Illawarra Coal's assets are located in the southern portion of the Sydney Basin within the Southern Coalfield.

The full sequence of Triassic to Permian sedimentary units are present within the Project areas, including the Permian Shoalhaven Group, Illawarra Coal Measures and the overlying Triassic Narrabeen Group and Hawkesbury Sandstone.

The economic coal seams relevant to the Project areas are hosted within the Illawarra Coal Measures. The general description of the most relevant units is provided below:

* Bulli Coal is the uppermost coal unit in the Illawarra Coal Measures. It is extensively worked in the northern portions of the Southern Coalfield. The Bulli Seam is the main economic coal seam for the BSO (Bulli Seam Operation (West Cliff and Appin)). It averages approximately 2.6 m thick across Appin, gaining a maximum thickness of approximately 4.1 m. The Bulli Seam thins to approximately 1.4 m in the south eastern part of West Cliff and also south west of Appin. Overall, the coal thickness for the Bulli Seam is generally consistent across BSO in the mined out areas and planned areas of longwall mining;

* The Loddon Sandstone is generally between 7 m to 10 m thick;

* Balgownie Coal consists of high ash coal and carbonaceous shale and is generally less than 1 m thick;

* Lawrence Sandstone is 7 m to 11 m thick;

* Cape Horn Coal is a carbonaceous shale to bright coal, typically less than 0.5 m thick;

* Eckersley Formation consists of thin coals, minor carbonaceous shale, laminites and black shales;

* Wongawilli Coal ranges between 7 to 11 m thick and consists of inter-banded tuffs, carbonaceous shales and coal. The basal 4 m contains coal of economic potential and is currently mined at the Dendrobium Mine. The Wongawilli Coal is subdivided into 13 individual plies and 12 partings units and into three working sections as shown in Figure 4-3. The working sections are based on mining experience and are the most relevant division of the seam. The Second Machine Band working section is generally the target of mining at Dendrobium.

* Wongawilli Seam is present within the Appin and West Cliff areas, although a viable working section is not interpreted to occur in the area;

* American Creek Seam is a thin coal inter-bedded with carbonaceous claystone, and,

* Tongarra Coal is a thin coal inter-bedded with carbonaceous siltstone and claystone.

The structure over the Project area is relatively well defined based on the geological data available. Seam dips over the Project area are generally low (1° to 3°). There are localised variations in seam structures. Relatively steeply dipping strata occurring at the Dendrobium Mine between Areas 2 and 3 where dips reach 7° - 8° in an area associated with a small scale fault. The localised steeper dip zones are also often associated with underlying igneous intrusions and domes.

Faulting has been identified across the BSO and Dendrobium Operation. The faults have been identified by 3D seismic, 2D seismic, underground mapping, underground drilling, de-gassing intra-seam holes and, to a lesser extent, interpreted from floor contours generated from drill-hole data. The faults are predominately extension normal faults, although low angle thrust faults have also been identified (such as Maingate 12 at Dendrobium).

Faulting affects the BSO area more significantly than at the Dendrobium Operation. Fifty-one faults have been interpreted at the BSO area to a level of confidence that allows them to be incorporated in the geological model. The throw on the Appin faults average approximately 20 m, although the maximum throw is 90 m; approximately 13 faults have throws of greater than 5 m. As the average thickness of the Bulli Seam is less than 2.7 m, a throw of more than 2 to 3 m can adversely impact the potential for eventual economic extraction. This was demonstrated at West Cliff where LW 22 to 24 were constrained due to faulting. The Appin mine plan has been laid out to avoid the significant faulting identified by exploration to date.

At the Dendrobium Operation only four faults are incorporated into the Dendrobium Operation geological model. Of these, only two are located within the current mine plan:

* Elouera Fault - identified in the old Elouera underground workings, affecting the southern boundary of the Project area, displacement of up to 20 m.

* WW1 Fault - Small displacement fault (less than 5 m) identified in the northwest mains workings, between Areas 2 and 3. There are a number of features that have been interpreted as probably faulting but to a lesser degree of confidence.

As well as the four modelled faults, there are a number of interpreted fault structures for the Dendrobium Operation, shown in Figure 4-5. Most of the predicted structures are understood to be minor and not expected to affect mining operation due to their limited throw.

Igneous intrusions are present at both the BSO and Dendrobium Operation.

The BSO has igneous dykes varying from near vertical and thin (less than 0.3 m), which are boggy and soft and easy to mine, to more significant dykes of 4 to 5 m in width which are very hard (up to UCS of 270 MPa) and more difficult to mine. Through geological studies and operating experience, the igneous dykes are understood and have been observed to have narrow contact margins. Hard and wide dykes are being intercepted in the current mining area.

At the Dendrobium Operation Tertiary igneous intrusions, in the form of sills and dykes, post-date the sedimentary strata in the area which hosts the coal. Sills and dykes have been identified through a combination of surface mapping, vertical drilling, in seam drilling, aeromagnetic survey and from mining.

Extensive igneous sills have been identified in the Wongawilli Seam and have had significant impacts on the extent of economic coal at the Dendrobium Operation. Sills that affect the Wongawilli Seam have been interpreted and are shown on Figure 4-5.

Additionally, there is a swarm of dykes known as the Dendrobium Dyke Zone located directly north of Dendrobium Area 2. The Dendrobium Dyke Zone currently defines the northern limit of the Dendrobium Mine design for Areas 2 and 3.

Longwall mining at Appin North (formerly West Cliff Colliery) concluded in early 2016. The latest mining area, Area 5, was completed in February 2016 and consists of part of Consolidated Coal Lease 767 and Coal Lease 381, which were both transferred from Appin Colliery to Appin North in 1997. Appin North merged with Appin Mine in February 2016.

The Bulli Seam underground longwall mining operations have transitioned wholly to the Appin areas (Area 9 and Area 7) following completion of longwall mining activities at West Cliff.

All coal produced at the BSO is processed at the West Cliff Coal Preparation Plant, which incorporates:
* Dense medium drum;
* Primary dense medium cyclone (“DMC”);
* Secondary DMC;
* Froth flotation cells;
* Thickening cyclone; and,
* Horizontal belt filters.