X MAY 2011 22 NOVEMBER 2012 2012 AGM PRESENTATION Rey Resources Limited (ASX:REY) provides a copy of the presentation made to shareholders at the Company’s Annual General Meeting today. ENDS For further information, please contact: Shareholders: Media: Kevin Wilson Richard Harris/Warrick Hazeldine Managing Director Cannings Purple +61 8 9211 1999 / kwilson@reyresources.com +61 8 6314 6300 / whazeldine@canningspurple.com.au 7886398/2 1
Kevin Wilson Managing Director AGM 22Nov 2012
Disclaimer Certain statements contained in this presentation, including information as to the future financial or operating performance of Rey Resources (“Rey”) and its projects, are forward looking statements. Such forward looking statements: may include, among other things, statements regarding targets, estimates and assumptions in respect of ore reserves and mineral resources and anticipated grades and recovery rates, production and prices, operating costs and results, capital expenditures, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions; are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Rey, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or r results reflected in such forward looking statements. Rey disclaims any intent or obligation to update publicly any forward looking statements, whether as a result of new information, future events or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “ bud get”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements. All forward looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein. The information in this report that relates to Exploration Results is based on information compiled by John Bridson who is a member of The Australian Institute of Mining and Metallurgy. Mr Bridson has sufficient experience to qualify as a Competent Person for the purposes of the December 2004 Edition of the“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (The JORC Code, 2004 Edition) . Mr Bridson is contracted as Exploration Manager with Rey Resources Limited and he consents to the inclusion in the report of the matters based on his information in the form and context in which they appear. The coal quality information in this report has been compiled under the supervision and reviewed by Mr. Andrew Meyers, who is a Member of the Australasian Institute of Mining and Metallurgy (Member since 1993) and Director of A&B Mylec Pty Ltd, metallurgical and coal technology consultants. Andrew Meyers has more than 20 years’ experience in coal processing for coal projects and coal mines both in Australia and ov erseas. With this level of experience, he is adequately qualified as a Competent Person as defined in the 2004 edition of the “Australasian Code for Rep orting of Exploration Results, Mineral Resources and Ore Reserves” (The JORC Code, 2004 Edition). Mr Meyers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 2
2012 • challenging environment • falling commodity prices, rising $A • weak financing market • rising costs • Duchess Paradise thermal coal project continues to advance through approval process • exploration - coal located in new areas • new shareholder ASF, 2 new board members • financed for 2013 exploration and permitting activities • partner search for Duchess Paradise ongoing • FINISHED YEAR IN STRONG CASH POSITION (~$11m November) 3
China Demand Expected to Grow ~1Bn tonnes by 2016 Imports Expected to Double 2011 - 2016 China Gross Coal Imports 400 - 450 • ~240 GW of coal-fuel generation expected to come 100- Met 110 on line by 2016 Thermal – represents >800Mtpa of 280 thermal coal use over 50 223 time 186 45 300- • 47 350 China reducing domestic 125 230 production; continuing to 35 178 close small inefficient mines 139 37 90 3 34 2008 2009 2010 2011 2012P 2016P Source: Peabody Global Analytics, China National Bureau of Statistics. 2008, 2009 imports exclude ‘other lignite’ product, no w reported in total import figures. Projections assume 7.5% China GDP growth, as outlined in 12 th Five-Year Plan. 4
Seaborne Supply: Australia and Indonesia Expected to Lead Growth 2011 – 2016 2016 2011 Total Exports Growth Exports Indonesia 319 130 – 160 450 – 480 140 – 160 420 – 440 281 Thermal Australia Metallurgical 93 U.S. 30 – 50 120 – 140 Russia 88 15 – 25 105 – 115 77 Colombia 35 – 45 110 – 120 67 South Africa 10 – 15 75 – 80 Total 2011 Exports: Canada 33 0 – 5 35 – 40 1,040 Mt 24 Mongolia 35 – 50 60 – 75 14 China (15 – 5) 0 – 10 44 Other 5 – 10 50 – 55 0 50 100 150 200 250 300 350 1,425 – 1,555 385 – 515 Source: Peabody Global Analytics; McCloskey and Wood Mackenzie. Data shown in million tonnes. Excludes land-based exports, except Mongolia. 5
US$/t NEWC benchmark 6300 gar Thermal coal prices- cyclical low 100 150 200 250 -50 50 0 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 6
Rey Resources’ Leases
Coal Reserves and Resources* • Mineral Resources of 305Mt in upper (P1) seam • Reserves of 26Mt in P1 for highwall mining • Resources represent only 25km of >300km of potential coal sub-crop in leases • 10 year mine life included in DFS • requires benchmark coal price > US$100/t * Detail and competent person statement appended 8
Regional coal potential
10% interest in 2 prospective Oil and Gas EPs 10
2013 activities • explore for JORC resources in 3 new key areas (access permitting) • Duchess Paradise Project – public process for PER – community consultation continues – complete TO negotiations – ML process underway • seek to bring partner into Duchess Paradise to fund costs at project level 11
Rey summary 100% Duchess Paradise thermal coal project 100% highly prospective Canning regional positions 10% free carried in prospective Canning oil & gas EPs project continues through permitting process in low coal price environment seek partner to fund costs on project exploration financed by cash through 2013
Kevin Wilson Managing Director www.reyresources.com 13
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