`

Killara Resources Limited ABN 68 132 204 561

ASX Code: KRA

Issued Capital:

120.3M Fully Paid Shares

38.0M Options (Unlisted)

31.5M Deferred

Consideration

Shares (Unlisted)

Robert Kipp

Managing Director

Peter Rudd

Non-Executive Chairman

Matthew Driscoll

Executive Director

Reza Zulkarnaen

Executive Director

Wim Zulkarnaen

Non-Executive Director

Darren Misquitta

Non-Executive Director

Leah Watson

Company Secretary

Level 3 North building

333 Collins Street

Melbourne, VIC 3000

T: +61 3 9629 3898

F: +61 3 9629 4898

www.killararesources.com

Minerals exploration in

Indonesia and Australia

Operational Update on Indonesian drilling campaign and field survey.

PT Borneo Emas Hitam – East Kalimantan

93 drill holes completed, total 3,350 metres as at 26

August 2013.

86 of the 93 drill holes intersected target coal seams.

Drilling at Pit 4 and Pit 11 now complete. Killara’s

technical team now focused on mine design.

Independent lab testing of coal samples indicate

average coal quality of 6,867 to 7,353Calorific Value (ar)

in target seams from Pit 4 and Pit 11.

Management now engaged in discussions with coal off

takers and traders.

PT Pagun Taka – Central Kalimantan

Field reconnaissance program completed.

Killara identified coal and obtained samples from three

geological formations.

Field mapping identified 22 outcrops with coal seam

thickness varying from 0.61m to 1.45 m.

Independent lab testing of coal samples indicate

average coal quality of Calorific Value 4,377 (ar),

Inherent Moisture 22.31%, Ash 1.86% and Sulphur

0.33%.

Management now preparing economic assessment of

the mining concession before undertaking any further

works.

3 September 2013

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PT Borneo Emas Hitam

Drilling contractor PT Reka Indo Internusa is continuing an expanded exploration program

at Killara’s PT Borneo Emas Hitam (BEH) coal concession in East Kalimantan. The now 120

hole (~5,050m) program is ongoing with 93 holes (~3,350m) drilled as of the 26th August,

2013. The program focuses on an additional target (East Expansion) east of the two short

term production targets (Pit 11 and Pit 4) which have been subject to land compensation.

Drilling at Pit 11 and Pit 4 is complete along with geological modelling. Killara is now in the

process of detailed mine planning and economic assessment of these 2 targets.

Current production permitting, land compensation, infrastructure, forestry classification and

ongoing works should allow Killara to commence mining these priority areas within an

estimated 3 months assuming positive results from mine planning and economic

assessment activities.

Results from drilling to date are within expectations of the Killara geological team. 86 of the

93 holes drilled have intersected target seams. Seam Interval thickness results from drilling

are summarised below. All intervals are apparent thicknesses and were adjusted to

geophysical log results. Further information is provided as an appendix.

Table 1 - BEH average seam thickness results from the current drilling campaign

Coal Quality

Since the last market update, 32 samples from 9 core holes have been submitted for

analysis at the PT Geoservices Balikpapan laboratory. An additional 3 outcrops were also

sampled and submitted to the laboratory during recent exploration. Coal quality results

from outcrop and drilling confirmed a direct shipping thermal coal product with high CV

and low ash but with varying generally high sulphur levels.

Area Seam Average Thickness (m)

11E 0.66

11EL 0.23

6E 0.39

5E 0.56

5EL 0.37

4E 0.31

33E 0.30

32E 0.23

31E 0.23

3E 0.69

3EL 0.20

2E 0.26

2EL 0.40

1EUU 0.22

1EU 0.25

1EM 0.33

1EL 0.30

Pit 11

Pit 4

East Expansion

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Table 2 - BEH average coal quality results from all outcrops

Total Inherent Ash Total Calorific Calorific

Sample ID Moisture Moisture Sulphur Value Value

% % % % cal/g cal/g

ar adb adb adb adb ar

All Outcrops 10.03 6.70 4.24 1.65 6,890 6,651

Table 3 - BEH average coal quality results from drilling on a seam by seam basis

Total Inherent Ash Total Calorific Calorific

Sample ID Moisture Moisture Sulphur Value Value

% % % % cal/g cal/g

ar adb adb adb adb ar

Seam 11E 6.33 4.45 4.77 2.68 7,283 7,140

Seam 11EL 5.69 4.35 7.34 4.06 6,965 6,867

Seam 6E 6.37 3.77 2.92 2.60 7,557 7,353

Seam 5E 7.26 4.18 5.83 3.24 7,171 6,943

Seam 4E 5.65 3.78 8.54 4.39 7,070 6,932

Seam 3E 6.62 3.38 6.27 2.21 7,312 7,069

Further detail is provided in the attached appendix.

Geology

The project covers both limbs of a south plunging syncline from the Kutai basin. Geological

formations are the Balikpapan and Pulaubalang, both major sources of coal production in

East Kalimantan. Dips increase away from the syncline’s axis up to a maximum of 56

degrees on the eastern and western concession borders in the Pulaubalang formation.

The priority areas currently being drilled are in the Pulaubalang formation on the eastern

limb of the syncline where dips range up to 30 degrees.

Ongoing Exploration

The East Extension area is the focus of ongoing exploration at BEH. A number of additional

drill targets have been identified, all with field reconnaissance completed by Killara and

some subject to drilling by previous owners of the concession. These targets will be the

focus of ongoing exploration, with the intention to drill them to a level of confidence

required for production.

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Figure 1 - BEH borehole locations, land compensation and mined out/dump areas

Figure 2 - BEH project location

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PT Pagun Taka

Killara has completed an initial field reconnaissance program at the PT Pagun Taka (PT)

concession in Central Kalimantan. The ~ 1 month field program focussed on validating

geological information provided by the vendor which included field mapping, drilling,

laboratory analysis and associated reports.

Killara identified coal from three geological formations at PT, the Montalat, Berai and

Warukin. The Montalat and Warukin formations are subject to coal mining in an adjoining

concession and throughout Central Kalimantan. Field mapping identified 22 coal outcrops

with true thicknesses averaging 0.61m and ranging up to 1.45m.

Table 4 - PT Outcrop data

Easting Northing

OC001 247,367 9,876,293 55 5E 1.45 OCBB-001-PG-BS

OC002 247,358 9,876,322 15 4E 0.86 OCBB-002-PG-BS

OC003 247,219 9,875,967 65 5E 1.28 OCBB-003-PG-BS

OC004* 246,332 9,877,738 65 18E 0.91 OCBB-004-PG-BS

OC005* 246,307 9,877,803 65 21E 1.39 OCBB-005-PG-BS

OC006 249,839 9,875,529 65 15E 0.30

OC007 248,100 9,878,693 65 15E 0.30

OC008 248,452 9,878,900 60 38E 0.17

OC009 248,454 9,878,897 55 42E 0.75 OCBB-009-PG-BS

OC010 248,519 9,878,505 68 44E 0.82 OCBB-010-PG-BS

OC011 248,418 9,878,541 68 42E 0.70 OCBB-011-PG-BS

OC012 252,121 9,882,259 58 50E 0.82 OCBB-012-PG-BS

OC013 250,396 9,881,187 40 28E 0.05

OC014 249,837 9,875,508 65 25E 0.20

OC015 248,585 9,878,371 182 52 0.35

OC016 248,440 9,878,327 55 22E 0.57 OCBB-003-PG-JL

OC017 248,213 9,879,071 40 45E 0.49

OC018 248,092 9,879,067 65 30E 0.50 OCBB-005-PG-JL

OC019 248,537 9,879,000 65 35E 0.73 OCBB-006-PG-JL

OC020 250,337 9,881,057 105 27W 0.30

OC021 250,128 9,880,985 270 25E 0.30

OC022 248,113 9,879,071 65 25E 0.23

Average 0.61

Sample CodeLocation

Outcrop Strike Dip Thickness (m)

*Outcrops OC004 and OC005 occur outside the concession boundary, however do strike

into the concession

12 of the 22 coal outcrops were sampled and submitted to the PT Geoservices Balikpapan

laboratory for analysis. Results confirmed a direct shipping thermal coal product with low

CV, very low ash and low sulphur.

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Table 5 - PT coal quality results

Total Inherent Ash Total Calorific Calorific

Moisture Moisture Sulphur Value Value

% % % % cal/g cal/g

ar adb adb adb adb ar

OC001 47.10 26.21 0.95 0.17 4,829 3,456

OC002 44.91 21.46 1.36 0.16 5,076 3,558

OC003 42.85 21.60 1.02 0.20 5,100 3,720

OC004 34.25 22.64 1.33 0.20 5,239 4,443

OC005 31.58 24.01 1.78 0.26 5,114 4,663

OC009 34.29 20.19 1.41 0.43 5,405 4,442

OC010 28.77 20.48 4.40 0.30 5,365 4,821

OC011 37.55 21.69 0.97 0.36 5,247 4,197

OC012 35.62 26.23 0.79 0.13 4,877 4,295

OC016 24.85 18.62 1.03 0.43 5,784 5,370

OC018 28.70 21.26 0.98 0.30 5,595 5,085

OC019 30.52 23.35 6.26 0.96 4,926 4,468

Average 35.08 22.31 1.86 0.33 5,213 4,377

Sample ID

Geology

The project occurs in the large tertiary Barito basin of Kalimantan and covers the southern

limb of an east-west striking anticline. Dips decrease away from the anticline’s axis and

range from 50 degrees in the Berai formation to 4 degrees in the Warukin formation.

Ongoing Exploration

A number of drill targets have been identified by the recent field reconnaissance

campaign. Killara is in the process of completing an economic assessment on the

concession, the results of which will determine the nature of ongoing work at the

concession.

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Figure 3 - PT outcrop locations

Figure 4 - PT Project Location

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Leah Watson

CFO and Company Secretary

For Investor Information, please contact:

Matthew Driscoll

Head of Investor Relations

Melbourne Head Office Phone: +61 3 9629 3898

Mobile: Australian Callers: 0417 041 725

Mobile: International Callers: +61 417 041 725

Web: www.killararesources.com

About Killara Resources Limited

Killara is an ASX listed company. Through a well-developed network of business contacts in

the Republic of Indonesia, the company is offered a range of resource projects for

potential acquisition and/or joint venture.

Competent Persons Statement

Exploration or technical information in this release has been prepared by Mr Tully Matthews

Bsc, who is a full time employee of Killara Resources Limited and a Member of the

Australian Institute of Mining and Metallurgy. Mr Matthews has sufficient experience which

is relevant to the style of mineralisation under consideration and to the activity which he is

undertaking to qualify as a Competent Person as defined in the 2012 Edition of the

“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore

Reserves” (the JORC Code). Mr Matthews consents to the release being issued in the form

and context in which it appears.

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APPENDIX

Table 1 - BEH borehole locations

Table continues on next page

Borehole X Y Z Final Depth** Dip Azimuth

P11E001 504,381 9,963,472 55.2 27.0 0 -90

P11E002 504,332 9,963,484 50.4 20.2 0 -90

P11E003 504,374 9,963,320 55.0 20.2 0 -90

P11E003C 504,374 9,963,322 54.9 12.0 0 -90

P11E004 504,323 9,963,319 44.9 18.0 0 -90

P11E004C 504,324 9,963,315 45.1 17.9 0 -90

P11E004R 504,323 9,963,316 45.1 18.2 0 -90

P11E005 504,354 9,963,123 54.6 16.4 0 -90

P11E006 504,304 9,963,133 48.6 15.0 0 -90

P11E007 504,353 9,962,925 55.4 13.5 0 -90

P11E008 504,315 9,962,890 52.7 22.5 0 -90

P11E009 504,373 9,962,728 60.5 22.5 0 -90

P11E009C 504,373 9,962,730 60.5 18.0 0 -90

P11E010 504,326 9,962,722 56.0 20.0 0 -90

P11E010C 504,327 9,962,729 56.3 17.6 0 -90

P11E011 504,371 9,962,518 63.7 21.0 0 -90

P11E012 504,328 9,962,604 55.6 22.0 0 -90

P11E013 504,365 9,962,311 59.6 19.5 0 -90

P11E014 504,321 9,962,307 49.4 28.0 0 -90

P11E015 504,285 9,963,477 43.2 40.0 0 -90

P11E016 504,273 9,963,321 41.7 30.0 0 -90

P11E016C 504,276 9,963,324 41.6 30.0 0 -90

P11E017 504,260 9,963,132 42.5 20.0 0 -90

P11E018 504,276 9,962,891 47.7 28.5 0 -90

P11E019 504,275 9,962,718 37.7 19.0 0 -90

P11E019C 504,276 9,962,723 38.1 19.4 0 -90

P11E020 504,409 9,962,602 68.9 30.0 0 -90

P11E021 504,390 9,962,453 67.0 25.0 0 -90

P11E022 504,363 9,962,604 62.1 30.0 0 -90

P11E023 504,362 9,963,476 52.8 10.0 0 -90

P11E024 504,300 9,963,684 41.3 15.0 0 -90

P11E025 504,234 9,963,689 30.4 25.0 0 -90

P04E001 504,791 9,963,683 51.5 30.0 0 -90

P04E002 504,811 9,963,559 53.9 30.0 0 -90

P04E003 504,771 9,963,502 47.0 30.0 0 -90

P04E004 504,795 9,963,316 63.7 30.5 0 -90

P04E004C 504,795 9,963,319 64.1 25.0 0 -90

P04E005 504,772 9,963,281 55.3 30.0 0 -90

P04E005C 504,772 9,963,278 55.1 23.4 0 -90

P04E006 504,769 9,963,099 42.8 30.5 0 -90

P04E007 504,799 9,962,976 51.8 30.0 0 -90

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P04E008 504,815 9,962,890 61.7 31.0 0 -90

P04E008C 504,815 9,962,893 61.8 17.0 0 -90

P04E009 504,741 9,962,917 54.5 29.0 0 -90

P04E009C 504,741 9,962,914 55.2 27.0 0 -90

P04E010 504,812 9,962,699 67.8 30.0 0 -90

P04E011 504,772 9,962,746 55.8 30.0 0 -90

P04E012 504,771 9,963,361 58.9 31.0 0 -90

P04E013 504,777 9,962,842 48.1 30.0 0 -90

P04E014 504,797 9,963,191 51.3 30.0 0 -90

P04E015 504,734 9,963,185 49.0 29.0 0 -90

P04E016 504,735 9,963,428 43.8 25.0 0 -90

P04E017 504,759 9,963,631 49.1 29.0 0 -90

P04E018 504,761 9,963,420 44.3 30.0 0 -90

MH001* 505,049 9,962,993 53.1 30.0 0 -90

MH002* 505,020 9,962,996 45.9 40.0 0 -90

MH006 505,049 9,962,767 71.8 30.0 0 -90

MH006C 505,048 9,962,764 71.7 34.0 0 -90

MH007 505,019 9,962,770 64.1 43.0 0 -90

MH007C 505,018 9,962,767 64.2 43.0 0 -90

MH008 504,985 9,962,772 58.2 50.0 0 -90

MH008C 504,985 9,962,770 58.6 39.0 0 -90

MH009 504,950 9,962,776 51.1 80.0 0 -90

MH009C 504,950 9,962,778 51.5 55.0 0 -90

MH010 504,920 9,962,777 47.5 100.0 0 -90

MH010C* 504,920 9,962,778 47.0 28.0 0 -90

MH011 505,031 9,962,674 59.2 30.0 0 -90

MH012 504,999 9,962,677 57.4 40.0 0 -90

MH013 504,967 9,962,574 49.7 50.0 0 -90

MH014 504,935 9,962,574 57.4 80.0 0 -90

MH015 504,906 9,962,582 50.0 99.0 0 -90

MH016 505,012 9,962,372 50.8 30.0 0 -90

MH016C 505,012 9,962,370 50.7 18.0 0 -90

MH017 504,975 9,962,373 61.5 40.0 0 -90

MH017C 504,975 9,962,370 61.9 25.5 0 -90

MH018 504,954 9,962,378 65.0 49.0 0 -90

MH018C 504,949 9,962,372 66.9 44.0 0 -90

MH019 504,912 9,962,387 65.7 80.0 0 -90

MH019C 504,911 9,962,386 65.7 62.0 0 -90

MH020 504,884 9,962,387 67.4 100.0 0 -90

MH020C 504,884 9,962,388 67.4 79.0 0 -90

MH021 504,985 9,962,173 74.5 30.0 0 -90

MH022 504,947 9,962,174 69.6 40.0 0 -90

MH023 504,924 9,962,178 60.9 50.0 0 -90

MH024 504,894 9,962,182 59.6 80.0 0 -90

MH025 504,861 9,962,180 51.2 100.0 0 -90

MH026* 504,953 9,961,832 40.0 30.0 0 -90 Table continues on next page

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MH026C* 504,953 9,961,829 40.0 13.0 0 -90

MH027* 504,923 9,961,835 62.0 40.0 0 -90

MH030* 504,842 9,961,944 67.0 96.0 0 -90

MH030C* 504,842 9,961,941 67.0 100.0 0 -90

MH031* 504,943 9,961,732 50.0 30.0 0 -90

* Awaiting survey, co-ordinates from GPS, ** Final depth from final geophysical log depth

Table 2 - BEH borehole intervals

Borehole Seam Thickness (m) Final Depth (m)

MH001 1EU 20.63 20.99 0.36 30.0

1EM 23.53 23.90 0.37

1EL 26.33 26.61 0.28

MH002 3E 16.95 17.35 0.40 40.0

2E 37.57 37.96 0.39

2EL 39.68 39.92 0.24

MH006 2EL 3.11 3.67 0.56 30.0

1EU 21.87 22.09 0.22

1EM 22.36 22.71 0.35

1EL 28.74 29.03 0.29

MH006C 2EL 3.57 4.16 0.59 34.0

1EU 21.89 22.16 0.27

1EM 22.47 22.84 0.37

1EL 28.37 28.67 0.30

MH007 2E 16.29 16.50 0.21 43.0

2EL 17.67 18.16 0.49

1EU 37.15 37.32 0.17

1EM 38.08 38.30 0.22

1EL 40.34 40.68 0.34

MH007C 2E 16.99 17.24 0.25 43.0

2EL 18.03 18.55 0.52

1EU 37.33 37.56 0.23

1EM 38.25 38.49 0.24

1EL 40.44 40.79 0.35

MH008 2E 33.18 33.46 0.28 50.0

2EL 34.38 34.86 0.48

MH008C 2E 32.94 33.22 0.28 39.0

2EL 34.13 34.55 0.42

MH009 3E 9.01 9.23 0.22 80.0

3EL 9.40 9.60 0.20

2E 47.48 47.72 0.24

2EL 48.60 49.03 0.43

1EUU 64.85 65.03 0.18

1EU 66.73 67.06 0.33

1EM 68.07 68.43 0.36

1EL 70.36 70.62 0.26

Interval (m)

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Borehole Seam Thickness (m) Final Depth (m)

MH009C 3E 10.41 10.89 0.48 55.0

2E 49.22 49.60 0.38

2EL 50.58 51.02 0.44

MH010 3E 24.46 24.95 0.49 100.0

2E 64.00 64.24 0.24

2EL 65.44 65.82 0.38

1EU 81.82 82.02 0.20

1EM 83.53 83.93 0.40

1EL 85.40 85.70 0.30

MH010C 3E 24.10 24.50 0.40 28.0

MH011 1EUU 17.87 18.11 0.24 30.0

1EU 19.21 19.44 0.23

1EM 20.65 20.98 0.33

1EL 23.80 24.09 0.29

MH012 2E 17.47 17.68 0.21 40.0

2EL 18.41 18.81 0.40

1EUU 35.15 35.39 0.24

1EU 37.48 37.71 0.23

1EL 38.72 38.97 0.25

MH013 3E 24.33 24.84 0.51 50.0

2E 44.95 45.28 0.33

2EL 47.34 47.66 0.32

MH014 3E 48.81 49.23 0.42 80.0

2E 72.57 72.76 0.19

2EL 74.40 74.69 0.29

MH015 33E 5.36 5.66 0.30 99.0

32E 18.95 19.18 0.23

31E 41.12 41.35 0.23

3E 57.09 57.58 0.49

2E 81.97 82.26 0.29

2EL 84.21 84.56 0.35

MH016 2E 11.46 11.74 0.28 30.0

2EL 14.16 14.43 0.27

MH016C 2E 11.14 11.27 0.13 18.0

2EL 13.61 13.95 0.34

MH017 3E 20.07 21.24 1.17 40.0

MH017C 3E 20.32 21.52 1.20 25.5

MH018 3E 39.39 40.31 0.92 49.0

MH018C 3E 39.57 40.34 0.77 44.0

MH019 3E 57.97 58.78 0.81 80.0

MH019C 3E 58.34 59.16 0.82 62.0

MH020 3E 74.26 75.14 0.88 100.0

MH020C 3E 74.30 75.04 0.74 79.0

MH021 3E 10.69 11.82 1.13 30.0

MH022 3E 28.46 29.49 1.03 40.0

Interval (m)

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Borehole Seam Thickness (m) Final Depth (m)

MH023 3E 34.76 34.99 0.23 50.0

MH024 3E 52.91 53.90 0.99 80.0

MH025 3E 62.19 63.28 1.09 100.0

2E 94.30 94.55 0.25

2EL 96.17 96.46 0.29

MH026 3E 9.08 9.36 0.28 30.0

MH026C 3E 8.97 9.22 0.25 13.0

MH027 3E 10.84 11.34 0.50 40.0

MH030 3E 72.43 73.35 0.92 96.0

P04E001 4E 7.31 7.60 0.29 30.0

P04E002 4E 3.27 3.43 0.16 30.0

P04E003 5E 5.68 6.26 0.58 30.0

4E 11.75 12.05 0.30

P04E004 6E 4.33 4.94 0.61 30.5

5E 14.61 15.22 0.61

4E 20.86 21.12 0.26 25.0

P04E004C 6E 4.60 5.06 0.46

5E 14.71 15.29 0.58

4E 20.72 21.06 0.34

P04E005 6E 6.48 6.92 0.44 30.0

5E 15.28 15.85 0.57

4E 21.72 22.12 0.40

P04E005C 6E 6.35 6.74 0.39 23.4

5E 15.28 15.84 0.56

4E 21.96 22.21 0.25

P04E006 5E 8.29 8.90 0.61 30.5

5EL 9.84 10.21 0.37

4E 15.34 15.64 0.30

P04E007 4E 9.13 9.44 0.31 30.0

P04E008 4E 10.37 10.69 0.32 31.0

P04E008C 4E 11.18 11.49 0.31 17.0

P04E009 6E 14.79 15.15 0.36 29.0

5E 21.19 21.59 0.40

P04E009C 6E 16.17 16.46 0.29 27.0

5E 22.75 23.10 0.35

P04E010 4E 11.31 11.72 0.41 30.0

P04E011 5E 4.21 4.90 0.69 30.0

4E 19.50 19.80 0.30

P04E012 6E 7.88 8.41 0.53 31.0

5E 17.87 18.50 0.63

4E 23.85 24.11 0.26

P04E013 4E 13.10 13.40 0.30 30.0

P04E014 4E 7.67 8.02 0.35 30.0

P04E015 6E 14.38 14.75 0.37 29.0

6EL 16.00 16.00 0.00

Interval (m)

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Borehole Seam Thickness (m) Final Depth (m)

5E 23.00 23.60 0.60

P04E016 5E 16.35 16.90 0.55 25.0

4E 22.50 22.77 0.27

P04E017 6E 3.74 4.00 0.26 29.0

5E 12.46 13.04 0.58

4E 18.81 19.13 0.32

P04E018 5E 6.00 6.64 0.64 30.0

4E 12.40 12.70 0.30

P11E001 11EL 9.90 10.52 0.62 27.0

P11E002 11E 10.12 10.58 0.46 20.2

11EL 19.21 19.65 0.44

P11E003 11EL 8.47 8.80 0.33 20.2

P11E003C 11EL 8.57 8.79 0.22 12.0

P11E004 11E 5.23 6.07 0.84 18.0

11EL 14.69 15.01 0.32

P11E004C 11E 5.26 5.80 0.54 17.9

11EL 14.53 14.84 0.31

P11E004R 11E 5.44 6.52 1.08 18.2

11EL 14.92 15.32 0.40

P11E005 11EL 4.00 4.00 0.00 16.4

P11E006 11E 7.71 8.41 0.70 15.0

P11E007 11EL 5.00 5.00 0.00 13.5

P11E008 11E 12.60 13.49 0.89 22.5

P11E009 11EL 5.00 5.00 0.00 22.5

P11E009C 11EL 5.00 5.00 0.00 18.0

P11E010 11E 14.13 14.95 0.82 20.0

P11E010C 11E 14.02 14.94 0.92 17.6

P11E011 11E 10.15 10.60 0.45 21.0

P11E012 11E 14.25 14.96 0.71 22.0

P11E013 11E 12.90 13.22 0.32 19.5

P11E014 11E 10.76 10.87 0.11 28.0

P11E015 11E 15.60 16.36 0.76 40.0

P11E016 11E 16.38 17.50 1.12 30.0

P11E016C 11E 15.98 17.04 1.06 30.0

11EL 25.95 26.10 0.15

P11E017 11E 12.88 13.82 0.94 20.0

P11E018 11E 22.04 22.69 0.65 28.5

P11E019 11E 13.94 14.72 0.78 19.0

P11E019C 11E 13.58 14.30 0.72 19.4

P11E020 11EL 10.60 11.05 0.45 30.0

P11E021 11EL 15.26 15.56 0.30 25.0

P11E022 11E 11.00 11.00 0.00 30.0

P11E023 11E 3.94 4.71 0.77 10.0

P11E024 11E 5.95 6.76 0.81 15.0

P11E025 11E 15.00 15.00 0.00 25.0

Interval (m)

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Table 3 - BEH coal quality results from drilling

Total Inherent Ash Total Calorific Calorific

Sample ID Moisture Moisture Sulphur Value Value

% % % % cal/g cal/g

ar adb adb adb adb ar

OC001 14.84 10.03 0.97 0.24 6,515 6,166

OC002 6.27 5.13 1.06 0.36 7,424 7,335

OC003 9.81 7.15 1.56 0.14 7,200 6,994

OC004 20.26 11.69 6.23 0.41 5,695 5,142

OC005 6.62 4.40 10.18 6.47 6,528 6,377

OC006L 6.65 4.97 3.82 4.34 7,248 7,120

OC006U 6.59 4.76 1.75 4.18 7,275 7,135

OC007 9.65 8.05 3.30 0.29 7,032 6,909

OC008 10.53 7.87 2.09 0.38 7,031 6,828

OC009 11.35 8.10 18.98 0.43 5,459 5,266

OC010 14.31 10.95 2.35 0.62 6,505 6,259

OC011 9.97 7.55 4.32 0.36 6,789 6,611

OC013 12.51 10.36 4.46 0.56 6,664 6,504

OC015L 5.72 4.01 6.06 2.82 7,220 7,091

OC015U 16.35 9.03 2.74 1.17 6,338 5,828

OC017 11.38 7.31 2.57 2.46 6,820 6,520

OC018 15.25 9.11 1.72 0.88 6,564 6,120

OC021 9.33 5.54 1.65 0.73 7,290 6,997

OC022 5.12 3.15 7.87 5.17 7,285 7,137

OC023 7.56 3.61 2.37 2.09 7,443 7,138

OC024 8.01 4.68 2.75 1.17 7,360 7,103

OC025 6.59 3.98 6.01 4.19 7,229 7,033

OC026 6.54 4.40 3.16 1.56 7,345 7,180

OC030 10.54 6.89 1.86 0.55 6,851 6,582

OC031 11.35 6.94 1.54 2.01 6,917 6,589

OC032 15.08 9.34 2.42 1.89 6,405 6,000

OC033 7.31 5.51 2.75 2.34 7,416 7,275

OC035 10.50 8.10 4.44 0.33 6,878 6,698

OC040 7.99 5.49 1.36 1.24 7,289 7,096

OC043 6.57 4.72 3.68 0.79 7,297 7,156

OC044 5.72 4.28 1.98 2.32 7,546 7,433

OC046 5.47 4.06 3.17 3.29 7,482 7,372

OC3002 13.13 8.76 2.53 0.23 6,686 6,366

OC3003 10.49 7.35 2.67 0.42 7,132 6,890

OC3004 15.70 7.35 22.01 1.26 4,978 4,530

Average 10.03 6.70 4.24 1.65 6,890 6,651

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Table 4 - BEH coal quality results from drilling

Total Inherent Ash Total Calorific Calorific

Moisture Moisture Sulphur Value Value

% % % % cal/g cal/g

ar adb adb adb adb ar

P11E004C 5.72 5.82 6.40 4.13 6.57 4.18 7,130 6,961

5.82 6.52 6.34 4.35 2.76 2.49 7,488 7,332

6.52 6.62 6.45 4.54 5.97 2.79 7,135 6,992

P11E016C 16.00 16.10 6.91 3.74 17.13 4.21 6,261 6,055

16.10 16.88 6.17 4.45 5.38 2.44 7,197 7,067

16.88 16.98 6.01 4.49 5.28 3.13 7,219 7,104

26.20 26.40 5.69 4.35 7.34 4.06 6,965 6,867

P11E019C 13.96 14.06 7.02 4.62 3.93 2.09 7,321 7,136

14.06 14.46 6.97 4.43 3.15 2.07 7,408 7,211

14.46 14.61 5.70 4.64 4.44 2.90 7,319 7,238

P11E010C 14.16 14.26 5.78 3.94 7.48 4.25 7,129 6,992

14.26 14.94 6.09 4.64 3.33 2.58 7,440 7,327

14.94 15.04 6.20 4.63 6.63 4.17 7,084 6,967

P04E004C 4.78 4.98 5.87 4.19 3.92 3.22 7,297 7,169

14.78 14.88 6.14 3.93 4.82 3.17 7,296 7,128

14.88 15.34 9.18 4.73 6.22 3.37 6,971 6,645

15.34 15.44 5.69 3.44 6.85 5.35 7,195 7,027

20.88 21.15 5.83 3.88 8.34 3.23 7,118 6,974

P04E005C 6.60 6.85 5.35 4.03 2.33 2.34 7,546 7,443

15.30 15.40 4.81 3.60 5.98 3.14 7,273 7,182

15.40 15.56 5.87 4.29 3.92 2.77 7,374 7,252

15.56 15.66 5.65 4.28 4.55 2.87 7,291 7,187

P04E008C 10.55 10.65 9.07 4.35 23.09 3.70 5,632 5,354

10.80 11.05 5.46 3.66 8.75 5.67 7,017 6,886

P04E009C 16.14 16.41 6.37 3.77 2.92 2.60 7,557 7,353

22.85 23.15 8.54 3.93 7.25 3.13 7,120 6,778

MH018C 39.72 39.82 8.30 3.52 26.63 3.97 5,390 5,123

39.82 40.40 6.71 3.09 4.60 2.13 7,455 7,176

40.40 40.50 12.28 4.35 10.36 1.61 6,806 6,242

MH019C 58.55 58.65 5.92 3.68 7.02 3.05 7,225 7,057

58.65 59.35 5.38 3.44 4.99 1.95 7,470 7,320

59.35 59.45 7.30 3.34 11.38 3.21 6,837 6,557

Sample Interval (m)Sample ID

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Table 5 - JORC Table for Public Reports on Exploration Results, Mineral Resources and Ore

Reserves

Criteria Explanation

Sampling Techniques Rotary drilling was used to obtain core which was sampled to industry

standards. Samples were prepared and analysed by PT Geoserv ices to

ASTM standards. Sample intervals were calibrated with downhole

geophysical logging results from Gamma, density and Caliper sondes

Drilling Techniques 4 Jacro 175 rotary drill rigs were used to drill HQ sized holes.

Drill Sample Recovery Average recovery from core holes was >90%. No sample bias occurred due

to core losses.

Logging All chips and core was geologically logged. No geotechnical holes were

drilled. All holes were subject to geophysical logging. All logging was to a

standard appropriate for Mineral Resource estimation.

Sub-sampling techniques

and sample preparation

Full core samples were taken. Samples were prepared to industry standards

and appropriate for the deposit in consideration.

Quality of assay data and

laboratory tests

Sample preparation and assaying was completed to ASTM standards by PT

Geoserv ices. No duplicates or laboratory checks were undertaken by

Killara.

Verification of sampling

and assaying

No adjustment to the assay data was made. All data and sampling was

rev iewed by a senior/managing geologist.

Location of data points Drill locations were recorded using a GPS. These will be updated by the

survey team using Topcon Total Station equipment. Outcrops were

recorded with a GPS only.

Data spacing and

distribution

See Figure 1 and Figure 3 of this announcement for spacings. Samples were

not composited. Data spacing and distribution is sufficient to establish the

degree of geological continuity appropriate for Mineral Resource

estimation.

Orientation of data in

relation to geological

structure

Geological sampling is considered representative of the projects

geological structure. Apparent widths were reported for drill intervals and

true widths reported for outcrops.

Sample security Samples were taken, stored and delivered to the coal laboratory by Killara

geologists.

Audits or reviews NA

Mineral tenement and

land tenure status

Production permit (Izin Usaha Pertambangan No:540/005/IUPOP/MB-

PBAT/I/2011) covering a 1,002ha area in the Tenggarong district, East

Kalimantan Regency, Indonesia. Expiry on the 8th January, 2014. Listed as

‘clean and clear’ by the Indonesia’s department of Energy and Mineral

Resources. No material issues with third parties including joint ventures,

parnterships, overriding royalties, native tit le interests, historical sites,

wilderness, national park or environmental settings known. Killara 80%

ownership.

Exploration done by other

parties

Vendor data included 566 borehole logs, topographical mapping, coal

analysis and associated reports. This information was validated by Killara’s

geologists however is not sufficient to allow for reporting of Reserves to

JORC Standards.

Section 1 Sampling Techniques and Data

Section 2 Reporting of Exploration Results

Table continues on next page

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Geology BEH is located in the Kutai basin, East Kalimantan, Indonesia. The first phase

of sedimentation in the Kutai Basin was a transgressive phase which began

in the early Miocene, this was followed by a phase of regression that

continues today. Sediments within the basin characteristically consist of

clastic fine grain quartz sandstones, siltstones and claystones. Other

sediments include intercalated siltstones, limestones and coal deposited in

parallic, neritic or littoral deltaic environments grading to open marine

environments. PT is located in the Barito basin, Central Kalimantan,

Indonesia. The basin is an asymmetric basin, with a foredeep in the eastern

part of the basin and a platform in the west approaching the Schwaner

Shield. The Barito Basin commenced its development in the Late

Cretaceous, following a micro-continental collision between the

Paternoster and SW Borneo microcontinents. The geological formations at

PT are Oligocene to Pliocene.

Drill hole information See Table1, Table 2 & Table 3 from the Appendix.

Data aggregation

methods

NA

Relationship between

mineralisation widths and

intercept depths

Apparent widths were reported for drill intervals and true widths reported

for outcrops.

Diagrams See Figure 1 & Figure 3.

Balanced reporting NA

Other substantive

exploration data

NA

Further work Refer to the announcement.

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