# ICZ - Indus Coal



## System (13 March 2012)

Indus Coal Limited (ICZ) is focused on identifying and developing multiple medium sized coal mines throughout Indonesia, and supplying from these mines a high-grade thermal coal export product into the Asian power generation markets.

http://www.induscoal.com.au


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## springhill (6 January 2013)

ICZ has recently completed a $6.6m cap raising and announced a staged acquisition of 3 thermal coal projects in Indonesia.

Current SP is 17.5c, with a big split between 1 buyer @4c and the first seller @ 17.5c.
High/Low for the last 12 months is 29/16c.

*Cap Raising*
$3,945,000 of financing was raised by way of a placement of secured convertible bonds on the terms and conditions set out below. Gleneagle Securities was the placement agent and arranger of this placement of secured convertible bonds.
-Par Value of Each Bond $1,000
-Number of Bonds 3,945
-Interest Rate 12% pa
-Conversion Price A$0.17. The bondholders can elect to convert the bonds at any time into shares at A$0.17 per share.
-Term 12 months. At the end of the term 100% of the principal amount of the bond plus all accrued interest is payable in one single bullet payment.

CPS Securities was the Lead Broker to the equity issue. $2,680,000 of equity was raised by way of a placement of 15,764,706 shares at $0.17 along with 15,764,706 options (one free option for every share subscribed for). Each option has a term ending on 31 October 2015 and a strike price of $0.17.

*Project Acquisition*
The Transaction is structured to occur on a staged basis. Stage 1 involves the purchase of a 38% shareholding in exchange for US$6,500,000. Stage 2 involves the purchase of a further 38% shareholding in exchange for US$9,500,000.
Under Stage 3, subject to and conditional upon:
● Indus owning 100% of the 3 Jambi Coal Projects,
● the completion of a 150 hole HQ JORC compliant drilling programme which results in the 3 Jambi Coal Projects having a JORC Indicated Resource of greater than 100,000,000 tonnes,
● Indus shareholder approval,
Indus shall pay US$27,000,000 and issue 130,000,000 shares in Indus and issue 86,000,000 performance options in Indus to various related and unrelated parties of Indus.

Transaction Highlights
● Acquisition of 3 thermal coal bearing concessions (14,394ha in total) all located in the well-known thermal coal producing region of Jambi Province, Sumatra, Indonesia.
● The 3 coal concessions are Block 7 (5,001ha), Block 8 (4,380ha) and Block 9 (5,013ha). Numerous operating, profitable coal mines are located in close proximity. Stripping ratios in these nearby coal mines are between 1:1 and 1:6.
● Historical drilling (12 holes) and 15 coal outcrops at surface on Block 9 have identified two main coal seams, the first being Seam A (9m thick) as an upper seam and Seam B (2.1m thick) as the lower seam. Drilling core and coal outcrop samples show an average calorific value of between 5,300 – 5,700 kcal/kg and sulphur content between 0.059–1.04% (adb) which is consistent with nearby coal mine production.
● Coal Exploration Target on Block 9 interpreted by independent Australian geological consulting firm Salva Resources Pty Ltd (Salva) based on historical drilling (12 holes) and 15 coal outcrops at surface of between 70,000,000 to 75,000,000 tonnes of thermal coal over a strike length of 4.5km x 1.5km wide.
● Excellent existing local infrastructure (roads, jetties and barging contractors) with available capacity which supports nearby coal mines which each produce 1-2mtpa. Nearby coal mines brought into production with low CAPEX budgets of only US$5m to produce 1-2mtpa of coal per mine.


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