Bowen Coking Coal Ltd. announced that it has executed a non-binding Term Sheet with M Resources Trading Pty Ltd. (M Resources), a related entity of Mr. Matt Latimore (a substantial holder of BCB), whereby BCB and M Resources will negotiate in good faith and use all reasonable endeavors to agree and enter formal agreements to establish a joint venture to market, promote and sell, all coking coal produced by and from any of BCB's existing coking coal portfolio, as well as third party coal for blending purposes as well as to provide BCB with a finance facility of up to $15 million, to be utilized in funding the development of BCB's Isaac River Coking Coal Project, or any other of BCB's coking coal projects, as the case may be. M Resources specialises in marketing coking coal, including hard coking coal, semi hard coking coal, semi soft coking coal and PCI coals for steel manufacturing, and is controlled and managed by Mr. Matt Latimore. Prior to establishing M Resources, Matt held the position of General Manager Sales and Marketing, for Wesfarmers Curragh mine and was responsible for global sales of Curragh metallurgical coal products to international steel mills and thermal coal to domestic and international power utilities, rail and port and quality and finance functions. Matt was a Director of Curragh Coal Sales. Prior to joining Wesfarmers in early 2001, Matt held various positions with Mitsui & Co (Australia) Pty Ltd. Mr. Latimore and his related entities currently own 15.2% of BCB and are therefore a substantial holder of BCB. As such, any and all formal agreements resulting from the above mentioned non- binding Term Sheet ("Transaction Documents"), the subject of this announcement, will be subject to shareholder approval as required by Listing Rule 10.1. To this end, a Shareholders Meeting will be called to approve the transaction as and when required and will include all additional required information. Mr. Latimore and his related entities also hold a 19.9% position in Stanmore Coal, the Company's joint venture partner in the Lilyvale and Mackenzie Joint Ventures. The parties have agreed to negotiate in good faith and use all reasonable endeavors to agree the terms of and enter formal legally binding documentation consistent with the following key terms and conditions: BCB and M Resources will establish a 50/50 joint venture coal Marketing company ("Marketing Co."), that will be responsible for the marketing and sales of all coal produced from BCB's current portfolio of wholly owned coking coal assets, cognisant of the terms of the Hillalong Farm-In Agreement with Sumitomo Corporation; BCB will use reasonable endeavors to have any co-owned marketing company established for the purposes of the joint venture with Sumitomo Corporation for the Company's Hillalong project appoint Marketing Co. as its exclusive marketing agent (other than in Japan where the appointment would be non-exclusive) under a marketing agreement that will form part of the Transaction Documents referred to above; Where any of the current wholly owned assets become jointly owned, subject to existing arrangements with Sumitomo Corporation, BCB will use its reasonable endeavors' to procure the owners of such jointly owned projects to also enter into an exclusive marketing agreement with Marketing Co. For completeness, it is noted that Lilyvale and Mackenzie Joint Ventures are not subject to this Term Sheet; BCB will grant Marketing Co. specific marketing rights under a Marketing Agreement, that will form part of the Transaction Documents referred to above; Marketing Co will be governed by a Shareholders Agreement between BCB and M Resources, that will form part of the Transaction Documents referred to above; Marketing Co. will engage M Resources to provide general support services to Marketing Co., which will be detailed under a Marketing Support Services Agreement, that will form part of the Transaction Documents referred to above; M Resources have agreed to provide BCB with a finance facility of up to $15m, either directly or through funds or persons designated and/or managed by M Resources, to be used for the purposes of funding the development of the Isaac River Coking Coal project, or any other of BCB's current coking coal projects, as the case may be; BCB may draw down on the finance facility in respect of a particular project once the decision to mine that project has been made; The finance facility will be secured against the project being developed (with M Resources having the ability to request additional security over other agreed assets), will attract interest at a rate of 9% p.a. and will be governed terms and conditions detailed in a formal Loan Facility Agreement, that will form part of the Transaction Documents referred to above; Mr. Latimore is to be appointed to the Board of BCB as a Non-Executve Director on entry of the Transaction Documents; It is the intention of BCB and M Resources to enter into the Transaction Documents within 90 days of execution of the Term Sheet. Unless BCB and M Resources agree otherwise, the Term Sheet will terminate if the Transaction Documents (other than the marketing agreement with any Hillalong co-owned marketing company) have not been signed within 90 days after the signing of the Term Sheet. While the parties have a binding obligation to negotiate in good faith and use all reasonable endeavors to agree the terms of the formal legally binding Transaction Documents, there is no guarantee that legally binding Transaction Documents will be entered by the parties. If the parties have not entered legally binding Transaction Documents (other than the marketing agreement with any Hillalong co-owned marketing company) within 90 days after the signing of the Term Sheet, the Term Sheet will terminate (unless the parties agree otherwise).