Cockatoo Coal : Quarterly Activities Report - 31 December 2016

December 2016 Quarterly Report

• Coal production targeted to start towards end of second quarter of calendar year 2017
• Banana Creek Bridge 95% completed and due for completion early February 2017
• Goldings Contracting work ongoing with Dawson Highway Overpass.
• 13.5km unsealed road section due to commence January 2017
• New resource and reserve estimates for Baralaba North area released
• Plan of Operations / Financial Assurance decision received from the State of Queensland
• Brett Garland appointed Chief Executive Officer January 2017
• Reinstatement of shares to quotation on the ASX
• Name change to Baralaba Coal Company Limited
• 500:1 share consolidation CORPORATE STRATEGY

  The Company continues the process to restart the Baralaba North mine including the associated infrastructure works.

  Production plan

  Resumption of coal production is targeted in the second quarter of calendar year 2017 with estimated production for the year of 600k - 800k tonnes of saleable product.

  In calendar year 2018, production of 2.0Mtpa - 2.2Mtpa is targeted. This target is within previously reported Marketable Reserves of 31Mt which has been updated to 33Mt as per the Reserves and Resources section below. The Marketable Reserves and other material assumptions on which this target is based are contained within the John T. Boyd Report - "Coal Reserve Report ‐ Baralaba North Coal Deposit Report No. 5153.005 December 2016".

  DEVELOPMENT UPDATE

  The Company continued with infrastructure works associated with restarting the Baralaba North mine. A total of $1.5 million was spent on development during the December 2016 quarter.

  Banana Creek Bridge Replacement

  Construction commenced on a new bridge over Banana Creek on 2 September 2016. Construction of this bridge is one of three major works packages associated with haul route upgrades required to be completed to allow an increase production above 1 million tonnes per annum of coal. Construction works on Banana Creek Bridge are now approximately 95% complete and it is estimated that practical completion of the new bridge will occur in early February 2017.

  Dawson Highway Overpass and Train Load Out (TLO) Private Access

  The Dawson Highway realignment and TLO access road work has been awarded to Golding Contractors and Golding commenced work on 15 November 2016. Practical completion of the work is expected in June 2017.

  When complete, the Dawson Highway realignment will have cars driving between Moura and Banana travel over a raised section of the highway to allow mining vehicles coming from Baralaba Mine to access the TLO by travelling directly underneath the Dawson Highway.

  Haul Route Road Upgrades

  Works relating to sealing, widening and upgrading certain parts of the haul route road are due to commence in January 2017 with Goldings being awarded the 13.5km unsealed section. It is estimated that this work will be completed by June 2017 ahead of the restart of mining operations.

  RESERVES AND RESOURCES

  New resource and reserve estimates for the Baralaba North area have been finalised and were released on the ASX on 22 December 2016. The relevant reports, both issued by John T. Boyd Company, are:

  • "Coal Resource Report ‐ Baralaba North Coal Deposit Report No. 5153.004 November 2016"

  • "Coal Reserve Report ‐ Baralaba North Coal Deposit Report No. 5153.005 December 2016"

The following tables summarise the Baralaba North JORC estimates as shown in the previous estimates and the new estimates by comparison.

*Marketable Coal Reserves yield compared to ROM Coal Reserves is based on estimated coal processing losses (including CHPP plant yield, where applicable) and moisture changes between ROM and Product Coal ("Coal Reserve Report ‐ Baralaba North Coal Deposit Report No. 5153.005 December 2016" ‐ Section 6).