For personal use only

9 February 2022

SHORT CREEK JORC RESOURCE STATEMENT

________________________________________________________________________________

HIGHLIGHTS

  • A large tier one underground deposit comprising 163Mt (short tons) with an additional 10Mt of coal available to be leased within the deposit area.
  • A premium mid-vol hard coking coal of which 134Mt (87% of the resource) is comprised of the world class Mary Lee and Blue Creek seams (Blue Creek) and with a proven CSR of 69%, Blue Creek coking coal commands premium pricing alongside the World's top hard coking coals.
  • Allegiance intends to complete an independent feasibility study by calendar Q3'22 with project development commencing late 2022, for a production start date late 2023 early 2024, subject to financial and regulatory considerations.
  • Completion of the acquisition, which is unconditional, is awaiting transfer of permits relating to Short Creek expected to be effected during Q2 2022.

________________________________________________________________________________

Allegiance Coal Limited (Allegiance) refers to its prior announcement dated 21 October 2021 in relation to the acquisition of the Short Creek coal mine (Short Creek) and is now pleased to present a summary of the JORC 2012 resource statement in relation to the Short Creek underground in-situ coal resource.

Coal Resources

Marshall Miller & Associates (MM&A) undertook a JORC 2012 compliant resource statement in relation to Short Creek, summarised in the tables below.

Leased

Measured Mt

Indicated Mt

Inferred Mt

Total Mt

Newcastle

9.1

11.9

-

21.0

Newcastle Leader

0.5

0.5

-

1.0

Mary Lee

17.7

39.1

-

56.8

Blue Creek Rider

1.9

5.3

-

7.2

Blue Creek

24.9

52.0

-

76.9

Total

54.1

108.8

-

163.0

Unleased

Measured

Indicated

Inferred

Total Mt

Newcastle

2.6

0.3

-

2.9

Newcastle Leader

0.0

0.0

-

0.0

Mary Lee

3.0

0.8

-

3.9

Blue Creek Rider

0.0

0.0

-

0.0

Blue Creek

3.0

0.6

-

3.6

Total

8.6

1.8

-

10.3

Allegiance Coal Limited: Suite 107, 109 Pitt Street, Sydney NSW 2000

ABN 47 149 490 353 T: +61 2 9233 5579 F: +61 2 9233 1349 E: info@allegiancecoal.com.au W: www.allegiancecoal.com.au

For personal use only

Coal Quality

The coal quality parameters listed in the table below are washed and stated on an air-dried basis. The Mary Lee and Blue Creek CSR (coke strength after reaction) was blended for coal quality analysis and a coke oven test undertaken in a semi-industrial moveable wall oven (the blend weighted slightly towards Blue Creek).

Washed at 1.5 SG (adb)

Newcastle

Mary Lee

Blue Creek

Proportion of resources

%

13

35

52

Ash

%

12.4

11.6

9.0

VM

%

26.1

25.3

24.9

Sulphur

%

2. 5

0.9

0.7

FSI

9.0

8.8

8.1

Fluidity

ddpm

29,646

23,685

16,031

RoMax

%

1.14

1.18

1.16

CSR

-

69

69

The Mary Lee and Blue Creek coal seams represent 87% of the coal resource and present as a tier 1 mid-vol hard coking coal highly regarded and sought after on the seaborne met coal market. Washability data indicates that at 1.45 to 1.40 SG the Mary Lee will wash to less than 10% ash delivering an on-specification premium CSR hard coking coal.

The figure below categorizes the variety of coking coals supplied to the seaborne market by reference to CSR and volatile matter. Steel mills use a blend of coking coals in their coke oven feed with a target blend quality highlighted below.

Short Creek Mary Lee Blue Creek MV

Black Warrior

Mary Lee Blue Creek HVA

Source: Warrior Met February 2020 Presentation

As is clearly evident from the figure above, Short Creek's mid-vol Mary Lee Blue Creek sits comfortably in the middle of the market's prime hard coking coals and as a consequence, is expected to attract demand and premium pricing. In addition, the high-vol A version of Mary Lee Blue Creek from Allegiance's Black Warrior Mine sits at the top of US prime high vol coking coals.

2

Project Location

For personal use only

Short Creek comprises 15,400 acres (controlled and partially controlled) located in Jefferson County, Alabama approximately 15 miles northwest of the city of Birmingham. Strategically located adjacent to the Locust Fork of the Black Warrior River with its own barge loading facility, Short Creek is part of the Black Warrior coal-producing region, at the southern end of the USA Appalachian coal fields.

Property

Surface and deep mining have been conducted on or adjacent to the Property since at least the 1970s by Drummond Coal and its predecessors. The Short Creek coal preparation plant and barge loadout facility were last in operation in April 2006 and have since been in an idle status.

3

For personal use only

The Property consists of approximately 15,128 fully controlled mineral acres, 272 acres that are partially controlled, and an interior 667-acre tract not currently controlled within the interior of the Property (controlled by the State of Alabama).

Four categories of property mineral control are present within the Property:

  • Mineral and surface leased
  • Mineral only leased
  • Mineral partially leased / controlled (less than 100% mineral control)
  • Non-controlledMineral and Surface (State of Alabama).

Surface Facilities

Although underground mining in the Pratt seam is present across a broad area, the property was most recently operated as a surface mine with key mine infrastructure including:

  • Preparation plant (referred to as Short Creek) with conveyors, stackers, and refuse disposal areas
  • Barge loadout located on Locust Fork of the Black Warrior River, and adjacent to the preparation plant
  • Materials handling and associated facilities.

The Preparation Plant is largely a shell with most operating parts removed; the barge loadout and materials handling infrastructure including conveyors and spiral stackers are adjacent to the Preparation Plant.

Geology

The Property is located near the east-central portion of the Black Warrior Basin where the Newcastle, Mary Lee, and Blue Creek seams occur at depths ranging from approximately 300 feet to more than 1,000 feet below the surface.

The Black Warrior Basin is bound by the Alabama Valley and Ridge, Highland Rim, and East Gulf Coastal Plain physiographic provinces. The southwestern and south-eastern margins of the basin are terminated by frontal thrust faulting of the Ouachita and Appalachian orogeny. The basin is a foreland basin covering approximately 23,000 square miles (59,570 square kms) of north-western and central Alabama; it extends approximately 230 miles from west to east and 188 miles from north to south. Bituminous coal deposits of Alabama are contained within the Pennsylvanian-aged (300 million years) Pottsville Formation.

Surface and shallow subsurface strata underlying the subject Property and surrounding properties are Cretaceous and Tertiary deposits of the Mississippi Embayment and Gulf Coastal Plain. Underlying these

4

For personal use only

deposits is a succession of Carboniferous-age interbedded sandstones, siltstones, claystones, shale, and bituminous coals of the Pottsville Formation. The Pottsville Formation consists of upper and lower stratigraphic subdivisions. The Lower Pottsville is dominated by sandstone with occurrences of economically minor coal deposits. The Upper Pottsville is characterized by alternating sequences of sandstone, siltstone, shale, and coal, interspersed with marine zones. The Warrior Coal Field contains more than 25 coal beds, occurring stratigraphically over a vertical section of approximately 6,500 feet; however, fewer than half of the coal beds have been developed economically. Coal seams occur in groups or zones (the most dominant of which is the Mary Lee Group).

Stratigraphic Column of Warrior Basin Sequence with Mary Lee Coal Zone Highlighted

The major structural features within this portion of the basin are the Sequatchie anticline, which trends northeast to southwest, and the Coalburg syncline located south of and approximately parallel to the axis of the anticline. The axis of the Sequatchie Anticline is located at the north-western edge of the Property, and the Coalburg Syncline at the south-eastern edge, where the strata dip variably to the southeast at typically less than 2 degrees towards the axis of the syncline.

Historical information available indicates the presence of a series of northwest-southeast trending normal faults of varying length and displacement. These have been in part revealed in the mine workings of the overlying Pratt seam. Faults range from 1,000 feet to 4 miles in length; a maximum vertical displacement of 125 feet has been identified within the Property; however, not uncommon elsewhere in the Warrior Basin, fault displacements of as much as 300 feet have been reported.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Allegiance Coal Limited published this content on 08 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 February 2022 21:56:50 UTC.