ABN 13 112 682 158

Level 2, 66 Hunter Street Sydney NSW 2000 Australia T: (61 2) 9300 3333 F: (61 2) 9221 6333 E: pnightingale@cockatoocoal.com.au W: www.cockatoocoal.com.au

REPORT ON ACTIVITIES FOR THE QUARTER ENDED 30 JUNE 2011

1. QUARTERLY ACTIVITY SUMMARY CORPORATE Equalisation/Surat Project JV

• Agreement, subject to certain conditions precedent, reached to sell 49% of the Woori coal project and associated data and assets to Mitsui for $37.25 million.

• Sale price represents $0.90 per Measured Resource tonne. • Agreement reached to consolidate the Collingwood, Taroom and

Woori coal projects into one joint venture with Mitsui to be managed by Cockatoo.

Capital Management

• $50.0 million guarantee facility entered into with Macquarie Bank. • 20.8 million options, each exercisable at a strike price of $0.64 to 31

December 2013 issued to Macquarie Bank. • $65.0 million loan facility entered into with KEB Australia, a wholly

owned subsidiary of Korea Exchange Bank. Administration • Commensurate with the management of the North Surat, Hume and

Bylong projects, the Company has significantly increased staff numbers and overheads, offset by management fee revenues.

PRODUCTION Flood Impact • Restoration of operations at the Baralaba coal mine following

December Queensland floods. Mining resumed by opening unaffected reserves outside the main pit. Coal production recommenced in May.

Tonnes • Baralaba coal mine production for the quarter totalled 22,909 tonnes. • Full fiscal year production of 181,081 tonnes. • Flood events severely impacted fiscal year production.

Sales • 29,585 tonnes of thermal coal sold in the quarter. EXPLORATION Queensland Bowen Basin • Increase in total of Measured and Indicated JORC Resources in the

open cut production areas of the Baralaba Mine project (ML 5605 and ML 80157) to 13.1 million tonnes, up 148%, or 7.8 million tonnes, from 5.3 million tonnes.

• Increase in total of all classifications of JORC compliant Resources in the Bowen projects to 165.0 million tonnes, up 4%, or 6.4 million tonnes, from 158.6 million tonnes.

• Exploration drilling activities back to full production with 4 rigs operational.

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Surat Basin • Increase in total of all categories of JORC compliant Resources for

the Tin Hut Creek project to 343.6 million tonnes, up 90%, or 162.3 million tonnes, from 181.3 million tonnes.

• Exploration drilling commenced at the Collingwood and Taroom projects.

• New 6 to 7 metre seam close to surface identified at Collingwood. • Increase in JORC resources to 35.2 million tonnes at Bottle Tree

deposit, at a strip ratio of less than 10:1. N.S.W Bylong • First stage of exploration under the Company’s management were

developed and completed. • Phase 2 exploration plans have been submitted to the NSW

Government for approval. Hume • Initial access for Stage 1 exploration within the Belanglo State Forest

area of the Hume Authorisation approval secured. • First cored holes drilled.

LOGISTICS Rail • Discussions continued with Queensland Rail.

• Initial meetings for NSW project capacity held with NSW track and rail operators.

• Undertook Due Diligence process with Surat Basin Rail. Port • Cockatoo selected as a 3 million tonnes per annum Wiggins Island

Stage 1 user. Working to Financial Close of Stage 1. • Initial meetings for port capacity for NSW projects held with terminal

operators in Newcastle and Port Kembla. 2. CORPORATE ACTIVITIES 2.1 AGREEMENT TO SELL 49% OF WOORI PROJECT TO MITSUI and

MASTER JOINT VENTURE AGREEMENT On 8 July 2011, the Company announced that agreement had been reached with Mitsui Coal Holdings Pty Ltd ('MCH') and its subsidiaries MCH Surat Basin Investment Pty Ltd ('MSBI') and Mitsui Moura Investment Pty Ltd ('MMI') (collectively 'Mitsui') whereby MSBI will acquire a 49% participating interest in the Woori coal project in the Surat Basin from the Company’s wholly owned subsidiary, Surat Coal Pty Ltd, for $37.25 million. This sale price represents $0.90 per Measured Resource tonne defined at the Woori project compared to the Company's current enterprise value of approximately $0.30 per resource tonne. Mitsui currently own 49% of the Collingwood and Taroom projects, and this transaction for the Woori Project will equalise the ownership of these three most significant projects in the Surat Basin. The consolidation of the Collingwood, Taroom and Woori coal projects into one joint venture activity to be managed by Cockatoo will facilitate the orderly development of these projects. The assets that Mitsui will acquire a 49% interest in comprise:

• MDL 187, MLAs 50247 and 50248, EPC 1322, EPCA 2207 (where Surat Coal is preferred applicant) and EPCA 2473 (where Surat Coal is a competing applicant);

• Mining information associated with the above tenements; • Freehold land owned by Surat Coal located at the Woori project; and • Cockatoo’s rights in respect of Wiggins Island Coal Export Terminal ('WICET') and Surat

Basin Railway ('SBR') capacity applications in respect of Woori.

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The overall scope of the consolidated joint venture, the North Surat JV, is to work on the completion of a feasibility study which will assess the three projects and determine the optimum development program and schedule in accordance with available infrastructure, on or before 31 December 2013. The North Surat JV will establish a marketing committee with the objective of securing letter of intent support for markets for the coal to be produced. MCH (or a related Mitsui entity) is to be appointed the exclusive marketing agent for coal produced by the North Surat JV with marketing rights worldwide except for South Korea, which shall remain the domain for Cockatoo and its marketing partner, SK Corporation. Completion of the agreement is subject to a number of conditions precedent, including:

• Mitsui obtaining FIRB approval for the Woori acquisition; • Mitsui obtaining indicative DERM approval in respect of the proposed transfer of the Woori

project tenements and existing environmental authorities; and • formalisation of the North Surat JV documentation.

The combination of three world class assets of Collingwood, Taroom and Woori into a single joint venture will allow Cockatoo and Mitsui to have a strong presence in the development of the Surat Basin province. As a frontrunner in the development of coal mines in the Surat Basin, the North Surat JV holds the Company's two development projects which are closest to the Surat Basin Rail corridor, and the large defined resources hold significant opportunity to maximise economies of scale. Mitsui Mitsui is one of the most diversified and comprehensive trading, investment and service enterprises in the world, with 155 offices in 66 counties as of May 2011. Utilising the global operating locations, network and information resources, Mitsui is multilaterally pursuing business that ranges from product sales, worldwide logistics and financing, through to the development of major international infrastructure and other projects in the following fields, Iron and Steel Products, Mineral and Metal Resources, Infrastructure Projects, Motor Vehicles, Marine and Aerospace, Chemicals, Energy, Foods and Retail, Consumer Services, Information, Electronics and Telecommunications, Financial Markets and Transportation Logistics. In the coal sector, Mitsui has a long history of ownership of project interests in Australia in both Queensland and the Hunter Valley region in New South Wales. 2.2 BANK GUARANTEE FACILITY On 9 May 2011, the Company was announced that it had entered into a Bank Guarantee Facility ('Facility') with Macquarie Bank Limited ('Macquarie Bank'). The principal terms of the Facility are: Facility amount: $50.0 million. Purpose: To support the development of the Company's coal assets and

associated infrastructure requirements. Maturity date: 31 December 2013. Options: As part of the Facility fee, the Company will issue Macquarie Bank

20,833,333 options, each to acquire one fully paid ordinary share in the Company at 64 cents per share at any time up to 31 December 2013. Any proceeds from the exercise of the options will first be applied to repay any outstanding Facility amount.

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2.3 BANK GUARANTEE FACILITY On 27 July 2011, the Company was announced that it had entered into a $65.0 million loan agreement with KEB Australia Ltd ('KEBA'), a wholly owned subsidiary of Korea Exchange Bank. The facility is to support the ongoing development of the Company's coal assets, infrastructure requirements and for working capital purposes. The loan agreement, which has a 30 December 2011 maturity, is secured by a guarantee to KEBA from SK Networks Co., Ltd (‘SKN’). SKN is the ultimate parent entity of SK Networks Resources Australia Pty Ltd, a shareholder of the Company. The Company has indemnified SKN for any losses which may be incurred in relation to the facility and have granted SKN a second ranking fixed and floating charge over the Company's assets and undertaking. A first ranking fixed and floating charge has been granted to Macquarie Bank in respect of the $50.0 million bank guarantee facility as announced on 9 May 2011. 3. BARALABA COAL MINE The Company's Baralaba coal mine comprises MLs 5580, 5581, 5590, 5605 and 80157, MDL 184 and MLA 80169 which are held by the Company's 62.5% owned subsidiary, Baralaba Coal Pty Limited. The Baralaba mine is located near the town of Baralaba in the south eastern limb of the Bowen Basin, Queensland. The Baralaba coal mine is an open-pit operation, managed by the Company and operated by contractors providing blasting, mining, and haulage. The Company undertakes its own coal preparation services. PCI coal and thermal coal are produced from multiple seams from the well known Rangal Coal Measures. All the coal sold is exported from the Port of Gladstone. 3.1 Flood Recovery As has been previously reported, in late December 2010, inundation of the pit and local flooding severely disrupted production and logistic operations at the Baralaba mine. Dewatering operations at the main pit of the Baralaba mine are ongoing, but expected to effectively complete in the July-Sept 2011 quarter. In the meantime, removal of overburden in the area adjacent to the north-eastern wall and above the water levels in the main pit, described as the Eastern Syncline, commenced in mid-February. Production of raw coal began from this new mining area in May 2011. Overburden material being removed from the Eastern Syncline is being utilised in the construction of a 1:1000 year flood-event levee bank, which is approximately 2.5 metres higher than the recent flood event, as part of the mining lease requirements for the Baralaba complex’s planned extension of operations. 3.2 Baralaba Mine Production As noted, recovery from the inundation of the pit and opening of the Eastern Syncline mining area to maintain continuity of operations was progressed in the quarter under review. Outcomes are thus untypical of historic production results. The production outlook is expected to return to stable levels in subsequent reporting periods.

September

2010 Quarter

December 2010 Quarter

March 2011

Quarter

June 2011

Quarter YTD

ROM coal (tonnes) 103,885 54,287 0 22,909 181,081 Overburden (bcm) 1,144,382 747,780 304,279* 1,015,704 3,212,145

* Revised from previous report.

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3.3 Baralaba Mine Coal Sales

Shipments September

2010 Quarter

December 2010 Quarter

March 2011

Quarter

June 2011

Quarter YTD

PCI (tonnes) 34,249 21,248 19,500 0 74,997 Thermal (tonnes) 60,038 98,016 0 29,585 187,639 Totals 94,287 119,264 19,500 29,585 262,636 During the June quarter, shipment volumes were constrained due to the inundation of the main pit, although production from the Eastern Syncline area was commenced and stock build for shipments from restored production was initiated. 4. BOWEN BASIN PROJECTS The Company's Bowen Basin projects comprise:

• MLs 5580, 5581, 5590, 5605 and 80157, MDL184 and MLA 80169 (Baralaba mine project), which are held by the Company's 62.5% owned subsidiary, Baralaba Coal Pty Limited;

• MDL 352, EPCs 1047, 2107 and 2143 to the south of Baralaba Township ( Baralaba South project) and EPC 1047, MDLA 416 and MLA 80170 to the north of the Baralaba mine (Baralaba North project) which are held by the Company's 80% owned subsidiary, Wonbindi Coal Pty Limited; and

• The Dingo project comprising EPCs 862 (Dingo South), 863 (Middle Creek) and 1063 (Tryphinia) which are which are currently 49% owned by the Company's 100% owned subsidiary, Independent Coal Pty Limited and which are subject to a Joint Venture Farmout agreement.

The Company's Bowen Basin projects extend from the Dingo project in the north to the Baralaba South project in the south and have contiguous target areas covering an area of approximately 56,320 hectares with Permian age, Rangal Coal Measures sub-cropping over a strike length of approximately 92 kilometres. Production at the Baralaba mine has demonstrated that the seams of the Rangal Coal Measures in this area have PCI and thermal coal properties. The seams mined at the Baralaba mine have been intersected in the Baralaba South and Baralaba North target areas. 4.1 Baralaba Mine and Baralaba North Drilling During the quarter, the Company has progressively returned to full exploration and development drilling activities in the Baralaba project areas, following the restrictions to site access caused by the flood events in central Queensland. Four exploration rigs are now operating in the Baralaba mine and Baralaba North project areas, primarily carrying out coal quality coring (slim and large diameter) for raw coal and washability data. Geotechnical, hydrological and gas-test drilling are set to commence within the next month. Work is set to continue over the remainder of the year in the ML 5605, ML 80157, MLA 80169 (MDL184) and MLA 80170 project areas, assisting the refinement of the Baralaba Expansion project development plans. The recently increased and upgraded JORC Resources, to 13.1 million tonnes of the Measured and Indicated categories in the operating mine areas of ML5605 and ML 80157 demonstrates the growth and potential for increased rates of production in the Company’s Baralaba Mine project. The newly defined Measured and Indicated JORC Resources are expected to directly contribute to additional Marketable Reserves following mine planning evaluation of the results.

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Conceptual mine planning over the Baralaba Mine Expansion projects will be further refined following the upgraded JORC Resources. The Company envisages future production from the Baralaba mine, Baralaba North and Baralaba South project areas, subject to rail and port upgrades, as a key step in the realisation of the Company’s strategic goals.

Bowen Basin project areas.

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A total of 609 holes for 73,316 metres have been drilled in the Baralaba mine project to date and 299 holes for 53,876 metres have been drilled in the Baralaba North project to date. Recent drilling in the Baralaba Mine and Baralaba North projects has cumulative down hole coal intercepts of up to 9.4 metres with an average thickness of 4.2 metres. Exploration potential remains open in most directions. Drill hole coordinates and cumulative thicknesses of coal at the Bowen Basin projects have been reported previously by the Company and are available on the Company’s website. Current JORC compliant reserves and resources for the Baralaba mine, Baralaba North, and Baralaba South projects, including all categories are presented below:

Project Tenement Depth of Resource

(m) JORC Classification

Reserves Resources

Marketable

(Mt) Measured

(Mt) Indicated

(Mt) Inferred

(Mt) Total (Mt)

Baralaba Mine MDL 184 (MLA 80169) 200 0 2.9 10 13

ML 80157 200 1.8 3.1 2 7

ML 5605 200

1.3

2.9 5.3 2 10

Baralaba North MDLA 416 (MLA 80170) 200 6.4 0 9.4 37 46

Baralaba South EPC 1047 200 0 0 0 25 25

MDL 352 EPC 1047 175 25.8 0 44.7 19 64

Bowen Basin Total 33.5 4.7 65.4 95 165

The fault-bound structural domains are comprised of JORC Measured, Indicated and Inferred categories depending on the number of Points of Observation (drill holes) within each area and the probability of economically viable development. Drilling activities and coal quality analytical efforts have focused on the distinct structural domains and as such upgrades in the JORC Resource categories have occurred within these defined areas. 4.2 Other Bowen Basin Projects No field exploration work was undertaken at the Baralaba South or Dingo projects during the June quarter. Core drilling activities in the Baralaba South project area are expected to commence in the coming weeks. 5. SURAT BASIN PROJECTS The Company has a 100% interest in the Surat projects which comprise EPC 796 (Horse Creek) and MDLA 441 (Krugers project), EPC 813 (Dogwood Creek) and MDLA 433 (Bottle Tree project), EPC 1041 (Miles) and MDLA 437 (Davies Road project), EPC 1134 and MDLA 430 (Tin Hut Creek project), EPC 1135 (Chinchilla), EPC 1136 (Dalby), EPC 1170 (Chinchilla #2), EPC 1278 (Tin Hut Creek North), EPC 1950 (Chinchilla North), EPC 1322 (Wandoan East), EPCA 1593 (Surcingle), EPCA 1967 (Macalister West), EPCA 2092 (Glenrowan), EPCA 2207 (Taroom East), EPCA 2231(Giligulgul) and EPCA 2473 (Bullock Gully). In addition, the Company has a 51% interest in MDLs 158 and 275 (Taroom project) and MDLA 452 (Collingwood) and has entered into an agreement with Mitsui to sell down the Company's interest in MDL 187, MLAs 50247 and 50248 (Woori project) to 51%. The Company also holds a 100% interest in EPC 882 (the Kingaroy project), located approximately 20 kilometres north of the Tarong power station and EPCs 963 and 1130 (the Condamine project) and EPCs 1017 and 1018 (the Injune project).

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Surat Basin project areas.

The Company's Surat Basin projects cover an area of approximately 4,000 km². The Juandah and Taroom Coal Measures of the Walloon Sub-Group both sub-crop within the Surat project area. The Woori and Tin Hut Creek projects comprise the Juandah Coal Measures. The Taroom and Collingwood projects and the Bottle Tree and Krugers prospects are located within the Taroom Coal Measures. All projects, other than the Woori project, have not been fully explored and have further significant resource potential. 5.1 Surat Projects Four multi-purpose drilling rigs are now operational in the Surat projects. The drilling activities are focused on providing slim core and large diameter core samples for raw coal and washability testwork, as well as expanding the resource boundaries through exploratory open hole drilling. The drilling that has been undertaken on the Collingwood, Taroom, Tin Hut Creek and Krugers projects has delivered positive results that will form part of the development program of the Company’s Surat Basin assets. A total of 705 holes for 83,579 metres have been drilled in the Surat Basin projects to date. Other major activities included infill open hole drilling to upgrade the earlier geological models, and core drilling to obtain samples for quality and washability testing. Mining planning and environmental studies, aimed at rapidly progressing feasibility studies and government development approvals, were initiated. Major contractors for planning and development studies were appointed, while at the same time the Company has been rapidly building up the in-house project management team for the Surat. During the quarter, the Company lodged a further EPC application (EPCA 2473 Bullock Gully) for 190 sub-blocks.

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5.2 Surat Basin Projects' Resources During the quarter, the Company announce increases in all categories of JORC Resources for the Bottle Tree deposit (MDLA 433) to 35.2 million tonnes, up 9%, or 2.7 million tonnes, from 32.5 million tonnes previously announced, at a strip ratio of less than 10:1 and at the Tin Hut Creek project to 343.6 million tonnes, up 90%, or 162.3 million tonnes, from 181.3 million tonnes. Currently defined JORC compliant reserves and resources at the Company's Surat Basin projects (100% basis) are as follows:

Project Tenement Depth of Resource

(m) JORC Classification

Reserves Resources

Marketable

(Mt) Measured

(Mt) Indicated

(Mt) Inferred

(Mt) Total (Mt)

Woori MLAs 50247 and 50248 <110 40.6 84.3 0 0 84

Collingwood MDLA 452 <150 0 0 64.5 172 237

Taroom MDLs 158 and 275 <150 0 36.4 89.0 73 198

Tin Hut Creek MDLA 430 <150 0 0 206.6 137 344

Bottle Tree MDLA 433 <125 0 0 29.5 6 35

Krugers MDLA 441 <150 0 0 0 105 105

Davies Road MDLA 437 <150 0 0 0 76 76 Kingaroy EPC 882 <150 0 35.5 87.4 85 208 Kingaroy EPC 882 150-300 0 0 40.9 29 70

Surat Basin Total 40.6 156.2 517.9 683 1,357

5.3 Surat Basin Projects Drilling During the quarter, 55 holes for 3,386 metres were drilled by the Company at the Collingwood project with cumulative down hole coal intercepts of up to 8.7 metres with an average thickness of 4.4 metres Drilling in the Collingwood project has intersected a seam which was not previously identified during earlier historic drilling. Typically 6-7 metres in thickness and close to surface, the new seam has been intersected in drill holes CW0005, CW0008 and CW0038. The seam, which has vertical strip ratios of less than 2:1, has been cored and sampled for coal quality analysis. In the Taroom project, the Company has now drilled 23 holes for 2,312 metres. Recent drilling in the Taroom project has cumulative down hole coal intercepts of up to 14.7 metres with an average thickness of 10.0 metres. In the Tin Hut Creek project, expansion of the Tin Hut Creek deposit to the north and south continues, with 7 holes for 736 metres drilled since the Quarter. Recent drilling in the Tin Hut Creek project has cumulative down hole coal intercepts of up to 12.1 metres with an average thickness of 9.1 metres. In the Krugers project, 20 holes for 2,412 metres have been drilled since the last report. Recent drilling has cumulative down hole coal intercepts of up to 11.9 metres with an average thickness of 8.4 metres. A total of 705 holes for 83,579 metres have been drilled in the Surat Basin projects to date. Drill hole coordinates and cumulative thicknesses of coal at the Surat Basin projects have been reported previously by the Company and are available on the Company’s website.

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5.4 Other Queensland Projects No field exploration work was undertaken at the Kingaroy, Condamine, or Injune projects during the June quarter. 6. NSW PROJECTS As noted previously, on 24 December 2010, the Company completed the acquisition of development and exploration assets located in NSW. The NSW projects are:

• Bylong project, North West Sydney Basin - 423Mt (150Mt Indicated and 273Mt Inferred) export grade thermal coal resource. The Bylong Project is 100% owned by Cockatoo Coal shareholder KEPCO, who has granted a 3 year call option for a 30% interest in the Bylong Project to the Company (details of the call option were disclosed on 7 July 2010). Cockatoo Coal is the manager for the Project.

• Hume project, Sydney Basin - 115Mt Indicated export grade metallurgical/thermal coal

resource. Hume is 30% owned by the Company, and 70% by Cockatoo Coal shareholder POSCO. Cockatoo Coal is the manager for the Project.

6.1 Hume Project During the quarter, the Company, as manager for the Hume project, consolidated the dedicated project team and progressed recruitment of further professional staff to expand the capabilities of the project development team. Liaison with community, government and stakeholders has been initiated and remains ongoing. Geological modelling of historic data has been prepared and exploration drilling activities in the Hume project aims to validate historical drilling and confirm coking coal quality characteristics of the Wongawilli Seam. The extent and quality of the underlying Tongarra Seam is also being investigated. A total of 7 holes for 742 metres have been drilled to date in the Hume project with recent drilling returning cumulative down hole coal intercepts of up to 9.0 metres with an average thickness of 5.4 metres. 6.2 Bylong Project During the quarter, the Company, as manager for the Bylong project, consolidated the dedicated project team and progressed recruitment of further professional staff to expand the capabilities of the project development team. A Technical and Sustainable Development office, field offices, core sheds and site accommodation have been established. Engagement with local communities and stakeholders has continued. Detailed exploration plans for the first stage of exploration under the Company’s management were developed with the goal to prove up the extent and quality of the Ulan and Coggan Seams.

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NSW projects areas. A total of 14 holes for 2,292 metres have been drilled to date in the Bylong project with recent drilling returning cumulative down hole coal intercepts of up to 10.2 metres with an average thickness of 6.9 metres. Phase 2 exploration plans have been submitted to the NSW Government for approval. Lease renewal applications for A287 and A342 have been completed and submitted to the NSW Government.

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7. INFRASTRUCTURE 7.1 Queensland Rail The Company has continued discussions with Queensland Rail in relation to infrastructure needed to support the development of the Company’s Bowen Basin and Surat project developments to the Port of Gladstone and the planned Wiggins Island Coal Export Terminal (‘WICET’), where the Company has been selected as a designated Stage 1 user. These discussions have included both joint WICET shipper consultations in relation to rail infrastructure for the new port, as well as mine specific requirements of the Company. 7.2 Wiggins Island Coal Terminal Project - Gladstone In 2010, the Company was selected as a 3.0 million tonne per annum Stage 1 user of the proposed Wiggins Island Coal Export Terminal ('WICET') at Gladstone, Queensland. The Company plans to use this Stage 1 allocation, together with its existing RG Tanna port allocation at Gladstone, to expand its Bowen Basin PCI and thermal coal total sales output from its current level of 550,000 tonnes per annum to 3.5 million tonnes per annum from 2014. The Company advises that sufficient rail capacity to deliver these increased WICET Stage 1 coal volumes to Gladstone is expected to be available via the Company’s existing rail access route. A total of eight coal producers have committed to a total of 27 million tonnes per annum capacity for the Stage 1 development of WICET. All Stage 1 allocations are subject to the applicants signing Take or Pay Agreements and WICET reaching financial close. Each applicant, including Cockatoo, has entered into a deed, supported by a bid bond, detailing its intention to execute a binding Take or Pay Agreement and to meet its proportionate share of WICET's ongoing project costs up to financial close. Coal shipments through Stage 1 of WICET are expected to commence in 2014. Intensive activity has continued by WICET and the Company during the quarter to achieve Financial Close for the WICET project in 2011, launch early works construction activities; and finalise all necessary agreements and approvals with Government. This effort is expected to see Financial Close in the September quarter. Cockatoo has lodged an expression of interest to participate in Stages 2 and 3 of the WICET development which is expected to bring the total annual WICET export capacity to up to 80.0 million tonnes from 2015/16. The Company has executed Agreements with WICET, along with other interested industry participants, to support the development of Stages 2 and 3 of the Terminal by WICET. 7.3 Surat Basin Rail The Surat Basin Railway (‘SBR’) is a key link to be developed that will open up the Surat Basin coalfields to the Port of Gladstone. During the Quarter, the Company has fully participated in a Preliminary Due Diligence process with SBR, as an initial step to commercial negotiations on access to the Railway, when completed, for the Company’s Surat Basin projects.

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7.4 NSW Infrastructure Following the establishment of the respective Hume and Bylong project teams, the Company (as project manager) has continued consultations in respect of securing export capacity with key providers in the NSW coal logistics chains:

• ARTC – Operator the NSW rail networks;

• PWCS – Newcastle coal terminal operator;

• PKCTL – Port Kembla coal terminal operator; and

• above rail operators. 8. OTHER 8.1 Competent Person The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr. Oliver Holm, geologist, who is a Member of the Australasian Institute of Mining and Metallurgy. Oliver Holm is a full-time employee of the Company who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Oliver Holm has consented to the inclusion in this report of the matters based on his information in the form and context in which they appear. For further information, contact Mark Lochtenberg or Peter Nightingale on (61-2) 9300 3333. Yours sincerely

Mark H. Lochtenberg Managing Director 29 July 2011 pjn6132

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