Tiaro Coal Limited : Quarterly Activities Report

QUARTERLY ACTIVITIES STATEMENT FOR THE PERIOD ENDING 30 JUNE 2013

This quarterly report is dated 31 July 2013 and is for the three months ending 30 June 2013.

Tiaro Coal Limited
(30 June 2013)
ASX: TCM
Quarterly Highlights:
• 87Mt JORC Resource for T9 West 1

Share Price $0.10
Shares on Issue 113,666,623

Unlisted Options Nil
Market Cap $11.4 million
Directors Peter J Meers

(Executive Chairman) Dan Buckley (CEO)
Sri Ibrahim Menudin Rado Jacob Rebek Jianfei Wang
Wei Huang
John Dawkins AO
Major Shareholders
• 200-300Mt Exploration Target for T9 - Shady Camp

2

• Drilling program planned for Priority Target areas
• Mining Assessment for T9 West commenced
• Discussions advanced for further project funding
Tiaro's business objectives:
Paragon Metallurgical Coal Project
• Paragon Coal Pty Ltd (66.67%) established to develop a Metallurgical Coal Project within EPCs
956 and 957
- 87 Mt JORC Coal Resource on T9 West 1
- Exploration target 200-300 million tonnes in the
Tiaro Coal Measures 2 (see Exploration Target
Hudson Resources
Limited (ASX: HRS)

China Qinfa Group

Limited (HKSE: 866)

NOTES:

27.98%
19.88%
note)
- Drilling program planned for Priority Target areas
- Metallurgical quality coal confirmed 3
- Conceptual Mine Planning study commissioned
Exploration

1. "Updated JORC Resource of 87Mt for T9 West" ASX announcement of

7th May 2013

2. "Exploration Strategy for T9-Shady Camp" ASX announcement of 9th

May 2013

3. "Coal Quality Review Confirms Metallurgical Coal Potential" ASX

announcement of 11 March 2013

JORC COMPLIANCE STATEMENTS Exploration Targets

T9- Shady Camp

The estimates of potential coal quantity and quality are based on assessment of exploration data gathered to date but remain conceptual in nature. At this stage, there has been insufficient exploration to estimate a further JORC Resource, and it is uncertain if further exploration will result in the estimation of major additions to the existing T9 West 87MT JORC Resource.

Clarence - Moreton Basin

The potential quantity and grade of exploration targets is conceptual in nature. Other than the declared JORC Resources, there has been insufficient exploration to define a further Mineral Resource and it is uncertain if further exploration will result in the determination of further Mineral Resources.

Competent Person

Technical information in this report that relates to Exploration Programs and Exploration Targets is based on information compiled by Jacob Rebek who is a member of Australian Institute of Mining and Metallurgy. Mr. Rebek is a qualified geologist and is a director of Tiaro Coal Limited. Mr Rebek has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the

'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (The 2004 JORC Code). Mr Rebek consents to the inclusion in the report of the matters based on information in the form and context in which it appears

Galilee Basin Project

Please refer to ASX announcement by Guildford Coal Limited (ASX: GUF)

dated 8 February 2013.

To undertake exploration in the company's additional Maryborough Coal Basin EPCs for coal deposits with the potential to produce metallurgical coal:
• Two coal measures in Maryborough Coal Basin:
- Tiaro Coal Measures
- Burrum Coal Measures
• Large exploration area -8 granted tenements -
1,464 sq kms; and 6 tenements - 2,013 sq kms under application
Investment
To invest through equity participation in significant coal projects:
Galilee Basin
• 29.2% indirect interest in Galilee Basin Project with
Guildford Coal Limited (ASX: GUF)
• 677Mt Inferred JORC Resource
Clarence - Moreton Basin
• 55% Interest in Clarence-Moreton Basin Project with CM Basin Coal Holdings Limited
• Exploration Target 50-100 Mt
(see adjacent Exploration Target note)
West of Blair Athol & Clermont coal mines
• 50% interest in EPC 1262

Level 2, 131 Macquarie Street Telephone [phone]

Sydney NSW 2000 Australia Facsimile [phone] www.tiarocoal.com.au

Quarterly Activities Statement - page 2
CORPORATE
On 27 May 2013 Tiaro Coal Limited (Tiaro) held its Annual General Meeting. All resolutions put to the meeting were passed on a show of hands.
Paragon Coal (66.67%)
Paragon Coal is a subsidiary of Tiaro, the holder of 100% interest in EPC 956 and EPC 957. Paragon Coal's shareholders are listed on three international securities exchanges: ASX through Tiaro (ASX: TCM), HKE through Qinfa (HKEx: 00866.HK); and SGX through ICP Ltd (SGX: 536). Tiaro holds 66.67% of Paragon Coal; Qinfa holds a 19.88% interest in Tiaro.
Galilee Basin Project (29.2%)
Zhejiang Provincial Energy Group Co. Ltd continued its due diligence process to acquire Tiaro's interest in the Galilee Basin Project held by Clyde Park Coal Pty Limited (formerly White Mountain Pty Limited) (Clyde Park), the special purpose company holding 100% interest in EPC 1260 and EPC 1250 in Queensland's Galilee Basin Project. Tiaro's indirect interest in Clyde Park at the end of the June quarter was 29.2%. Tiaro holds its interest through Galilee Co Pty Ltd (Galilee). Under the terms of the Clyde Park shareholders agreement, Guildford Coal Limited has a first right of refusal, whereby it can acquire all the shares Galilee holds in Clyde Park on the same terms as those offered to a third party.
Clarence Moreton Basin Joint Venture (55%)
Tiaro holds a 55% interest in EPC 1270, 1271, 1272 and 1273, located in the Walloon Coal Measures of the
Clarence Moreton Basin. Minority interests have committed $2.5 million toward exploration expenditure.
PROJECTS
Tiaro holds interests in various Queensland projects covering coal prospects in the Maryborough, Clarence
Moreton, and Galilee Coal Basins and west of Blair Athol & Clermont coalmines.
Maryborough Coal Basin
The tenements cover most of the known exposures of the Tiaro Coal Measures within the Mesozoic Maryborough Basin, located between Gympie and Maryborough in southeast Queensland. The tenements are well serviced by nearby infrastructure, including manpower, mining support services, road, and rail and port facilities. The rail line bisects the exploration tenements.
Paragon Metallurgical Coal Project
87Mt JORC Resource (ASX: 7 May 2013)
RungePincockMinarco Limited (RPM) completed an updated geological computer model and report for the T9 West area (located within EPC 956) resulting in a JORC Resource Estimate of 87 million tonnes 1 (see Figures 1 & 2 for location).
This new estimate represented a 118% increase on the previous 40 million tonne Maiden JORC Resource Estimate for T9 Block A (now part of T9 West) announced on 25th May 2012 2, and has provided greater understanding of the stratigraphy of the Upper Tiaro Coal Measures in the proximity of T9 West.
RPM reported that there are no identified structural limits on the north and south of the T9 West Resource area and that it is likely that the seams continue along strike but that additional drilling would be required to extend these limits.
T9 - Shady Camp Exploration Strategy and Exploration Target 200 - 300 Mt (ASX: 9 May 2013)
As a result of work to date and the planned exploration programmes, Tiaro's Chief Geologist, Mr Jacob Rebek, has estimated a conceptual in nature Exploration Target of 200-300 Mt for two Priority Target areas adjacent to T9 West, located within EPCs 956 and 957, excluding T9 West area (with defined JORC Resource of 87Mt) (see Figure 2).
The potential quantity and grade of exploration targets is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Quarterly Activities Statement - page 3
Exploration in T9 - Shady Camp
The likely extensions of the T9 West coal sequence into the immediately adjacent areas have been prioritised as target areas for the next stages of exploration, as follows (also see Figure 2):
• Priority One Target area - north and south of T9 West
• Priority Two Target area - east and north east of T9 West
The exploration programmes will be designed to provide appropriate drill hole spacing to enable correlation of coal seams in the Priority Targets with the aim of estimating further JORC Resources. Diamond coring will be conducted, as well as in-fill drilling where necessary.
Drill hole locations for the Priority One Target area - north and south of T9 West are now being finalised with the aim of commencing drilling in 3rd quarter of 2013.
Mining Concept Assessment
Xenith Consulting has been commissioned to carry out a Conceptual Mine Planning Study for the Paragon Metallurgical Coal Project based on the T9 West JORC Resource area. A Preliminary Report is anticipated to be finalised in 3rd Quarter 2013.
Funding
Tiaro Coal has held discussions with interested parties towards securing funding for further exploration and technical assessment for the Paragon Metallurgical Coal Project. These discussions are anticipated to be completed in coming months with the aim of securing additional funding before the end of 2013.Additional Maryborough Basin Areas
There are additional areas for exploration within EPC 956 and EPC 957 and surrounding 100% Tiaro Coal owned tenements. These include T3, Gunalda, Netherby, Ooramera and Curra within EPCs 956 and 957 and Glenbar, Gundiah and Yerra within 100% Tiaro Coal owned EPCs. These areas have been defined by interpretation of geology, gravity, magnetic, radiometric and digital terrain data. Some already with a few shallow open and reverse circulation holes, others with no drill holes to date. (See Figure 1.)
These areas have not been included in above exploration target assessment as the anticipated exploration required to define Mineral Resources is currently a lower priority than T9 West - Shady Camp.
West of Blair Athol & Clermont coal mines (50%)
EPC 1262 is located approximately 20 kilometres southwest of the township of Clermont consisting of 218 sub-blocks (654 sq km); located in the Anakie Inlier, also known as the Anakie Metamorphics. It occurs between the large Permian aged Bowen and Galilee Basins. It covers ground to the west of the Bowen Basin and is centred approximately 30km from Blair Athol Mine operated by Queensland Coal Pty Limited a subsidiary of Rio Tinto.
Tiaro is currently reviewing the project area and is proposing a drilling program to further test the gravity lows in its program to discover coal seams similar to those at Blair Athol Mine (7 Mt marketable reserves at
12/20114) and Clermont Mine (177 Mt marketable reserves at 12/20115).
Outcrops of a conglomerate similar to that exposed on the edge of Blair Athol Basin have been found in gravity low areas in EPC 1262, confirming potential for coal discovery. Tiaro currently holds 50% interest in the tenement.

Quarterly Activities Statement - page 4

Table 1 - Tiaro Project indicative interests at 30 June 2013

Asset EPC's Area (km2) Ownership Target Coal Target/JORC Resource

Tiaro Coal

Measures

956, 957 387 66.7%

Coking / PCI / Thermal

87Mt JORC

200-300Mt

967, 972, 1553,

1540, 2899*

726 100%

exploration target ET

1,830 100% Coking / PCI / Thermal

n/a

378 29.2%

(64.4% owned by GUF)

Thermal 677Mt JORC

2,622 55.0% Thermal

0-100Mt exploration target ET

West of Blair Athol

& Clermont Mines 1262 327 50.0% Thermal n/a

Prospects for

development 2756, 2758* 534 100% Thermal n/a

ET Exploration Targets

The potential quantity and grade of exploration targets is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Quarterly Activities Statement - page 5

Figure 1. Tiaro Coal and Paragon Coal - Tiaro Area Tenements

T9 West Area

-..-...-. ----- - --- -

TIAR - C---L ·.

Quarterly Activities Statement - page 6

---------------------

Figure 2. T9- Shady Camp - JORC Resource and Exploration Priority Areas

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----------------- Quarterly Activities Statement - page 7

Figure3. Tiaro Exploration Projects June 2013

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LEGEND

c::::J Tiaro CoalMeasures c::::J Burrum CoalMeasures c::=l Galilee CoalBasin c::::J Clarence Moreton Basln

c::::J West of Blair Athol& Ciermont CoalMines

c::::J Between Bowen and Galilee CoalBasins