company presentation august 2009 - white energy co€¦ · five production stages 1. coal...

white energy company limited ABN 62 071 527 083

Company Presentation

October 2015

A Diversified Coal Company – Coal Technology and Coal Mining

Forward Looking Statements. Statements in this presentation, particularly those regarding possible, targeted, expected or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, growth, earnings or trend projections are or may be forward looking statements. The words ‘anticipated’, ‘expected’, ‘intended’, ‘projection’, ‘forecast’, ‘estimate’, ‘guidance’, ‘plan’, ‘could’, ‘should’, ‘may’, ‘target’, ‘consider’, ‘believe’, ‘will’ and other similar expressions are intended to identify forward looking statements. Such forward looking statements relate to future matters and may involve known and unknown risks, uncertainties, or other factors, many of which are outside the control of the company, which could cause actual results to differ materially from past results or results expressed or implied by such statements. To the maximum extent permitted by law, the company, its related bodies corporate and their directors, officers, employees, agents and advisers disclaim any obligation to update any forward looking statements to reflect subsequent events or circumstances.

For more information visit www.whiteenergyco.com or contact:

Brian Flannery

Managing Director and CEO

White Energy Company Limited

+61 2 9959 0000

Disclaimer

Ivan Maras

Chief Financial Officer

White Energy Company Limited

+61 2 9959 0000

Summary information. The information in this presentation does not purport to be complete. It should be read in conjunction with

the company’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are

available at www.asx.com.au.

No liability. No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the

information, opinions and conclusions expressed in the course of this presentation. To the maximum extent permitted by law, the

company, all of its related bodies corporate and their directors, officers, employees, agents and advisers do not accept any

responsibility or liability (including, without limitation, any liability arising from negligence on the part of any person) for any loss or

damage incurred by any person in connection with this presentation or any action taken on the basis of such information, opinions or

conclusions. You must make your own independent assessment of the information, opinions and conclusions and in taking any

action seek your own independent professional advice as appropriate.

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http://www.asx.com.au/







White Energy

A diversified coal company listed on the ASX with significant global growth prospects

White Energy is the exclusive worldwide licensee of a patented technology which upgrades high moisture low value sub-

bituminous and lignite coals through a low cost process of dehydration and compaction. This technology is known as the

Binderless Coal Briquetting (“BCB”) technology, and was developed by a consortia led by the Commonwealth Scientific

and Industrial Research Organisation (“CSIRO”).

White Energy has more recently applied the BCB technology to the beneficiation of thermal and metallurgical coal fines.

White Energy acquired Mountainside Coal Company Inc. (“MCC”) in 2013, following the earlier acquisition of South

Australian Coal Limited in 2010. These assets form the coal mining division of the Company.

Notes: (1) 1 ADR = 5 Ordinary Shares

(2) Fully diluted excludes unissued options

(3) Includes $2 million WA Supreme Court Security Bond relating to the freeze order obtained in respect of Bayan Resources’ shareholding in Kangaroo

Resources Limited and $4.4 million in coal mining reclamation bonds at MCC

(4) As at 9 October 2015 – Top 40 extract of the White Energy Company Limited share registry

Key Statistics 30 September

2015

Share Price - ASX: WEC A$0.20

US ADR Price - OTCQX: WECFY (1) US$0.73

Ordinary Shares On Issue 328.4 million

Equity Market Capitalisation (2) A$62 million

Cash Reserves (approx) (3) A$27 million

Major Shareholders (4) Shareholding %

M&G Investment Management 17.93%

Gaffwick Pty Ltd 9.73%

Ganra Pty Ltd 9.24%

Remaining top forty shareholders 36.20%

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A highly regarded board and management team with an industry wide reputation for

delivery and execution of major coal projects

Board and Management

Travers Duncan

Chairman

Brian Flannery

Managing Director and CEO

Graham Cubbin

Non-executive Director

Hans Mende


Vincent O’Rourke


Terence Crawford


5

Positioning for Future Growth & Profitability

White Energy is organised around two distinct – but related – business divisions which

comprise coal technology and coal mining/exploration, with a pipeline of key projects currently

being developed

* 100% owned unless otherwise stated

Coal Mining &

Exploration Coal Technology

Mountainside

Coal Company,

Inc. (MCC)

Briquette

Bituminous

Coal Fines

(thermal, coking)

Upgrade

Sub-bituminous

coals

Indonesia Other Markets

To be

developed Current focus

Other

markets North America China

North

America Australia/NZ

South

Australian

Coal Limited

51% 51% 51%

Other

Opportunities

51%

South

Africa

Project

underway

Positioning for Future Growth & Profitability

In a significantly depressed global coal market, White Energy’s investment in MCC provides

exposure to high-demand specialty coal markets, whilst enabling the Company to continue its focus

on near-term opportunities to commercialise coal fine briquetting projects utilising the BCB

technology

Despite the pricing pressures in world coal markets, there continues to be demand for high quality, low-ash stoker coals in the

U.S. and export markets. This underpins MCC’s strategy of becoming a key player in the value-added sized coal smelting

markets, where specialty coals continue to command a premium price.

Shareholders will be aware that it was always the intention for MCC to substantially exit the thermal coal market and focus on

mining those coal seams which can be supplied into the specialty markets. Following the recent commissioning of the new coal

wash plant, this strategy is now well underway.

The focus of MCC management has turned to marketing activities associated with the ongoing sales of the high value and low-

ash stoker coal product. This focus has initially centred on the U.S. domestic market, as evidenced by the recent signing of a

sales contract with a major U.S. silicon metal producer. However, it is MCC’s intention to also export stoker product in the short

to medium-term.

Most of the focus in the South African market has been on the opportunity for the River Energy JV to build a 500,000 tonne per

annum fine coal beneficiation, binderless briquetting and waste management plant that is fully integrated with an existing mine

and wash plant operated by one of the largest coal producers in South Africa.

This project has appeal across several fronts, as it effectively takes a waste product, which carries a significant ongoing

financial and environmental liability for the coal producer in question, and converts this product into a coal briquette which can

be blended and sold with the producer’s existing Run of Mine (ROM) product.

The MCC and South African coal fines beneficiation/briquetting opportunities, as outlined above, represent the two key projects

that are intended to drive growth and profitability of the Company in the short-term.

White Energy’s Coal Upgrading Technology

Five Production Stages

1. Coal preparation

2. Crushed coal drying

3. Solids separation

4. Briquetting

5. Cooling / conditioning

The BCB technology has been developed over 20 years, by a consortia led by the

CSIRO

Binderless Briquetting Circuit (BCB)

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Coal Fines - A Major Environmental Liability

Coal fines represent a major environmental liability for coal producers and also carry

a significant ongoing maintenance cost

Billions of tonnes of coal fines are stored in slurry

ponds around the world.

Coal fines derived from a combination of thermal

coal and coking coal.

New arising fines continue to be generated at coal

mines around the world, due to inefficiencies in coal

processing methods.

There is a significant ongoing cost for coal

producers associated with the management of coal

fines.

Dried briquettes produced from wet coal fines can

be blended with a coal producer’s saleable coal, for

export or domestic markets.

The excavation of coal fines from a typical slurry pond at a South

African mine site

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Application of the BCB Technology to Coal Fines

Binderless Briquetting

Circuit (BCB)

Export

Conveyor

Domestic

Thermal

Market

Power Station

Ultra Fines

Spiral Fines Coa

l M

ine

Wa

sh

Pla

nt

Reclaimed

Fines

Slu

rry p

on

d

Collect the waste &

discarded fines

Dewater and clean

the fines

Briquette and improve

fines calorific value

Blend briquetted fines

with ROM output

White Energy Value Add Environmental Liability High Value Product

Fine Coal Beneficiation

Circuit (FBC)

White Energy is able to leverage its patented and scalable technologies to

beneficiate ultra fine coals in order to create saleable product by converting a

waste product into a high value product that can enhance a mine’s revenues

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The Coal Fines Beneficiation and Upgrading

Process

2 - Reclaiming the coal fines from ponds 1 - A coal fines slurry pond

4 - BCB Briquetting phase

5 - Upgraded coal fines briquettes

3 - Beneficiation/screening phase

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The Coal Fines Opportunity for White Energy

White Energy has identified a number of commercial opportunities associated with

the deployment of the BCB technology to the briquetting of coal fines

Coal fines beneficiation plant at the Woestalleen Hub – South Africa

Inspection of briquettes produced from South African coal fines

The BCB technology produces an upgraded coal briquette without

the need to use a binding agent, which is more costly, and gives the

Company a significant advantage over competition.

White Energy continues to test at its Cessnock Production Plant the

suitability of the BCB technology to the briquetting of the coal fines

remaining from production at MCC’s mining operations.

South Africa continues to represent a significant

short-term opportunity for the recovery and

processing of bituminous coal fines. This coal is all

of a thermal quality.

A pipeline of potential project opportunities, all

centrally located within the existing

Witbank/Middleburg coalfields in South Africa,

involve some of the largest coal producers in the

South African market.

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The Need for Cleaner Coal

White Energy continues to focus on its core BCB coal technology business,

which is based on the upgrading of low rank, low cost sub-bituminous coals to

export grade higher value coal.

Source: Casey Research published in the mining.com 1/7/2014 article “My air is more expensive than your air”

A major portion of remaining world coal reserves are low rank.

The current and future dependence on coal will require technologies that can reduce emissions and

mitigate the negative effects of coal using high moisture, lower rank coal.

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Value Proposition – Upgrading Sub Bituminous Coals

White Energy’s commercial proposition is simple – access low cost / low rank

coals and upgrade the coal to more valuable and higher energy briquettes

Product Upgrade Historical Price Arbitrage

Feedstock coal • High moisture coal

Upgraded high energy

coal briquettes

Approx. 6,000

Kcals/kg GAR Sub-

bituminous

coal

example

Indonesia

Approx. 4,300

Kcals/kg GAR

PRB Coal

Approx. 8,400

Btu/lb GAR

Approx. 11,350

Btu/lb GAR

* GAR = Gross As Received

Target

Source: Argus/Coalindo Indonesian Coal Index Report

Historical Indonesian Coal Prices (US$/ton) 2008 - 2013

$0

$20

$40

$60

$80

$100

$120

$140

$160 6500 GAR

5500 GAR

4200 GAR

Pri

ce A

rbitra

ge

US

$/t

on

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White Energy upgraded coal results in improved energy content, lower

emissions and enhanced transportation efficiencies when compared to lower

rank feedstock coals

Higher energy content

Reduced C02

emissions per Kwh

Lower risk of

spontaneous

combustion

30% - 100% increased energy content compared to low rank feedstock coal

In comparison to low rank feedstock coal, White Energy’s upgraded coal has a

reduced CO2 and other emission profile at the point of combustion

White Energy upgraded coal has improved physical and chemical stability,

enhancing handling, storage and transportation options

Increased power output and improved heat rate, enabling higher capacity utilisation

and efficiency at point of combustion

White Energy upgraded coal mitigates exposure to stricter environmental emissions

regulations

Reduced moisture content results in an up to 30% decrease in load volumes and

associated transportation costs

Improved performance

at power stations

Enhanced transport

efficiency

Benefits of White Energy upgraded coal compared to typical

Sub-Bituminous feedstock coal

White Energy Upgraded Coal vs Sub-Bituminous Coal

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• Ash:

• Reduction in ash as a waste

product and consequent

dust particles

• Sulphur Oxide:

• Sulphur % of 0.1% is

amongst the lowest in the

world, leading to significant

reduction in sulphur dioxide

emissions

• Nitrogen Oxide:

• Lower levels of nitrogen

oxide are emitted on

combustion

Source: External third party test results

White Energy Upgraded Coal vs Bituminous Coal

Upgraded bituminous coal has an improved pollution profile as it maintains the

positive environmental attributes of the feedstock coal

Superior environmental performance as

compared to typical Australian bituminous coal

Significant reduction

in SOx and NOx

emissions

BCB Coal Aust. Bituminous Coal

Many of the high moisture coals (particularly

Indonesian) have very low ash and sulphur contents.

Therefore, when the moisture is removed the resultant

higher energy product is very attractive from an

energy, ash and sulphur viewpoint 14

Research & Development - Cessnock

The Cessnock Production Plant continues to provide a ‘centre of excellence’, used to

test coal samples sourced from coal producers around the world

Demonstration plant testing has

lead to a number of equipment

modifications at the Cessnock

plant. The modifications are

designed to enable the Cessnock

plant to simulate a bituminous

coal fines upgrading operation, in

addition to sub-bituminous and

lignite coal testing.

White Energy over the past year

has performed a number of

Demonstration Plant runs on

South African and Australian

reclaimed coal fines and has

performed Pilot Plant test work

on a range of coals.

Results of test work completed to

date continues to show positive

results with respect to sub-

bituminous coal as well as

bituminous (thermal and coking)

coal fines.

White Energy Board Members touring the Cessnock Demonstration Plant

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Coal Mining - South Australian Coal Limited – EL4534

South Australian Coal Limited holds the exploration rights to a large sub-bituminous

coal deposit located in Northern South Australia (EL4534)

EL4534 is located

approximately 765 kilometres

north of Adelaide and 70

kilometres south west of the

township of Coober Pedy.

The Darwin to Adelaide railway

runs through EL4534.

A conceptual mine plan and

preliminary costings have been

completed in preparation for a

detailed feasibility study, based

on the supply of Lake Phillipson

coal to the domestic power

market in South Australia.

Desktop studies have been

completed and confirmed that

the Lake Phillipson coal is

suitable for gasification using

the Lurgi process.

Core from the 2012 South Australian Coal drilling program at EL4534

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Coal Mining - Mountainside Coal Company

Highwall mining pit at the Flat Creek mine

The acquisition of Mountainside Coal Company has provided White Energy with

control and certainty of feedstock coal supply and enables it to capture a greater

portion of the value chain by utilising the BCB technology to upgrade the resource

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Highwall mining pit at the Hatfield Gap mine

Clean coal stockpiles at the MCC coal wash plant Coal cores from 2015 exploration activities

Coal Mining - Mountainside Coal Company (cont.)

White Energy intends to expand the Mountainside Coal business in a stepped

process, including the installation of a coal wash plant which was commissioned in

February 2015 and BCB plant at the site

White Energy intends to increase

production levels with a particular focus

on increasing the quantum of sales of

the low-ash sized coal product.

Low-ash sized coal product is currently

sold at an attractive premium.

Test work conducted at the Cessnock

Demonstration Plant has shown that

the fine coal remaining after screening

out the washed sized coal from

Mountainside Coal’s production, can be

processed into a stable briquette similar

to the sized coal.

These coal fines presently amount to

approximately 25% of production.

The briquetting of these coal fines using

the BCB process is expected to

increase the value of the Mountainside

Coal business.

The MCC new coal wash plant was commissioned in February 2015

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Level 9, 20 Hunter Street

Sydney, NSW 2000

Telephone: +61 2 9959 0000

Facsimile: + 61 2 9959 0099

Email: [email protected]

ABN 62 071 527 083

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mailto:[email protected]

company presentation august 2009 - white energy co€¦ · five production stages 1. coal...

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