HIGHLIGHTS

• Scoping Study confirms robust economics for project development :

• NPV9 of US$263 M ( r eal, after tax, unleveraged)

• IRR of 20%

• Payback Period of 4.9 years (undiscounted)

• Average annual saleable coal production of 1.4 Mt over a 26 year mine life from an underground longwall mine

• Low average annual operating cost s of US$70 per tonne product resulting from short rail transport distances , low labour costs, royalties and taxes

• Realised coal sales price of US$143 per tonne assumed for Lochinvar low ash high volatile coking coal ( including freight benefit )

• Strong operating cashflow s avera ging US$ 75 M per annum with a n operating margin of US$73 per tonne of clean coal

• Low project construction capital cost of US$284 M (including 13% contingency) with only 7km rail spur to connect to mainline rail to domestic customers and ports

• High yield of 71% ( all inclusive LOM average including roof and floor dilution)

• Infill drilling and seismic surveys , first Reserve and Pre – Feasibility planned during 2015

• Construction planned to commence in 2017 with first coal production planned in 2018

NAE Managing Director, Gary, Fietz commented: " We are delighted to report such a robust economic outcome for Lochinvar. The study confirms the potential for a long life operation producing a low ash, high volatile coking coal to supply domestic UK and Eur opean steel mills with operating costs in the lowest quartile of the global seaborne coking coal cost curve.

Lochinvar benefits from immediate access to existing rail and port infrastructure and locally available utilities required to develop the project. We are excited about developing a major new coal project in the UK, an excellent investment destination with low risk, an attractive fiscal regime and a rich coal mining history "

INTRODUCTION

The majority of the Study was undertaken by Palaris Australia Pty Ltd (Palaris) , an internationally recognised mining consultancy specialising in coal exploration and mining. A number of other specialist consultants completed components of the S tudy with some sections being undertaken internally by NAE.

Lochinvar is situated on the border of Scotland and England and benefits from close proximity to excellent infrastructure including direct a ccess to rail , power, water , major roads, the major town of Dumfries and city of Carlis.

NAE holds a 100% interest in the Exploration Licences and Conditional Underground Mining Licences over the Lochinvar and Lochinvar South areas as shown in Figure 1 . The Lochinvar and Lochinvar South licences were granted to NAE by The Coal Authority in June 2012 and March 201 4 , respectively . Since then, NAE has undertaken two exploration drilling programs over the Lochinvar licence outlining a total Indicated and Inferred Resource of 111 million tonnes (Mt) to date.