering the market. JVs with downstream partners to finance project development and secure offtake contracts. Mergers amongst mid-caps to build scale largely unsuccessful in Australia to date. Equity raising activity continuing. Xstrata s acquisition of Tahmoor and Anvil Hill Mineralogy acquires Waratah Coal and forms China First Coal Banpu s on-market purchase of 19.9% of Centennial Coal and subsequent takeover offer Rio Tinto / Riversdale Xstrata s unsuccessful takeover of Gloucester BMA acquires New Saraji Yanzhou Coal acquires Felix Resources Peabody & New Hope launch unsuccessful takeover bids for Macarthur Anglo sale of exploration assets to Cockatoo / KEPCO / POSCO Aston IPO Griffin Coal Sale Xstrata s takeover of Resource Pacific Proposed Gloucester/ Whitehaven merger Noble takeover offer for Gloucester Foreign acquisitions of Australian owned assets Macarthur unsuccessful takeover of Gloucester Noble minority takeout of Gloucester Linc asset sale to Adani Gloucester acquisition of Noble s interest in Middlemount JV and capital raising Page 10

11 Purchase Price of A$486m for 100% of the Equity in Cascade Coal is Fair and Reasonable and at the Lower End of IE Valuation Range of A$459m to A$587m White Energy is acquiring Cascade Coal at the bottom of the Independent Expert s valuation range. The transaction has also been deemed Fair and Reasonable for non-associated shareholders. IER Fair Market Value of Cascade Coal Cascade Value For personal use only Value of Consideration (1 Week VWAP) Mid-Point A$523m IER Fair Market Value of Consideration Implied Value of Consideration based on 1 Week VWAP (A$2.94) Implied Value of Consideration based on 1 Month Week VWAP (A$3.09) Consideration Value Maximum Scrip Implied Value of Consideration based on 3 Month VWAP (A$3.32) 460 IER Fair Market Value of Consideration Implied Value of Consideration based on 1 Week VWAP (A$3.94) Implied Value of Consideration based on 1 Month Week VWAP (A$3.09) Consideration Value Maximum Cash Implied Value of Consideration based on 3 Month VWAP (A$3.32) 463 The IER Fair Market Value of Consideration is based on the Independent Expert s valuation of Ordinary Shares at between A$3.50 and A$3.70 per Ordinary Share and the Implied Value of Consideration is based on market data as at 22 February Page 11

12 Mt. Penny is Competitively Positioned Within the Australian Export Thermal Coal Landscape Mt Penny Open-Cut 1 is attractively positioned in the second quartile of Australian export thermal coal mines. This provides the project with flexibility in varying coal markets and allows it to significantly benefit in robust coal conditions FOB Cash Costs inc. Royalties & Levies (A$ per saleable tonne) First Quartile Second Quartile Third Quartile Forth Quartile Open-Cut 1 (Cascade) LoM: A$56.0/t For personal use only Open-Cut 1 (BDA 1 ) LoM: A$60.4/t Note (1): Costs based on Behre Dolbear (BDA) FOB Cash Costs estimates, adjusted to include marketing, levies and royalties based on Deloitte assumptions for long-term coal prices and foreign exchange. Page 12

13 For personal use only Mt. Penny Open-Cut 1 is Being Fast-Tracked to Production in 2013 The Mt. Penny project is expected to come online in 2013 and ramp-up to 9.2Mtpa ROM production in This positions the asset to significantly benefit from existing and expected buoyant coal markets. Production Open Cut - Pits 2-4 Open Cut - Pit 1. Production (Mt ROM) FY13 FY15 FY17 FY19 FY21 FY23 FY25 FY27 FY29 FY31 FY33 Assumptions Pit 1 Pits 2-4 Life of Mine Production 103 Mt 48 Mt Full ROM Production 5.2 Mtpa 4.0 Mtpa Full Saleable Production Mtpa Mtpa Production Mix 100% Export Thermal Coal 100% Export Thermal Coal Page 13

14 Attractive Asset in Leading Thermal Coal Basin With Existing Rail Connection to Port of Newcastle Cascade Coal Overview Location Private Australian coal developer, with two properties in the Hunter Valley region of New South Wales. Mt Penny is a proposed open-cut and underground coal project Expected to host 4 open-cut mines and 1 underground mine Detailed mine plan established for Open-Cut 1 expected to commence production in 2013 Adjacent to rail infrastructure providing direct access to the Port of Newcastle Cascade Coal has secured all necessary land and water rights and is confident that it can access sufficient port capacity at PWCS Glendon Brook Coal Project is a semi-soft coking coal exploration project Exploration target of 50Mt resource Mt Penny Resources Reserves Resources mt Total Measured Indicated Inferred Total Resource Block 1 - OC Resource Block 2 - OC Resource Block 3 - OC Resource Block 4 - OC Resource Block 5 - UG Total Page 14

15 Mt Penny Open-Cut 1 is Expected to Receive Final Approvals by 2012 and Producing Coal in Continued Geological Investigations within EL 7406 Mine Development Part 3A Major Project Approval Stakeholder Consultation Detailed Mine Planning and Design Early Procurement Construction Mine Construction CHPP Construction Rail Spur Construction Production First Coal Production Ramp Up Infrastructure Port Nomination Rail Nomination Port Allocation Process Rail Allocation Process Page 15

16 Board/Management with Demonstrated Ability to Bring Coal Assets into Production A highly regarded board and management team with an industry wide reputation for delivery and execution of major coal projects. The ownership of a NSW coal asset leverages the skills of the White Energy Board and Management. Highly experienced coal mining management team with long track record of success (Felix Resources). Travers Duncan is the former Chairman of Felix Resources Travers Duncan Chairman Brian Flannery Managing Director and CEO John Kinghorn Non-executive Director Graham Cubbin Non-executive Director Brian Flannery is the former CEO of Felix Resources Hans Mende, Vincent O Rourke and John Kinghorn are former Directors of Felix Resources Significant experience in developing NSW coal projects such as Moolarben, Ashton, Ulan and United Hans Mende Non-executive Director John Atkinson Non-executive Director John McGuigan Non-executive Director Vincent O Rourke Non-executive Director Page 16

17 Why Cascade Coal? 1 2 Company-Making Transaction, Transforming White Energy into a Leading Mid-Tier Coal Company Rare Opportunity to Acquire a Large, Scarce, Export Quality, Open-Cut Coal Mining Asset in NSW 3 Purchase Price of A$486m for 100% of the Equity in Cascade Coal is Fair and Reasonable and at the Lower End of IE Valuation Range of A$459m to A$587m 4 Mt. Penny is Competitive with and Superior to Other Comparable Australian Thermal Coal Assets 5 Mt. Penny Open-Cut 1 is Being Fast Tracked to Production in 2013, and is well positioned with Existing Rail Connection to Port of Newcastle 6 Board/Management with Demonstrated Ability to Bring Coal Assets into Production Moolarben, Ashton, Ulan and United Page 17

18 Transaction Overview White Energy s Acquisition of Cascade Coal Strategic Rationale Cascade Coal - A Company Making Transaction Combination Rationale White Energy and Cascade Coal Combined Detailed Asset Overview The Cascade Coal Assets Page 18

19 The Continuing Evolution of White Energy The Cascade Coal acquisition represents the next step in the continuing evolution of White Energy into a diversified coal company. Continue with joint venture business model Acquisition of SACL provides development options BCB Coal Upgrading Technology Sub-bituminous Coal Assets Extend BCB technology into new applications New Applications eg. Coking Coal Other Related Coal Assets Conventional Coal Mining Technology Offering Upgrade Coal Fines Acquisition of Cascade Coal leverages management skills and expertise Page 19

20 White Energy and Cascade are an Attractive Combination of Assets An acquisition of Cascade Coal will position White Energy as an attractive mid-tier Australian coal company with a number of options to optimally develop its diverse set of coal properties. This strategy has been well communicated to the market and shareholders. The Cascade acquisition would further reinforce White Energy s stated strategy of two interdependent divisions: Coal technology Coal mining Coal Technology Coal Mining A more diverse operating model would provide greater stability around future earnings A number of development options are opened for White Energy to consider: Coal Upgrading Coal Fines Processing BCB Technology Application SACL Cascade Develop the two divisions separately to better maintain current White Energy capital structure. Identify financial partners at the project / asset level. Pursue a funding / development strategy centered around geography. Multiple Geographies Post-acquisition White Energy will be positioned as an attractive mid-tier Australian coal company presenting a long term value proposition which will likely appeal to financial partners and / or strategic investors Page 20

21 White Energy will Continue to Focus on its Market Leading Coal Upgrading Platform White Energy s coal upgrading technology will remain a central pillar to its long-term strategy and future growth. White Energy s upgrading process has been developed over 20 years, by a consortia led by the CSIRO, Australia s pre-eminent government research organisation. Graphical Depiction of the BCB Process Steps in the White Energy Process 1. Crushed coal is injected into the drying column and flash dried to remove moisture 2. The dry, crushed coal is then compacted and briquetted, creating tight bonds between the coal particles and eliminating nearly all voids 3. Raw feed coal is crushed to <3mm to optimise the ability to process 4. Briquettes are then cooled to enable handling and to be stockpiled 5. The result is a higher-density, higher-energy briquette with low permeability and reduced propensity toward spontaneous combustion Page 21

22 White Energy s Facility in Tabang is the World s First Commercial Scale Coal Upgrading Plant White Energy s industry leading plant in Tabang, Indonesia is now in production and has the capability to produce 1Mtpa of upgraded coal. Joint Venture Structure Kaltim Supacoal (KSC) is a joint venture between White Energy (51%) and Bayan (49%) established to operate coal upgrading plants in Tabang Bayan is one of the largest coal miners in Indonesia and owns several large sub-bituminous deposits in Tabang Tabang is located in East Kalimantan, Indonesia and is well positioned to key South East Asian and North Asian markets KSC has completed construction of an initial 1Mtpa coal upgrading module Plant has been commissioned and is currently ramping up to full capacity Work to address remaining technical issues at the Plant is underway KSC plans to significantly expand the capacity to 15 Mtpa Expansion will be prioritised over any other White Energy plants in Indonesia Coal Upgrading Technology Indonesia Approx. 4,400 Kcals/kg GAR Approx. 6,100 Kcals/kg GAR PRB Coal Approx. 8,400 Btu/lb GAR Approx. 11,350 Btu/lb GAR Page 22

23 White Energy s Takeover of South Australian Coal Delivered its First Coal Asset Potential Uses of the Lake Phillipson Deposit. Lake Phillipson Coal Deposit Gawler Craton Upgrade coal via BCB Technology Sell high moisture coal domestically Identify new coal technologies Drilling program update Develop minerals and base metals The high moisture coal is a potential feedstock for BCB Process Produce higher energy briquettes suitable for export market Positive transport dynamics to Asia from Darwin or South Australian ports Opportunity to develop an Australian centric project South Australia needs new base load capacity Port Augusta Power Station currently uses high moisture, lower energy coal from Leigh Creek (similar) Lake Phillipson is a potential alternate coal source for Port Augusta Opportunity to use the more efficient, upgraded BCB coal As an owner of a coal asset, WEC may wish to test/pursue other coal technologies Size of the reserve may present opportunities associated with gasification and coal to liquids Comprehensive resource drilling program completed in December 2010 quarter A Competent Person under the JORC Code has been engaged to evaluate the results Company expects to receive a final report within the next [4] weeks confirming the additional JORC resources identified Olympic Dam and Prominent Hill are located in a geological province known as the Gawler Craton, as is the Lake Phillipson EL4534 Some of EL4534 will be tested for potential base metal mineralisation Opportunity to develop a more diversified portfolio of assets outside of coal Page 23

24 Transaction Overview White Energy s Acquisition of Cascade Coal Strategic Rationale Cascade Coal - A Company Making Transaction Combination Rationale White Energy and Cascade Coal Combined Detailed Asset Overview The Cascade Coal Assets Page 24

25 Cascade Coal Background Cascade Coal Pty Ltd ( Cascade ) was established in 2008 to engage in greenfield coal exploration and developments within NSW. Cascade Coal Corporate Structure Cascade Coal Pty Ltd Key Events in Cascade Development Cascade bid was in a public tender and was granted coal exploration licenses EL 7406 and EL 7405 in October 2009 Mt Penny Coal Pty Limited EL 7406 Mount Penny Mt Penny Properties Pty Limited Right to acquire key Mt Penny properties Glendon Brook Coal Pty Limited EL 7405 Glendon Brook Cascade s Board made a decision to focus on the development of Mount Penny in priority to Glendon Brook An accelerated development timeline has been followed by Cascade, drilling 60 holes between Nov Aug. 2010: 20 open holes to indicate resource extent, structural control & depth 40 cored holes for resource definition and coal quality characterisation 523 coal and parting samples were recovered and submitted for analysis Page 25

26 Mount Penny EL 7406 The Mount Penny coal deposit, EL 7406, is located in the NSW Western coal field. NSW Coal Fields NSW Coal & Rail System Mt Penny Rail access to Port Kembla Page 26

27 Exploration Tenement Details Cascade has developed a detailed mine plan for Open-Cut 1 The Mt Penny coal project contemplates 4 x Open-Cut and 1 Underground mine Mt Penny has access to quality infrastructure with the Sandy-Hollow Ulan Rail line cutting across the EL Page 27

28 Exploration Tenement Details The Mt Penny coal deposit has a JORC compliant resource of 174 Mt. EL 7406 JORC coal resource Coal Description Reserves Resources The mine plan for Open-Cut 1 contemplates a 5.2Mtpa ROM open-cut mine producing Mtpa of saleable coal mt Total Measured Indicated Inferred Total Resource Block 1 - OC Resource Block 2 - OC Resource Block 3 - OC Resource Block 4 - OC Resource Block 5 - UG Total The cumulative coal thickness is 7 9m Open-Cut 1 resource is capable of producing thermal and steam raising coals for export and domestic utility generation The coal will require washing to produce a product that is of export quality Optimum recovery would be achieved by targeting a product with 17% ash (±0.5%) The coal has low sulphur of less than 0.5% and a CV of 34.5 MJ/kg (d.a.f.) Page 28

29 Exploration Tenement Details Core mine infrastructure such as rail loop, materials handling plant, haul road and administrative centre is to be constructed in close proximity to Open-cut 1. Page 29

30 Infrastructure and Utilities Mt Penny is well positioned with respect to rail and utility infrastructure. Rail Port Power Water Staged bi-directional loop proposed enabling routing of trains to Newcastle or Port Kembla Sufficient excess rail capacity to cater for Mt Penny production Port Waratah Coal Service Terminal has been identified as a likely port for export Depending on rail infrastructure Port Kembla could emerge as a viable export port Power requirements of approximately 6.5 Mva will be needed and can be serviced from the Bylong sub-station An application has been submitted to Integral Energy Water requirements for Open-Cut 1 at 5.2 Mtpa ROM operation is 1,500 mega liters Cascade believes it can control Water Access Licenses that provide 1,700 mega liters Passing lanes to be constructed to Wollar and Bylong There may be an opportunity to also source water from site run off Page 30

31 Land Access and Encumbrances Cascade Coal s subsidiary Mt Penny Properties Pty Ltd has secured put and call options to purchase land located within Open-Cut 1 and over the relevant infrastructure areas Controlled Land Native Title Areas highlighted in blue denotes land controlled or owned by Mt Penny Properties Pty Limited Based on searches of the register administrated by the Native Title Tribunal completed on 30 September 2010, Mt Penny s exploration license EL 7406 is not covered by a native title claim Aboriginal Cultural Heritage surveys commenced during October 2010 to ensure that it complies with relevant guidelines Cascade has engaged relevant Aboriginal groups and are following through with the relevant procedures Page 31

32 Glendon Brook Asset Snapshot Cascade was granted Glendon Brook in October 2009 for a period of 5 years. Glendon Brook is located in the Hunter Valley Coalfield approximately 12km east of Singleton and immediately south of ML 1309 Mitchell s Flat held by Xstrata PLC. ML1309 expires in February The development consent for the proposed rail access corridor which was also granted, has allegedly expired, however Cascade is currently investigating its options in this regard The coal is typical of the Vane group and a lower part of the Burmawood formations, which are host to a number of coal seams that are mined at Rixs Creek, Ashton, and Camberwell mines. Cascade carried out exploration activity in September 2009 consisting of a fully cored hole in steep dipping zones. 13 samples ranging from 0.3 to 2.1m thick were intersected Page 32

33 Forward looking statements Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements, including statements, containing the words planned, expects, believes, strategy, opportunity, anticipates, and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate. For more information visit contact: Brian Flannery Managing Director and CEO White Energy Company Limited Ivan Maras Chief Financial Officer White Energy Company Limited Page 33

34 Competent Person Statement Cascade Coal Pty Limited The information in this presentation concerning the proposed acquisition of Cascade by White Energy, which relates to Coal Reserves and Coal Resources at EL7406 and EL7405 is based on information compiled by Mr Michael Johnstone, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Johnstone is the principal consultant of Minerva Geological Services PL. Mr Michael Johnstone has 32 years of relevant mining and geological experience in coal. During this time he has either managed exploration programs or contributed significantly to mining studies related to the estimation and assessment of coal resources, and in the development of coal mining operations in Australia, India, Pakistan, Philippines and Vietnam. He was the project Geologist responsible for implementing the Ulan Stage 2 exploration program, and Exploration Manager for the Ashton and recently commissioned Moolarben Development. He has sufficient experience which is relevant to the style of coal occurrence and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting Mineral Resources and Ore Reserves. Pursuant to the requirements of ASX Listing Rule 5.6, Mr Johnstone consents to the inclusion in the announcement of the matters based on their information in the form and context, which it appears. Michael Johnstone - February 2011 Member AIMM Principal Consultant Minerva Geological Services Pty Ltd Page 34

35 Maritime Trade Towers Level 20, 201 Kent Street Sydney, NSW 2000 Telephone: Facsimile: info@whiteenergyco.com ABN