Coal resources on the Stockton Plateau are restricted to the Middle to Late Eocene aged Brunner Coal Measures (BCM). The unconformably overlies the Ordovician aged Greenland Group greywacke’s and argillite’s, which has been extensively intruded by Cretaceous granites and porphyry (Berlins Quartz Porphyry). Due to the stratigraphic nature of coal measures, the coal seams generally lie in a horizontal or sub- horizontal plane. The resource has a dip to the NE at the northern end of the deposit and to the East along the western margin. Folding and faulting through the coal seams can create localized changes in dips up to 80 degrees.

The Mangatini coal seams are the main coal seams of the Stockton deposit. The seams have been given the abbreviation M. There are the three seams M1, M2, and the M3. The M2 seam is the predominant seam over the deposit and splits into four segregated seams in places. The M1 seam is thin and discontinuous stratigraphically below the M2 and not considered for resource estimation. The M3 is a rider seam to the M2; however the seam is discontinuous and often not recovered during mining. The M3 is not considered during resource estimation.

There is sufficient confidence in interpretation of geological stratigraphy, structure and seam correlation/continuity though it is variable across the Stockton area. Mining activities supports a good confidence in the geological interpretation of the deposit.

The data used in the geological interpretation included field mapping, drillhole data, core logging data, geophysical logs, sampling, coal quality laboratory testing and structural interpretations. Residual variability exists concerning geological structure along/within the major fault zones, resulting in a lower level of resource confidence. This variability will influence the local estimates rather than the global structural and coal quality estimates for these zones.

The Stockton resource area covers approximately 22.9km², a roughly rectangular shape up to 3.5km wide (E-W), and 8km long (N-S).

Within this area all seams are exposed in the operating mine. With in situ coal between 0 and 50m below the original ground surface.

Coal thickness varies considerably over the deposit, from 28m (areas with structural thickening) down to <0.5m (areas with coal seam poorly developed). On average the remaining coal resource has an average thickness of 8- 10m.

The M3 rider seam to the main M2 seams is on average 0.5m thick but can have local thicknesses of 3m.

The mining method is conventional drill and blast, load and haul open pit mining operation. This utilises truck and excavator for waste movement, while coal is loaded using a combination of loaders and excavators with haulage to the ROM hopper CHPP, or stockpiles using dump trucks. The operations are supported by additional equipment including dozers, grader and watercarts.

Geotechnical parameters are based on geotechnical studies undertaken by the Stockton engineering geologists. Specific parameters are applied to each pit. Pit designs have been based on geotechnical constraints and parameters. The typical highwall configuration is a batter height of 15 m with batter angles between 30°- 76° using 8.5 m wide benches. A maximum 10% gradient and 23 m wide running surface is being used for in pit ramps and roads.

Minimum recoverable in-situ thickness is 0.5m.

Minimum mining widths are dependent on volumes to be excavated and the size of the fleet to be used. Typically for the bulk excavator and truck fleet this is approximately 30 metres. For the small excavators and trucks this is approximately 15 metres.

Current mining methods require the following infrastructure; haul roads, drainage, pumps, sumps and dam structures, lime dosing plants, coal stockpile areas, CHPP, coal load out and bins, aerial ropeway, train load out and bins, workshop, offices, contractor facilities. The majority of this infrastructure is in place with the main new infrastructure required being related to water management and access such as sumps, dams and water control as the mining progresses into new areas.

A maximum ash cut-off of 25% has been applied to all coal seams except where seam continuity is required, which may include intervals with greater than 25% Ash. Coal with Ash <8% is considered “bypass” coal and does not require any further processing. Coal with Ash >8% needs to be processed through the company’s Coal Handling and Processing Plant (CHPP). Coal tonnes are only reported from the M2 seam or its splits (No M3 and M1 tonnes are reported).

Contaminated coals from mining and or from underground workings are processed via the company’s Coal Handling and Processing Plant (CHPP) since 2010. The CHPP removes the dilatant material and a small portion of coal to provide a more saleable product. The plants performance has been routinely monitored since its inception.

Although not included in the resource estimate, studies have been conducted on the properties of the coal pertaining to combustion potential, Ash fusion temperatures and Hardgrove Grindability Index.

Small parcels of coal have been sent to customers for evaluation and test work.

Approximately 59% of total reserve coal tonnes require washing to make a marketable product.

Stockton is an operating site with existing infrastructure in place to support the operation. This includes a CHPP, ROM pads, water treatment plant, lime dosing plant, workshop, offices, access road, aerial ropeway, train load out, water treatment structures, weighbridge area, contractor’s laydown yard, power station and explosives storage.

Labour is primarily sourced from the nearby town of Westport.

Accommodation for the labour source is off-site in the small nearby towns but primarily in Westport.

Bypass Coal - is defined as coal recovered that is not contaminated by rock or other materials and which when mined, is a saleable product (ash <8%).

Wash Coal- is defined as either coal contaminated with non-coal lithology’s (>8% and <50% Ash) or high ash in situ coal (>8% and 35% Ash) and requires processing/washing prior to becoming a saleable product.

Approximately 59% of total Reserve coal tonnes require washing to make a marketable product.

Stockton has a CHPP in operation to produce a saleable product.