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Kangala project overview

Ownership

70.5%

Coal resource (JORC compliant)

24Mt Gross in-situ measured, indicated and inferred resource (48.7Mt measured)

Product

Eskom/5,400Kcal quality coal

Target development

• Targeting 3.0Mtpa production rate* Commences H2 2011

Project highlights

• Mining right: granted
• BFS: Optimisation being fi nalised – Q4/2011
• Production: 5 400Kcal/Eskom thermal coal
• Off-take discussions advanced
• Resources: Initial 48Mt measured resource
• Low cost: Life of Mine low-cost open pit operation
• Infrastructure: 14km west of Leeuwpan rail siding

Kangala is located approximately 65km east of Johannesburg, in the Witbank coalfield in Mpumalanga province, which supplies more than 50 % of South Africa’s saleable export and domestic coal.

The project consists of three properties; Wolvenfontein, Middelbult and Modderfontein, and contains thermal coal suitable for the domestic market. It is located near several coal-fired power stations and benefits from excellent road, rail, rail siding and power infrastructure.

The Kangala Coal Project contains an abundance of Seam 2 and Seam 4 which are the most widely exploited coal measures in the Witbank coalfield.

All of the coal at Kangala is expected to be accessible by open pit mining techniques.

Universal Coal submitted a tender in October 2009 to supply Eskom with coal from Kangala and has initiated preliminary discussion with a number of other local coal users. The Environmental Impact Assessment is complete and the Water Licence Application has been submitted for approval. Upon completion of the Bankable Feasibility Study (‘BFS), anticipated in H2 2011, Universal Coal will be eligible to apply for Domestic B grade sales.

* Subject to bankeable feasibility study