1. Platt’s 21st Annual Coal
Properties & Investment Conference
The Coal Business from a
Global Capital Markets Perspective
--------
Tim Alch
V.P & Senior Minerals Business Analyst
Behre Dolbear & Company (USA), Inc.
New York, New York
+1.845.480.1434

2. From a Lender’s, Investor’s and Owner’s
View – Perspective is Important
• Who is driving business
• What else has changed
• What capital looks for
• Prepare for the best/worst
• Be realistic
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

3. Who is Driving the Bus(iness)?
• This is a Decade of the Emerging Market Consumer
People want and May get what ‘we’ enjoy.
• Urbanization and rising middle class continues to
drive energy and coal consumption, esp. in China
• In the next 20 years, the US may be out spent by a
rising ‘middle class’ in China (330M) and elsewhere
• GDP growth in China, Asia, Latin America, etc. will
likely exceed growth in the OECD nations
• Struggling to keep pace will be commodity supply
chain logistics including coal, fueling price volatility
• Growth may exceed current expectations
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

4. Asia is Where Most People Live and
Emerging Markets Grow Faster
Source: The Economist
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

5. More Consumers, More Money & Minerals Consumed
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

6. China Now Consumes as Much
Coal as the Rest of World (Source: USA EiA)
• China’s coal use grew by 325 million tons in 2011, equal to 87% of the
374 mt global increase in coal use. Of the 2.9 billion tons of global coal
demand growth since 2000, China accounted for 2.3 bt (82%) (US EIA)
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

7. China’s Share of Global Copper, Steel, Iron
Ore, Etc. Consumption Also Exploded
Source: UBS
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

8. Behre Dolbear Recent Coal Related Engagements
(Some Detail About Behre Dolbear’s Work is Shown at Back)
• Australia • Mexico
• Botswana • Mongolia
• Brazil • Mozambique
• Canada • New Zealand
• China • Nigeria
• Colombia • Philippines
• Germany • Russia
• India • USA
• Indonesia • Vietnam
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

9. China and Other Emerging
Markets are Expanding
• China’s GDP is growing at ±8% pa and
adding power gen capacity equal to UK’s
capacity in each of past/next 10± years
• China is largest consumer of minerals
• China shifts from export led to consumer
based economy as other emerging market
nations expand resource intense sectors
consuming resources, energy, coal, etc.
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

10. China’s Recent Population Growth is Hard to Fathom
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

11. China is Urbanizing & Powering On
• In each year for the next 15 years, China will move
20 million people into cities, consuming more resources
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

12. China Produces Half Global Steel
Source: http://designbuildsource.com.au
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

13. The BIC’s Growth in the Past 10 Years
Broke a Long Period of Flat Pricing
Nominal Industrial Metal Average Prices
1970 - 2012
Aluminum Copper Lead Zinc Nickel
$ Per Tonne (Copper, Lead, Zinc, Aluminum)
10,000 40,000
9,000
Capital Capital Capital 35,000
8,000
Destruction
? Destruction Creation 30,000
7,000
$ Per Tonne Nickel
6,000 25,000
5,000 20,000
4,000 15,000
3,000
10,000
2,000
1,000 5,000
0 0
Data Source: USGS and LME
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

14. Coal is Different
• 96% of coal is used by PowerGen & Steel
• Two KPIs of modern economic growth
• Not as fungible as precious & base metals
• Demand patterns are more predictable
• Markets and end users are more
specifically defined
• Transport can be (a near) dominant factor
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

15. China’s Power is Fueled by Coal
• China had an estimated total installed electricity generating capacity of 1,073 GW in 2011. The largest
in the world and increased by 9+% from 2010 and doubled from 519 GW in 2005
• Installed capacity may double again by 2030 to meet rising demand, particularly from main
urban areas in the East and South of the country (FACTS Global Energy) with gas-fired capacity too
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

16. Robust, Tempered Coal Outlook
• Continuing modernization in Developing World
is driving energy, metals at greater rates
• Estimates vary e.g. 300 GW of new coal fired
plants may come online requiring about 900 mt
of new supply – equal to US output now
• Declining ore grade, fewer large deposits, high
capital costs, Best Practices, larger Gov ‘takes’,
changing political winds etc. curtail investments
and reduced capex throughout mining sector
• Thus, production may struggle to meet future
demands and lead to sporadic price spikes
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

17. Coal is Forecast to Fuel a Large Share of
Future Total Global Electricity Generation
EIA AEO2013 Reference
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

18. Future Growth of Global Electricity Production Will
Be in the Non OECD and Be Coal Fueled
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

19. A Rising Standard of Living is
Often Measured by Electricity & Steel
BBC News 20 February 2013 Last updated at 05:53 ET
Bulgaria government to resign, PM Boiko Borisov says
• The government's resignation follows nationwide
protests against high electricity prices
• Bulgaria's government has announced it is resigning after nationwide
protests against high electricity prices and austerity measures, Prime
Minister Boiko Borisov has said. The PM said he had decided to go after
protesters against rising electricity prices clashed with police in Sofia……
________________________________________________________
• There are weekly rolling ‘Black Outs’ in 1/3 of India
• Brief widespread outages after recent storms in USA
• In today’s world, People without Power is Not Good
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

20. In the Top Ten Commodities by Global
Projects in 2011: Gold 1; Coal 7
• Investors, lenders and speculators have been attracted to the
precious metals markets: Is the world investing enough in coal?
Source: Intierra BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

21. Closer to Home: What Has Changed
• USA crude oil production increased by 790,000
bbl/d from 2011 to 2012, the largest increase in
annual output since the beginning of U.S.
commercial crude oil production in 1859
• U.S. EIA expects U.S. crude oil production to
continue rising over the next two years
• Fuel Switching to Nat Gas by Generators drove
coal share to ~36% in Sept/Oct 2012
• Greater efficiency and slow GDP growth have
impacted U.S. power consumption
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

22. Share of Total US Generation by Coal was Hit by
Natural Gas
(Source: US EIA Short-Term Energy Outlook Feb 2013)
U.S. Electricity Generation by Fuel, All Sectors
thousand megawatthours per day
14,000
Forecast
12,000
10,000 Coal
42.3% 37.4% 39.1% 39.1% Natural gas
48.5% 48.2% 44.8%
49.6% 49.0% 44.4%
8,000 Petroleum
Nuclear
6,000
30.3% 28.2% 27.6% Hydropower
23.9% 24.7%
18.8% 20.1% 21.6% 21.4% 23.3%
4,000 Renewables
Other sources
2,000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

23. Coal Prices in USA Basins are Down in 2012
and Off from 2008 Highs (US EIA Feb 2013)
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

24. Be Realistic about Near Term Coal Use – Impact of
Nat Gas Can Not Be Underestimated
U.S Coal Consumption Forecast by U.S. EIA – Feb 2013
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

25. Higher Rail Costs Challenge USA Coal
Operators = Another Not So Favorable Trend
• From 2001 to 2010 average cost of railing coal to power plants rose by almost 50% in USA
• Railroad transport accounts for more than 70% of U.S. coal destined to generators
• So rail rates impact cost of coal delivered to power plants – often borne by producers
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

26. What Capital is Looking for –
More Hard Work Will/Can/May Help
• Offset higher capital, operating costs
• Other than higher prices – What can offset
higher costs?
• Hard Work, Implementing Best Practices,
Process Improvements, New Markets, etc.
• Dig in and focus on doing best possible
• There is no panecea – especially with low
Natural Gas prices
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

27. Coal Production Costs are Rising
• Transport logistics are big factor
• Quality, grade and usage are related
• Rising costs reflect mining method:
 Surface coal in the Powder River Basin cost
is (±US$6.00+ per ton)
 Underground coal in Alabama cost is
(±US$45.00+ per ton)
• Competition is fierce
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

28. US Coal Exports Are Trending Higher (US$ Billions)
• Exports to Asia have grown, though not without challenges
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

29. Can New Export Terminals on West Coast help Boost
U.S. Coal Exports to 200 mtpa = Black Gold
Source: U.S. EIA, Short-Term Energy Outlook, U.S. Census data. Note: Data for 2012 are through August. Export share by
coal type assumes a continuation of current volumes. October STEO forecast used in chart. The steam coal 95% growth
estimate assumes the STEO forecast with current year-to-date steam/met export ratio.
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

30. Export Markets = USA’s Coal Hope
• China’s efforts to consolidate and improve its coal
industry is a massive undertaking
• China will continue to rely upon coal imports to fuel its
power generating sector for many years to come
• Likewise, as India modernizes and expands its coal-
fueled generating capacity – it too requires significant
imported coal for blending and primary fuel
• India’s metals, steel industry is forecast to be another
large consumer of metallurgical coal
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

31. Coal Trade Has Its Challenges
• There continues to be a shortage of skilled laborers
and experienced professionals
• The U.S. needs to resolve export logistics to compete
and aggressively expand into seaborne markets
• Others face logistical, transport, etc. hurdles
• Environmental, permiting and social concerns defer
investment and development of new capacity
• Increased government take and NGOs slow expansion
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

32. Global Growth and Fear –
Suggest Coal Acquisitions
• Global paradigm shifts as Middle Class and
Urbanization drives resource demand
• Minerals markets subject to price spikes may
provide sufficient investment returns to
attract capital from some investors
• Stability and security of fuel supply is key
• Valuations of USA coal on a long term basis
– may now be attractive
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

33. Some See the Value in Coal –
M&A Targeted Coal in 2012 (US$B) (Source E&Y)
2012 M&A Activity by Target Commodity
25
21.4
20
17.9
15 14.2
13.4
$ Billions
10.6
10
7.3
5.3
5 4.0 3.9 3.6
2.3
0
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

34. China’s Outbound Acquisitions Have
Grown (US$ Billions and Volume)
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

35. China’s Coal Deals Rank #2 After Gold
Source: Ernst and Young BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

36. M&A Drivers in Coal
• Coal share valuations over corrected in 2H12
• Low profits force sale of low margin, downstream assets
• Significant cross-border investment and M&A likely
• Majors and Strategic investors with strong balance
sheets may opportunistically acquire key assets
• Increased price volatility and resource nationalism,
including higher government taxes and royalties may
contribute to stability of supply and quality concerns
• Risk management is very important to acquirers
• There are less undeveloped attractive assets in
developed countries
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

37. Consolidation Likely to Continue
• Valuations are less expensive than greenfield
investment
• Consolidation to form Super and Larger Majors is likely
• Strategic M&A may buoy coal assets and share prices
• SOEs, SWFs e.g. Japan, Korea, India may continue to
acquire strategic metals and coal resources, etc.
• Fewer companies control larger share of minerals –
giving some producers greater market leverage
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

38. Where are Assets are On Value Curve - and Cost Curve
Source: BMO
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

39. Getting and Keeping Business
• Quality Control is essential & challenging
• Consistent quality product is key
• Bid realistic achievable coal specs
• Respond to customer problems
• Focus on What you are Best at: Remind
all stakeholders, What that is
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

40. Capital Ideas for 1H2013
• Equity markets in 2012 were turbulent and hit lows
• Banks, investors, and operators are risk adverse
• Alternative, strategic interests, private equity, SWFs,
SOEs are opportunistically stepping into resources
• This trend may / will likely continue in 2013
• Management, stakeholders, employees, partners, and
customers should be realistic about options
• Now is not the best time to over reach
• Thank you
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

41. Behre Dolbear’s Coal Services
• Specializes in executive level consultancy to financial
institutions, independent investors, large and small coal
producers, coal consumers, and government agencies.
• Our technical advisories address full spectrum of engineering
and operating activities, including exploration, resource and
reserve definition and review, mine design, project development,
coal preparation, production and operations planning, sales,
transportation, coal characterization, and coal utilization.
• Our business advisories address project justification and
finance, capital budgets, operating costs, organizational
structures, and planning for profit optimization.
• We also support legal and accounting firms and insurance
companies with litigation and arbitration assistance, business
interruption valuations, and expert opinion statements.
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

42. The Behre Dolbear Group
• Behre Dolbear has 12 offices in 8 countries and completed 210+
jobs in 55+ countries in each of the last 5 years using our global
network of 125+ professionals in all major mining markets
• We perform studies and advise a wide range of entities in the
mining, banking, investment, financial, legal and accounting
sectors, and government agencies around the world
• Our experience spans technical, operating, and financial issues
in the base, precious and ferrous metals, coal, uranium, fertilizer
and industrial minerals, gemstones, and construction materials
THANK YOU
Tim Alch
V.P. & Senior Minerals Business Analyst
Behre Dolbear & Company (USA), Inc.
100 Park Avenue, New York City 10017
+1.845.480.1434 Tim.Alch@dolbear.com
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
© 2011 Behre Dolbear Group Inc. All Rights Reserved

43. The Behre Dolbear Group
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

44. Appendix
• Characteristics of Scoping, Pre Feasibility
and Full Scale Feasibility Studies
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

45. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A1
Potential Areas of Investigation
for Proposed Mining Projects
PROPERTY INFORMATION MANAGEMENT AND LABOR
Location, topography and climate Management organization requirements
Land ownership and royalties Labor requirements
Property history
Current status PRODUCTS, MARKETS AND SALES
Products
GEOLOGY AND RESOURCES Markets
Geological description Prices
Mineralogy Sales
Drilling, sampling and assaying
Evaluation techniques ENVIRONMENTAL AND PERMITTING
Mineral resource estimate Permit list
Environmental impact
MINING Compliance costs
Ore reserve estimate
Compliance cost timing
Mining method and plans
Mining equipment Reclamation expenses
Material handing
Material handling equipment FINANCIAL ISSUES
Historical and forecast production Taxes
Consumables Royalties
Mining capital estimates Fees
Mining operating cost estimates Licenses
PROCESSING DEVELOPMENT COSTS AND SCHEDULE
Ore sampling and testwork Development cost estimate
Processing method Development schedule
Other required processes Development methodology
Process equipment
Historical and forecast production POLITICAL & SOCIAL CONSIDERATIONS
Consumables Economic benefits and costs
Processing capital estimates
Government considerations
Processing operating cost estimates
Other issues

INFRASTRUCTURE
PROJECT ECONOMICS
Industrial infrastructure facilities
Social infrastructure facilities Economic parameters
Utilities, power, water Discount rate determination
Infrastructure capital estimates Cash flows
Infrastructure operating cost estimates Investor returns
Debt analysis
Sensitivities
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

46. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A2
(continued)
CONCEPTUAL
CATEGORY PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
INTRODUCTION
Location, Topography, and Climate
Site location map •Yes •Yes •Yes
Ownership and Royalties
Claims list •No •No •Yes
Claims map No Yes Yes
Current Status and History
Historical chronology No No Yes
Information on past production, if any No No Yes
GEOLOGY AND RESOURCES
Geological Description
Geological map Yes Yes Yes
Geological cross-sections No Yes Yes
Drilling, Sampling, and Assaying
Parameters Yes Yes Yes
Drill hole location map Yes Yes Yes
Sampling/assaying flow diagram and assessment No Yes Yes
Assay check assessment and graph No Yes Yes
Mineral Resource Estimate
Resource methodology determination and approach Yes Yes Yes
Geologic model limits Yes Yes Yes
Lithology/tonnage factors/code No Yes Yes
Cumulative frequency of samples verses grade No Yes Yes
Variograms No Yes Yes
Resource Estimate Industry Standards (NI 43- Industry Standards (NI 43- Industry Standards (NI 43-
101, JORC, etc.) 101, JORC, etc.) 101, JORC, etc.)
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

47. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A3
(continued)
CONCEPTUAL PRE-FEASIBILITY
CATEGORY FEASIBILITY STUDY
STUDY/SCOPING STUDY STUDY
MINING
Ore Reserve Estimate
Reserve and resource calculation parameters Assumed Values Test-Based Values Test-Based Values
Cutoff grade equations No Yes Yes
Reserve and resource estimate Industry Standards Industry Standards Industry Standards
Mining Method and Plans
Mining parameters Yes, minimal engineering basis Yes, some geotechnical data Yes
Hydrology/geotechnical parameters No Yes Yes
Mining equipment list No Yes Yes
Consumables list No Yes Yes
Material handling systems No Yes Yes
Material handling equipment No Yes Yes
Personnel list No Yes Yes
Surface mining No Yes Yes
Final pit and dump outlines Yes, simple outline Yes Yes
Incremental pit and dump outlines No Yes Yes
Underground mining
General mine development Yes, general outline Yes Yes
Mining approach (stoping, cut and fill, etc.) Yes, general approach Yes Yes
Production Schedule
Historical production, if any Yes Yes Yes
Annual ore and waste tonnage and grade Yes, division of total Yes Yes
Mining Capital and Operating Cost Estimates
Mining operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Mining capital cost estimates Yes, factored ±45% Yes, from engineering Yes, from vendor quotes and
manuals ±30% take-offs ±15%
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

48. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A4
(continued)
CONCEPTUAL
CATEGORY PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
PROCESSING
Ore Sampling and Test Work
Test work data No, assumed values No, preliminary data No, preliminary data
Processing Methods and Plans
Processing methods Yes, general approach Yes Yes
Processing parameters Yes, minimal engineering Yes Yes
Equipment list No Yes Yes
Consumables list No No Yes
Personnel list No Yes Yes
Material balance No Yes Yes
Flow diagram No Yes Yes
Site plan Yes, simple block diagram Yes Yes
General arrangement drawings No No Yes
Production Schedule
Historical production, if any No Yes Yes
Annual production tonnage and grade Yes Yes Yes
Off-site Processing Cost Estimates
Concentration charges Yes, division of total Yes, preliminary estimate Yes, quote
Smelting and refining charges No Yes, preliminary estimate Yes, quote
Other charges No Yes, preliminary estimate Yes, quote
Material handling and transport No Yes, preliminary estimate Yes, quote
Insurance and sales charges No No Yes, quote
Processing Capital and Operating Cost Estimates
Processing operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Processing capital cost estimates Yes, factored ±45% Yes, from engineering Yes, from vendor quotes and
manuals ±30% take-offs ±15%
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

49. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A5
(continued)
CONCEPTUAL
CATEGORY PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
INFRASTRUCTURE
Industrial Infrastructure Facilities
Facilities list Yes, with minimum detail Yes Yes
Power and water parameters Yes, preliminary Yes Yes
Full site plan No Yes Yes
Social Infrastructure Facilities
Facilities list Yes, with minimum detail Yes Yes
Housing No Yes, preliminary Yes
Schools No Yes, preliminary Yes
Hospitals No Yes, preliminary Yes
Other No Yes, preliminary Yes
Infrastructure Capital and Operating Cost Estimates
Consumables list No Yes Yes
Personnel list No Yes Yes
Infrastructure operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Infrastructure capital cost estimates Yes, factored ±45% Yes, from engineering Yes, from vendor quotes &
manuals ±30% take-offs ±15%
MANAGEMENT, LABOR & ADMINISTRATION
Personnel
Personnel lists No Yes Yes
Training requirements No Yes Yes
Personnel Capital & Operating Cost Estimates
Consumables list No No •Yes
Personnel operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Personnel capital cost Yes, factored ±45% Yes, ±30% Yes, ±15%
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

50. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A6
(continued)
CONCEPTUAL PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
CATEGORY
MARKETS, PRODUCTS AND SALES
Markets, Products and Sales
Products Yes, preliminary Yes Yes
Volume Yes, preliminary Yes Yes
Prices Yes, preliminary Yes Yes
Sales organization No Yes, preliminary Yes, preliminary
Sales Related Capital and Operating Cost Estimates
Personnel list No Yes Yes
Consumables list No No No
Sales related operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Sales related capital cost estimates Yes, factored ±45% Yes, ±30% •Yes, ±15%
ENVIRONMENTAL AND PERMITTING
Environmental
Permit list No Yes Yes
Environmental Impacts Yes, preliminary Yes Yes
Environmental Compliance Cost Estimates
Personnel list No Yes Yes
Environmental related operating cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
Environmental related capital cost estimates Yes, factored ±45% Yes, ±30% Yes, ±15%
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

51. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A7
(continued)
CONCEPTUAL
CATEGORY PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
DEVELOPMENT SCHEDULE AND COSTS
Development Schedule
Development methodology •Yes, preliminary •Yes •Yes
Development schedule Yes, preliminary Yes Yes
Development Costs
Personnel list No Yes Yes
Development related operating cost estimates No Yes, ±30% Yes, ±15%
Development related capital cost estimates No Yes, ±30% Yes, from vendor quotes &
take-offs ±15%
PROJECT ECONOMICS
Financial Issues
Taxes Yes, preliminary Yes Yes
Royalties Yes, preliminary Yes Yes
Fees Yes, preliminary Yes Yes
Licenses Yes, preliminary Yes Yes
Economic Issues
Economic parameters Yes, preliminary Yes Yes
Discount rate determination Yes, preliminary Yes Yes
Cash flows Yes, preliminary Yes Yes
Investor returns Yes, preliminary Yes Yes
Debt analysis No No Yes
1.Sensitivities No Yes, preliminary Yes
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS

52. Characteristics of Scoping, Pre-Feasibility, and
Full-Scale Feasibility Studies – A8
(continued)
CONCEPTUAL
CATEGORY PRE-FEASIBILITY STUDY FEASIBILITY STUDY
STUDY/SCOPING STUDY
SUMMARY AND RECOMMENDATIONS
Operational Parameters Mostly assumed and factored Some engineering basis Some engineering basis
Title and ownership Yes Yes Yes
Geology Yes Yes Yes
Ore reserves Yes Yes Yes
Mining and processing rates Yes Yes Yes
Development period and mine life Yes Yes Yes
Metal/mineral recoveries Yes Yes Yes
Sales Yes Yes Yes
Operating cost estimates Yes Yes Yes
Capital cost estimates Yes Yes Yes
Financial Parameters
Cash Flows Yes Yes Yes
NPV, IRR, and ROI Yes Yes Yes
BEHRE DOLBEAR
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