Nucoal Resources : Quarterly Activities Report to 31 March 2017

Quarterly Report For the 3 Months ended March 2017

This Quarterly Report updates activities undertaken during the period 1 January 2017 to 31 March 2017.

1. PROJECTS

   Savoy Hill Coal Project (100%)

   As previously notified, the Savoy Hill tenement, Exploration Licence 6812 (EL 6812) has been extended until 20 June 2018.

   The Company has completed necessary exploration across the tenement to consider the longer term mining options for the project and has undertaken initial marketing analysis for a potential open-cut operation, supplying the nearby domestic power stations. Further work will be undertaken as required.

2. NUCOAL'S LEGAL CASES

   Background

   On 31 January 2014, the NSW Government passed the Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW) (Mining Amendment Act), cancelling Exploration Licence 7270 (EL 7270) with no compensation payable to NuCoal. The legislation was passed following an inquiry by the Independent Commission Against Corruption (ICAC).

   During the quarter, NuCoal continued to implement the legal and political strategy previously announced to seek redress for shareholders following the unfair and unjust cancellation of EL 7270 by the NSW Government.

   Free Trade Actions

   The Company is continuing to pursue claims against the Australian Government on behalf of

   U.S. shareholders under the Australia US Free Trade Agreement (AUSFTA). This potential international action is being progressed with a view to obtaining compensation from the Australian Government for the decision by the NSW Parliament, on the advice of the O'Farrell led Government, to expropriate EL 7270 without payment of compensation.

   Registered Office

   Unit 8, 24 Garnett Road

   Greenhills NSW 2323

   T [phone] F [phone]

   E [e-mail]

   www.nucoal.com.au

   ASX:NCR • Share Information

   Issued Shares: 768.6m

   Board of Directors

   Chairman: G. Galt

   Non Executive Director: G. Lewis

   Non Executive Director: J. Beecher

   Non Executive Director: M. Davies CEO, CFO and Company Secretary: M. Etcell

   The Company, on behalf of its U.S. shareholders, lodged a submission to the AUSFTA Joint Committee on 7 April 2016 following a public invitation to make comments regarding the general functioning of the Australia US Free Trade Agreement. The Review Meeting of the AUSFTA Joint Committee was held on 4 May 2016 and NuCoal is aware that the NuCoal matter was discussed at some length during the meeting.

   In June 2016, NuCoal's Chairman visited Washington D.C. and met with senior staff of politicians who could be influential in pressuring the Australian Government to allow an action under the AUSFTA. Visits were also made to the U.S. Trade Representative's legal staff and the Australian Ambassador. A number of meetings were also held with NuCoal investors in the USA to update them directly regarding progress. A number of these investors are now pursuing the matter directly with their local Congressman and Senators.

   NuCoal has engaged U.S. Lobbyists, BGR Group, to assist with progressing action under the AUSFTA, and the Group's Managing Director visited Washington D.C. in September and again in November. To date, NuCoal has participated in twenty two (22) meetings with relevant government offices including the USTR and The Australian Embassy. The meetings have been extremely positive and further visits will be scheduled to progress the matter on behalf of U.S. shareholders.

   Meetings with Politicians

   NuCoal officers and advisers continued to meet with politicians and Ministers in NSW and federally during the quarter. The aim of the meetings is to educate and eradicate any misconceptions about the facts surrounding NuCoal's circumstances and to ensure that people understand that the Company is well funded and that the intention is not to cease the pursuit of justice until appropriate compensation is received.

3. OTHER RELEVANT MATTERS

Criminal trial of former Minister, Ian Macdonald and former Doyles Creek Chair, John Maitland

The criminal trial of former Minister, Ian Macdonald and former Doyles Creek Chair, John Maitland was heard during February and March 2017. Both men were found guilty by a jury of the charges against them.

This result has no bearing on NuCoal's fundamental position, which is one of complete innocence and deserving of compensation. Relevant other comments are:

1. The award of EL 7270 to Doyles Creek Mining Pty Ltd (DCM) occurred in December 2008. This was long before NuCoal even existed.

2. In February 2010, NuCoal purchased the shares of DCM for $94 million and re-listed on the Australian Securities Exchange. DCM's valuable asset, which was valued in the NuCoal Prospectus, was EL 7270. That asset was not transferable. It was tied to its grantee, DCM. NuCoal was in all respects a bona fide purchaser of DCM and gave good and valuable consideration for the company.

3. At the time of acquisition of DCM by NuCoal, lawyers did not raise any caveat or warning about the validity of the Licence. There was a good reason for that: none was evident. NuCoal did not, and could not, have known about any misconduct when it purchased DCM.

4. In August 2010, a probity report completed by O'Connor Marsden and commissioned by the NSW Government, confirmed the validity of EL 7270 and concluded that its grant was "within power" and cleared it of any impropriety.

5. NuCoal's shareholders continued to invest based on the report, effectively information prepared by the Government.

6. In January 2014, NuCoal's major asset, EL 7270, was expropriated by the enactment of special legislation by the NSW Parliament (Mining Amendment Act).

7. Compensation was expressly denied and NuCoal was legislatively barred from bringing any case for recompense against the state of NSW or any Government officer.

8. Three years on, Mr Macdonald, the Government officer who awarded the Licence to DCM in 2008, has now been found guilty of Misconduct in Public Office.

9. Under normal circumstances - if a Government Officer is found guilty of Misconduct in Public Office, the State of NSW has an obligation to indemnify any person or Company who has suffered loss as a result of the actions of that Officer.

10. NuCoal relied on the relevant Minister of the Crown acting within the powers afforded to him as a Government officer and should, at a minimum, be afforded the standard compensatory rights of any other person, or company.

11. The innocence of NuCoal and its shareholders has been universally acclaimed - i.e. there is no doubt at all about the matter as noted above and in Appendix 1.

12. NuCoal's shareholders were unjustly punished when the legislation was introduced and are now being further punished by not being able to seek compensation from the NSW Government for the guilty actions of Ian Macdonald, a Government Officer.

13. The special legislation enacted by the NSW State Government was unprecedented. NuCoal's innocent investors have lost all their investment despite acting in good faith and lawfully.

1. CORPORATE

   Cash and deposits as at 31 March 2017 were A$1.85 million.

   A further three properties are currently formally listed For Sale and the Company continues to assess other land holdings in the area.

2. ADDITIONAL REPORTING REQUIREMENTS

The following additional information is provided in accordance with ASX Listing Rule 5.3.3.

Interests in Mining Tenements

The Company held the following mining tenements during the quarter.

Tenement Location % interest at the beginning of the quarter Acquired and/or disposed % interest at the end of the quarter

EL 6812 Savoy Hill, New South Wales 100 N/A 100

Beneficial percentage interests held in farm-in or farm-out agreements

NuCoal does not hold any interests in farm-in or farm-out agreements.