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Location

The Kolan Coal Project is located in the hard coking coal-bearing Maryborough Basin in Queensland, Australia and includes an estimated 23,700 hectares of coal exploration permit contained in two tenements, which are 100% TerraCom owned – EPC1872 and EPC2003.

In 2012, TerraCom entered into a Farm in and Joint Venture Agreement (JV) with QCI (Coking) Pty Ltd, a wholly owned subsidiary of Perth based Hancock Prospecting Pty Ltd for the Kolan Project. QCI agreed to contribute $2 million over 3 years and in return, manage and operate 2 tenements.

However, during the 3rd quarter 2013-14, post a review of the Kolan exploration to date, QCI (coking) Pty Ltd advised of its withdrawal from the Kolan JV. The exploration results from the last two years work show limited prospectivity of the tenements.  The conclusion of the JV with QCI means that TerraCom will resume management of the tenements and that QCI’s farm in option ceases.

The tenements are located in the Maryborough Basin, in which the Colton Hard Coking Coal Project (ML50280, 50273 and 50274) is being developed by New Hope Coal.

Map-2-GUF-QLD-projects-Apr-2013   Map-10-Kolan-Location-map

Resource and Exploration

An Exploration Target* for the Kolan Project has been prepared by MDM, of 60 to 400Mt of high value coking product with high CSN, low ash and low moisture. The Maryborough Formation is known to contain thicker seams of coal, underlying the Burrum Coal Measures. Drilling to date on the Kolan Project has only intersected thin sections of Burrum Coal Measures but confirms extension of the seams on the Project area.

Coal quality data has been obtained from twelve (12) holes in the Kolan Project area. A summary of the results of the historical exploration coal quality analyses along with recent results achieved by TerraCom are shown in the following table. The qualifying ranges for coking and PCI coal used in this table are based on A Guide to Coal Utilisation by the Australian Coal Association (1994).

*References to Exploration Targets in this document are in accordance with the guidelines of the JORC code (2004). As such it is important to note that in relation to reported Exploration Targets any references to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report coal resources in accordance with the JORC code (2004). It is uncertain if further exploration will result in the determination of a Coal Resource.

Product Coking Specification Range PCI Specification Range Raw Results from M008 Range of Results from Historical Data
Volatile Matter % 18-34 19-44 23.1 25.9-32.2
Ash % 6-10 6-10 32.5 5-15.8
Crucible Swell Number 6-9 6-9 6.5 7.9
Total Sulphur % 0.3-1.1 0.3-0.8 0.5 0.43-0.78
Specific Energy (MJ/kg) 30-34 29-32 22.28 28.98-34.45

NOTE: Qualifiers are based on the Australian Coal Association’s Guide to Coal Utilisation.

Infrastructure

The Kolan Coal Project is connected to the Port of Gladstone via Queensland Rail’s North Coast Line which runs adjacent to the Project.

The Kolan Project is expected to host coal from the Burrum and Maryborough Coal Measures and may potentially be amenable to bulk mining of thin seams via open cut mining methods.