Ncondezi Coal CompanyInvestor Presentation

Africa Mining Congress, January 2012

January, 2012

© 2012 Ncondezi Coal Company – All Rights Reserved

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2

Overview of Ncondezi Coal Company

3

Ncondezi Coal Company Shareholder Structure

Strata Ltd

45%

Free Float

49%

Management EBT

6%1 As at January 25, 20122 Definitive Feasibility Study3 As at December 21, 2011

Description Ncondezi is an AIM listed coal exploration and

development company with 4 licences in the

Tete province of Mozambique

Share price (GBp) 61.501

Shares 121m

Market cap. £74m (US$110m)

Net cash c.$30m – as at January 2012

Main project Ncondezi Project – licences 804L & 805L

(100% owned)

Exploration status Completing DFS2 by Q3 2012

JORC coal resource 1,661Mt3

Mining method Open pit

Target first production Q4 2014 / Q1 2015

Target production Up to 10Mtpa saleable product

Target coal product Export thermal coal – c.6,300 kcal/kg AD,

sulphurc.1%, c.22% ash

Potential metallurgical product to be further

confirmed

Ncondezi Management & Board

Name Position

Graham Mascall CEO

Nigel Walls COO

Manish Kotecha CFO

Hanno Pengilly Corporate Development

Dwight Jefferys Chief Geologist

David Eshmade Country Manager

Richard Stuart Non-Executive Chairman

Estevão Pale Non-Executive Director

Colin Harris Non-Executive Director

Mark Trevan Non-Executive Director

Nigel Sutherland Non-Executive Director

Top Institutional

shareholders

Name Holding

Henderson 7.0%

Investec 6.2%

Spearpoint 5.9%

Evergreen 5.0%

JPMorgan 1.5%

M&G 1.5%

Key Milestones Timetable

4

1 Order of Magnitude2 Environmental and Social Impact Assessment study

Extension of Ncondezi Project licences Feb 2010

Maiden JORC classification Feb 2010

Scoping Study completed Apr 2010

IPO (US$52m) Jun 2010

Placing of US$36.5m Jan 2011

5% strategic Chinese partner investment Jan 2011

Completion of DFS drilling Sep 2011

Completion of OoM1 greenfield rail and port study Sep 2011

Completion of Phase I power study Dec 2011

Completion of Phase I coal gasification study Dec 2011

Interim resource update Dec 2011

Infrastructure agreement signed with Rio Tinto Jan 2012

Additional resource updates Q1 2012

Update on coking coal potential Q1 2012

Coal gasification burn tests completion Q2 2012

Completion of Phase II power study Q3 2012

DFS completion Q3 2012

ESIA2 completion Sep 2012

Begin project financing discussions H2 2012

Mining licence application H2 2012

Initiate mine construction H1 2013

First coal production H1 2015

Completed Upcoming

Mozambique is an Attractive Environment for Investment

Political and economical stability

Attractive mining environment

5

One of Africa’s fastest growing economies

Politically stable since the end of civil war in 1992

Considered successful example of post-conflict reconciliation

President re-elected in elections in October 2009

Key mining sector ministers reappointed for further 5 years

High inflows of Foreign Direct Investment

Strong commercial links with South Africa as its main trading partner

Strong resource development and investment track record

BHP – Mozal US$2 billion

Kenmare – Moma US$500 million

Sasol Gas Pipeline US$1.2 billion

Vale – Moatize Project US$1.3 billion

Rio/Tata Steel – Benga Project US$516 million

Established and transparent licence granting process

Straight forward transition from exploration to mining licences

Realistic/attractive fiscal regime

Mozambican Coal Story – Heating Up

6

Large scale projects being developed in Mozambique

Coal development concentrated in the Tete Province

Potential to export over 70Mtpa of coking and thermal coal by

2020

Significant mining, power and steel companies already

committed to developing projects

Coal development driving major transport infrastructure

expansion for additional coal capacity

Existing capacity only 5Mtpa

Vale approved US$4.4Bn expansion on Nacala corridor

Rio Tinto leading development of new transport corridor

Coal potential motivating considerable consolidation of coal

projects in the region

Rio Tinto completed US$4.2bn Riversdale acquisition in

2011

Revuboe next?

Potential for up to US$20bn to be invested in the region in

the 10 years leading up to 2020

Coal Projects in Mozambiqe

Company Project

Target

production

(Mtpa)

First coalEstimated

Capex

Vale Moatize 20 2011 3,950

Rio Tinto +

Tata SteelBenga 10 2012 +5161

Rio TintoZambeze

+ Tete East+16 2016 n/a

Jindaal Songa c.5 2012 200

Nippon +

PoscoRevuboe 5 - 8 2015/2016 n/a

Ncondezi Ncondezi 10 2015 365

ENRC Estima n/a 2015 n/a

Beacon Hill Minas Moatize 2 2012 n/a

Note: based on company and public information1 Capex for c.3Mtpa phase I operation

0

10

20

30

40

50

60

70

80

90

Exp

ort

Co

al

Pro

du

cti

on

(M

tpa)

Beacon Hill

Revuboe

Ncondezi

Rio-Tete East

Rio-Zambeze

Rio-Benga

Vale - Moatize II

Vale - Moatize I

Mozambican Coal Projects Production Ramp Up

Note: Excludes production projections for companies where there is limited publicly available information, including: Jindal, ENRC, Coal India, Essar, ETA Star, etc.

Ncondezi Project – Ideally Located Close to Existing

Projects and Rail Infrastructure

7

Ncondezi Project – 6 Discreet Coal Blocks Identified

8

804L

805L

West Block

Central Block

River Block

East Block

South Block

North Block

North East Block

Mozambique Well Positioned for Global Markets

9

Ncondezi Project - DFS Timetable Summary

10

Sep-2011:DFS drilling complete

Q4 2011 to Q1 2012:

Resource update

Q4 2011: Coal washability

test work complete

Q1 2012 to Q3 2012:

Mine, plant and cost

optimisation

Sep-2010: Initiation of

DFS Work Programme

Q3 2012:

Completion

of DFS

Ncondezi Project - DFS Programme Update

Drilling complete

Over 306 new holes have been drilled (+52,000m of drilling)

Closer spaced drilling from 1km down to 350m grid

4,700 samples sent to laboratories for wash tests

Updated resource model in progress

South, North and Central blocks complete

East, West and River blocks expected in Q1 2012

Optimisation programmes initiated

Main optimisation programmes are:

Wash plant

Mine design

Cost

Targeting completion in Q3 3012

DFS study target completion end Q3 2012

Target to confirm viability of large scale open pit export thermal

coal mine

Fully funded to complete study

11

Ncondezi Project – Latest JORC Coal Resources Resource update announced on 12 December, 2011

3 of 6 coal blocks updated – South, North and Central blocks

Total updated resource of 1.7Bt

Results suggest final updated resource will be larger than

maiden 1.8Bt resource classified in Feb 2010

Coal zones occur at or near surface on all three coal blocks

More than 1.4Bt occurs at depths of less than 250m below

surface

Average coal zone thicknesses of between 26m to 86m

Updated South Block resource

42% larger than maiden JORC coal resource

41% increase in measured and indicated coal resources to

605Mt

Coal zones identified at surface and extend beyond 300m

810Mt occur at depths of less than 250m below surface

Potential products

An export thermal coal with c.20% ash.

A domestic thermal coal product consisting of a high to low

volatile matter and +30% ash

Currently investigating domestic and international market for low

volatile coals for gasification

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Updated Ncondezi Project JORC Coal Resource

Total Tonnes In-Situ Resources (Mt)

Block Volatile Matter Indicated Inferred Total

South Block High 243 115 358

Low 362 128 490

Low + High 605 243 848

North Block High 134 185 319

Low 32 54 86

Low + High 166 239 405

Central Block High 92 316 408

Total High 469 616 1,085

Low 394 182 576

Low + High 863 798 1,661

Notes:

TTIS = Total Tonnes In-Situ coal resource (GTIS resources with geological loss factors applied)

Indicated resources are defined within areas where the spacing of boreholes with raw coal quality data is

approximately 500 metres. Extrapolation of these areas is limited to approximately 250 metres

Inferred resources are defined within areas where the spacing of boreholes with raw coal quality data is

approximately 2,000 metres. Extrapolation of these areas is limited to approximately 1,000 metres

"Low Volatile" coals have been devolatilised by igneous intrusions. Studies by Ncondezi indicate that

these coals may be economic

South Blocks - TTIS were estimated from the GTIS tonnages by applying a Geological Loss of 10% to

Indicated resources and 15% to Inferred resources

Mozambican Thermal Coal Potential

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Ncondezi Target Vale Riversdale

Project Ncondezi Project Moatize Benga

CV GAR (kcal/kg) c.6,000 <6,000 6,000

Ash % ad c.22 23 24

Sulphur % c.1.0 N/A 0.6

Total Moisture % ar c.8.0 9.0 7.0

FOB Product Richards Bay Newcastle Kalimantan

Country South Africa Australia Indonesia

CV GAR (kcal/kg) 6,300 6,300 4,100 – 5,900

Ash % ad 15 13 5 – 15

Sulphur % 1.0 0.7 0.2 – 1.0

Total Moisture % ar 8.7 8.1 26.6 – 40.0

Potential Mozambique Export Thermal Products

Seaborne Thermal Product Benchmarks

Mozambican thermal coals characterised by high CV and

ash contents

Market for Mozambican spec thermal coals is growing

Modern power stations have capacity to burn coals with a

wider range of heat and ash characteristics

Most new power stations built in the growing economies

of Asia

China’s entry into the seaborne market has increased

demand and eroded the discount to traditional coals from

SA and Australia

Growth being driven by increasing coal demand from

China and India where there is also an emphasis on

lowering generation costs and diversify coal supplies

Australia now exporting coals with ash content between

18-28% and reducing calorific values down to

5,300kcal/kg (NAR)

IHS McCloskey launched Australian 5,500kc NAR FOB

marker in Dec 2011 following significant increases in

trading

South Africa exporting coals with up to 30% ash and

5,300-5,400kcal/kg (NAR) mainly geared towards India

5,500kcal

(NAR)

6,000kcal

(NAR)

Diff as 6,000kcal

(NAR)

Date US$ US$ %

Apr-11 98.6 122.34 14.78

May-11 100.88 118.4 8.35

Jun-11 103.45 119 6.15

Jul-11 101.85 120.08 8.97

Aug-11 102.59 118.95 7.04

Sep-11 104.66 122.15 7.98

Oct-11 102.26 118.81 7.25

Nov-11 96.48 113.8 8.55

McCloskey Newcastle FOB markers - monthly av.

Source: IHS McCloskey – Dec 2011

Coking Coal Update and Strategy

Work completed to date

2 LD scout holes drilled in Q4 2010

LD hole 5001 identified coal with reasonable swells and rogas (see table opposite)

South and East block models currently being investigated – completion end Q1 2012

Resource model will highlight areas of potential for coking coal

Areas that demonstrate good potential for coking coal will be followed up with a detailed LD drill programme

Timing likely to be after resource model has been completed – Q1 2012

Metallurgical test results from LD holes would be expected in Q2 2012

Results will confirm potential

14

Existing Transport Corridors Update

Coal export options

15

Beira Nacala Chinde

575km c.885km 400km

Distance to port

Sena railway to Port of Beira

Sena line recently refurbished between Moatize and Port of

Beira

Berth 8 being refurbished for initial production from Vale and

Rio Tinto of 5Mtpa starting H2 2011

New coal terminal at Beira with expanded rail network for

between 18-24Mtpa planned by Mozambican Government

Connect Nacala railway line and port to Moatize

Natural deep water port with potential capacity of +30Mtpa

Requires c.200km of new railway line to connect to Moatize

US$4.4Bn upgrade announced by Vale in November 2011 to

increase capacity to 18Mtpa

Vale and Malawian Government sign agreement for new rail

through Malawi in April 2011

Target completion in 2014

Barge down the Zambezi and trans ship from Chinde

Technical studies show that barging is feasible

Initial capacity of 3Mtpa ramping up to 20Mtpa

EIA completed in Q2 2011 found that barging coal will cause

no significant environmental damage

Studies being lead by Rio Tinto

Potential for Middlings and Low Volatile Coal Products

Being Investigated Production of export thermal product results in lower grade coal by-product or

“middlings” which could be suited to several value accretive processes

Fuel for coal fired power plant

Coal gasification - to produce diesel fuel, methanol, glycol, hydrogen and or

fertilisers

Burn tests being undertaken at LURGI

Tests evaluate relevant coal properties for coal gasification process

Expected completion in Q1 2012

A prefeasibility study on power production using coal middlings from the

Ncondezi Project was completed in November 2011

Phase I power plant of 650MW

Discussions with local power utility already underway for reserved capacity on

new 6,000MW CESUL power line from Tete to South Africa via Maputo

Ncondezi is undertaking a definitive feasibility study on a 3,200MW coal fired

power plant

Report due in Q3 2012

16

CESUL Power Project

Environmental and Social Responsibility

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“Environment, Social, Health and Safety responsibilities are integral to the way we do business”

Environmental Management Plan approved by Ministry of

Environmental Affairs in Jan 2009

Applies to all 4 exploration licences

Socio-economic baseline study completed Dec 2010

Full time Community Liaison Officer appointed in Tete

ESIA to be completed in Sep 2012

Important part of the DFS and standalone requirement for mining

licence application

ESIA work to be carried out by independent local and international

consultants

Sustainable projects budgeted for 2011 include:

Provision of water bore holes

A rural health post

Bicycle ambulance programme

Bursaries for four students to attend university abroad

Key Highlights

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Demand for thermal coal remains robust

Mozambique geographically positioned to service

growth markets in Asia

Sizeable resource identified with additional

potential

Fully funded to complete DFS on Ncondezi Project

Target completion of DFS in Q3 2012

Coking coal potential to be assessed in Q1 2012

Infrastructure agreement signed with Rio Tinto

Access to 10Mtpa of capacity

No additional funds required

Assess other value creating options

Corporate opportunities

Power/Coal gasification

Contact Details

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General enquiries:

Info@ncondezicoal.com

Ncondezi Servces (UK) Ltd

Tel: +44 (0) 207 183 5402

Fax: +44 (0) 207 183 5411