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NuCoal’s Loss, Shareholders Lose, Australia Loses

Generating Power for Australia

In December 2009, NuCoal acquired all of the issued capital of Doyles Creek Mining Pty Ltd (DCM) for $94 million and thereby Exploration Licence 7270 (EL 7270).

On 23 November 2011, the NSW Government announced that the Independent Commission Against Corruption (ICAC) would be tasked with undertaking an inquiry into the circumstances of the initial grant of EL 7270 to DCM. ICAC is a tribunal and is not a judicial body (eg a Court). Its procedures do not afford parties the same protections and legal entitlements as a Court would dispense. By way of example, appearance before it is not automatic and the right to cross-examine witnesses, indeed the right to call witnesses, is severely circumscribed.

On 18 December 2013, ICAC delivered its final recommendatory report to the NSW Government. That report recommended among other things that EL 7270 be expunged or cancelled.

On 31 January 2014, the NSW Government passed unprecedented legislation to cancel EL 7270. The legislation passed by Parliament denies NuCoal the ability to seek compensation, notwithstanding that the ICAC recommended that any special legislation could be accompanied by a power to compensate any innocent person affected. The legislation also prevents the State from having any liability for its past conduct.

NuCoal and its investors not only relied on a validly issued and executed exploration licence (signed by Minister Macdonald as a representative of the Crown) as their basis for their investment, but also took comfort from a probity report commissioned by the NSW Government, which was made public in late 2010. That probity report confirmed that there was no impropriety in the granting of EL 7270 by Minister Macdonald.

There was no reason for NuCoal, an independent commercial entity, to question or go behind the validity of the licence granted by the Minister. Independent investors should be able to expect that when a licence is issued by a Minister of the Crown of a developed and renowned common law country that espouses the Western ideal that property rights are sacrosanct, ought to expect that those rights will not be taken away.

NuCoal and all of its innocent shareholders did not ever contemplate, and neither should they have, that the economic value of their investments would be depleted by Government action without compensation.

Neither NuCoal nor its current directors have ever been charged or convicted of any corruption, yet NuCoal is the only party affected by the alleged corruption of others in relation to the Doyles Creek tenement.

NuCoal will pursue all available actions to protect the legal rights of the Company and its shareholders.

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