Buckskin Project

White Energy’s wholly owned subsidiary, White Energy Coal North America, Inc. (“WECNA”), has entered into agreement with Buckskin Mining Company (“Buckskin”), a wholly owned subsidiary of Kiewit Group, to enable WECNA to develop coal upgrading plants at Buckskin’s mine in Gillette Wyoming. The project will have an initial capacity of 1 million tonnes per annum but the parties intend to expand the capacity to 8 million tonnes per annum.

The Buckskin Mine produces in excess of 27 million tons of sub-bituminous coal annually, and since 1981 has shipped more than 285 million tons of high quality, low quality coal from the Southern Powder River Basin. White Energy will own 100% of the Buckskin project.

The key terms of the Buckskin joint venture are as follows:

• The first 1MTPA plant to be built at the Buckskin mine will be financed and owned by WECNA;
• Buckskin has agreed to lease the land required to construct the first 1 MTPA plant and will provide ancillary site related services; and
• WECNA and Buckskin have entered into a long term coal supply contract, under which Buckskin will supply the feedstock coal to be upgraded at the plant.

Status

BCAT analysis, air modelling and air permit applications have been filed in late 2010. A tentative site has been selected for construction of the first coal upgrading module.

Marketing Strategy

WECNA will market the upgraded Buckskin coal to utilities in the eastern United States as a substitute for low sulphur bituminous coal. There are over 93 utilities in the eastern United States that burn bituminous coal. This group consumes approximately 220 million tons per year of low sulphur bituminous coal.

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