The stratigraphy of the Maramarua Coalfield is similar to that of other northern Waikato coalfields, being dominated by thick, Cenozoic, Te Kuiti Group sediments which unconformably overlie Mesozoic basement rock of the Newcastle Group. The Waikato Coal measures and later Te Kuiti Group sediments were deposited in a broad north to north-north west trending elongated trough, which appears to have been controlled by structural trends within the underlying Newcastle Group basement rock. The Waikato Coal Measures are present over the entire coalfield with a thickness of up to 134 m.

The Kupakupa main seam (KK) is located near the base of the coal measures, and is the most widespread and thickest seam, ranging from less than 1 m to 15 m thick. The Kupakupa seam has up to four lower seams (KL1, KL2, KL3, KL4) located 1 m to 3 m below the main KK seam. These lower seams are discontinuous and generally less than a metre thick. The Kupakupa seam is overlain by carbonaceous shales, siltstones and claystones of the upper Te Kuiti Group.

The generalised structure of the Coalfield dips at 15 degrees north-northwest, flattening out towards the Miranda Fault, due to fault drag effects on the hanging wall. Two major faults dominate the two permits. The Foote Fault zone is interpreted to be a large displacement fault striking north-northeast that is downthrown to the southeast with an estimated throw of 150 m. The Miranda Fault is a northeast striking fault, with displacements of up to 60 m to the southeast.

Several other smaller displacement (less than 10 m) faults are interpreted to exist throughout the Coalfield, which generally strike parallel to the two major faults. Fault dips have been interpreted to be 65 degrees, based on fault zone intercepts in drillholes.

The main Kupakupa (KK) seam is low ash, low fixed carbon and very low sulphur coal. There is some evidence of higher phosphorous coal (greater than 0.06% phosphorous in coal) at the base of the KK seam. The coal resource is sub- bituminous C rank.

Coal quality ply results are composited using a thickness weighted average to give an average assay for the entire thickness of a coal seam.

No seam thickness cut-offs have been applied, as the reported coal seam does not thin below the minimum thickness cut-off which is generally acceptable for opencast mining (typically less than 0.5m thickness).

Due to the stratigraphic nature of coal measures the coal seams generally lie in a horizontal or sub horizontal plane. The Maramarua resource has a dip of 10o to 15o to the northnorthwest. Drillholes are generally oriented vertically (90o ), and are designed to intercept target seams at as high angle as possible in order for drilled seam thickness to represent true seam thickness as closely as possible. A number of holes have been inclined to target the major fault zones.

The Maramarua resources area is approximately 3.1 km in length and 1.5 km in width, covering approximately 250 hectares. Within this area there are two main areas of focus for future mining – the K1 area and the KCQ and K4 area. As discussed above, coal seam are generally laterally continuous, however thickness can vary over short lateral distances, due to the highly faulted nature of the deposit.

The main Kupakupa (KK) seam is the target in this area. Seam thickness ranges from 3 m to 18 m. Depth of the seam ranges from 7 m to 71 m. The KK seam outcrops in the walls of the historic K1 opencast pit and dips at 10o – 15o NNW.

At Maramarua, it is planned that production will occur as an opencast operation. Waste will be transported and stored in an engineered land fill to backfill a historic opencast pit. The low sulphur levels in the coal will mean acid mine drainage will not occur.

Pit limits have been determined using pit optimization techniques, with restrictions for current land and mineral access. Pit optimisations used current cost and revenue budget assumptions.

All mining is via open cut methods. Mining equipment is hydraulic backhoes and mechanical drive rigid body trucks.

Coal is present in a thick seam and is easily distinguishable from the surrounding waste rock. Coal quality has been shown to be consistent both laterally and within the seam.

Coal recovery estimates consist of two parts:

- Minimum recoverable in-situ thickness is 0.5m.

- 75mm of coal is assumed lost from both the roof and the floor (150mm in total) during mining to ensure no waste dilution within the coal.

Minimum mining widths are to suit 90t capacity trucks and are typically >50m.

The selected mining method requires simple infrastructure to support mobile opencut mining equipment (i.e. workshop, fuel farm, site ablution and offices, wash pad).

Currently no wash plant is used at the Maramaua operation. The ROM coal produced is processed through a crushing/screening plant where losses are minimal.

The ROM coal produced at Maramarua is crushed and screened on site. A process recovery of 95% is used based on a processing reconciliation study.

Product coal specifications include ash, sulphur, moisture and calorific value.

Some parts of the Reserve show the base of the seam with elevated phosphorous levels. This can be effectively blended out within the entire seam thickness, however care will need to be taken not to mine the seam floor as a discrete entity.