Ithra Esearch: White Energy Company

MITHRA RESEARCH
Taming the Divine Bull White Energy Company (ASX: WEC - A$2.70, OTC: WECFY.PK- $12.65)
Initiating Coverage with a Speculative Buy Rating
White Energys White Coal: The Right Technology at the Right Time
White Energy Company (WEC) owns the exclusive worldwide license to a patented coal upgrading technology developed by the Australian government. After expending approximately $100M in the acquisition and further development of the binderless coal briquetting (BCB) process, WEC is on the cusp of initial commercial production. The ubiquity of low-grade coal combined with the rising demand for coalfired power and depleting reserves of hard coals makes the proposition of enhancing the economic appeal of low-grade coals as a source of energy a very useful application. Agreements for three key projects have been signed: one in the U.S. with NRG Energy (NYSE: NRG- NR - $40.42) and two with Indonesian-based coal producers, PT Bayan Resources and the Adaro Group. A fourth relationship with Datang in China is in advanced stages. The companys strategic partnering is an integral platform in its initial global expansion plans, and ensures its economic participation in briquetting operations. Global Market Opportunity: Coal is the fastest growing source of energy and is projected to supply nearly 50% of the worlds energy by the year 2100 from a current level of approximately 25%(a). Technology Offers Tremendous Economics: White Energys BCB process can transform $5-$12/ton brown or sub-bituminous coal to have energy characteristics of $50-$80/ton bituminous coal. At the Cusp of Commercialization: The first commercial plant is scheduled for completion in 2008. Initial JV partner Bayan Resources has agreed to buy $215 million worth of upgraded coal over the first five years of operation. World-Class Support: Via a $35 million investment, BHP Billiton (NYSE: BHP NR - $77.05) has become White Energys global marketing agent. Keeping it Simple: The White Coal BCB process is wholly a mechanical one, requiring low energy intensity in the production of an upgraded binderless briquette: existing competing technologies are chemical and use a binding agent. Additionally, the commercial plants have modular designs and are highly scalable. Energy & Environmental Benefits: Sub-bituminous coal is lower in sulphur, ash, and nitrogen vs. hard coals; more efficient burns can further enhance reduced emissions; dramatically lowering the moisture content of the coal significantly reduces transportation costs; the BCB process results in lower dust production during handling and transport AND a water-resistant briquette that prevents spontaneous combustion. U.S. & Chinese Coal Markets Ideal Beneficiaries: The synergies White Energys BCB process can realize in the U.S. and China are particularly strong due to the huge deposits of sub-bituminous coal.
White Energy (ASX: WEC)
52-week range: A$3.34 - A$2.10

Capitalization (A$M M s) M kt. Cap + Total Debt + Min Int. - Cash = Ent. Value A$492.0 45.0 0.0 46.7 A$490.4
Div Yield:
Valuation Summary EV/Sales FY08E EV/EBITDA FY08E Debt/Tot Cap. Book Val/Share Cash Per Share:
0.0%
nm nm 38.5% A$0.56 A$0.36
Target Price/Ownership/Trading Profile Initial Target Price ADR Target Price Exchange Rate FD Shares Out (MMs): Institutional Ownership Insider Ownership Float (MMs) Short Interest as of Jan 28 2008 Avg. Daily Volume (on ASX) No. Thomson-First Call Analysts US$ A$5.85 $27.00 0.9213 182.2 na 34.0% 82.2 na 111,898 0 116.7% 113.4%
Note: FD shares out includes all outstanding options as if converted (41,174,124 shares) and $250,000 face value convert w/7.9% coupon convertible at A$3.44 per share maturing Dec 10, 2012. If all exercised, would generate A$70.3M to WEC.
Initiate Coverage with Speculative Buy Rating and 12-18 Month Price Target of A$5.85 (+117%).
Gary M. Goldstein
April 14, 2008
Mithra Research (201) 401-9360 Research@MithraResearch.com www.MithraResearch.com

Please refer to important disclosures on page 44
Laurie D. Goldstein, C.F.A.

Page 1 of 44
White Energy Company

Title
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Table of Contents
Page
Introduction: Welcome to a world that needs White Coal ........................................................ 3 The Energy Challenge ...........................................................................................................................3 Peak Coal? ...........................................................................................................................................4 Coal Is Still King ........................................................................................................................................6 Types of Coal ............................................................................................................................ 7 Hard Coals vs. Soft Coals ......................................................................................................................9 Mining Hard Coals vs. Mining Soft Coals ........................................................................................ 10 International Coal Trade & Transportation ..................................................................................... 11 Transportation Dynamics in the U.S. ................................................................................................. 12 Issues of Powder River Basin Rail Transportation .......................................................................... 13 Harmful Effects of Coal Burning .............................................................................................. 14 Coal Technology Lifecycle ............................................................................................................... 15 Benefits of the White Coal Technology .............................................................................. 15 Summary: The World Needs White Energys White Coal ................................................... 16 Company Overview ....................................................................................................................... 18 Overview of White Energys Binderless Coal Briquetting (BCB) Technology ............................. 18 Sub-bituminous Coal Briquetting: The Challenge ....................................................................... 19 History of White Energy and the White Coal BCB Technology ................................................. 19 The White Coal Briquetting Process ........................................................................................... 20 White Energy Management ........................................................................................................... 22 Business Strategy ............................................................................................................................ 23 Business Development Activities ................................................................................................... 24 Indonesia ................................................................................................................................................ 24 China........................................................................................................................................................ 24 United States ......................................................................................................................................... 25 Dynamics & Economics of White Upgrading Plants ..................................................................... 25 White Energy Financial Summary & Capitalization....................................................................... 27 Future Outlook ................................................................................................................................. 29 Appendix A: Test Matrix Summary Results ................................................................................... 30 Appendix B: Summary of Important News & Events .................................................................... 31 Appendix C: Coal Resource Classification System of the USGS ................................................ 34 Appendix D: Coal Characteristics ............................................................................................... 35 Appendix E: Coal Producing Regions in U.S. ............................................................................... 36 Appendix F: Glossary of Terms ..................................................................................................... 38 Footnotes / Sources of Information ................................................................................................ 42 Risks, Analyst Certification & Important Disclosures .................................................................... 44 Exhibits 1. World Electricity Generation by Fuel .......................................................................................... 5 2. World Energy Consumption & Electricity Generation ............................................................... 6 3. Main Applications of Coal .......................................................................................................... 7 4. Coalification Process and Rank ................................................................................................. 7 5. Types of Coal and Their Uses ...................................................................................................... 8 6. World Hard & Brown Coal Demand, 1980 2005 ...................................................................... 9 7. World Map of Hard and Brown Coal Deposits .......................................................................... 10 8. Map of Global Coal Trade Routes ............................................................................................. 11 9. Map of Coal Tons by Rail in U.S., 2002 ...................................................................................... 12 10. Coal Technology Lifecycle ......................................................................................................... 15 11. Benefits of White Coal .............................................................................................................. 16 12. Upgraded Coal Comparison ..................................................................................................... 20 13. Diagram of White Energys White Coal Binderless Coal Briquetting Process ...................... 21 14. Economics of White Coal BCB Plants ..................................................................................... 26 15. Map of U.S. Coal Producing Regions by Coal Type ................................................................. 37
April 14, 2008
www.MithraResearch.com
Gary M. Goldstein Laurie D. Goldstein, C.F.A.
Page 2 of 44

Introduction: Welcome to a world that needs White Coal
The proliferation of civilization has been our use of energy. As we learned to harness progressed from wood fires and steam our consumption of energy marches International Energy Association (IEA), the forms of energy has risen by 50% in the last at the top of our fossil fuel consumption.
Mithra Research
supported if not promoted by the growth in energy from the sources around us, we engines to diesel motors and jet engines. And relentlessly ahead. According to the global average per capita consumption of all 40 years alone. This trend continues, with oil
The current global energy mix consists of oil (35%), coal (25%), natural gas (21%), nuclear (6%), hydro (2%), combustible renewables & waste (10%), and renewable energy sources such as geothermal, wind and solar (1%). For most of the 20th century, oil transformed the modern world: it was cheap and abundant. However, energy demand is increasing at a rate never before seen. The price of crude was up almost 40% in 2007 and up 365% in a decade. At the root of the stunning rise in the price of oil is an unprecedented boom in the world economy. Since the beginning of 2008, the price of crude has at times surpassed its historic inflation-adjusted high, reached in April 1980 in the aftermath of the Iranian revolution. At that time, oil surged to the equivalent of $101.70 a barrel. With oil hovering around $100 a barrel now, the world is headed towards its third energy shock in just one generation. However, unlike past oil shocks which were caused by sudden interruptions in exports from the Middle East this time prices have been rising steadily as demand for gasoline grows around the globe. Demand from the Peoples Republic of China and India alone is expected to double in the next two decades as their economies continue to expand. The question is: how will the energy sector meet the anticipated growth in global demand over the long term? That is the energy challenge.
The Energy Challenge

More than any other country, the Peoples Republic of China represents the scale of this challenge. As it developed into a global economic behemoth over the past decade, the PRC (obviously) became a major energy user. Its economy has grown at a furious pace of about 10% a year since the 1990s. But rapid industrialization has come at a price: oil demand has more than tripled since 1980, turning a country that was once self-sufficient into a net oil importer and the second largest global consumer of oil behind the U.S. However, what to-date appears to have escaped world attention is the fact that the PRC the worlds largest producer of coal became a net importer of coal in 2007. India and China are home to about a third of humanity. People there are demanding access to electricity, cars and consumer goods and can increasingly afford to compete with the West for access to those resources. In doing so, these two Asian giants are profoundly transforming the worlds energy balance which remains dependent upon fossil fuels and despite investment in alternatives, will in all probability continue to be so for over the course of at least this century. Today, the PRC consumes only about a third as much oil as the U.S., which burns approximately a quarter of the worlds oil each day. By 2030, India and the PRC together are expected to import as much oil as the U.S. and Japan do today. Oil consumption in the U.S. was 21 million barrels a day in 2007 this compares to about 17 million barrels a day consumed in the early 1990s. If the Chinese and Indians consumed as much oil for each person as we do in the U.S., the worlds oil consumption would be more than 200 million barrels a day. !! This compares to the 84 million barrels it is today. More realistically, according to the IEA, global demand is expected to rise to about 115 million barrels a day by 2030. This is still a level that is likely to tax the worlds ability to pump more oil out of the ground.
April 14, 2008
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Peak Coal?
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There has been much research and debate surrounding what is termed peak oil production. Technology, driven by our enormous demand, has so far been able to compensate, and the production-to-reserve ratio has remained a fairly steady 45 years of oil production. Coal is a different story. When discussing the future availability of fossil energy resources, the conventional wisdom is that globally there is an abundance of coal that will allow for increasing coal consumption far into the future. This assumption is being challenged by recent studies published by two highly regarded organizations, the Energy Watch Group, and the Institute for Energy (which study was commissioned by the EU). To summarize the findings of these publications: 1) The supply base of coal is being continuously depleted. World proven reserves of coal are decreasing fast, unlike world oil and gas reserves, which are proportionally enhanced and are maintaining their levels. This is partially due to production it is also partially due to revisions in old, poor quality data. 2) The bulk of coal production and exports is becoming concentrated within a few countries and market players; 3) Coal production costs are rising steadily globally, due to the need to develop new fields, increasingly difficult geological conditions, and additional infrastructure costs associated with the exploitation of new fields. As reported by the Energy Watch Group in Coal: Resources and Future Production, March 2007(b) the timeline analyses of data suggest that on a global level the statistics overestimate the reserves and resources due to the poor quality of data. According to the group, the global sum in both reserve and resource changes have been downgraded over the past two decades at an extraordinary rate. The most dramatic example of unexplained changes in data is the downgrading of the proven German hard coal reserves by 99% from 23 billion tons to 0.183 billion tons in 2004. The World Energy Council noted in its 2004 Survey of Energy Resources(c) that earlier assessments of German coal reserves contained large amounts of speculative resources which are no longer taken into account. Poland has downgraded its hard coal reserves by 50% compared to 1997 and downgraded its lignite and sub-bituminous coal reserves in two steps since 1997 to zero. The Energy Watch Group goes on to point out that for some countries such as Vietnam proven reserves have not been updated for up to 40 years. The data for the Peoples Republic of China were last updated in 1992, in spite of the fact that about 20% of their then stated coal reserves have been produced since then, and another 1-2% have been consumed in uncontrolled coal fires. Bottom line? World coal resource assessments have been downgraded continuously from 1980 to 2005 by a whopping 50%. According to the World Coal Institute, world coal reserves (through production and data revision) have fallen from a 225-year supply to a 155-year supply. Peak Coal is a new term in todays world, but one likely to be seen more frequently. There is evidence of a sustained and tightening squeeze on global supplies of the coal needed to power the worlds coal-fired power stations as Asia embarks on a massive expansion of planned generating capacity based on coal. The Peoples Republic of China is bringing a new coal-fired station on stream every week to help keep the lights on and to power its frantic industrial growth. According to the IEA, The PRC plans to triple generating capacity to 500 gigawatts by 2030, and India is driving to triple its generating capacity by 2010. South Korea is adding 7.3 gigawatts over the next several years, and even Vietnam has announced that it plans to spend billions on coal power due to soaring economic growth. Even green Japan is adding 10 new coal-powered stations without decommissioning any of its existing ones. The U.S. Department of Energy projects annual global coal consumption to grow 2.5% a year through 2030 by which time world consumption of coal will be nearly double that of today. Driving this growth is the demand for electricity, outlined on the next page in Exhibit 1: World Electricity Generation by Fuel, 2004 and 2030. The pivotal problem is The Peoples Republic of China, which is fundamentally upsetting the market. It has become a net importer of coal for the first time. Until now, the PRC regularly exported between 80m 100m tons of coal, largely to South Korea and Japan, both of which are totally dependent on coal imports.
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Exhibit 1: World Electricity Generation by Fuel, 2004 and 2030

World Electricity Generation by Fuel, Bn Kilowatt Hours
2004 937 2,619 3,086 3,231 6,723 2030 % Change 1,178 25.7% 3,619 38.2% 4,804 55.7% 7,423 129.7% 13,650 103.0% % Share 2004 5.6% 15.8% 18.6% 19.5% 40.5% 100.0% % Share 2030 3.8% 11.8% 15.7% 24.2% 44.5% 100.0%
Oil Nuclear Renewables Natural Gas Coal
Total
16,596
30,674
84.8%
Source: Energy Information Association
And the PRC is going to have to import a lot more coal. The Peoples Republic of China may be the largest coal producer in the world, but it is facing increasing difficulties in supplying its own industrial south from its northern coal belt at competitive prices due to transportation costs and the low energy content of much of its coal. It has had to resort to importing coal in increasing volumes from Australia, India, Vietnam, Mongolia and even North Korea. But India, the worlds third largest coal producer, now needs more of its own coal and is beginning to import coal itself. Vietnam is under the same pressures. In fact, Vietnam is moving to curb exports to the PRCs Guangdong economic powerhouse region. According to the Sino Daily news, Vietnam, the biggest supplier of coal to China, will cut exports to its giant neighbor nearly in half in 2008 to meet rising demand from its own power plants.(d) Vietnam expects to reduce coal sales to the PRC to 13 million tons this year down significantly from the 24.6m tons of 2007. This situation is creating a scramble among Asian governments and power utilities to close long-term, fixed priced contracts with the mines. As it is, over half of global steam coal is traded via direct contracts between the power companies and the mines. An example of this scramble can be seen in Indias Tata Power, which acquired 30% stakes in Indonesias two largest coal mines(e) securing 50% of the 20 million tons of coal needed to fuel its 750 kilowatt project on Indias west coast. Indonesia is already the worlds largest exporter of steam coal it is striving to double output over the next five years and is finding investors to help it do just this. Interestingly, in January of 2008, Ras Al Khaimah (one of the United Arab Emirates) announced the formation of Ras Al Khaimah Minerals and Metals Investments (RMMI). The RMMI is an initiative by the Ras Al Khaimah Investment Authority (Rakia), the agency that oversees investment activities in Ras Al Khaimah. The RMMI was founded with the objectives of catering to the growing demand for industrial minerals and metal resources for various industries and; to identify opportunities in emerging markets such as Africa, Eastern Europe and the Far East. The investment potential for RMMI in these markets is estimated at $1 billion in 2008.(f) Even more interestingly, in February 2008, the RMMI announced it had signed a memorandum of understanding (MoU) with the government of Indonesias South Sumatra Province. According to GulfNews.com, The MoU covers the entire mining-to-export chain of the coal industry. It includes the building of an industrial park, captive power plants and supporting structure: The idea is to plan and develop a port along with supporting infrastructure in a manner that encourages economic growth. Madhu Koneru, Managing Director of RMI said, The MoU is in line with our commitment to develop minerals and metal networks around the world. We plan to invest more than $1 billion in 2008 towards the development of strategic resources and infrastructure projects in Asia and Africa. Notably, the Sumatran coal resources covered in the MoU are primarily sub-bituminous coal. The U.S. is often cited as the Saudi Arabia of coal. But it passed peak production of its hard coal reserves in 1990, and the remainder of its vast reserves are mainly in lower-quality bituminous and even lower-quality sub-bituminous coal and lignite, which due to the low energy content of the coal, are not economic to transport over long distances. Given the geological difficulties in developing new fields and the additional infrastructure costs entailed, the worlds supply of high-grade coal available at anything like todays operating costs is likely very limited. Important to note, just 53% of the worlds dwindling coal reserves are of the highest quality coals, bituminous and anthracite. April 14, 2008
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Coal Is Still King
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Despite being the ugly stepsister of the fossil fuels, coal is currently the worlds fastest-growing source of fuel. Global consumption grew 4.5% in 2006 and 5.7% in 2005.(g) In 2005, coal accounted for: 25% of all global fossil fuel consumption, 37% of fossil fuel emissions of carbon dioxide, 40% of global electricity generation, and 70% of fuel inputs to iron and steel smelting(h)
Coal is the lowest cost and most easily accessed energy source in the world. Used primarily in the electric power sector, coal is projected to supply over 50% of the worlds electricity by 2100. It currently fuels about 40% of electricity worldwide: in many countries, this figure is much higher: according to the World Coal Institute, Poland relies on coal for over 94% of its electricity; South Africa for 92%, China for 77%, and Australia for 76%. According to the Institute for Energy, policies to reduce carbon dioxide emissions have the potential to threaten coals dominance in the electric power sector in favor of less carbon-intensive natural gas. Carbon dioxide capture and storage (CSS) technologies hold promise in offsetting this switch, but this technology is still years away.(i)
Exhibit 2: World Energy Consumption & Electricity Generation
Source: World Coal Institute
The immense growth in coal consumption since 2000 (driven mainly by China) has not been matched by a corresponding development of proven coal reserves. From 2000 to 2005, world proven reserves-to-production ratio of coal dropped by almost a third, from 277 years to 155 years. Conversely, over the same period of time, the world proven reserves-to-production ratio of oil and gas remained essentially constant (45 years and 65 years, respectively), despite the large growth in demand. Of concern, record high coal prices in recent years have not yet stimulated development of world proven coal reserves: yet according to most agencies, coal is projected to be one of the energy sources with the largest growth in use worldwide up to at least 2030. This presents some market challenges.
April 14, 2008
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Exhibit 3: Main Applications of Coal
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Main Applications of Coal

Cement & Other 12% Residential & Agricultural 14% Metallurgy (iron & steel) 16%
Electricity & Heat Generation 58%
Source: The Future of Coal, Institute for Energy, February 2007
Types of Coal
Coal is a combustible organic rock composed primarily of carbon, hydrogen and oxygen. According to the British Geological Survey, Mineral Profile Coal (March 2007)(j) coal is composed of lithified plant remains. It is formed by the alteration of dead plant material that initially accumulates as a surficial deposit of peat and is then buried beneath layers of younger sediment. As the temperature rises, due to increasing depth of burial, the initial peat may be sequentially altered by the process of coalification through brown coals or soft coals, which include lignite and sub-bituminous coal, to black coals or hard coals that comprise bituminous coal, semi-anthracite and anthracite. Coalification involves the loss of water and volatile components (in the form of carbon dioxide and methane) and an increase in the carbon content from about 50% in peat to more than 90% in bituminous coal and 95-98% in anthracite. The position of any specific coal in the coalification sequence is described as its rank. For example, anthracite (hard coal) has a high rank, whereas lignite (soft coal) has a low rank.
Exhibit 4: Coalification Process & Coal Rank
Source: Australian Coal Association
April 14, 2008
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When expressed in carbon content per energy unit, coal is the fossil fuel with the highest carbon intensity. The other components of coal are hydrogen (3-13%), oxygen, and small amounts of nitrogen, sulphur and other elements. Coals contain different proportions of water and inorganic matter that remain as residue (ash) upon burning.(k) Low rank coals, such as lignite and sub-bituminous coals, are typically softer, friable materials with a dull, earthy appearance; they are characterized by high moisture levels and a low carbon content, and hence a low energy content. High rank coals are typically harder and stronger and often have a black vitreous luster. Increasing rank is accompanied by a rise in the carbon and energy content and a decrease in the moisture content of the coal. Anthracite is at the top of the rank scale and has a correspondingly higher carbon and energy content and a lower level of moisture. Each coal class has a range of energy content. According to the IEA, the following classification is most common: Anthracite: Bituminous: Sub-bituminous: Lignite: 30 MJ/kg 18.8 29.3 MJ/kg 8.3 25 MJ/kg 5.5 14.3 MJ/kg
Exhibit 5: Types of Coal and Their Uses
Source: World Coal Institute
Anthracite is the highest rank of coal; used primarily for residential and commercial space heating. It is a hard, brittle, and black
lustrous coal, often referred to as hard coal, containing a high percentage of fixed carbon and a low percentage of volatile matter. The moisture content of fresh-mined anthracite generally is less than 15 percent. The heat content of anthracite ranges from 22 to 28 million BTU per short ton on a moist, mineral-matter-free basis. The heat content of anthracite coal consumed in the United States averages 25 million BTU per short ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter). Note: April 14, 2008
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Since the 1980's, anthracite refuse or mine waste has been used for steam electric power generation. This fuel typically has a heat content of 15 million BTU per short ton or less.
Bituminous coal is a dense coal, usually black, sometimes dark brown, often with well-defined bands of bright and dull material, used primarily as fuel in steam-electric power generation, with substantial quantities also used for heat and power applications in manufacturing and to make coke. Bituminous coal is the most abundant coal in active U.S. mining regions. Its moisture content usually is less than 20 percent. The heat content of bituminous coal ranges from 21 to 30 million BTU per ton on a moist, mineralmatter-free basis. The heat content of bituminous coal consumed in the United States averages 24 million BTU per ton, on the asreceived basis (i.e., containing both inherent moisture and mineral matter). Sub-Bituminous coal is a coal with properties that range from those of lignite to those of bituminous coal and used primarily as fuel
for steam-electric power generation. It may be dull, dark brown to black, soft and crumbly, at the lower end of the range, to bright, jet black, hard, and relatively strong, at the upper end. Sub-bituminous coal contains 20 to 30 percent inherent moisture by weight. The heat content of sub-bituminous coal ranges from 17 to 24 million BTU per ton on a moist, mineral-matter-free basis. The heat content of sub-bituminous coal consumed in the United States averages 17 to 18 million BTU per ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter).
Lignite is the lowest rank of coal, often referred to as brown coal, and is used almost exclusively as fuel for steam-electric power
generation. It is brownish-black and has a high inherent moisture content, sometimes as high as 45 percent. The heat content of lignite ranges from 9 to 17 million BTU per ton on a moist, mineral-matter-free basis. The heat content of lignite consumed in the United States averages 13 million BTU per ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter).
Hard Coals vs. Soft Coals

Large variations in coal composition determine the type of coal available for different applications. The main quality parameter for coal is the carbon/energy (the higher the better), followed by considerations of moisture content (the lower the better). As outlined earlier, world reserves of low rank and hard coals are quite similar (47% and 53%, respectively) but their consumption trends are quite different. The world consumes far more hard coal than brown coal, and that gap is growing. (Please refer to Exhibit 6: World Hard & Brown Coal Demand, 1980 2005, below). According to the World Coal Institute, coal transportation costs can account for up to 70% of final delivery costs. Thus the transportation of hard coal over long distances could make economic sense under certain conditions, but to-date it has not been economically feasible to even consider transporting low-grade coal over any serious distances due to its relative (lack of) energy content. Because of this, the logistics of the two markets have been quite different, with low-grade sub-bituminous and brown coals being consumed either on-site (at minemouth power plants) or within a short distance of the coal field.
Exhibit 6: World Hard & Brown Coal Demand, 1980 2005 (Million Tons)
World Hard & Brown Coal Demand 1980 - 2005
6000 5000 Million Tonnes 4000 3000 2000 1000 0 1980 1990 2000 2001 2002 2003 2004 2005 Hard Coal Brown Coal
Source: Institute for Energy
April 14, 2008
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Mining Hard Coals vs. Mining Soft Coals
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Depending upon the geology of the deposits, coal is mined in one of two ways: surface mining or deep mining. Surface mining is economic when the coal seam is relatively close to the surface: it allows for very high coal recovery rates from deposits 90% and more. Surface mining, with its much lower operating costs, is most often appropriate for lower-quality coal types, e.g. sub-bituminous and lignite. In hard coals (bituminous and anthracite), deep mining accounts for approximately two-thirds of all mining operations. The recovery rates in deep mining are much lower than those for surface (open-pit) mining: from 50 60% for lower-technology operations and around 75% for higher-technology operations.(l) While lower quality coals are almost universally less costly to mine, the problem is that the energy content of lignite and subbituminous coals ranges from 20% to 60% lower (measured as BTU per pound) than their bituminous counterparts. Thus these coals generally do not justify the transportation costs for moving them over any real distance.
Exhibit 7: World Map of Hard and Brown Coal Deposits
April 14, 2008
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International Coal Trade & Transportation
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According to the EIA, internationally traded coal made up 15% of total world consumption in 2004. In the EIAs IEO2007 reference case, world coal trade is projected to grow at an average annual rate of 1.5%, from about 18.4 quadrillion BTU in 2005 to 26.5 quadrillion BTU in 2030. Because the largest increases in coal consumption through 2030 are projected for Asia China in particular the share of coal traded as a percentage of global consumption is projected to fall to 13% in 2030. Australia is the worlds largest exporter of coal. Japan is its largest customer (about 45% of all exports) and Europe is its second largest customer (about 15%). Australia also exports to South Korea, Taipei, and India. Indonesia (with a relatively small coal resource base) in recent years has become the worlds second largest coal exporter (about 16% of coal export trade). Major customers are Japan, Europe, South Korea, and Taipei. Russia, the third largest exporter, sends most of its coal exports to Europe. South Africa, the fourth largest exporter, also sends most of its coal exports to Europe.
Iron and steel making require coal with very specific properties: this type of coal is coking coal, and because of its qualities is far more expensive than steam coal. According to the Institute for Energy, world demand for coking coal is about nine times smaller than world demand for steam coal, and world trade in coking coal is less than half the world trade in steam coal. The players in the world coking market are very few, and the trade itself is concentrated in the Pacific region. On the supply side, Australia is basically the key supplier, responsible for more than 50% of world coking coal exports. On the demand side, Japan accounts for 30% of imports, followed by South Korea and India, each responsible for approximately 10%.(m) World steam coal trade has more than doubled since the beginning of the 1980s, rising to approximately 815 million tons. According to the German Utility RWE, If the year-on-year growth rates of the recent past of 6% - 8% continue, the annual demand for seaborne hard coal trade could reach one billion tons in 2010.(n) With a 20% share currently, coal accounts for a significant portion of the dry cargo segment of the world freight market. As outlined earlier, minimizing transport costs is paramount for the competitiveness of suppliers to the world coal market.
Exhibit 8: Global Coal Trade Routes
World Coal Exports: 815 mmt
Source: Energy Information Agency, Coal Information 2007.
April 14, 2008
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Transportation Dynamics in U.S.
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Exports of coal from the U.S. are currently around 50 million tons, a little less than half of the record export tonnages transported in the 1980s. Exports are expected to decrease in the future, primarily due to the anticipated availability of low cost coal supplies from South America, Asia and Australia. In fact, the EIA reference scenario predicts that the U.S. share of the total world coal trade will fall from 6% in 2003 to 3% in 2025. At the same time, U.S. imports of low-sulfur coal are projected to grow, from the current 28 million tons to almost 90 million tons by the year 2030. According to the EIA, the potential need to meet tighter emissions targets may make coal imports an attractive option for coal-fired power plants in the Gulf Coast and Atlantic seaboard areas. According to the EIA, the national transportation network should not be challenged by these predicted export and import trends. Transloading terminals on the Gulf Coast and the Atlantic seaboard have adequate capabilities for managing such traffic, and they have managed increased volumes in the past. Notably, reversing or shifting the flow direction from export to import may present logistical and operational problems for the transportation infrastructure, principally the railroads. Most of the coal delivered to U.S. consumers is transported by railroads, which accounted for 64% of total domestic coal shipments in 2004. Trucks transported approximately 12% of the coal consumed in the U.S. in 2004, mainly in short hauls from mines in the East to nearby coal-fired electricity and industrial plants. A number of minemouth power plants in the West also use trucks to haul coal from adjacent mining operations. Other significant modes of coal transportation in 2004 included conveyor belt and slurry pipeline (12%) and water transport on inland waterways, the Great Lakes, and tidewater areas (9%). Gulf Coast lignite is generally transported over very short distances to minemouth power plants; Appalachian and Illinois Basin coals are typically transported over somewhat longer distances from mine to market, and according to the National Coal Council, coal mined in the Powder River Basin may travel distances ranging form less than 100 miles to more than 1,500 miles before it reaches the user. Of note, rail is particularly important for long-haul shipments of coal, such as the transport of sub-bituminous coal from mines in the Powder River Basin to power plants in the eastern United States. In 2004, rail was the primary mode of transportation for 98% of the coal shipped from Wyoming (the Powder River Basin) to customers in other States.
Exhibit 9: Coal Tons by Rail in U.S., 2002
Source: Coal: Research and Development to Support National Energy Policy (2007)
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Under the EIAs reference case forecast (EIA 2006) all transportation modes particularly railroads will be called on to transport more coal for longer distances to both existing and new markets. This forecast projects that Appalachian coal production will increase slightly (2%) between 2004 and 2030, production from the interior will increase by 135 million tons (92%), and production from the rail-dependent West will increase by 435 million tons (76%). Accordingly, future growth in coal use will depend on the availability of sufficient rail capacity to deliver increasing amounts of coal.
Issues of Powder River Basin Rail Transport

Demand for transport of coal has increased markedly in recent years: this is especially the case in the West, where the tonnage of coal transported on the line jointly operated by BNSF Railway Company (BNSF; NYSE:BNI NR - $93.19) and Union Pacific Corporation (NYSE: UNP NR - $130.21) to serve the southern Powder River Basin coal fields (the PRB Joint Line) increased from 19 million tons in 1985 to 415 million tons in 2005. The PRB Joint Line is a 103 mile long subdivision with more than 295 miles of track due to double and triple track segments. There are 10 coal mines operating along the Line that are jointly served by both BNSF and UNP: these 10 mines produced the 415 million tons of coal transported by the PRB Joint Line in 2005. Coal Dust During Transport On May 14 2005, BNSF experienced a train derailment along the line. On May 15, 2005, UNP experienced a train derailment along the line. The derailments were due to a combination of heavy rain and snow combined with accumulated coal dust in the roadbed that led to track instability. The derailments damaged all three main lines on what is the busiest rail transportation corridor in the world (in terms of tonnage moved). All coal shipments were halted
Source: BNSF Presentation, 2005 (o)
temporarily. Since that time, rail shipments of coal to electric utilities have been reduced throughout most of the Midwest, Southern Plains and Rocky Mountain regions. The railroads embargoed new customers on the PRB Joint Line in order to keep volumes down. UNP, for example, did not make offers for new PRB coal customers, thereby reducing competition for expiring contracts, until almost two years later when UNP lifted its embargo on new customers along the PRB Joint Line on March 27, 2007. According to the EIA, In 2005, as higher records of coal movement were set on the Joint Line, the railroads were unable to keep pace with the magnitude of coal dust falling into the material [that acts as a shock absorber and as a drainage mechanism for rainfall and to avoid standing water], and the roadbed degraded. According to a subsequent study, BNSF reported that results indicate that coal dust accumulation in the ballast at select switches range from 0.5% to 30%. The lower percentage values came from previously cleaned switches. The study results also demonstrated that the ballast/coal mixture has the capacity to retain water, lose compressive strength, and ultimately cause track surface irregularities. The
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accumulation rates range from 75.2 pounds per year to 93 pounds per year. The estimated volume of coal deposited on the PRB Joint Line from coal dust during transportation is more than 84,000 cubic yards over 103 route miles. Coal Dust Accumulation on Rail Tracks In 2005, PRB coal was delivered to electric utilities and independent power producers in 36 states. Delivered price of coal to electric utilities is significantly more than the mine-mouth price. According to the EIA, in 2005, the average price of coal delivered to electric utilities was $31.22 per ton this compares to the average price of $7.71 per ton for the PRB coal at the mine mouth. Transportation charges account for the vast majority (75%) of the delivered price of PRB coal. The further the coal is shipped, the higher the delivered price. In 2005, coal delivered to Wyoming electric utilities was twice the price of the PRB mine-mouth price. PRB coal delivered to Ohio utilities was almost five times higher than the PRB mine-mouth price at $37.00 per ton. Coal shipments to Florida were over seven times higher than the PRB mine-mouth price, $55.76 per ton.(q)
Source: BNSF Presentation, 2005 ( p)
Rail rates fell from 1984 to 2003, due in part to deregulation and offloading of shortlines that had higher costs relative to traffic. However, since 2003, rail rates have escalated with demand and as excess rail capacity has shrunk. In 2006, PRB coal deliveries increased 10%, reaching 457.5 million tons. Coal deliveries in 2007 were expected to grow another 3% to 472 million tons. In 2006, BNSF loaded a total daily average of 49.7 trains in the PRB, up 10.4% from the 45.0 average daily PRB coal train loading in 2005. Average BNSF train loadings for PRB continue to increase, setting new records each month. September 2007 average daily loadings of 52.4 coal trains exceeded the previous monthly record of 51.8 trains per day in December 2006.(r) Demand for Powder River Basin coal is growing, straining the ability of the rails to deliver the product. Derailments due to dust accumulation highlighted the problem, and consumers of PRB coal paid for the problem in terms of missed deliveries and rising costs. Clearly a solution that lowers transport costs, both directly and indirectly (as in lower dust accumulation problems), could be very valuable to both mine operators and particularly to coal consumers.
Harmful Effects of Coal Burning

Combustion of coal, like any other compound containing carbon, produces dioxide (CO2) and nitrogen oxides (NOX) and sulphur dioxide (SO2) in varying amounts depending upon where it was mined. Sulphur dioxide reacts with oxygen to form sulphur trioxide (SO3), which then reacts with water to form sulfuric acid. Sulfuric acid is returned to earth as a form of acid rain. Emissions from coal-fired power plants represent the largest source of carbon dioxide emissions, an environmental concern. Since the carbon content of coal is much higher than oil, burning coal is a more environmentally challenging issue. Modern power plants utilize a variety of techniques to limit the harmfulness of their waste products and improve the efficiency of burning, though these techniques are not widely implemented in some countries as they can add significantly to the cost of the power plant. To reduce CO2 emissions from coal plants, many technologies have been applied, but there is still a long way to go to zero-emissions coal-fired power plants. Carbon capture and storage (CSS) technology is in development stages, but is not yet commercially viable. Many OECD countries are examining zero-emission policies and targets. The reality is a long way off. Clean coal technologies include improved combustion efficiency and reduced emissions in conventional sub-critical, new super-critical and new ultra supercritical power plants; integrated coal gasification combined cycle and pressurized fluidized bed combustion; integrated coal
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gasification fuel cells; new approaches to carbon capture and storage; and the production of hydrogen from coal will likely play a large part in the transition to a hydrogen-based future. Notably, the world has very large reserves of coal that are low in pollutants such as sulphur and ash but are not exploited because of their low energy content and transportation economics. White Energys coal upgrading technology can make these coal deposits more economically viable.
The Coal Technology Life Cycle

There are two clean coal technology pathways or technology routes for coal preparation and utilization for electricity generation. The two primary pathways include combustion and gasification. In the technology lifecycle, White Energys White Coal technology process facilitates these pathways, focusing on upstream coal cleaning or coal cleaning as a front-end option that would reduce emissions by enhancing the combustion process. As the coal technology lifecycle evolves and coal becomes increasingly cleaner, the White Coal technology can facilitate efficiency improvements, advanced technologies and the drive to zero emissions. Please refer to Exhibit 10, Coal Technology Lifecycle, below.
Exhibit 10: Coal Technology Lifecycle
Source: White Energy Company, Ltd.
Benefits of the White Coal Technology

White Energy offers a solution to upgrading low energy and grade black or brown coals (lignite, sub-bituminous and some bituminous coals) so that they can be upgraded in quality, briquetted, transported efficiently and safely (without combusting) and so that they create less damage to the environment (less dust released into the environment during transportation, and lower noxious emissions per energy content when burned). White Energys White Coal technology process upgrades low value coals by significantly reducing the moisture level and agglomerating undersize or friable coals into physically and chemically stable, dense briquettes that can be handled, transported and utilized like normal coals. Commercially, the key advantage of White Energys White Coal technology is that with its use, a potentially large number of low-quality, high moisture coal deposits worldwide have the potential to become economically viable. Please refer to Overview of White Energys White Coal Binderless Coal Briquetting (BCB) Technology, page 18, and Exhibit 11: Benefits of White Coal Technology, on the next page.
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Exhibit 11: Benefits of White Coal Technology
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Source: White Energy Company Ltd.
Summary: The World Needs White Coal

World demand for coal is growing steadily. Hard coals are depleting more rapidly than soft coals; there is no immediate threat to our ability to commercially access the coal we need to fire our power plants globally, but demand for higher quality hard coals is increasing at a more rapid rate as coals share of fossil fuel usage continues to grow in step with the growth in electricity demand globally. Transportation costs of low quality coals can be prohibitive, reducing the economic viability of a needed global resource. Coal market dynamics are changing: large consumers, such as the Peoples Republic of China and India, are changing the dynamics of the energy markets the coal markets in particular and have begun to seek out new sources of supply. Countries in fossil-fuel rich regions, like Ras Al Khaimah, are acknowledging their need to seek out new energy investments, and are making large investment commitments to minerals like coal and sub-bituminous coal is beginning to gain attention in world markets. Coal needs to be clean to be viable. There is an increasing emphasis on decreasing emissions. Around the world, emissions of CO2, SOx, NOx, and Hg are coming under increased regulation. White Energy has a technology that represents a first step in building a cleaner coal solution. White Energys coal upgrading process removes coal moisture and improves heat content and quality while essentially retaining the parent coals lower emission profile.
One of the greatest challenges to the growing demand for coal is going to be the problem of economically transporting it between producing regions and points of consumption. According to current data, there are approximately 909 billion tons of coal reserves globally. Approximately 430 billion tons of these reserves (47%) are in the form of sub-bituminous and brown coals. These coals are high in moisture and low in energy content. This renders them economically and environmentally inefficient: though easy and economic to mine, they are difficult and expensive to transport over long distances. The moisture content of sub-bituminous coals typically ranges between 20% and 35%. In terms of transport that means that for every three rail car loads of actual energy-producing coal, there is about one rail car load of water. Moisture content in younger brown coals can be as high as 50%. When used in a coalfired power station, this water will absorb energy released by the coal combustion, turning it into steam before any energy is available for use in power generation. In addition, the presence of moisture leads to lower flame temperature, which results in less efficient heat April 14, 2008
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transfer in the power station boiler. Unless the coal has some very special property such as low sulphur sub-bituminous coal in the U.S. market or low sulphur and ash sub-bituminous coal from Indonesia, currently its market (economic viability) is limited. If the moisture content in lower grade fuels can be reduced at an economic cost and product stability against spontaneous combustion achieved (please refer to Sub-bituminous Coal Briquetting: The Challenge, page 19), then lower grade sub-bituminous and brown coals would be able to compete in the markets currently dominated by higher grade bituminous steam coals with economic and environmental benefits. White Energys White Coal technology does just this. It is the right technology at the right time.
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Company Overview
White Energys binderless coal briquetting technology enables a commercially viable and economically attractive coal energy arbitrage by increasing the utility of widely available but low-energy output sub-bituminous coal. White Energy Company (WEC) owns the exclusive worldwide license to a patented coal upgrading technology developed by the Commonwealth Scientific and Industrial Research Organization (CSIRO), a research organization sponsored by the Australian government. The White Energy process has been successfully tested on coals around the world including Indonesia, Australia, South Africa, South America, China, and the United States. The company also has four nickel sulfide exploration projects located in Western Australia that we expect to be divested.
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enables a coal energy arbitrage by increasing the utility of widely available, but low energy coal. The recharacterization of the coal undergoing the process results in benefits including: Higher energy content: demonstrated to produce approximately 11,000 BTU/lb (6,200 kcal/kg) coal briquettes from approximately 8,000 BTU/lb (4,500 kcal/kg) sub-bituminous coal an increase of 37.5% in heat energy output; Easier, cheaper, and safer transportation: reduced moisture (relative reduction of 74% - 81%) content leads to drop in load volumes by 20% - 30% and a corresponding drop in transportation costs (per energy content); Low dust creation during handling: The briquettes can be handled and transported as normal coal and does not generate excessive fines; Lower ash and sulphur per energy content: The increased energy value leads to more efficient burning of the briquetted product, and the higher value energy release with lower carbon emissions results in the potential for carbon credits; Uniform size resulting in more efficient burns: briquettes have a controlled and consistent size and chemistry and as a result the coal burns more efficiently and depending upon the plant using it, can result in lower maintenance costs. WEC briquettes have very little inner particle voidage: The briquettes produced from the process have a density greater than that of the original coal; Coal that is water-resistant: The low voidage also results in very low moisture re-absorption by the briquettes, preventing oxidation that can lead to spontaneous combustion. Reduces power utilities need to retrofit/install postcombustion emissions control equipment. Notably, a less moisture-rich coal in briquette form can be more efficiently packaged as cargo leading to more energy delivered per container. It also leads to a cleaner cargo in another way: less dust. Coal dust is a major source of railway track maintenance problems (please refer to Issues of Powder River Basin Rail Transportation, page 13) and community environmental complaints. Rail operators and local communities have increasingly demanded additional measures be taken to limit its release into the environment and its accumulation on tracks.
Overview of the White Energy White Coal Binderless Coal Briquetting (BCB) Technology
Reforming dried coal into larger lumps has been attempted for over 100 years. Past processes have had limited commercial success in producing a sufficiently stable product: the challenges have been to find a binder that is cheap enough to viably apply and produce lump coal that is easy to handle with limited risk of spontaneous combustion. White Energys White Coal technology process has met these challenges. White Energys White Coal BCB process transforms lowgrade coal into a physically and chemically stable, significantly higher value product via a patented mechanical process that uses no chemicals or binders. These virtues are largely attributable to removing moisture from sub-bituminous coal and, critically, keeping the moisture sealed out. After undergoing the process, the upgraded sub-bituminous coals can be handled, transported, and utilized like any other coal. Simply put, the White Energy White Coal technology process removes water from inexpensive low-grade coal, and keeps it out via the briquetting process. In other words, the technology April 14, 2008
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Sub-bituminous Coal Briquetting: The Challenge
Drying and briquetting sub-bituminous coal is not a new idea, but it has been a challenging one. The drying of brown coals followed by the stabilization of the product by briquetting has been successfully practiced for over one hundred years though the cost of such operations have not been commercially viable. However, the technology applied to these brown coals (such as rotary steam tube dryers followed by ram extrusion briquetters), has not been successfully applied to sub-bituminous coals. The physical characteristics of the sub-bituminous coals are such that they could not be formed into stable briquettes that had the strength to withstand handling and stockpiling and that were not highly subject to spontaneous combustion. At least one reason for this is that the sub-bituminous coals are much harder than brown coals and cannot be deformed into the desired shape at practical compaction pressures. The challenges of briquetting sub-bituminous coal include: Drying the coal while inhibiting combustion; Creating binderless briquettes OR creating briquettes with chemical binders that do not negatively impact coal performance or handling; Friability of briquettes created; Creation of dust during handling of briquetted coal; Spontaneous combustion of briquetted coal due to subsequent moisture re-absorption; Addressing all of the above in an economic model that supports commercial scale operations. Several attempts have been made at chemical modification to the dried coal in order to improve the stability of sub-bituminous coals, though it appears moisture reabsorption and dust creation remain challenges in the processing of sub-bituminous coal in these processes. As previously outlined, White Energys process has addressed all of these challenges by creating a binderless briquette that is physically and chemically stable, reduces water content of the coal to approximately 5%-8%, results in a strong briquette as measured by the industry standard drop test; a briquette that produces very little dust during handling and transport; and creates a dense briquette that is water-resistant, which characteristic is further enhanced by sealing the coals surface pores via the briquetting process. Ultimately, White Energys process produces a significantly cleaner coal as measured by several parameters, including less ash, nitrogen, and sulphur per energy content. And while burning upgraded coal in and of itself does not lessen carbon emission levels, the indirect gains made in transportation April 14, 2008
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efficiency (sub-bituminous coal ranges from 20% - 35% water content) leads to a proportional savings in the energy intensity required to deliver coal. In many plants, burning briquetted coal (which is uniform in size) also results in plant efficiencies. Finally, the sole byproduct of White Energys coal drying process is distilled water, another basic, if not precious, commodity. To date, White Energy has successfully tested numerous coals from around the world, including coals from Indonesia, South Africa, South America, Australia, China and the U.S. (Please refer to Appendix A: White Energy Sample Coal Test Matrix Results, on page 30).
History of White Energy and the White Coal BCB Technology

The White Energy binderless coal briquetting technology process has developed from the work of KR Komarek (one of the worlds leading manufacturers of briquetting equipment) conducted in the late 1950s. This work was follow up by TraDet Inc. (USA), a world authority on coal thermal drying in conjunction with the CSIRO (Australia). The CSIRO began development of the technology in 1993 by taking early reports of binderless briquetting and applying its knowledge of coal chemistry and processing to develop an understanding of the mechanisms necessary for binderless briquetting methods by which those mechanisms can be made to occur. It formed a group seeking expertise in dryer and briquetting technologies. Development then progressed through laboratory-scale work at the CSIRO and initial pilot scale work in the USA, through a 0.2 tonne per hour pilot plant at CSIRO, a 3 ton per hour development plant in the USA and finally a 10 tonne per hour development plant in Collie, Western Australia. The 10 tonne per hour development plant was built by Griffin Coal (Australia), operated from 1997 to 2005 and was the basis on which most of the patented intellectual property was developed. Griffin Coal is a major miner of sub-bituminous coal in Western Australia. The aim of the development plant was to demonstrate the binderless briquetting of Collie sub-bituminous coal. Scale-up of the process to this plant proved to be far more complex than had been anticipated: the exercise became a sixyear development project in which key features of the White Coal Technology process were developed and the design of commercial scale elements, particularly at the briquette presses, were proven. Achieving quality briquette production at a small scale (production rates of less than 1 tonne per hour) was one thing, but achieving these same features at commercially relevant Page 19 of 44

production rates required the slow and costly development of subtle design and operational features. It involves the specific way that the coal is dried and the way in which the coal particles are brought together during compaction so as to form intimate coal-to-coal bonds. In April 2005, Binderless Coal Briquetting Company Pty Ltd. (BCBC) acquired the exclusive global rights to the underlying technology, owned in equal parts by the CSIRO, TraDet Inc., KR Komarek, Inc., and Griffin Coal. BCBC is a wholly-owned subsidiary of White Energy Technology Ltd, which in turn is a fully-owned subsidiary of White Energy Company, Ltd. White Energy became a public company in June 2006 via a reverse merger with an associated name change (formerly Amerod Resources). Since acquiring the White Coal Technology, White Energy has developed the process further with innovations around plant design, improvement in processes, development of process models for dynamic simulation, finite element analysis of briquetting machine, design of unique coal dryer and product cooling system and development of plant control logic and software. In order to assess the behavior of a new customers coal in the White Energy BCB process and so that potential end users of the White Energy technology may assess it in their furnaces, the customer will sometimes require large tonnages of product made from their own coal so they can have it assessed, before committing to have a commercial plant built. The size of these samples can be 10,000 tons or more. With this in mind, White Energy has just completed construction of its first commercial sized production plant in Cessnock, NSW in Australia that has an installed capacity of 90,000 tonnes per annum. This production plant allows proof of an effective scale-up of the proprietary binderless coal briquetting process, enabling testing and stockpiling of a wide range of low quality coals from different regions. The Cessnock production plant is expected to have completed its commissioning and subsequent commercial testing phases by June 2008 and should be fully operational immediately thereafter.
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The White Coal Briquetting Process
White Energys White Coal Binderless Coal Briquetting process is basically an evolutionary process that in its essence speeds the maturation of lower grade coals. The difference, of course, is that lower quality coals are not only lower in carbon content, they are also lower in sulphur and nitrogen, and White Energys White Coal BCB process does not increase the sulphur and nitrogen content. The upgrading technology significantly reduces the moisture content and improves the quality to higher energy levels characteristic of valuable bituminous coals while retaining the parent coals lower emission profile please refer to Exhibit 10, Upgraded Coal Comparison, below. Superficially, the White Coal Technology process that was finally developed looks like a simple combination of drying and briquetting but it incorporates key features which enable it to produce dense, stable briquettes where individual coal grains have been bonded to each other and formed into intimate contact, creating moisture-resistance. The fact that the process appears quite simple (and as a result, inexpensive) belies the fact that it has many years of development and substantial intellectual property integrated into many subtle aspects of it. Critically, White Energys BCB compaction process results in intimate contact between the coal particles and the elimination of nearly all voids. The resultant briquette has a high density and very low permeability, which is a key factor in providing stability, particularly against spontaneous combustion. The low voidage prevents the reabsorption of water, which causes the oxidation that can lead to spontaneous combustion. Further, the BCB process is a low energy intensity process that involves mild heating of the coal during the drying phase and produces essentially no change in the chemistry of the coal except for the removal of the moisture.
Exhibit 12: Upgraded Coal Comparison

Parameter Boiler Efficiency (%) Parasitic Load (%) Overall Efficiency (%) Nox (mg/Nm3) Sox (mg/Nm3) Ash Generation (kg/MWh) Sub-bituminous Coal 85.3 6.4 34.1 284 223 21.3 White Energy Upgraded Coal 89.4 5.7 36.3 280 169 17.3 Compare Australian Bituminous Coal 14% ash 89.5 5.9 36.1 454 1404 57.6
Source: White Energy Company Ltd. / BHP Billiton
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The process involves the crushing and drying of low rank coals in order to remove the coal water content (to approximately 5% 7% from 20% - 35%). White Energys compaction technology generates the close bonding between the dried coal particles. The process can also be used as a means of producing stable and transportable lump coal from unwanted undersized fractions of high energy bituminous coals. The binderless briquettes are just that binderless. The briquettes are held together by the natural bonding mechanism of coal; they do not require the binders normally used to briquette coal, which substantially reduces production costs. The drying process provides coal with the correct characteristics as an input to the briquetting process. Hot drying gases are produced through separate combustion of a small proportion of
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the coal (approximately 4% of the feedstock. Please refer to Dynamics & Economics of White Energy Upgrading Plants, page 25). The briquetting process is a purely mechanical procedure involving material distribution, compaction, cooling and storage. Very high compaction rates in the briquetter enable high production rates in an economically viable way. Again, what makes White Energys binderless coal briquetting process different and apparently more successful than other briquetting attempts is its ability to generate close bonding between the coal particles i.e. the application of the compaction force in such a way as to cause the particles to come into intimate contact and establish strong bonding between them.
Exhibit 13: White Energy White Coal Binderless Coal Briquetting Process
Source: White Energy Company Ltd.
In many applications, upgraded sub-bituminous coals would be used in a pulverized form, however, there are some applications, such as stoker furnaces and rotary kilns where it is important that lump form of the coal is maintained throughout the process. A problem regularly encountered with briquetted coal was that the binder in the briquette broke down prematurely leaving the briquette to revert to its original powder form. Even the parent coal can cause problems in these applications because most subApril 14, 2008
bituminous coals decrepitate as moisture is driven out of them during the heating and combustion process. Binderless coal briquettes rely on the same bonding mechanisms that exist in the lump coal, but because the moisture has already been removed, importantly they remain extremely stable during heating and combustion. One of the most severe applications from a thermal perspective is the COREX process, an alternative Page 21 of 44

steel making process where lump coal is fed directly into a very high temperature gasifier with temperatures in excess of 2,400F. Degradation of the coal in this process is of major concern, therefore a shock heating test is used to assess various feed coals. White Energys binderless coal briquettes produced from sub-bituminous coals and bituminous coals have been shown to perform very well in this test. When White Energys binderless coal briquettes produced from Australian Collie coal were plunged into a furnace preheated to this temperature, there was no loss of integrity of the briquettes and very little evidence of any degree of cracking. There was a reduction in the average size of the product, as the briquettes underwent an approximate 25% shrinkage.(s)
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infrastructure development projects in Australia, India, Indonesia and Papua New Guinea. Mr. Duncans experience includes the successful financing and development of projects such as the Piparwar coal mine in India and the North Goonyella coal project in Queensland. Mr. Duncan has played a key role in the White group of companies, most recently as Chairman of White Mining Limited, with a particular focus on advancing White Minings New South Whales projects. He leads a team in the development and commercialization of Ultra Clean Coal (UCC) technology, and he identified the Binderless Coal Briquetting process as a means of agglomerating Ultra Clean Coal for transport by conventional transport systems. Mr. Duncan is a major shareholder and Chairman of ASX listed coal company Felix Resources Limited. Darron Hitchings, Director of Operations & Infrastructure. Mr. Hitchings is a civil engineer with over 35 years of experience in civil engineering and mining projects in Australasia, Indonesia, Ghana, Tanzania, South Africa, Jamaica, South America, Hong Kong and Papua New Guinea. Mr. Hitchings led teams in the development and construction of large mining and associated infrastructure projects, including mineral processing. Some of these projects include the North Goonyella coal mine, Bengalon coal project Kaltim Pria Coal lease, Indonesia, gold mining projects in Ghana and Tanzania, and bauxite and copper mines in Jamaica and Chile. He has held senior management roles in major publicly listed mining and engineering construction companies. Ilyas Khan, Non-Executive Director. Mr. Khan is the Managing Director and head of Merchant Banking at Londonlisted Crosby Capital Partners and the founder and NonExecutive Chairman of Techpacific Capital, an investment holding company based in Hong Kong. Techpacific has interests principally in investment banking through Crosby Capital Partners and oil and gas production and exploration in the U.S. Through his ownership of Techpacific Capital, Mr. Khan is, indirectly, the largest shareholder of Crosby Capital Partners, an Asia-focused investment bank and the major shareholder of Japan-listed IB Daiwa Corporation, which produces and develops gas in the Gulf of Mexico. Mr. Khan is the major shareholder of MCS Music, one of Europes leading music publishing and royalty administration companies, and he is a Non-Executive Director of Speymill Properties, which owns and manages residential property through funds in Germany and Macau. Mr. Khan is also the controlling shareholder and founder of privately held Creative Work Limited, which invests in, owns and operates businesses that develop intellectual property in Asia. He is a former Managing Director at Nomura, based in Hong Kong, and he has more than 16 years of corporate finance and investment banking experience with financial institutions such as Citicorp and UBS.
White Energy Management

John Atkinson, Managing Director. Mr. Atkinson formerly managed Baker & McKenzie in Hong Kong, the firms largest office, where he specialized in mergers and acquisitions for 11 years; he is also the former chair of Baker & McKenzies global Major Projects Group. During his tenure at Baker & McKenzie, Mr. Atkinson advised a number of leading multi-national corporations on their corporate activities in Asia. He left Baker & McKenzie to co-found Hunter Bay Partners Pty Ltd., a boutique investment house in Sydney, Australia. Mr. Atkinson has been on the board of a number of public and private companies, and he is currently a Director of Krispy Kreme Australia and Jesters Pie Company. He is a founding shareholder of Krispy Kreme Australia and Little Creatures Brewing Company. Keith Clark, Director of Technology. Mr. Clark has over 35 years of experience in research & development in coal and mineral processing. Mr. Clark was a Senior Principal Research Scientist with the Commonwealth Scientific & Industrial Research Organisation (CSIRO), where he led the R&D program that developed the White Coal Technology process. He left CSIRO in 2002 to join WECL on various coal upgrading and clean coal technologies. Mr. Clark was a co-inventor and instigator of the patent covering the Binderless Coal Briquetting (BCB) process, the modified Ultra Clean Coal (UCC) process to produce gas turbine grade Ultra Clean Coal, and the inventor of the Coke BCB process. He was a key driver behind the development of the Binderless Coal Briquetting Company (now a subsidiary of White Energy Company Ltd.), and he helped form the multinational group that developed the process, determined its market direction, and secured its associated intellectual property and trademarks. Travers Duncan, Executive Chairman, White Energy Technology Ltd. Mr. Duncan is a civil engineer with over 30 years of experience in the management of large coal mining and
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John Langley, Director of Business Development. Mr. Langley has over 30 years of experience as Director and in the management of public and private mining and mining technology companies. Mr. Langley leads a team in the development and commercialization of the Ultra Clean Coal (UCC) technology, and he has identified the Binderless Coal Briquetting process as a means of agglomerating Ultra Clean Coal for transport by conventional transport systems. He is currently Non-Executive Chairman of IFC Capital Limited. Ivan Maras, Chief Financial Officer. Mr. Maras has been with White Energy Company Limited in the role of CFO since June 2006. He was previously employed by Hunter Bay Partners Pty Ltd., a boutique investment house in Sydney, where he managed the companys investments in Krispy Kreme Australia, Jesters Pie Company and Belaroma Coffee Company. Prior to joining Hunter Bay Partners, Mr. Maras spent 10 years in various financial roles with Consolidated Press Holdings Limited, a private investment company wholly owned by the Packer family. During his last four years at Consolidated Press Holdings Limited, Mr. Maras served as CFO of The Hoyts Corporation, where he was closely involved in the growth phase of the Hoyts Group; this initiative culminated in the sale of Hoyts to West Australian Newspapers and Publishing & Broadcasting Limited in December 2004. John McGuigan, Non-Executive Chairman. John McGuigan began his career at Price Waterhouse, then left that firm to join Baker & McKenzie, where he became Executive Chairman, ultimately supervising Baker & McKenzies worldwide operations. He spent 7 years at the Baker & McKenzie office in Hong Kong, where he played a key role in developing Baker & McKenzies presence throughout the Asia-Pacific region, in particular in Hong Kong and China, then spent another 4 years at the firms Chicago, IL office. Upon leaving the law firm, Mr. McGuigan co-founded Hunter Bay Partners Pty Ltd., a boutique investment house in Sydney, Australia. Mr. McGuigan has been on the board of a number of public and private companies, including a long association with various entities in the resources sector. He is also the Executive Chairman of Krispy Kreme Australia, and a Director of Jesters Pie Company and the Victor Change Cardiac Research Institute. Mr. McGuigan is a longterm investor in White Mining related coal ventures. Judith Tanselle, President North American Operations. Ms. Tanselle joined White Energy Company Ltd. from JM Energy Advisors, LLC, where she was principal of an energy consulting company specializing in advising U.S. based power companies and others involved in the competitive energy industry on risk management, portfolio optimization, project development and environmental strategy. Immediately prior to her time with JM Energy, Ms. Tanselle was an Executive Director of New Jerseys NRG Energy where she was responsible for managing their coal emissions procurement and April 14, 2008
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trading activities. She has also held the positions of Managing Director of Coal and Oil Trading for PG&E National Energy Group in Maryland, Vice President of Coal and Emissions Marketing for Missouri-based Aquila Energy, and Manager of Coal Trading at LG&E Energy Marketing in Louisville, KY. She currently serves on the Board of Directors for the Coal Trading Association (CTA), is a past member of the NYMEX Coal Advisory Committee and a past President and Director of the Lexington Coal Exchange.
Business Strategy
White Energys business strategy is extremely well thought through and is designed to ensure that the company leverages its investment in the White Coal binderless coal briquetting technology. Integral to the companys expansion plans, White Energy has structured a joint venture strategy that ensures its economic participation in briquetting operations. As opposed to just licensing the technology or selling briquetting plants to potential customers, the economics of the BCB operations are such that WEC is able to capitalize on its technology by partnering with what would otherwise have been its customers. All operational managers at White Energy come from the coal mining industry, bringing extensive industry experience to the table. With this expertise in mind, White Energy developed a two-pronged approach in its global marketing strategy: target both mining operations and end-user power companies to become its business partners in the development of its technology. White Energys coal upgrading technology provides significant potential benefits to both suppliers of coal and consumers of coal. By working both ends of the chain, White Energy further builds on its growing reputation as a solution provider. This approach gives White Energy much greater economic leverage, in that the joint venture not only provides White Energy with a return per ton of feedstock coal processed in the form of a royalty paid by the joint venture; it also enables White Energy to directly benefit from the arbitrage between the relative low cost of sub-bituminous feedstock coal it upgrades and the resultant sales price achieved for the higher energy bituminouslike coal it sells through its pro-rata share of the profits generated from the joint venture when selling the upgraded coal. North American / U.S. Opportunity. Notably, White Energy has a unique opportunity in the United States: The Powder River Basin contains the largest reserves of sub-bituminous coal in the world;
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Transportation of coal from the region accounts for approximately 75% of the cost of the coal to the end-user, and increases dramatically with distance: in 2005, PRB coal delivered to Wyoming electric utilities was twice the price of the PRB mine-mouth price; PRB coal delivered to Ohio utilities was almost five times higher than the PRB mine-mouth price, and PRB coal delivered to Florida were over seven times higher than the PRB minemouth price; Coal dust has now become such a serious issue for all concerned that an industry solution is being demanded. White Energys coal upgrading technology may be just the solution this market needs.
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Development Agreements Indonesia
PT Bayan Resources. Originally signed in 2006, the underlying terms of White Energys first commercial JV with PT Bayan Resources (51% owned by White Energy) were significantly improved in 2007. The parties agreed to increase the size and scope of the project from an annual output of 3 million tonnes of upgraded coal to 5 million tonnes, and Bayans annual offtake obligation of upgraded coal was increased from 500,000 tonnes up to a maximum of 1.5 million tonnes. The five-year commitment equates to an annual offtake obligation of approximately $215 million (after allowing for the rolling commissioning of each 1 million tonne module over the period). Construction of the first MTPA plant is underway, and initial production is expected to begin in the fourth quarter of calendar 2008. The Bayan Resources Group is the eighth largest coal miner in Indonesia. Bayan, through its affiliates, has the right to mine and operate various coal mines in East Kalimantan. Adaro Group and Itochu Corporation. White Energy entered into its second major JV transaction with the Adaro Group, one of Indonesias largest coal companies, and Itochu Corporation, a major Japanese trading house in January 2007. Under the JV, (51% owned by White Energy) the company will design, build and operate coal upgrading plants at Adaros coal mines in East Kalimantan. Financial and technical feasibility studies are nearly complete. The agreement is to build a 1 million ton per annum coal upgrading plant with the intention to increase that output to 8 million tons per annum.
Business Development Activities

The primary markets identified by White Energy are: 1) Indonesia. The sub-bituminous coal deposits of Kalimantan and Sumatra are seen as a key area of growth in meeting the shortages of the world supply of steam coals for the PRC and Indian markets. 2) China. China is both the largest producer and consumer of coal in the world and has become a net importer of coal. It has large reserves of sub-bituminous coal that are not currently economic to use and transport to the regions that need it to generate electricity. 3) North America. The Powder River Basin area is currently the largest sub-bituminous coal-producing region in the world with an annual output in excess of 400 million tons. The low sulphur Powder River coals have a very high moisture content (25% - 30%), resulting in reduced power generation capability and high transportation costs an excellent opportunity for White Energys White Coal BCB technology. White Energy is looking to ramp-up its North American presence in order to capitalize on the opportunities available working with American coal producers, particularly in the Powder River Basin. White Energy has four key agreements in place in these primary target markets. Construction of White Energys first commercial I million tonne per annum (MTPA) plant is underway at the Tabang mine in East Kalimantan, Indonesia. The company aligned itself with one of Australasias leading engineering procurement and construction groups, Thiess, to build, operate and maintain its binderless coal briquetting plants in Indonesia through a subsidiary, Thiess Indonesia. WEC currently has joint venture contracts in place to produce a targeted thirteen million tons of its patented BCB product per annum as outlined below. April 14, 2008
The Peoples Republic of China

Datang International Power Company Ltd. Datang Power is one of Chinas largest utility companies. Datang has signed a heads of agreement with White Energy to construct up to a 10 million tonne per annum operation at a Datang-owned subbituminous deposit in Inner Mongolia. Infrastructure approvals are now in place, permitting Datang to advance the project, which is now in the final feasibility study stages with negotiation of joint venture agreements likely to follow shortly. Further, having received all necessary approvals, in September 2007 White Energy announced it recently opened an office in Shanghai. The company appointed Joyce Zhou as its Chief Representative in China. Ms. Zhou previously worked for the Australian Government as an Investment Director for Invest Australia in Greater China. Before then, she was the Director of China for the International Copper Association. Page 24 of 44

United States
In March 2008, White Energy appointed Judith A. Tanselle as the President of its North American operations. Ms. Tanselle joined White Energy from JM Energy Advisors, LLC, where she was principal of an energy consulting company specializing in advising US based power companies and others involved in the industry on risk management, portfolio optimization, project development and environmental strategy. Please refer to White Energy Management, page 22 for further information. NRG Power Marketing and Buckskin Mining Company. In March 2008, White Energy entered into a development agreement with NRG Power Marketing, LLC (a wholly-owned subsidiary of NRG Energy Inc.) and Buckskin Mining Company (indirect wholly-owned subsidiary of Kiewit Corporation). The first phase of the development agreement is to complete a detailed feasibility study (funded equally by the parties) to evaluate the economic, technical and logistical viability of constructing a plant that is capable of producing at least one million tons of binderless coal briquettes at the Buckskin mine in Gillette, WY. Pilot plant tests conducted to date have concluded that Buckskins mine produces a sub-bituminous coal that is ideal for upgrading with White Energys White Coal binderless coal briquetting process.
Mithra Research
the drying process, for an energy arbitrage in feedstock-tofinished product of approximately 30%. This equates to a very efficient use of energy with just 4% of feedstock coal required to realize an average energy gain of 30% (or more please refer to Exhibit A: White Energy Sample Coal Test Results Matrix, page 30). Electric power is used to power motors, fans, grinder and briquetters. The electricity requirement to produce one tonne of briquetted coal varies depending upon the moisture of the feedstock coal, but again is energy efficient. In the process, the coal is ground to 3mm. The raw coal is flash dried in the drying column where the water is evaporated off. The raw coal feedstock is injected into the drying column, where it is rapidly dried for only a few seconds by coming into direct contact with the hot gas from the furnace. The moisture content of the upgraded coal is reduced to just 5% - 7% from 20% - 35%. The process does not affect the chemistry of the coal: no volatiles are released in the process. The process results in a briquette that is dense (with very low voidage). The specific gravity is an average of 1.33 for all ranks of coal. In relation to bulk density, this ranges from 0.75 to 0.8 tonnes per cubic meter. Notably, in the process all dust is captured and then used again as an input to the process; in addition, there is an additional dust is captured from the briquetting process, so there is no waste product, and there is very little dust escape at any point, and all dust captured is diverted back into the process. The only byproduct of the process is the water, which is evaporated off as steam. This distilled water has the potential to be captured. As an add on to the process, this could be an excellent proposition in arid areas where water is in short supply. White Energy is currently investigating the economics of implementing something like this. Clearly, the process is one of low energy intensity, contributing to the attractive economics. The plant footprint for a one million tonne per annum plant is 60 x 60 meters. However, if you also include stockpile areas for coal feed and upgraded product, a space of 200 x 150 meters is required. The plants are built in one million tonne modules. So if a 5 million tonne per annum plant is required, this would comprise 5 one MTPA modules. The space required is a multiple of the space required for the one MTPA plants, however the stockpiling areas could be combined.
Dynamics & Economics of White Energys Upgrading Plants

The White Energy upgrading technology enables a coal energy arbitrage by increasing the utility of widely available, but low energy coal. What is required to make that happen? The design of the plants is modular. They are constructed in one million tonne per annum modules. The modules include equipment for crushing, drying and briquetting the coal. The plant is run by an 8KW per hour coal-fired power plant. The requirements for each type of coal are different, but can be generalized. To produce 1 ton of upgraded, briquetted product, the process requires approximately 1.4 tons of feedstock coal (for a subbituminous coal with approximately 35% moisture content). Of the 1.4 tons of feedstock, 0.05 tons is used as fuel for the drying process (approximately 4% of the feedstock). Before upgrading the coal, the energy content of 1 ton of subbituminous coal equates to approximately 17 million BTUs; the upgraded product creates energy of approximately 22 million BTUs per ton. Based on upgrading the coal to 22 million BTUs per ton, WEC uses approximately 0.88 million BTUs per ton in April 14, 2008
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The process is effective and has been tested on a wide variety of coals with varying moisture contents ranging from 25% - 60%. After initial coal sample tests are performed, plants are then designed to accommodate the relevant moisture content of the feedstock coal with capacity for variation. Spontaneous combustion is a risk in stockpiling and transporting coal. Laboratory tests for spontaneous combustion of White
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Energys briquetted product have been successfully performed in Australia, Japan and the USA. In addition to the positive laboratory testing, an open stockpile of 5,000 tonnes of product was maintained for 18 months to demonstrate that the briquettes did not break down or undergo spontaneous combustion. This was performed at the earlier demonstration plant at Collie, Western Australia.
Exhibit 14: White Coal BCB Plant Economics

US$ Estimates Input cost - feedstock Input cost per upgraded ton (1) Processing Cost Core Plant Capital & Site Prep cost 8 MW Power Plant Capital Cost Handling/transport/maintenance (2) Total Cost Per Ton Basis $5.00 $7.00 $4.50 $4.50 $0.80 $16.00 $32.80 $6.00 $8.40 $4.50 $4.50 $0.80 $16.00 $34.20 $7.00 $9.80 $4.50 $4.50 $0.80 $16.00 $35.60 $8.00 $11.20 $4.50 $4.50 $0.80 $16.00 $37.00
Value Arbitrage per Ton of Upgraded Coal Sensitivity Table Value Arbitrage per Ton at cost of Selling Value of $5.00 $6.00 $7.00 $8.00 Upgraded Coal $50.00 $17.20 $15.80 $14.40 $13.00 $60.00 $27.20 $25.80 $24.40 $23.00 $70.00 $37.20 $35.80 $34.40 $33.00 $80.00 $47.20 $45.80 $44.40 $43.00
Core Plant Capital Cost (3) Site Prep (4) Total Capital Cost 8 MW Power Plant Capital Cost Life of Plant (5)
$30 million $15 million $45 million $8 million 10 years
Notes: These estimates are based primarily on the Bayan J.V. project, which due to the remote location of the plant has a very high site preparation cost.
(1) 1.4 million tons of feedstock coal is required to produce 1 million upgraded ton of briquettes. (2) Maintenance portion is approximately $500,000 per year. (3) Includes core production module for feedstock with moisture content up to 35%.
(4) Site prep is completely dependent upon topography and can vary significantly. (5) Life of plant and power plant should be well in excess of 20 years, but are depreciated
over 10 years.
April 14, 2008
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Agreements and Projects Pending:
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PT Bayan Resources JV: 51% owned by White Energy 5 MTPA plan Adaro Group & Itochu Corporation JV: 51% owned by White Energy 8 MTPA The signed JV agreements in place total 13 one MTPA plants in the two joint ventures in Indonesia. It is anticipated that these will be constructed over the next four years. U.S. development agreement with NRG and Buckskin Mining is in place; timing has not been disclosed, though feasibility studies are underway. Feasibility study with Datang International Power Company in China as it relates to sub-bituminous deposits in Inner Mongolia is in the final stages.
White Energy Company Financial Summary

A$000s
June FY
Consolidated Balance Sheet

12/31/07 6/30/07 6/30/06
Current Assets Non Current Assets Total Assets Total Liabilities (1) Net Assets Total Equity
56,769 75,251 132,021 60,119 71,902 71,902
18,411 67,482 85,892 8,423 77,469 77,469
6,700 59,126 65,826 4,411 61,415 61,415
(1) 12/31/07 Includes A$45 million convertible notes issued October 2007. Notes are convertible into ordinary shares at A$3.44 per share.
A$000s
June FY
Consolidated Statement of Cash Flows

YTD 12/31/07 6/30/07 6/30/06
Net Cash (outflows) from Operating Activities Net Cash (outflows) from Investing Activities Net Cash (outflows) from Financing Activities Net Increase (decrease) in cash & equiv Closing Cash & Cash Equivalents (2)
(2,593) (10,369) 45,236 32,274 46,652
(1,301) (12,700) 22,509 8,508 15,072
(769) (1,518) 5,902 5,902 6,564
(2) 6/30/07 includes consolidation of Indonesian JV cash balance reported only in annual statutory filings, not in quarterly reports.
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Capitalization
Classes of Shares & Options Ordinary Shares Options A$0.25 options (expire 11/30/08) A$0.40 options (expire (11/30/08) A$1.40 options (expire 8/30/09) A$2.50 options (expire 10/12/10) BHP Options US$7.5m assuming A$2.45 floor conversion at exchange rate 0.88, expiring 4 years from CFNA BHP Options US$12.5m assuming A$2.55 floor conversion at exchange rate 0.88, expiring 9/30/08 A$1.20 options (expiring 8/30/10 - Director) A$3.50 options (expiring 11/30/11) A$1.20 options (expiring 8/30/10 - ESOP)
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Total 127,972,633
18,242,400 5,000,000 252,650 1,250,000
3,478,664
5,570,410 2,800,000 2,800,000 1,780,000 41,174,124
Convertible Notes Notes with $250,000 face value, 7.90% coupon, convertible at $3.44 per share, maturing 12/10/2012 Total notes on issue Total potential additional shares to be issued if all notes converted Total fully diluted shares on issue if all options exercised Total fully diluted shares on issue if all options exercised and all notes converted 182,228,257 180 180 13,081,500 169,146,757
In October 2007, White Energy announced the completion of an A$45 million unsecured Convertible Note issue. The Notes are convertible into ordinary shares at A$3.44 per share, which represents a 20% premium to the 30 day average closing price of White Energys shares prior to the issue date. The Convertible Notes are unsecured with an annual yield of 7.90%, maturing in five years. Note holders can elect to redeem some of all of their notes at the end of the third year. An existing shareholder in White Energy, Deephaven Asia Limited, a subsidiary of Deephaven Capital Management LLC and part of the US-based Knight Capital Group, led the consortia investing in the Convertible Note Issue.
BHP Billiton Transaction In December 2007, White Energy announced it had formally completed all aspects of the transaction with the BHP Billiton Group that provides for the following: US$35 million funding package. Billiton Marketing Holding B.V. has provided White Energy with a US$35 million 7-year unsecured convertible funding facility to be used in the global roll out of White Energys patented coal upgrading technology. Appointment as Global Marketing Agent. BHP Billiton Marketing AG has been appointed as the companys exclusive marketing agent for export coal produced via White Energys upgrading coal process. In addition, the agreement with BHP Billiton and White Energy also provided that the companies will seek to analyze joint development opportunities.
April 14, 2008
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ADR Program
In May 2007, White Energy initiated a Level 1 American Depository Receipt (ADR) program. Bank of New York is operating the White Energy ADR program and acts as the depositary bank. Each ADR represents 5 ordinary White Energy shares.
Mithra Research
Future Outlook
We believe White Energy is a little company with an enormous future: The company has developed a strategic plan that ensures its economic participation in the economics of the energy arbitrage of its upgrading technology; Coal upgrading technologies have been attempted for decades. To date, none have met with commercial success. We believe White Energys White Coal binderless coal briquetting technology is different and we believe its development partners testify to the quality and potential of its technology; White Energys partners are key global players in the energy markets and include Bayan Resources, the Adaro Group, the Itochu Corporation, BHP Billiton, NRG Energy Resources, and a Powder River Basin mine, Buckskin Mining Company; Further minimizing risk in a development-stage company, White Energy is already in active joint venture projects, is set to begin commercial production before the end of the calendar year, has successfully tested over one hundred coals from around the world, and is currently producing briquetted coal at its facilities in Australia. Of course there can be no assurances that White Energys White Coal binderless coal briquetting process will ultimately meet with success. But for all the many reasons outlined in this report, we believe that White Energy has the right technology at the right time and is developing it the right way.
Target Price
Our initial 12 18 month target price of A$5.85 (ADR target price of $27.00) is based upon a 20% discount to the Pollution & Treatment control industry multiple of 40.7x applied to our preliminary earnings projection of A$0.44 (US$0.40 at current exchange rate of 0.9213) per share in 2013. We apply a 20% discount rate to derive our 12 18 month initial target price.
For more information, please contact us at Research@MithraResearch.com or refer to the companys website, www.whiteenergyco.com
April 14, 2008
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Appendix A: White Energy Sample Coal Test Results Matrix

White Energy has tested over 100 coals from around the world: these represent a small summary sample of actual results
USA Mines Raw Coal Moisture (%) Moisture of BCB product (%) Percent Moisture Reduction Energy as Received (BTU/lb) Energy of BCB Product (BTU/lb) Percent Energy Increase Drop Shatter (% >9.5mm)
1 29.8 9.1 69 8,650 11,242 30 93.4
2 30.2 9.7 68 8,470 10,939 29 92.1
3 27 8.1 70 8,750 10,983 26 93.4
4 26.5 5.4 80 8,800 11,372 29 94.5
Indonesian Mines Raw Coal Moisture (%) Moisture of BCB product (%) Percent Moisture Reduction Energy as Received (BTU/lb) Energy of BCB Product (BTU/lb) Percent Energy Increase Drop Shatter (% >9.5mm)
1 37.6 5.9 84 7,417 11,041 49 93.9
2 32.3 7.8 76 8,095 11,082 37 94.1
3 26 4.6 82 9,346 11,998 28 95.1
4 53.6 9.9 82 4,812 9,482 97 95.6
5 24.5 4.2 83 9,022 11,459 27 96.6
6 39.6 7.8 80 6,915 10,485 52 92.2
Chinese Mines Raw Coal Moisture (%) Moisture of BCB product (%) Percent Moisture Reduction Energy as Received (BTU/lb) Energy of BCB Product (BTU/lb) Percent Energy Increase Drop Shatter (% >9.5mm)
1 32.7 6.9 79 7,440 10,315 39 95.5
2 30.5 8.2 73 8,005 9,171 15 86
3 33.4 3.2 90 6,662 10,063 51 93.1
April 14, 2008
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Appendix B: Summary of Important News & Events 2008

March 12 White Energy Enters Into a US Development Agreement with NRG and Buckskin Mining Co. WEC, which is actively commercializing its patented coal upgrading technology worldwide, announced it has entered into a Development Agreement in North America with NRG Power Marketing, LLC (wholly owned subsidiary of NRG Energy Inc., NYSE: NRG) and Buckskin Mining Company (indirect wholly owned subsidiary of Kiewit Corporation). White Energy Appoints Head of North American Operations WEC appointed Judith A. Tanselle as the President of its North American operations. (Please refer to WEC Management, page 22).
March 4
2007
Dec 3 White Energy Completes BHP Billiton Transaction The transaction with the BHP Billiton Group (NYSE: BHP) provides for the following: US$35M funding package: a 7-year unsecured funding facility to be used in the global roll-out of White Energys patented coal technology. Appointment as Global Marketing Agent: BHP Billiton Marketing AG has been appointed as the companys exclusive marketing agent for export coal produced via White Energys upgrading coal process. Oct 15 White Energy Raises A$45 Million in Unsecured Convertible Note Issue: A$3.44 per Ordinary Share White Energy announced the completion of a A$45M unsecured convertible note issue. The notes are convertible into ordinary shares at A$3.44 per share, which represent a 20% premium to the 30-day average closing price of White Energys shares prior to Fridays issue date. The convertible notes are secured with an annual yield of 7.9%, maturing in 5 years. Noteholders can elect to redeem some or all of their notes at the end of the third year. An existing shareholder in White Energy, Deephaven Asia Limited, a subsidiary of Deephaven Capital Management LLC and part of the US-based Knight Capital Group, led the consortia investing in the Convertible Note issue. September 17 White Energy China Initiative Having received all necessary approvals, White Energy announced it recently opened an office in Shanghai. The company appointed Joyce Zhou as its Chief Representative in China. Ms. Zhou previously worked for the Australian Government as an Investment Director for Invest Australia in Greater China. Before then, she was the Director of China for the International Copper Association. The companys China office is coordinating the final aspects of the feasibility study on the building of a 10 MTPA operation in conjunction with Datang Power International Ltd., one of the largest independent power producers in China, at a Datang owned deposit in Inner Mongolia. September 13 White Energy and Thiess Enter Into a Strategic Alliance for the Construction of White Energys Binderless Coal Briquetting Plants White Energy announced it had entered into a strategic alliance for a period of five years with Thiess, through a contract with its Indonesian subsidiary, PT Thiess Contractors Indonesia. WEC has aligned itself with one of Australasias leading engineering procurement and construction groups to develop Binderless Coal Briquetting plants in Indonesia. White Energy currently has joint venture contracts in place to produce a targeted thirteen million tons of its patented binderless coal briquettes per annum.
April 14, 2008
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Under the terms of the strategic alliance, Thiess will provide engineering design, procurement and construction services for the development of Binderless Coal Briquetting plants based on White Energys designs. In addition, Thiess will provide White Energy with ongoing operation and maintenance services at those plants. This will allow White Energy with ongoing operation and maintenance services at those plants. This will allow White Energy to leverage Thiess specialized labor force and expedite growth. August 2 Synthetic Natural Gas Opportunity for White Energys Binderless Coal Briquetting Process In its quarterly report released 31 July 2007, White Energy referenced that it has completed pilot scale testing of a U.S. lignite coal as part of a major study into the generation of synthetic natural gas in the USA. Approximately one ton of coal from the North Dakota region was successfully processed using White Energys patented binderless coal briquetting process (BCB) to produce high quality upgraded coal with more than 50% greater useable energy content, excellent handling properties and very consistent physical properties. The coal sample was supplied by Allied Syngas Corporation, a U.S. company that is making a major investment to turn the isolated low grade coals of the Montana/North Dakota region into a high value synthetic natural gas. The coal upgraded by White Energys patented BCB process shows the potential to significantly improve the efficiency and stability of the gasifiers used to generate the Syngas, which is a precursor to the production of natural gas. White Energy is currently evaluating synthetic natural gas opportunities in the key markets of the U.S. and China. May 24 White Energys Cleaner Coal Technology A$4.35M Commonwealth Government Grant White Energy announced its wholly owned subsidiary, Binderless Coal Briquetting Pty Ltd., has been offered a A$4.35 million Commercial Ready Innovation grant by AusIndustry. BHP Billiton US$35 Million Convertible Funding Facility and Appointment as Global Marketing Agent White Energy announced that BHP Billiton agreed to provide a US$35M 7-year unsecured convertible funding facility. A term sheet has been signed subject to formal documentation, completion of due diligence and internal approvals on both sides. American Depositary Receipt Program White Energy has initiated a Level 1 American Depositary Receipt Program through the Bank of New York to meet the growing demand and interest from U.S. investors in the company. Necessary filings have been made and the company is awaiting final approval from the U.S. regulatory bodies. Datang International Power 10 million Ton Plant Final Feasibility Program White Energy previously announced the signing of a Heads of Agreement with Datang International Power Company Ltd regarding the forming of a joint venture to build binderless coal briquetting plants with a capacity of one million tons as the first stage of a 10 million ton development at Datangs sub-bituminous coal mine in Inner Mongolia, China. Since that time, significant process has been made regarding infrastructure approvals to permit Datang to advance the project. Given this progress, both White Energy and Datang have now jointly commenced a final feasibility study to verify the economics and logistics of the proposed project. January 31 White Energys Coal Technology Attracts Indonesian Coal Giant and Major Japanese Trading House in JV Agreement White Energy announced a joint venture was signed with the Adaro Group, one of Indonesias largest coal companies, and Itochu Corporation (Itochu), a major Japanese trading house. Under the JV agreement, a wholly owned subsidiary of White Energy, Binderless Coal Briquetting Company Pty Ltd (BCBC), will design, build and operate processing plants used to undertake White Energys coal upgrading process at Adaros coal mines in East Kalimantan. The formation of the JV will be subject to the parties completing a financial and technical feasibility study, with the aim of a processing plant being built with the capacity to produce 1 million tons of upgraded coal per year, with the intention to increase plant capacity to 8 million tones of upgraded coal per year.
May 10
April 2
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2006
September 22
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Bayan Joint Venture: Feasibility Agreed: Scope of Project Increased to 5 Million Tons; Bayan Offtake Increased to U.S.$215 Million The Bayan Resources Group is the eighth largest coal miner in Indonesia. Bayan through its affiliates has the right to mine and operate various coal mines in East Kalimantan. After a detailed review of the financial feasibility study the parties have confirmed they will proceed with the joint venture and immediately commence implementation work on the plant. In addition, the underlying terms of the joint venture with Bayan have been significantly improved in that the parties have agreed to: increase the size and scope of the project from an annual output of 3 million tons of upgraded coal to 5 million tons; increase Bayans annual offtake obligation of upgraded coal from 500,000 tons per annum to 1.5 million tons per annum. This five year commitment equates to an offtake obligation on Bayan of approximately US$215 million (after allowing for the rolling commissioning of each 1 million ton module over the period). The joint venture is 51% owned by White and 49% by Bayan. An initial module will be built with the production capacity of 1 million tons per annum. Once this module has demonstrated proven capacity, modules able to process a further 4 million tons per annum will be added, taking total production to 5 million tons per annum.
August 9
White Energy Capital Raising Oversubscribed White Energy announced it successfully placed 23,983,333 shares at A$0.96 per share under a private placement offering resulting in a total capital raise of A$23.024 million. After the issuance of new shares of White Energy will have 119.9 million shares on the issue, and a market capitalization of A$115 million at current prices. The company initially planned to raise $20 million but the high demand for the stock resulted in the issuance of additional shares. The shares were placed with a small group of institutional investors based in Australia, Asia, the United Kingdom and North America. The placement is in addition to the A$5.032 million raised in April 2006. White Energy Name Change The shareholders of White Energy Company Limited, formerly Amerod Resources Limited, approved the change in the name of the company. Effective immediately the new ASX Code is WEC. PT Bayan Resources Joint Venture Documentation Including $100M Offtake Agreement Agreed & Signed Amerod announced that the company signed a formal JV Venture Documentation with PT Bayan Resources, a member of the Bayan Resources Group. The JV arrangements now include a five year $100 million offtake agreement that underpins the model for sales from the proposed 1 million per annum ton binderless coal briquetting plant.
July 3
June 14
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Appendix C: Coal Resource Classification System of the U.S. Geological Survey By Gordon H. Wood, Jr., Thomas M. Kehn, M. Devereux Carter, and William C. Culbertson
GEOLOGICAL SURVEY CIRCULAR 891
Table 1. - Classification of coals by rank

Class Group Fixed Carbon (Dry, Mineral- Matter-Free Basis) Equal or Less Greater Than Than I Anthracite* 1.Meta-anthracite
2.Anthracite 3.SemianthraciteC
Volatile Matter Limits, percent Calorific Value Limits BTU per pound Limits, percent Dry, Mineral(Moist,B Mineral-Matter-Free Basis) Matter-Free Basis Greater Than Equal or Less Than 2 Equal or Greater Than Agglomerating Character nonagglomerating
Less
98 92 86 78 69 98 92 86 78 69 2 8 14 22 31
8 14 22 31 14000D 13000D 11500 10500 commonly 14000 agglomerating**E 13000 11500 agglomerating 11500 10500 9500 8300 6300 nonagglomerating
II Bituminous
1.Low volatile bituminous coal 2.Medium volatile bituminous coal 3.High volatile A bituminous coal 4.High volatile B bituminous coal 5.High volatile C bituminous coal
III 1.Subbituminous A Subbituminous coal 2.Subbituminous B coal 3.Subbituminous C coal IV. Lignite 1.Lignite A 1.Lignite B
A
10500 9500 8300 6300
This classification does not include a few coals, principally nonbanded varieties, which have unusual physical and chemical properties and which come within the limits of fixed carbon or calorific value of the high-volatile bituminous and subbituminous ranks. All of these coals either contain less than 48 percent dry, mineral-matter-free fixed carbon or have more than 15 500 moist, mineral-matter-free British thermal units per pound. B Moist refers to coal containing its natural inherent moisture but not including visible water on the surface of the coal. C If agglomerating, classify in low-volatile group of the bituminous class. D Coals having 69 percent or more fixed carbon on the dry, mineral-matter-free basis shall be classified according to fixed carbon, regardless of calorific value. E It is recognized that there may be nonagglomerating varieties in these groups of the bituminous class, and there are notable exceptions in the highvolatile C bituminous group. 1 ASTM, 1981, p. 215. * Modified from ASTM, 1981.
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Appendix D: Coal Characteristics Approximate averages
Rank Anthracite BTU per lb. 14,000 Vitrinite Refl. 2.50 1.50 1.10 0.50 0.60 0.45 0.40 0.25 0.15 NA % Carbon 92 - 98 78 - 86 69 - 78 69 79 77 75 72 55 50 % Hydrogen 3 4 5 5 12 5 18 5 5 6 % Oxygen 2 2 5 10 2 15 15 21 2 1 1.00 2.00 1.00 2.00
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% Nitrogen 1.00 1.00 1.50 2.00
% Water 1-3 1-5 5-7
% Volatiles < 14 < 22 22 - 31 > 31%
Bituminous A (low 13,000 - 15,000 volatile) Bituminous B (med. 13,000 - 15,000 volatile) Bituminous C (high 10,500 - 13,000 volatile) Subbituminous A Subbituminous B Subbituminous C Lignite Peat Wood 10,500 - 11,500 9,500 - 10,500 8,300 - 9,500 3,000 - 8,300 7,200 8,500
15 - 35 15 - 35 15 - 35 40 - 50 85 - 95 70 50 < 40 < 40
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Appendix E: Coal Producing Regions in US
Geographic Classifications
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Appalachian Region. Consists of Alabama, Eastern Kentucky, Maryland, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. Northern Appalachian Region. Consists of Maryland, Pennsylvania Bituminous, and Northern West Virginia. Central Appalachian Region. Consists of Eastern Kentucky, Virginia, Southern West Virginia, and the Tennessee counties of: Anderson, Campbell, Claiborne, Cumberland, Fentress, Morgan, Overton, Pickett, Putnam, Roane, and Scott. Southern Appalachian Region. Consists of Alabama, and the Tennesee counties of: Bledsoe, Coffee, Franklin, Grundy, Hamilton, Marion, Rhea, Sequatchie, Van Buren, Warren, and White. Interior Region (with Gulf Coast). Consists of Arkansas, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Texas, and Western Kentucky. Illinois Basin. Consists of Illinois, Indiana, and Western Kentucky. Western Region. Consists of Alaska, Arizona, Colorado, Montana, New Mexico, North Dakota, Utah, Washington, and Wyoming. Powder River Basin. Consists of the Montana counties of Big Horn, Custer, Powder River, Rosebud, and Treasure, and the Wyoming counties of Campbell, Converse, Crook, Johnson, Natrona, Niobrara, Sheridan, and Weston. Uinta Basin. Consists of the Colorado counties of Delta, Garfield, Gunnison, Mesa, Moffat, Pitkin, Rio Blanco, Routt, and the Utah counties of Carbon, Duchesne, Emery, Grand, Sanpete, Sevier, Uintah, Utah, and Wasatch. Note: Some States discontinue producing coal as reserves are depleted or as production becomes uneconomic.
Please refer to map, following page
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Exhibit 15: U.S. Coal Producing Regions
Mithra Research
Source: US Geological Survey
April 14, 2008
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Appendix F: Glossary of Terms(t, u)
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Relevant terms primarily as presented by The Coal Association of Canada and Coal Resource Classification System of the U.S. Geological Survey AGGLOMERATING Coal that, during volatile matter determinations, produces either an agglomerate button capable of supporting a 500-gram weight without pulverizing, or a button showing swelling or cell structure. AGGLOMERATION - A family of processes that can be used to concentrate valuable minerals (including coal) based on their adhesive properties. ANTHRACITE - Coal of the highest rank; it is almost pure carbon and is used mainly for home heating and cooking in some developing countries industrial purposes. According to the USGS, anthracite is a rank class of non-agglomerating coals as defined by the American Society for Testing and Materials having more than 86% fixed carbon and less than 14% volatile matter on a dry, mineral-matter-free basis. This class of coal is divisible into the semi-anthracite, anthracite, and meta-anthracite groups on the basis of increasing fixed carbon and decreasing volatile matter. According to the EIA, anthracite is the highest rank of coal; used primarily for residential and commercial space heating. It is a hard, brittle, and black lustrous coal, often referred to as hard coal, containing a high percentage of fixed carbon and a low percentage of volatile matter. The moisture content of fresh-mined anthracite generally is less than 15 percent. The heat content of anthracite ranges from 22 to 28 million Btu per short ton on a moist, mineral-matter-free basis. The heat content of anthracite coal consumed in the United States averages 25 million Btu per short ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter). Note: Since the 1980's, anthracite refuse or mine waste has been used for steam electric power generation. This fuel typically has a heat content of 15 million Btu per short ton or less. ASH The inorganic residue remaining after complete incineration of coal. BITUMINOUS - An intermediate ranked coal between anthracite and sub-bituminous coal. It has a high carbon content and is low in moisture content. Bituminous coal can be used for both steelmaking and power generation. Low and medium volatile bituminous coals are ranked by their carbon content, while high volatile bituminous coals are ranked by their heating value. According to the USGS, bituminous coal is a rank class of coals as defined by the American Society for Testing Materials high in carbonaceous matter, having less than 86% fixed carbon, and more than 14% volatile matter on a dry, mineral-matter-free basis and more than 10,500 BTU on a moist-matter-free basis. This class may be either agglomerating or non-agglomerating and is divisible into the high-volatile C, B, A; medium; and low-volatile bituminous coal groups on the basis of increasing heat content and fixed carbon and decreasing volatile matter. BRITISH THERMAL UNIT (BTU) The quantity of heat required to raise the temperature of 1 pound of water 1 degree Fahrenheit at, or near, its point of maximum density of 39.1 degrees F (equivalent to 251.995 gram calories; 1,054.35 Joules; 1.05435 kilojoules; 0.25199 kilocalorie). BROWN COAL a term used for low rank coals, usually lignite; sometimes includes lower grades of sub-bituminous coal. CALORIE (cal) The quantity of heat required to raise 1 gram of water from 15 degrees to 16 degrees Celsius. A calorie is also termed gram calorie or small calorie (equivalent to 0.00396832 BTU; 4.184 Joules; 0.001 kilogram calorie). CARBON DIOXIDE - A colorless, odorless, non-toxic radiative gas that is essential to plant and animal life. It is also emitted as a result of burning organic materials, including fossil fuels. CHARCOAL - The residue, primarily carbon, from the partial combustion of wood or other organic matter. CLEAN-COAL TECHNOLOGIES - Technologies that allow coal-based power or electricity generation to have improved environmental performance, through decreased emissions. These technologies decrease emissions by using coal in a more efficient and cost-effective manner. COAL - A fossil fuel composed mostly of carbon, with traces of hydrogen, nitrogen, sulphur and other elements. April 14, 2008
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COAL DESULPHURIZATION - Removal of sulphur from coal or coal gas. COAL GASIFICATION - Any of a variety of processes by which coal is converted to a gas.
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COKE - A hard, dry carbon substance produced by heating coal to a very high temperature in the absence of air. Coke is used in the manufacture of iron and steel. According to the USGS, it is a gray, hard, porous, and coherent cellular-structured solid, primarily composed of amorphous carbon. It is combustible and is produced by destructive distillation or thermal decomposition of certain bituminous coal that passes through a plastic state in the absence of air. COMBUSTION CHAMBER - The part of a boiler in which fuel is burned. DEMONSTRATION PHASE - A stage in the research and development process during which a process or facility is tested under anticipated operating conditions. DENSITY Mass of coal per unit volume. DROP TEST Also known as Friability Test. This test measures the case with which the coal fractures into smaller pieces when subjected to repeated handling and thus indicates the extent to which pieces will break up during transport, or during descent in a blast furnace. FRIABILITY Friable material is material that can be crumbled, pulverized, or reduced to powder in the hand. GASIFICATION - (see Coal Gasification) GREENHOUSE EFFECT - A misnomer for a natural phenomenon that occurs when so-called 'greenhouse gases' trap radiated heat in the atmosphere. The greenhouse effect is actually a minor portion of a complex and dynamic process of heating and cooling that occurs in the earth's atmosphere. This natural process of heating and cooling also includes the fluid dynamics associated with atmospheric moisture (such as clouds), oceans and other surface water, soot and other dust particles known as aerosols. The entire heating and cooling cycle warms the atmosphere and makes life on earth possible. GREENHOUSE GASES - Gases such as carbon dioxide (CO2), water vapor, methane (CH4), nitrous oxide (NO2), and other trace gases that restrict the re-radiation of infrared heat back into the atmospheres. HIGH-ASH COAL Coal containing more than 15% total ash on an as-received basis. HIGH-SULPHUR COAL Coal containing 3% or more total sulphur on an as-received basis. HIGH-VOLATILE BITUMINOUS COAL Three related rank groups of bituminous coal as defined by the American Society for Testing and Materials which collectively contain less than 69% fixed carbon on a dry, mineral-matter-free basis; more than 31% volatile matter on a dry, mineral-matter-free basis; and a heat value of more than 10,500 BTU per pound on a moist, mineral-matterfree basis. HYDROCARBONS - A class of compounds containing hydrogen and carbon formed by the decomposition of plant and animal remains, including coal, mineral oil, petroleum, natural gas, paraffin, the fossil resins and the solid bitumens occurring in rocks. Gasoline is a mixture of hydrocarbons. JOULE The basic metric unit of work or energy equal to 1 x 10**7 ergs, 0.238662 gram calorie, 0.0002386 kilogram-calorie, or 0.0009471 BTU. KILOGRAM-CALORIE (KCAL) A metric unit of heat equal to 1,000 gram-calories; 3.9683207 BTU; 4,184 Joules, 4.184 x 10**10 ergs; or 4,184 Watt seconds. Also known as large calorie.
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LIGNITE - A low-rank coal with a relatively high moisture and low heat/energy content. Ranging in color from black to brown, lignite is used in power generation. According to the USGS, lignite is a class of brownish-black, low-rank coal defined by the American Society for Testing and Materials as having less than 8,300 BTU on a moist, mineral-matter-free basis. In the U.S., lignite is separated into two groups: Lignite A (6,300 8,300 BTU) and lignite B (<6,300 BTU). LIQUEFACTION - The process of converting coal into a synthetic liquid fuel, similar in nature to crude oil and other refined products. LOW ASH COAL - Coal containing less than 8% total ash on an as-received basis. LOW SULPHUR COAL - Coal that has a sulphur content generally ranging from 0.1 per cent to 1.0 per cent. All western Canadian coal is low in sulphur. LOW VOLATILE BITUMINOUS COAL - A rank group of bituminous coal as defined by the American Society for Testing and Materials containing more than 78% and less than 86% fixed carbon, and more than 14% and less than 22% volatile matter on a dry, mineral-matter-free basis. MEDIUM ASH COAL Coal containing 8% - 15% ash on an as-received basis. MEDIUM SULPHUR COAL Coal containing more than 1% and less than 3% total sulphur on an as-received basis. MEDIUM VOLATILE BITUMINOUS COAL A rank group of bituminous coal as defined by the American Society for Testing and Materials containing more than 69% and less than 78% fixed carbon and more than 22 % and less than 31% volatile matter on a dry, mineral-matter-free basis. METALLURGICAL COAL - A term used to describe varieties of bituminous coal that are converted into coke for use in the steelmaking process. According to the USGS, generally metallurgical coal has less than 1% sulphur and less than 8% ash on an asreceived basis; most metallurgical coal is low- to medium-volatile bituminous coal. METHANE - The most simple of the hydrocarbons formed naturally from the decay of vegetative matter, similar to that which formed coal. It is the principal component of natural gas and is a radiative gas. Mtce - Mega tons of coal equivalent. MOISTURE CONTENT The percentage of moisture (water) in coal. Two types of moisture are found in coal, namely, free or surface moisture removed by exposure to air, and inherent moisture trapped in the coal. NITROGEN OXIDES (NOx) - Formed when nitrogen (N2) combines with oxygen (O2) in the burning of fossil fuels, from the natural degradation of vegetation, and from the use of chemical fertilizers. NOx gases are a significant component of acid deposition and a precursor of photochemical smog. The primary source of nitrogen oxide emissions is automobile exhaust. OVERBURDEN Rock including coal and (or) unconsolidated material that overlies a specified coal bed. Overburden is reported in feet and (or) meters and is used to classify the depth to an underlying coal bed. OZONE (O3) - A bluish toxic gas, with a pungent odor, formed of three oxygen atoms rather than the usual two. Occurs in the stratosphere and plays a role in filtering out ultraviolet radiation from the sun's rays. At ground level ozone is a precursor of photochemical smog. OVERBURDEN - Layers of rock and soil covering a coal seam. In surface mining operations, overburden is removed using large equipment and is either used for reclaiming mined areas or hauled to designated dumping areas. PEAT - A dark brown or black deposit resulting from the partial decomposition of vegetative matter in marshes and swamps. PROVED RESERVES - Those quantities which geological and engineering information indicate with reasonable certainty can be recovered in the future from known deposits under existing economic and operating conditions. April 14, 2008
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SCRUBBER - Any of several forms of chemical/physical devices that operate to remove sulphur compounds formed as a result of fossil-fuel combustion. These devices normally combine the sulphur in gaseous emissions with another chemical medium to form inert compounds that can then be removed for disposal. SHORT TON A unit of weight equal to 2,000 pounds; 0.9071847 metric ton, ton, or megagram; 0.8928571 long ton. SPECIFIC GRAVITY OF COAL The ratio of the mass of a unit column of coal to the mass of an equal volume of water at 4 degrees Celsius. The specific gravity of coal varies considerably with rank and with differences in ash content. STEAM COAL - A term used to describe coal that is used primarily to generate heat. Also referred to as thermal coal. SUB-BITUMINOUS COAL - A generally soft coal with a heating value between bituminous and lignite. It has low fixed carbon and high percentages of moisture and volatile material. Sub-bituminous coal is mainly used for generating electricity. According to the USGS, sub-bituminous coal is a rank class of nonagglomerating coals having a heat value content of more than 8,300 BTUs and less than 11,500 BTUs on a moist, mineral-matter-free basis. This class of coal is divisible on the basis of increasing heat value into the sub-bituminous C, B, and A coal groups. According to the EIA, sub-bituminous coal is a coal that has properties that range from those of lignite to those of bituminous coal and used primarily as fuel for steam-electric power generation. It may be dull, dark brown to black, soft and crumbly, at the lower end of the range, to bright, jet black, hard, and relatively strong, at the upper end. Subbituminous coal contains 20 to 30 percent inherent moisture by weight. The heat content of sub-bituminous coal ranges from 17 to 24 million BTU per ton on a moist, mineral-matter-free basis. The heat content of sub-bituminous coal consumed in the United States averages 17 to 18 million BTU per ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter). SULPHUR CONTENT The quantity of sulphur in coal expressed in percent or parts per million. May be divided into the quantities occurring as inorganic (pyretic) sulphur, organic sulphur, and sulfate sulphur. SULPHUR OXIDES (SOx) - A family of gases, including sulphur dioxide (SO2) formed when sulphur, or fossil fuels containing sulphur, burn in air. Airborne sulphur compounds may be converted to other substances that contribute to acid deposition. THERMAL COAL - A term used to describe coal that is used primarily to generate heat. Also referred to as steam coal. TON - An Imperial unit of weight equivalent to 2,000 pounds or 907.2 kg. This is also known as a "short ton" . TONNE - A metric unit of weight equivalent to 1000 kg or 2,240 pounds. This is also known as a "metric ton" or "long ton". VITRINITE REFLECTANCE Vitrinite is one of the primary components of coals; it is a type of maceral (the organic components of coal analogous to the minerals of rocks). Vitrinite has a shiny appearance resembling glass. It is derived from the cellwall material or woody tissue of the plants from which the coal was formed. Chemically, vitrinite is composed of polymers, cellulose and lignin. The study of vitrinite reflectance is a key method for identifying the temperature history of sediments in sedimentary basins. It is used to diagnose the thermal maturity (rank) of coal beds. The key attraction of vitrinite reflectance in this context is its sensitivity to temperature ranges that largely correspond to those of hydrocarbon generation. This means that with a suitable calibration, vitrinite reflectance can be used as an indicator of maturity in hydrocarbon source rocks. VOLATILE MATTER - Matter that is driven off as gas or vapor when coal is heated to about 9500 C.
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Footnotes
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a. International Energy Agency. http://iea.org/ b. Energy Watch Group in Coal: Resources and Future Production Final Version 28032007, March 2007, EWG-Series No 1/2007 http://www.energywatchgroup.org/fileadmin/global/pdf/EWG-Coalreport_10_07_2007.pdf c. World Energy Council, Survey of Energy Resources 2004, http://www.worldenergy.org/publications/324.asp d. Vietnam to cut coal exports to China nearly in half: report, Sino Daily, Feb 19, 2008 http://www.sinodaily.com/reports/Vietnam_to_cut_coal_exports_to_China_nearly_in_half_report_999.html e. Tata Power buys 30% in 2 Indonesian Coal Cos, Business Line, the Business Daily from THE HINDU group of publications, March 31, 2007. http://www.thehindubusinessline.com/2007/04/01/stories/2007040103160100.htm f. GulfNews.com, January 24, 2008. http://archive.gulfnews.com/business/Industry/10184264.html g. BP Statistical Review of World Energy (June 2007). http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2007 /STAGING/local_assets/downloads/pdf/statistical_review_of_world_energy_full_report_2007.pdf h. World Coal Institute, Coal Facts 2007. http://www.worldcoal.org/pages/content/index.asp?PageID=188 i. The Future of Coal, B. Kavalov, S.D. Peteves, Institute for Energy, February 2007. EUR 227 44 EN DG JRC Institute for Energy, Luxembourg: Office for the Official Publications of the European Union. j. British Geological Survey: Mineral Profile Coal (March 2007). http://www.mineralsuk.com/britmin/mpcoal_07.pdf k. Australian Coal Association http://www.australiancoal.com.au/classification.htm l. The Future of Coal, , B. Kavalov, S.D. Peteves, Institute for Energy, February 2007. EUR 227 44 EN DG JRC Institute for Energy, Luxembourg: Office for the Official Publications of the European Union. m. The Future of Coal, B. Kavalov, S.D. Peteves, Institute for Energy, February 2007. EUR 227 44 EN DG JRC Institute for Energy, Luxembourg: Office for the Official Publications of the European Union. n. World coal trade may rise to 1 bln T by 2010 RWE, Reuters UK, Friday November 9, 2007. http://uk.reuters.com/article/oilRpt/idUKL0966691220071109 o. Powder River Basin Coal Update, BNSF Railway Southwest Power Pool Regional State Committee: October 24, 2005 Santa Fe, NM. p. IBID. q. Deliveries of Coal from the Powder River Basin: Events and Trends 2005 2007, EIA. http://www.oe.netl.doe.gov/docs/Final-Coal-Study_101507.pdf t. Coal Resource Classification System of the U.S. Geological Survey. http://pubs.usgs.gov/circ/c891/glossary.htm r. IBID. s. Thermal Drying and Binderless Briquetting of Sub-bituminous Coals, Keith Clark. Binderless (Coal) Briquetting Company Pty Limited: Sydney, Australia t. The Coal Association of Canada. http://www.coal.ca/content/index.php?option=com_content&task=view&id=58 u. U.S. Geological Survey. http://www.usgs.gov/
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Sources of Information
Mithra Research
PT Adaro: http://envirocoal.com/ Allied Syngas (Allied Resource Corp.): http://www.alliedresourcecorp.com/pages/business/business.html American Coal Council: http://www.clean-coal.info/ Australian Coal Association: http://www.australiancoal.com.au/ Australia Stock Exchange: http://www.asx.com.au/ British Geological Survey: http://www.bgs.ac.uk/ British Petroleum: http://www.bp.com/home.do?categoryId=1 Coal Association of Canada: http://www.coal.ca/content/ Coal Information Network: http://www.coalinfo.org/ Coal Online: http://www.coalonline.info/site/coalonline/content/home Commonwealth Scientific & Industrial Research Organisation: http://www.csiro.au/ Datang International Power Generation Co., Ltd.: http://www.dtpower.com/ Earth Resources: http://eri.gg.uwyo.edu/ Energy Information Administration: http://www.eia.doe.gov/emeu/aer/coal.html Energy Watch Group: http://www.energywatchgroup.org/ Evergreen Energy Inc.: http://www.evgenergy.com/ IEA Greenhouse Gas R&D Programme: CO2 Capture & Storage: http://www.co2captureandstorage.info/ Institute for the Analysis of Global Security: http://www.iags.org/ Institute for Energy: http://www.jrc.nl/ International Energy Agency: http://www.iea.org/ Kansas Geological Survey: http://www.kgs.ku.edu/kgs.html KR Komarek: http://www.komarek.com Lignite Energy Council: http://www.lignite.com National Coal Council: http://nationalcoalcouncil.org/ National Mining Association: http://www.nma.org/ National Coal Transportation Association: http://www.nationalcoaltransportation.org/ Science Direct: http://www.sciencedirect.com/ SourceWatch: http://www.sourcewatch.org/index.php?title=SourceWatch Subbituminous Energy Coalition: http://www.prbsec.org/ Thiess: http://www.thiess.com.au/ Union of Concerned Scientists: http://www.ucsusa.org/ Uranium Information Centre Ltd.: http://www.uic.com.au/index.htm U.S. Department of Energy: http://www.doe.gov/ U.S. Geological Survey http://www.usgs.gov/ White Energy Company Ltd.: http://www.whiteenergyco.com World Coal Institute: http://www.worldcoal.org/index.asp World Energy Council: http://www.worldenergy.org/
April 14, 2008
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Risks
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Risks in an investment in White Energy Company Ltd. include but are not limited to: There are no assurances that White Energy Company Ltd. will continue be successful in its marketing or commercialization efforts; future regulations governing the coal processing plants may negatively impact the companys operations, ventures, or ability to continue to commercialize its technology; commercial viability of the technology may not come to fruition. The company has experienced operating losses and has a substantial accumulated deficit. If the company is unable to improve its financial performance, it may not be able to meet its obligations or its ability to raise further capital necessary to continue operations may be negatively impacted. Binderless coal briquettes produced by the companys technology have proven, to date, to be safe in storage and handling, however, the company may be subject to substantial liability claims if there is ever a major accident involving coal briquettes produced by a joint venture project of White Energy Company Ltd. Due to geopolitical considerations, countries in which White Energy establishes operations may present political risk that could also materially negatively impact the companys future operating ability. For a more complete list of factors that may adversely affect future operations or an investment in White Energy Company Ltd., please refer to the companys filings, available at www.whiteenergyco.com or www.asx.com.au/.
Analyst Certification
In issuing this research report, Gary M. Goldstein and Laurie D. Goldstein certify that: (1) the views expressed herein accurately reflect the analysts personal views as to the subject company; and (2) no part of the analysts compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analysts in the report.
Important Disclosures
Mithra Research is a publishing and related services firm not affiliated with a broker dealer. Mithra Research LLC does from time-totime provide Investment Relations and/or Public Relations services to corporate clients; however, White Energy Co. Ltd. is not a client of the firm. Additional information on White Energy Co. Ltd. is available upon request.
Analyst Stock Ratings

Strong Buy Buy Speculative Buy Sell Short Sell The stock is expected to appreciate 35% or more within a 12 18 month time frame The stock is expected to appreciate 10% to 35% within a 12 18 month time frame. The stock is a particularly high-risk investment; this rating is used primarily for early stage companies with products or properties in/under development. The stock is expected to under-perform its industry or peer group by 10% - 20% within a 12-18 month time frame. The stock is expected to depreciate by 20% or more within a 12 18 month time frame, or where fundamentals of a company have deteriorated significantly or are expected to deteriorate significantly and the stock is expected to materially depreciate as a result thereof. The stock does not have enough upside or downside potential to rate a Strong Buy, Buy, Sell or Short Sell. The stock is either fairly valued or has too much uncertainty to be assigned another rating.
Hold
Disclaimers
The information contained herein is based on sources Mithra Research LLC believes to be reliable, but is neither all-inclusive nor guaranteed to be accurate. Mithra Research LLC has not independently verified the facts, assumptions, or certain estimates contained herein and, accordingly, makes no representations or warranties either express or implied, concerning the fairness, accuracy, or completeness of the information and opinions contained herein. Opinions and price targets reflect the analysts judgment at a particular point in time and are subject to change due to company-specific, industry, and/or economic factors. Further, this transmission is not intended to be an offer or solicitation to buy or sell securities. Mithra Research LLC and its affiliates, principals or employees, other than the research analyst(s) who prepared this report, may have a position in the securities referenced to herein, or own options, rights, or warrants to purchase or sell such securities. Copyright 2008 Mithra Research LLC all rights reserved. April 14, 2008
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Ithra Esearch: White Energy Company

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MITHRA RESEARCH

White Energy (ASX: WEC)

52-week range: A$3.34 - A$2.10

nm nm 38.5% A$0.56 A$0.36

Mithra Research (201) 401-9360 Research@MithraResearch.com www.MithraResearch.com

Laurie D. Goldstein, C.F.A.

White Energy Company

April 14, 2008

White Energy Company

The Energy Challenge

April 14, 2008

White Energy Company

April 14, 2008

White Energy Company

Exhibit 1: World Electricity Generation by Fuel, 2004 and 2030

Oil Nuclear Renewables Natural Gas Coal

Source: Energy Information Association

White Energy Company

Exhibit 2: World Energy Consumption & Electricity Generation

Source: World Coal Institute

April 14, 2008

White Energy Company

Main Applications of Coal

Electricity & Heat Generation 58%

Source: The Future of Coal, Institute for Energy, February 2007

Exhibit 4: Coalification Process & Coal Rank

Source: Australian Coal Association

April 14, 2008

White Energy Company

Exhibit 5: Types of Coal and Their Uses

Source: World Coal Institute

White Energy Company

Hard Coals vs. Soft Coals

Source: Institute for Energy

April 14, 2008

White Energy Company

Exhibit 7: World Map of Hard and Brown Coal Deposits

April 14, 2008

White Energy Company

Exhibit 8: Global Coal Trade Routes

World Coal Exports: 815 mmt

Source: Energy Information Agency, Coal Information 2007.

April 14, 2008

White Energy Company

Exhibit 9: Coal Tons by Rail in U.S., 2002

April 14, 2008

White Energy Company

Issues of Powder River Basin Rail Transport

Source: BNSF Presentation, 2005 (o)

April 14, 2008

White Energy Company

Source: BNSF Presentation, 2005 ( p)

Harmful Effects of Coal Burning

April 14, 2008

White Energy Company

The Coal Technology Life Cycle

Exhibit 10: Coal Technology Lifecycle

Source: White Energy Company, Ltd.

Benefits of the White Coal Technology

April 14, 2008

White Energy Company

Source: White Energy Company Ltd.

Summary: The World Needs White Coal