Chairman’s Address for Extraordinary General Meeting

12 July 2010

Announcement Details
ASX URL: http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=wec#headlines

Summary

Welcome to this Extraordinary General Meeting of White Energy Company Limited. As you are aware the meeting has been called to specifically consider resolutions relating to White Energy’s proposed takeover of South Australia Coal Limited and the associated capital raising. SAC is owned by the ex-Felix Resources shareholders and was separated from Felix Resources immediately prior to the successful takeover by Yanzhou Coal Mining Company Limited in late 2009. SAC’s core asset is a large sub-bituminous coal deposit at Lake Phillipson in South Australia.

We are pleased to announce that the takeover offer by White Energy’s wholly owned subsidiary, White Energy Mining Pty Limited, for all of the ordinary shares in SAC has received strong support from the SAC shareholders. As at today’s date White Energy has already received acceptances under its takeover offer in respect of 73.41% of SAC shares on issue.

We are confident that subsequent to the passing of the resolutions at today’s meeting that we will achieve the required acceptance level.

White Energy’s Board believes that the SAC acquisition is a game changing opportunity for our shareholders.
The acquisition of SAC provides White Energy with highly complementary assets:

The Lake Phillipson coal deposit is a JORC inferred, indicated and measured total sub-bituminous coal resource of 515 million tonnesi. Following completion of the takeover, an exploration program will be immediately undertaken with a view to increasing the size of the resource to at least 1.5 billion tonnes;

SAC’s sub-bituminous coal is capable of being upgraded by White Energy’s technology which could lead to a significant revaluation of the coal reserve;

The location of the deposit has significant infrastructure advantages. It is located in immediate proximity to an existing under utilised railway enabling the transport of the upgraded coal product to Port Augusta, Adelaide or Darwin for export; and

Given South Australia’s forecast energy requirements (including the significant increase in capacity required to accommodate the possible expansion of the Olympic Dam operation) there could be substantive domestic demand for Lake Phillipson coal.

In addition to the coal asset being acquired, the SAC acquisition delivers to White Energy an industry leading board and management team which is capable of leading White Energy through our next phase of growth as we become an operating coal company. After completion of the SAC transaction, the following changes will be made to the White Energy Board:

Mr Travers Duncan, ex-Felix Resources Chairman and current Board member and major shareholder of White Energy, will become Chairman of White Energy;

Mr Brian Flannery, the former Felix Resources Managing Director and current major shareholder of White Energy, will assume the role of CEO of White Energy and join the Board as an executive director;

Former Felix Resources board members Mr Hans Mende and Mr John Kinghorn will join the White Energy board as non-executive directors; and

Myself the current Chairman of White Energy, Mr John Atkinson the current Managing Director of White Energy and current director Mr Graham Cubbin will all continue as non-executive directors of White Energy.

It is our view that these changes to the White Energy Board and the introduction of the ex-Felix Resources management team, who have considerable experience in coal mine project development and execution, will create a platform for White Energy to become one of Australia’s leading independently owned coal companies, and allow White Energy to participate in the consolidation of the Australian coal industry and identify growth opportunities in other key coal markets.

Concurrent with the acquisition, White Energy is raising between $94.1 million and $144.8 million through a share placement. This capital raising is being led by our new Board who are showing their confidence in the Company by committing over $90 million. The capital raising will significantly strengthen White Energy’s balance sheet and provide White Energy with cash reserves in excess of $200 million.

I do wish to draw shareholders attention to the Independent Experts Report prepared by Deloitte confirmingthat the acquisition of SAC is fair and reasonable to all non-associated shareholders.

White Energy’s strong cash position will provide an outstanding platform for growth and will specifically be used to further develop the acquired Lake Phillipson coal deposit, facilitate an acquisitive growth strategy, and assist with funding the roll-out of our coal upgrading plants in Indonesia, the United States and Africa.