CAUTIONARY STATEMENT ON FORWARD LOOKING INFORMATION AND DISCLAIMER

Certain information contained in this presentation, including any information as to company strategy, plans or future financial or operating performance and other statements that expressmanagement's expectations or estimates of future performance, constitute "forward-looking statements”. All statements, other than statements of historical fact, are forward-lookingstatements. The words “believe”, "expect", "will", “anticipate”, “contemplate”, “target”, “plan”, “continue’, “budget”, “may”, “intend”, “estimate” and similar expressions identify forward-looking statements.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significantbusiness, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks,uncertainties and other factors that may cause the actual financial results, performance or achievements of Australian Energy Company Limited (AEC), to be materially different from theCompany's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees offuture performance. These risks, uncertainties and other factors include, but are not limited to: the availability of financing; the values of assets and liabilities based on projected futurecash flows; changes in the worldwide price of coal, oil or certain other commodities; fluctuations in currency markets; changes in U.S. dollar interest and exchange rates; risks arisingfrom holding derivative instruments; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in thejurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costsassociated with mining inputs and labour; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits and diminishingquantities or grades of reserves; contests over title to properties; the risks involved in the exploration, development and mining business.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except asrequired by applicable law.

Empire Securities Group Pty Ltd Corporate Authorised Representative of Novus Capital Ltd. Australian Financial Services License 238-168Empire Securities Group Pty Limited (Empire) is a Corporate Authorised Representative of Novus Capital Limited ("Novus") , the holder of Australian Financial Services License No238 168. Empire, Novus, their directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage,p , , , , p y y, , y p g ,commission, fees or other benefits from the companies mentioned in this presentation. Unless specifically stated within this document or an attached document, constitutesunsolicited general advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particularinvestor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives,financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you,particularly if based on past performance or relate to a future matter.Empire believes that information in this presentation is accurate when issued but do not warrant its accuracy or reliability. Empire and Novus have not, unless specifically stated inwriting, independently verified the information contained in this document. Empire is not obliged to provide you with updated information or advice if circumstances change. Empire,Novus and its directors, officers, associates and employees exclude to the full extent permitted by law, all liability of any kind whether in negligence, contract, under a fiduciary duty orotherwise, for any loss or damage, whether direct, indirect, consequential or otherwise, whether foreseeable or not, arising from or in connection with this document.

EXECUTIVE SUMMARY� Australian Energy Corporation Ltd (AEC) is an unlisted Australian public company, has an institutional

shareholder base and plans to list on the Australian Stock Exchange.� AEC is seeking a substantial cornerstone investor, preferably with coal associations which would also C s see g a subs a a co e s o e es o , p e e ab y coa assoc a o s c ou d a so

take board seats and contribute to accelerated project development.� AEC has substantial coal assets in Australia and the USA and is focusing on its Australian assets at

the current timethe current time.� 1st Strategy is to have large resource, long life mines that are already in production.� 2nd Strategy is to beneficiate the coal by proven and low cost methods to substantially value add the

l t d th f ll i t h i l ifi ti coal to produce the following technical specification range.

Country Gross Calorific KCAL/kg Moisture Content % Ash % Sulphur %

� Production of the Australian beneficiated coal will increase in stages to 7 mtpa and then to 15 mtpa.

Australian Product 6,283-6,569 <2.00 0.70 – 1.90 0.25 – 0.38

g p p

4

AUSTRALIAN OPERATIONS

� AEC has a 600 million tonne Coal Reservation Agreement with the existing Loy Yang Power Station Mine in the Latrobe Valley, Victoria which has been activated and will be the initial long term source of coal supply. Therefore y, g pp yAEC will not have the capex cost and time constraint of a new mine development.

� The Loy Yang mine has over 3 billion tonne of reserves and a current 60 year mine plan.

� AEC h l d t d l JV i t t i t dj i i d it t t lli 10 19b t f JORC � AEC has also agreed to develop a JV interest in two adjoining deposits totalling 10.19bn tonnes of JORC compliant resources of low ash lignitic coal located in the Latrobe Valley, Victoria, Australia. The JORC breakdown of the resource is as follows:¾ Measured 2 30 billion tonnes¾ Measured 2.30 billion tonnes¾ Indicated 4.24 billion tonnes¾ Inferred 3.65 billion tonnes.

� In addition, AEC has a 500m tonne coal resource adjoining the 10.19bn tonnes abovementioned resource which because of the highly beneficial strip ratio is the most proficient area to start a new pit.

� The total resource will be held in reserve ready for new mine development if needed to expand the operation.

� The total FOB cost to export the beneficiated coal is estimated at AUD65.15 per tonne. 5

5

AUSTRALIAN OPERATIONSPROJECT COSTS CAPEX SAVINGS & INDICATIVE REVENUESPROJECT COSTS, CAPEX SAVINGS & INDICATIVE REVENUES

� The Stage One beneficiation plant is estimated to cost AUD500M and will produce 7.14 mtpa of high quality steaming coal product ($250M equity and $250M project finance) quality steaming coal product ($250M equity and $250M project finance).

� The after tax net cash flow is estimated at $235 million per annum for the initial 7 mtpa project (see Financial Models on pages 8 – 10 herein), based on a 50:50 debt:equity basis. After tax net cashflow p g ), q yrises to over $640 million for Stage Two.

� Planned production is to rise to 15 mtpa.

� An immediate saving to the AEC venture is the capex costs of not having to establish a new coal mine due to the 600 million tonne Coal Reservation Agreement with the existing Loy Yang Power Station mine and this capex saving is conservatively estimated at AUD400M. S s p s g s s y s U 00

� The Loy Yang mine has over 1.25 billion tonne of unallocated coal and an excess of production capacity. It has a mine plan extending out 60 years.

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AUSTRALIAN PROJECTPROJECT ECONOMICS Operating Costs $000’s

Opex cost to mine (dry tonne equivalent) 21 25Opex cost to mine (dry tonne equivalent) 21.25

Internal stockpiling, reclaiming and handling

3.27

Upgrading cost per dry tonne 15.40

Stage One – Base Product Case 6,300 kcals

Upgrading cost per dry tonne 15.40Road transport 16.00Coal loading at port 8.00Incidentals 1.23TOTAL FOB COST 65 15Case 6,300 kcals TOTAL FOB COST 65.15Selling Price – FOBThis kcal thermal coal trades in the range 120-135 per tonne

Margin per tonne (Product 6,283-6,569 kcal) 54.85 – 69.85Capital costs are current estimated as follows:

$000’s

Infeed, crushers and conveyors 64,000

Energy Supply (Boilers) 130 000Energy Supply (Boilers) 130,000Coal drying 35,840Dust extraction 28,560Briquetting presses 21,000Ancillary works including design 96 970

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Ancillary works including design 96,970Contingency @ 23.73% 117,130TOTAL 493,500

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LOY YANG POWER – MINE DEVELOPMENT 2040

14

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LOY YANG POWER – MINE DEVELOPMENT 2070

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AUSTRALIAN PROJECTFlow SheetFlow Sheet

16

AUSTRALIAN PROJECTExisting Mecrus Managed Coal Briquetting Operationg g q g p

Latrobe Valley, Victoria, Australia

17

AUSTRALIAN PROJECTMecrus Briquette Ex Press and Prior to Cuttingq g

Latrobe Valley, Victoria, Australia

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AUSTRALIAN PROJECTTransport LogisticsTransport Logistics

� Th b i tt h b bj t d t t d d i d t f t d d t t th i it bilit f � The briquettes have been subjected to standard industry fracture and drop tests re their suitability for bulk transport.

� As there is no traditional bulk loading coal terminal in Victoria, Stage One production of 7 mtpa will be transported via road transport to Port Anthony (Barry Beach) where it will be transferred to conventional coal barges and then transferred to a bulk carrier via clam cranes or barge conveyor.

� This loading method is quite common throughout the world, particularly in Indonesia.g q g p y� The berth for barge loading at Port Anthony is complete and the stockpile area is about to

commence.� St T d ti ill b b 100 k il t i t th i ti il t k d ill b � Stage Two production will be by a 100 km rail extension to the existing rail network and will be

funded by an infrastructure fund.

19

19

AUSTRALIAN PROJECTTransport Logistics

20

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AUSTRALIAN PROJECTTechnical specifications for the two product rangesTechnical specifications for the two product ranges

Predicted Ranges Component Moisture

Briquette Dry

Briquette Proximate Fixed Carbon (%) 37 – 40 46 - 51 Volatile Matter (%) 43 – 46 49 – 52 Moisture (%) 10 – 13 - Ash Yield (%) 0.6 – 1.7 0.7 – 1.9 ( )Ultimate Carbon (%) 68 – 71 Hydrogen (%) 4.7 – 5.1 Nitrogen (%) 0.45 – 0.60 Nitrogen (%) 0.45 0.60 Total Sulphur (%) 0.25 – 0.38 Oxygen (%) 22 – 25 Energy (MJ/kg) 22 9 – 24 2 26 3 – 27 5

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Energy (MJ/kg) 22.9 24.2 26.3 27.5 (kcal/kg) 5470 - 5781 6283 - 6569

AUSTRALIAN PROJECT Typical Dimensions

Description “L” Industrial 43mm Victoria Briquettes Size (approx ) 58mm x 43mm x 40mm

Typical Dimensions

Size (approx.) 58mm x 43mm x 40mm Weight (approx.) 90g Bulk Density 0.75 tonne/m3

Other Properties

Ash Fusion Temperature 1250°C (reducing atmosphere) Hardgrove Index 40-45 C i St th (k / 2) 160 200 Compressive Strength (kg/cm2) 160-200 Briquette Particle Density (g/cm3) 1.118-1.240 Bulk Density 0.75 tonne/m3 Size (approx.) 58mm x 43mm x 40mm Weight (approx.) 90 gms

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AUSTRALIAN PROJECT Analysis of Ash ConstituentsAnalysis of Ash Constituents

Ash Constituents (Laboratory Furnace Ash)

Predicted Minimum Value (% db)

Predicted Maximum Value (% db)

Silica 5 60 Alumina 5 30 Titanium oxide 0.2 2 Iron oxide 5 15 Calcium oxide 2 10 Magnesium oxide 5 20 Sodium oxide 4 20 Potassium oxide 0.2 1 Sulphur trioxide* 10 40

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AUSTRALIAN PROJECT Analysis of Major Elements of Fly Ash and Grate Ash sampleAnalysis of Major Elements of Fly Ash and Grate Ash sample

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AUSTRALIAN PROJECT Analysis of Trace Elements of Fly Ash and Grate Ash sampleAnalysis of Trace Elements of Fly Ash and Grate Ash sample

25