Australian Pacific Coal : Dartbrook Kayuga Seam Underground JORC Reserves Statement

ASX RELEASE

27 March 2017

Dartbrook Kayuga Seam Underground JORC Reserves Statement

Australian Pacific Coal Limited ('AQC', or 'the Company') (ASX Code: AQC) today announces its "Dartbrook Kayuga Seam Underground JORC Reserves Statement" ('Underground Reserve Statement').

Mining Consultancy Services (Australia) Pty Ltd was engaged by the Company to conduct a technical Feasibility Study for re-entering previous underground workings in the Kayuga Seam at the Dartbrook Coal Mine ('Dartbrook') in New South Wales, Australia by way of a bord and pillar mining operation.

AQC has decided not to proceed with the identified underground mine plan for Dartbrook at this time based on the factual data and information that is detailed in the attached Underground Reserve Statement. However, a final decision on underground mining at Dartbrook is yet to be made by the Company. Alternative underground mine plan approaches providing a better risk-adjusted financial outcome for AQC will certainly be considered as part of the Company's deliberations regarding any future coal mine development at Dartbrook.

For further information, please contact:

Australian Pacific Coal Limited Tel: [phone]

Email: [e-mail]

Australian Pacific Coal Limited ABN 49 089 206 986

Level 7, 10 Felix Street, Brisbane QLD 4000 ∙ PO Box 16330, City East QLD 4002

Tel: [phone] ∙ Fax: [phone] ∙ Web: www.aqcltd.com

Waterfront Place Level 19, 1 Eagle Street

Brisbane QLD 4000

(GPO Box 84, Brisbane QLD 4001)

AUSTRALIA

Tel: [phone]

Fax [phone]

www.mcsau.com

Dartbrook Kayuga Seam Underground JORC Reserves Statement Coal Reserves as at February 2017 AUSTRALIAN PACIFIC COAL LIMITED (AQC)

February 2017

JORC Reserves Dartbrook Kayuga Underground February 22, 2017

Disclaimer

The opinions expressed in this report have been based on information supplied to Mining Consultancy Services (Australia) Pty Ltd (MCS) by Australian Pacific Coal Limited (AQC) and other external parties appointed by AQC. The information supplied is to the best of MCS' knowledge and understanding, complete, accurate and true. Whilst MCS has taken all due care in compiling this report, the accuracy of the results and conclusions of this report are dependent on the accuracy and completeness of the supplied data. MCS does not accept responsibility for any errors or omissions in the supplied information and does not accept subsequent liability arising from commercial decisions or actions resulting from any such errors or omissions.

Prepared by: Jack Steenekamp

Managing Director Mining Consultancy Services (Australia)

Reviewed by: Alan McMurtrie

Senior Mining Engineer Mining Consultancy Services (Australia)

Australia Waterfront Place Level 19, 1 Eagle Street	Russia Aurora Business Centre 2nd Floor, Sadovnicheskaya Str. 82. Bld 2	South Africa 1st Floor, Unit C La Rocca Office Park
Brisbane QLD 4000	115035, Moscow, Russia	321 Main Road, Bryanston
(GPO Box 84, Brisbane QLD 4001)	Tel: [phone]	(PO Box 1996, Randburg, 2125)
Tel: [phone]	Tel: [phone]
Fax: [phone]	Fax: [phone]
www.mcsau.com	www.mcsza.com

JORC Reserves Dartbrook Kayuga Seam Underground February 22, 2017

CONTENTS

1. Executive Summary 8

2. Introduction 15

3. Material Compliances and Qualifications 15

4. Limitations 28

5. Review and Audit Process 28

6. Mine Plan and Design 30

7. Overview 30

8. Mining Schedule 40

9. Mining Geometry and Parameters 51

10. Modifying Factors 58

11. Mining 58

12. Coal Processing (Metallurgical as per JORC) 58

13. Infrastructure 59

14. Economic 62

15. Marketing 65

16. Environmental 66

17. Social and Governmental 67

18. Legal 68

19. Conclusion 71

20. JORC Reserves 72

21. Reserves Estimation 72

22. Reserves Classification 75

23. - iii -