Nucoal Resources : Annual Report to Shareholders – 30 June 2018

ANNUAL REPORT

NuCoal Resources Ltd ABN 29 060 352 990

Annual Report - 30 June 2018

Contents

Page

Corporate Directory .......................................................................................................... 1

Chairman's Letter ............................................................................................................. 2

Director's Report .............................................................................................................. 3

Auditor's Independence Declaration ............................................................................ 14

Corporate Governance Statement ................................................................................ 15

Financial report ............................................................................................................... 21

Independent Auditor's Report ....................................................................................... 46

Shareholder Information ................................................................................................ 51

Corporate Directory

DirectorsSecretary

Principal registered office in AustraliaShare registryAuditorBankersStock exchange listings

G Galt B.Eng (Mining, Hons), B.Com, GDip App Fin (Finsia), MAusIMM, MAICD

Chairman

G Lewis MAICD

M Davies B.A Hons, MBA

M Etcell B.Com, CA, MAICD

Unit 8, 24 Garnett Road Greenhills NSW 2323 [phone]

Link Market Services

Level 12, 680 George Street Sydney NSW 2000 1300 554 474

Ernst and Young

Ernst and Young Centre 200 George Street Sydney NSW 2000

Corporate Directory

Australia and New Zealand Banking Group Limited 490 King Street

Newcastle West NSW 2300

Westpac Banking Corporation Shop 39 Wallsend Plaza

24 Kokera Street Wallsend NSW 2287

NuCoal Resources Ltd shares are listed on the Australian Securities Exchange. The home exchange is Sydney.

Website address

www.nucoal.com.au

www.nucoal.com.au1

Chairman's Letter

A word from our Chairman

Fellow Shareholders

On behalf of your Directors, I present the Annual Report for the 2017/18 year.

The past year has once again seen us focused on pursuing justice for our shareholdersfollowing the expropriation, without compensation, of our Doyles Creek exploration licence bythe State of NSW in early 2014, as discussed further below. On other matters, we have nowsold all our land holdings and only water licences remain. These are also currently listed forsale. At the end of the fiscal year we have no debts or substantive liabilities and we retain oneexploration asset - the Savoy Hill exploration licence.

As an oversight of our "justice" activities, we believe that as time progresses our case will only become stronger. The NuCoal case will continue to be a thorn in the sides of the NSW and Australian Governments and its implications will be more obvious to potential investors. Our job is to make sure that we persist and continually press our case in any and all available forums. The bottom line is that NuCoal is well funded to stay the course and has no intention of giving up on our pursuit of natural justice.

Internationally, we have been seeking to bring an action under the existing Free Trade Agreement between Australia and the USA. This initiative has progressed during the year and led to the sending of a request by the head of the USTR, Mr Lighthizer, to the Australian Trade Minister, Mr Ciobo, to have talks aimed at allowing an action to commence in the International Court of Arbitration. Despite the senior nature of this request, Mr Ciobo took no visible steps to respond appropriately to either the US Government or to NuCoal. The lack of a response has been noted in the USA - by officials and our shareholders. Notwithstanding that we now have to deal with a new Trade Minister in Australia and perhaps even another one after the coming Federal election, further efforts to press the matter are underway and will continue.

Domestically, we have maintained a program of meetings to keep our issue in front of the NSW Government. Compensation agreements with Shenua and BHP present clear precedents for compensating companies who relinquish their exploration properties. We have written and served a submission on our matter to the NSW Premier and met with parliamentary members of both houses and from all parties. Dr Phelps has been vocal about our matter in Parliament, calling out some of the key issues such as concealment of exculpatory evidence. Shareholders have written to their local State and Federal members and we are organising visits to Parliament by shareholders so politicians can hear for themselves about the damage that their expropriation law has done. We have proposed to the Premier and members that an independent ex-judge be appointed to consider our case and, if satisfied with our case, recommend appropriate compensation.

Our innocence is clear - having been stated in the Supreme Court of NSW by ICAC itself - and the record shows that the ICAC Commissioner recommended consideration of compensation and ex-Premier O'Farrell said he "would have paid compensation but had no money". Times have changed and NSW now has plenty of money. It should right this wrong.

I conclude this year by noting what might have been. Directors and shareholders established NuCoal with a noble goal - to explore for and, if lucky enough, start a new business to bring wealth to investors and to Australia. Despite this noble and completely legal aspiration, we and all the shareholders of NuCoal have been subjected to completely unjustified criticism and denied recourse to natural justice by the Government of NSW. The efforts and aspirations of an incredible number of entirely professional and honest workers and mums and dads have been removed and vilified by our Government with no regard to the rule of law with no sensible explanation of why such actions have been taken.

I always thank you, our shareholders, in my Chairman's letter and this year is no exception. Your response to our struggles with the Government has been overwhelmingly positive and we acknowledge your support - and thanks as always to my fellow Directors, including Mr James Beecher who left us recently, and to Ms Etcell our CEO, for your continued work on your shareholders' behalf.

Yours sincerely

Gordon Galt

Chairman - NuCoal Resources Ltd

www.nucoal.com.au2