Regional Geology.
The Yarrabee deposit is situated in the eastern portion of the Central Bowen Basin in central Queensland adjacent to the Dawson Tectonic zone. The stratigraphic sequence is made up of thin Quaternary soils, Tertiary sands and gravels, the Triassic Rewan Formation and the Upper Permian Rangal Coal Measures. The coal measures consist of interbedded siltstones and sandstones with some mudstones and shales. The Rangal Coal Measures are separated from the lower Burngrove Formation by the Yarrabee Tuff, which, when present, can be used for correlation purposes.

The Tertiary material is dominated by sand and gravel, the thickness of which increases with proximity to the Mackenzie River. Thicknesses of the Tertiary range from 40 meters depth in the north to zero meters in the south. The base of weathering is typically between 5 and 15 meters below the Base of Tertiary surface.

The seams at Yarrabee in stratigraphic order are: Cancer, Aries, Castor Upper, Castor Lower, Pollux, Orion and Pisces Lower) have been modelled and resourced where supported by adequate data. The lower Orion and Pisces seams are generally thin and of poor quality and thus are not resourced, with the exception of the Yarrabee East South (YES) and Domain 2 South pit areas. In these zones the seams thicken and improve in quality sufficiently to be resourced.

Deposit Geology.
The Yarrabee deposit is located within a fault slice of the Rangal Coal Measures of the Blackwater Group, between the Yarrabee fault on the east and another fault on the west, both faults being thrusts and upthrown to the east.

The overarching structure of the Yarrabee area is an asymmetric south easterly plunging syncline, the Yarrabee Syncline, with the greatest amount of compressional deformation located on the western limb and the northern nodal part of the syncline. The Yarrabee Mine is located between two significant fault structures (most likely faulted zones, rather than single faults) on the east and to the west. Faults strike in a NNE-SSE direction and are upthrown to the east.

The Yarrabee Syncline is itself folded and faulted by smaller fold structures and faults. The anticline structures are typically faulted in the more compressed parts of the Yarrabee area and coal is only present in the synclines. Six thrust faults have been interpreted with the lowest angle faults being located in the east and subsequent faults located to the west steepening to the west.

The Pollux seam is the only seam that is subsampled with multiple ply samples taken. The other seams are typically sampled as a single sample unless the geologist determines that the seam intersection has been structurally thickened by faulting and in those cases additional samples are taken to ensure correct representation of the seams coal quality attributes.

The Pollux seam is stratigraphically equivalent to the Leichardt or Elphinstone of the Northern Bowen Basin and the DU and D seam of the south-eastern Bowen Basin at Moura. The RPM Competent Person is familiar with the characteristics of the Pollux seam throughout the Bowen Basin.

The Pollux seam is subdivided into four coal intervals which are listed below. The upper and lower sections of the Pollux seam are subdivided at the medial stone band which is a Bowen Basin wide marker in the Leichardt / Elphinstone seam.

1) Wash Top - The Wash top ply is sampled as a single interval, because it is typically less than 30cm thick.
2) Bypass Upper - The Bypass Upper is typically sampled as a single interval because it has uniformly consistent coal quality.
Medial Stone Band
3) Bypass Lower - The Bypass Lower is sampled as a number of intervals to characterise the raw coal ash and phosphorus. In general a minimum of three samples is required.
4) Wash Bottom - The wash Bottoms is also sampled as a number of intervals to characterise the raw coal ash and phosphorus and a minimum of three samples is required.

Company utilises large scale open cut mining methods in open cut mining operations, which include the removal and storage of topsoil material via truck and front-end-loader (“FEL”) methods, drilling of a blast pattern, blasting of fragment rock, excavation of waste material with truck and shovel or excavator in the upper benches and by draglines in lower benches, and digging, loading and hauling of coal via truck and excavator or FEL methods. Open cut mines include HVO, MTW, Stratford Duralie, Middlemount and Yarrabee, as well as portions of Moolarben and Ashton.

Operations.
Yarrabee uses conventional truck and excavator methods. ROM coal is mined from a number of pits and is either processed at the site’s coal handling preparation plant or bypassed for crushing only. About 40% of the ROM coal is bypassed due to its superior in situ quality. Product coal is road hauled to the Boonal load out facility on the Blackwater railway system and then railed 280 kilometres to the RG Tanna and Wiggins Island Coal Terminals at the Port of Gladstone for export to steelmakers in the Asian region.

Yarrabee operations are contained within 10 Mining Leases (ML’s), one Mineral Development Licence (MDL) and four Exploration Permits for Coal (EPC’s). The area covered by these licenses and permits is about 9,100ha with the area having approximate dimensions of 13.5 km north south and 10 km east west.

Pit Limits
Within in the mine footprint are the designated mining pits:
- On the eastern side of the deposit Yarrabee East North (YEN) in the northern and central eastern side of the deposit;
- Also on the eastern side of the deposit to the south of YEN pit is Yarrabee East South (YES) pit;
- Domain (DOM) 6 the northern most pit on the western side of the deposit; and
- DOM 2 N and DOM 2 S in the central to southern regions of the west side of the deposit.

Previous mining Domains 1, 3, 4 and 5 and the northern most part of YEN have been mined out. These areas were also structurally complex however containing the lower strip ratios of Yarrabee.

Pit optimisation completed by the YAL has been used as the basis to determine Yarrabee’s pit limits. The input costs were validated against the annual budget costs and the revenue values for the product coal were sourced from the marketing team of YAL.

Pit limits were targeted to achieve sufficient margin based on the optimiser shell to allow for a buffer of sustaining capital and other variances not captured in the optimiser process.

Pit limits at Yarrabee are not only defined by pit optimisation, however by the complex geology where the pits end at major fault intersections or at the edge of synclines. Pits are generally designed along the floor of the basal seam for stability. As a result structural regions can become entirely economic or not. Many of the areas within the pit limits have steeply dipping coal and requires additional coal to maintain wall stability.

Mine Design
Seismic hazard studies were not included in the documents available however, the region is classified as a low seismicity area and seismic hazard is not a critical design consideration.

Geotechnical hazards are controlled through mine planning via determination of wall angles, placement of benches and pit wall orientation. Independent geotechnical assessments are conducted annually and recommendations are implemented in the mine plans.

Pits are generally designed to be mined down dip of the deposit to reduce geotechnical hazards. Pit orientation is designed to intersect major faults and the bedding planes in the area perpendicular to their strike. This limits the presence of wedge material in highwalls through fault and fracture planes. Highwalls are designed to achieve an average angle of approximately 45° with shallower wall angles in the tertiary material and catch benches at the base of weathering (BoW).

The Yarrabee mine planning team manages the technical components on site. A specialist geotechnical consultant is used to monitor mine plans, conduct regular field inspections and validate the Yarrabee geotechnical management process. Each of the current pits are assessed and all of the dig plans are assessed to ensure a Factor of Safety associated with the design is greater than 1.2.

Overburden is hauled to a combination of in-pit and out of pit or out of pit dumps. Once pits are in a steady state of operation (after completion of the boxcut) all of the waste that is excavated can be hauled to inpit dumps.

With the development of DOM 6 and YES pits during the LOM plan, boxcuts will be excavated for the development of these pits that will require out of pit dumping before steady sate conditions are in place that will require all waste removal to be dumped in pit.

Waste movements from the excavation source to its destination assumes all waste is scheduled block by block for the entire schedule and waste dumps are designed for each annual period using the “max spoil” method to determine the closest practical dumps for each period.

Since 2009 Yarrabee has been producing low volatile PCI and thermal coal products via open cut mining methods. Coal is either washed in the Yarrabee CHPP to produce PCI coal, or crushed and sold as bypass thermal coal. CHPP reject is separated into coarse and fine streams, with the coarse reject being disposed of in the open pit voids and the fine reject being stored in tailings dam facilities. Product coal is hauled 37km by road truck to the Boonal Loadout Facility which is located adjacent to the Capricorn Highway 10km east of Blackwater and then railed up to 280km to either the Wiggins Island Coal Terminal or the RG Tanna Coal Terminal at the Port of Gladstone.

The CHPP uses standard technology and liberates coal through sizing, gravity and flotation separation. After sizing, dense medium cyclones are used for processing the coarse material and spirals and flotation cell are used for the fine coal.

The CHPP was originally commissioned with a nameplate capacity ........