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: alawson@cockatoocoal.com.au W: www.cockatoocoal.com.au

REPORT ON ACTIVITIES FOR THE QUARTER ENDED 30 June 2012

1. CONSOLIDATED QUARTERLY ACTIVITY SUMMARY

MINING OPERATIONS Baralaba June Quarter 2012 Previous Quarter ROM Coal production (tonnes) 150,640 192,576

Overburden (tonnes) 1,631,754 1,569,616

Strip ratio 10.8 8.1

Production cash cost ($'000) 21,397* 17,490*

Shipments

- PCI (tonnes) 207,878 112,726

- Thermal (tonnes) - -

Receipts ($'000) 31,430 20,425

Gross cashflow contribution ($'000) 10,033 2,935

Cash at end of quarter ($'000) 97,536 7,738 * Payments for production during the quarter have been increased by $2,352,000 ($11,378,000 increase to date) to match

certain production costs with the period in which they are paid. This adjustment, which has a consequential effect on the net increase/(decrease) in cash held and the balance of cash at end of quarter, has been made to more accurately report the cash cost of production of coal.

RESERVES & RESOURCES (as at 30 June 2012) Global Resource Inventory (100% Project Basis)

Marketable JORC Reserve (Mt)

Total JORC Resource (Mt)

Change

- Bowen Basin (Qld) 33.4 278 110 Mt Resource upgrade

- Surat Basin (Qld) 300.8 1,616 32 Mt Resource upgrade

- Bylong (NSW) - 423 Unchanged

- Hume (NSW) - 451 5 Mt Resource upgrade

Total 334.2 2,768

HIGHLIGHTS SUMMARY ASX: COK Corporate

• KEB Australia bank finance facility fully drawn as precautionary measure against debt market pricing risk.

• Investment in Wiggins Island Preference Shares sold for $31.1M cash. • Funding of $22.1M provided to secure WEXP1 port allocation.

Mining Operations

• Outperformance on shipment volumes (22%) and product split (100% PCI). • Production below plan (11%) for quarter due to localised rain reducing mining days in June. • All time high monthly coal production recorded in July.

• Production cash costs include costs associated with transport of coal which had been stockpiled in March quarter.

Development and Exploration

• 110 Mt (65%) upgrade of Bowen Basin projects’ total JORC Resources.

• Baralaba expansion BFS preparations continued (3Q 2012 target release).

Infrastructure

• 3.5 Mtpa Baralaba expansion total capacity rail contract signed with QR National.

• 4.2 Mtpa WEXP1 port allocation awarded to Collingwood/North Surat JV.

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2. CORPORATE ACTIVITIES 2.1 COCKATOO MONETISES NON-CORE WIGGINS ISLAND PREFERENCE SHARES During the quarter, the Company made a small gain on the $31.1 million sale of its investment in Wiggins Island Preference Shares ('WIPS'). The Company was required to subscribe for the WIPS, which were a long dated non-core asset, as part of the financing for the development of the Wiggins Island Coal Export Terminal ('WICET'). Proceeds were, in part, allocated to the Company's $22.1 million WICET Expansion Stage 1 ('WEXP1') Capacity Commitment financing requirement to secure the 4.2 Mtpa port allocation which underpins future coal tonnages from the Collingwood project in the Surat Basin. 3. 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.

Bowen Basin project areas.

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The Company's Bowen Basin projects extend from the Dingo project in the north to the Baralaba South project in the south. 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. 3.1 Baralaba Coal Mine The Baralaba mine, located near the town of Baralaba in the south eastern limb of the Bowen Basin, Queensland, 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 through the Port of Gladstone. Coal production in the June quarter was marginally down on the previous record March quarter production due to access for mining activities being prevented for a number of days due to localised rain. On an annualised basis, production still exceeds 600,000 tonnes and, based on the record coal production achieved in the month of July, annualised production remains forecast to exceed 700,000 tonnes.

Production September

2011 Quarter

December 2011 Quarter

March 2012

Quarter

June 2012

Quarter YTD

ROM coal (tonnes) 104,296 152,659 192,576 150,640 600,171 Overburden (bcm) 2,879,799 1,574,781 1,569,616 1,631,754 7,655,950

Cash costs of production during the quarter included haulage, rail and port costs which were not interrupted by the localised rain. Activities continued to transport coal from the mine to the rail load out facility and onto the port for shipment.

Shipments September

2011 Quarter

December 2011 Quarter

March 2012

Quarter

June 2012

Quarter YTD

PCI (tonnes) 51,870 75,054 112,726 207,878 447,528 Thermal (tonnes) 0 36,000 0 0 36,000

Totals 51,870 111,054 112,726 207,878 483,528

3.2 Bowen Basin Exploration Activities During the quarter, an increase of JORC compliant Resources by 110 million tonnes ('Mt'), or 65% from 168 Mt to 278 Mt was achieved as well as a significant upgrade of JORC classifications. In addition, a total of 253 holes for 30,385 metres were drilled in the Bowen Basin projects, including:

• 89 LOX holes for 3,176 metres in the northern extension of the Baralaba mine project; • 131 open holes for 23,149 metres in the Baralaba South project; and • 33 cored holes for 4,060 metres in the Baralaba South project.

Exploration potential remains open in most directions.

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3.3 Bowen Basin Projects’ Reserves and Resources A summary of the Company's Bowen Basin projects' currently defined and reported coal reserves and resources, by project on a 100% basis, is as follows:

Project Ownership

(%) Tenement

Depth of Resource

(m) JORC Classification

Reserves Resources

Marketable

(Mt) Measured

(Mt) Indicated

(Mt) Inferred

(Mt) Total (Mt)

Baralaba mine 62.5 MLs 5605 and 80157 <200 1.2 4.7 8.4 4 17

62.5 MDL 184 (MLA 80169) <200 0 5.9 5.6 8 20

Baralaba North

80.0 MDLA 416 (MLA 80170) <200 6.4 8.4 9.6 32 50

Baralaba South

80.0 MDL 353/EPC 1047 <200 25.8 35.5 17.2 114 166

80.0 EPC 1047 <200 0 0 0 25 25

Bowen Basin Total 33.4 53.6 40.8 183 278

4. SURAT BASIN PROJECTS 4.1 The Surat Projects The Company's Surat Basin projects cover an area of approximately 4,000 km². Both the Juandah and Taroom Coal Measures of the Walloon Sub-Group sub-crop within the Company's Surat Basin project area. The Woori and Tin Hut Creek projects are located in the Juandah Coal Measures and the Taroom, Collingwood, Bottle Tree, Krugers and Bushranger projects are located within the Taroom Coal Measures.

Surat Basin project areas.

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The Company holds a 51% interest in the Collingwood, Taroom and Woori projects which form the North Surat Joint Venture with MCH Surat Basin Investment Pty Ltd (a subsidiary of Mitsui Coal Holdings Pty Ltd) ('Mitsui') holding a 49% interest. The consolidation of the Collingwood, Taroom and Woori projects into one joint venture activity to be managed by the Company will facilitate the orderly development of these projects. The Company holds a 100% interest in all other Surat Basin projects. 4.2 Collingwood Definitive Feasibility Study Commenced

Following the successful nomination of the Collingwood project for a port allocation of 4.2 Mtpa of coal through WEXP1 in Gladstone, Queensland, a definitive feasibility study has been commenced. In concert with the feasibility study, core and open hole drilling, focused in the southern part of the Collingwood project area, is ongoing to provide greater confidence in the quality, position and thickness of the economic coal sequence. 4.3 State Significant Projects EIS Terms of Reference Finalised The Final Terms of Reference for the Collingwood and Taroom project Environmental Impact Studies was issued by the Coordinator General during the period. In February 2012, both the Collingwood and Taroom projects were declared by the Queensland Coordinator General to be significant projects for which Environmental Impact Statements ('EIS') are required. An EIS is required to assess the existing environment, potential impacts and propose mitigation measures – and the terms of reference will now go toward finalising this important milestone for both projects. 4.4 Surat Basin Exploration Activities During the quarter, a total of 212 holes for 11,412 metres have been drilled in all Surat projects, including:

• 159 holes for 7,055 metres in the Taroom project; • 52 holes for 4,208 metres in the Collingwood project; and • 1 open hole for 149 metres in the Woori project.

Core drilling for raw quality testing and open hole drilling for improved geological modelling and hydrology studies continued at Taroom, Collingwood and Woori. In addition, EPC 2092 was granted during the period. The block, adjoining the Bushranger MDLA 451, provided down-dip continuity of the exploration target. Exploration potential in the different projects remains open in most directions.

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4.5 Surat Basin Projects’ Reserves and Resources A summary of the Company's Surat Basin projects' total JORC compliant Reserves and Resources, by project on a 100% basis, is as follows:

Project Ownership

(%) Tenement

Depth of Resource

(m)

JORC Classification

Resources

Measured

(Mt) Indicated

(Mt) Inferred

(Mt) Total (Mt)

Woori 51.0 MDL 187

MLAs 50247 and 50248 <110 84.3 0 0 84

Taroom 51.0 MDLs 158 and 275

MLA 55006 <150 158.1 149.3 126 433

Collingwood 51.0 EPC 640 <150 79.7 80.3 69 229

Tin Hut Creek 100.0 EPCs 813 and 1134

MDLA 430 <150 0 206.6 137 344

Bottle Tree 100.0 EPC 813

MDLA 433 <125 0 29.5 6 35

Krugers 100.0 EPCs 796 and 1041

MDLA 441 <150 0 33.2 130 163

Davies Road 100.0 EPCs 813 and 1041

MDLA 437 <150 0 14.4 35 49

Kingaroy 100.0 EPC 882 <150 35.5 87.4 85 208

EPC 882 150-300 0 40.9 29 70

Surat Basin Total 357.6 641.6 617 1,616

Project Ownership

(%) Tenement

JORC Classification Quality

(Marketable)

Reserves (In-situ)

Marketable Reserves (As-received)

Energy kcal/kg

(ad)

Ash % (ad) Proven

(Mt) Probable

(Mt) Total (Mt)

Proven (Mt)

Probable (Mt)

Total (Mt)

Woori 51.0 MDL 187 MLAs 50247/50248

67.8 0 67.8 40.6 0 40.6 6,727 9.4

Taroom 51.0 MDLs 158/275

MLA 55006 124.0 78.5 202.5 99.9 61.7 161.7 6,232 13.1

Collingwood 51.0 EPC 640 69.4 55.8 125.2 54.4 44.1 98.5 6,147 11.1

Total 261.2 134.3 395.5 194.9 105.8 300.8

5. NSW PROJECTS The Company has an interest in the following Sydney Basin projects:

• Auth 349 (Hume project) - 30% interest. • Auths 287 and 342 (Bylong project) - 30% call option.

The Company is the appointed manager of the Hume and Bylong projects. 5.1 Hume Project

The Company has a 30% interest in the Hume project (Auth 349) and is Manager of the project.

The Hume project is located in an established coal field in the southwest portion of the Southern

Coalfield of NSW, approximately 160 kilometres from Sydney with existing rail infrastructure

providing access to Port Kembla. The project's coking coal exhibits strong metallurgical properties

of very low phosphorus, high CSN and good fluidity.

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During the period, JORC compliant Resources in the Hume project (AUTH 349) were improved as follows:

• Indicated JORC Resources increased to 324.1 million tonnes, up 58% or 119.2 million tonnes, from 204.9 million tonnes; and

• total JORC Resources increased to 451 million tonnes, up 1% or 5 million tonnes, from 446 million tonnes.

Exploration drilling activities, comprising open, cored and water monitoring drill holes have continued. A large diameter coring program designed for washability and product quality testing has been completed with the samples currently being analysed. 6. INFRASTRUCTURE 6.1 QR NATIONAL RAIL CONTRACT

The Company signed a new long term rail haulage contract with QR National which secures the transport of coal from the expansion of the Company's Baralaba Complex in the Bowen Basin. The 10 year contract secures an additional 3.0 Mtpa of coal to be railed by QR National to WICET from 2014 and an extension of an existing contract for 0.5 Mtpa to be railed by QR National to the RG Tanna coal terminal at Gladstone. This expanded rail haulage contract provides some freight cost reductions due to additional economies of scale and dovetails with the Company's 3.0 Mtpa allocation to a port entitlement with Stage 1 of WICET. This completes the infrastructure solution for the planned expansion of the Company's Baralaba Complex in the Bowen Basin. 6.2 4.2 Mtpa WEXP1 PORT CAPACITY As manager of the North Surat Joint Venture, the Company was selected as a 4.2 Mtpa user of the planned stage 1 expansion of WICET at Gladstone, Queensland, scheduled for a target commencement date of 2016. The Company plans to use the WEXP1 allocation to initially load coal from its Collingwood project, part of the North Surat Joint Venture, a 51:49 joint venture between Cockatoo and Mitsui & Co., Ltd related entities. 7. OTHER 7.1 Competent Person The information in this report that relates to Exploration Results and Mineral Resources 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. The information in this report that relates to Ore Reserves is based on information compiled by Richard Hoskings, engineer, who is a Member of the Australasian Institute of Mining and Metallurgy. Richard Hoskings is a member of the Minserve Group and 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’. Richard Hoskings has consented to the inclusion in this report of the matters based on his information in the form and context in which they appear.

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For further information, contact Mark Lochtenberg, Andrew Lawson or Peter Nightingale on (61-2) 9300 3333. Yours sincerely

Andrew C. Lawson Managing Director 31 July 2012 pjn6799

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