Allegiance Coal Limited refered to the ASX announcement dated 26 September 2022 relating to the executed coal sale agreement with Marco International Corporation (Marco). As advised in the September quarterly activities report dated 21 October 2022, delivery of coal against this contract commenced in October 2022. On 17 October 2022, the Company presented an initial invoice to Marco in accordance with the terms of the contract.

This invoice was due for payment by Marco on 21 October 2022 (US time). Marco has failed to make payment in accordance with the contract terms and have stated to company that while they have every intention to perform, need more time to finalise contractual arrangements with their customer. The Company and Marco are working collaboratively in an effort to ensure the contract proceeds on agreed terms as soon as possible.

In the interim Marco are also prepared to utilise a modified version of the previously utilised stockpile financing facility which Allegiance will explore as an option. The Company cautions that notwithstanding Marco's assurance, there is a risk Marco will not perform, in which case the Company will take advice as to its legal options. Until either, Marco honours its commitments under the contract, or the Company elects to terminate the contract for non-performance, the Company intends to sell its coal production into the spot market, which it has done successfully since it commenced production at New Elk and acquired Black Warrior.

To the extent that the price achieved selling into the market is less than the sale price to Marco, the contract provides that the Company may claim the difference from Marco.