JSW Australia Acquisition

and

FY13 Results

October 2013

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Disclaimer

2

The following disclaimer applies to this presentation and any information provided regarding the information contained in this presentation (the Information). You are advised to read this disclaimer carefully before reading or making any other use of this presentation or any information contained in this presentation.

Except as required by law, no representation or warranty, express or implied, is made as the fairness, accuracy, completeness, reliability or correctness of the Information, opinions and conclusions, or as to the reasonableness of any assumption contained in this document. By receiving this document and to the extent permitted by law, you release Hughes Drilling, and its officers, employees, agents and associates from any liability (including in respect of direct, indirect or consequential loss or damage or loss or damage arising by negligence) arising as a result of the reliance by you or any other person on anything contained in or omitted from this document.

Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Hughes Drilling, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties, many of which are outside the control of, and are unknown to, Hughes Drilling and its officers, employees, agents or associates. In particular, factors such as variable climatic conditions and regulatory decisions and processes may cause or may affect the future operating and financial performance of Hughes Drilling. Actual results, performance or achievement may vary materially from any forward looking statements and the assumptions on which those statements are based. The Information also assumes the success of Hughes Drillings business strategies. The success of the strategies is subject to uncertainties and contingencies beyond Hughes Drilling’s control, and no assurance can be given that the anticipated benefits from the strategies will be realized in the periods for which forecasts have been prepared or otherwise. Given these uncertainties, you are cautioned to not place undue reliance on any such forward looking statements. Hughes Drilling undertakes no obligation to revise the forward looking statements included in this presentation to reflect any future events or circumstances.

In addition, Hughes Drilling’s results are reported under Australian International Financial Reporting Standards, or AIFRS. This presentation may include references to EBITDA, EBITA, EBIT and NPAT. These references should not be viewed in isolation or considered as an indication of, or as an alternative to, measures reported in accordance with AIFRS or as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity.

The distribution of this Information in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. This Information does not constitute investment, legal, accounting, regulatory, taxation or other advice and the Information does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and the market and for making your own independent assessment of the Information. You are solely responsible for seeking independent professional advice in relation to the Information and any action taken on the basis of the Information. No responsibility or liability is accepted by Hughes Drilling or any of its officers, employees, agents or associates, nor any other person, for any of the Information or for any action taken by you or any of your officers, employees, agents or associates on the basis of the Information.F

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Bringing together two of Australia’s leading drilling contractors

The Acquisition brings together two of Australia’s leading drilling contractors, providing service, sector, geographic and

commodity expansion

Key details of the Acquisition:

� The total purchase price comprises:

� 26,918,080 fully paid ordinary shares at A$0.26 per share equating to A$6,998,900.80 to be issued to be issued to JSW

shareholders (New Shares); and

� Retention of existing JSW debt of ~A$17.4m

� The New Shares issued within Hughes 15% capacity under ASX Listing Rule 7.1

� The issue price of the New Shares was a 4.0% premium to the trading price of Hughes’ quoted ordinary shares at 16 August 2013

� Hughes has acquired 100% of the ordinary voting shares, which is 96% of the issued shares in JSW. The balance of issued shares

are retained by a JSW executive and do not have voting rights

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Complementary business providing significant growth opportunities

CREATES A LEADING

AUSTRALIAN DRILLING

CONTRACTOR

� Accelerates Hughes access to blast hole opportunities in North West Western Australia

� Utilising Hughes delineation assets accelerates JSW’s move into the Queensland and NSW

� Creation of a leading national drilling contractor – focussed on production

� Increased scale and profile

� Complementary services and production focus

� Complementary geographic and commodity focus

SIGNIFICANT SYNERGIES

AND ADDITIONAL

BENEFITS

� Cross selling, enhanced marketing sales – access to new market growth for both Hughes and JSW

� Cost reduction across the business – drill rig maintenance, drill rig acquisition, reduced reporting etc.

� Advanced systems and reporting

COMPLEMENTARY

BLUE CHIP CLIENT BASE� Balances customer mix of blue chip clients and new opportunities

COMBINES SPECIALIST

EXPERTISE ACROSS

DRILLING CONTRACTOR

MARKET

� Leverage Hughes’ blast hole expertise in WA markets

� Leverage JSW’s capability in grade control, delineation, pit dewatering drilling, water services and specialist

services

� Leverage REICHdrill’s engineering capabilities to continue the advancement of the group’s rig fleet, particularly in

drilling efficiency

POSITIVE FINANCIAL

IMPACT

� JSW expected to represent 38% of FY14 combined revenue

� Expected to be EPS accretive FY14 pre synergies

� Significant synergies available FY14 and beyond

EXPERIENCED BOARD &

MANAGEMENT TEAM

� Experienced Board and management with significant drilling experience

� Significant management experience leading Australian drilling companies

DIVERSIFIED EARNINGS

STREAMS

� Across sectors, business divisions and commodities

� Reduced variability of earnings

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Overview of JSW Australia Pty Ltd

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Background:

� Operating since March 2010

� Head office in Perth, WA - Offices and Support centres in Bibra

Lake, Kalgoorlie, Port Hedland and Boddington

� Location of operations include the Kimberley, Pilbara, Mid

West, Goldfields-Esperance, Wheat belt, Peel, South West and

Great Southern regions of Western Australia

� 24 specialist drill rigs (including 4 sub-contracted rigs)

� 140 professional workforce

Pilbara Support Facilities Goldfields Support Facilities

South West Support FacilitiesHead Office

Business Divisions:

� Production Drilling - Focused on Grade Control, Resource

Delineation

� Water Services - Dewatering Bores, Production Bores and

Monitoring Bores

� Specialist Services - Geo-thermal, BOP Well Control, Paste/

Service Holes, ROBIT Casing Advance

Clients:

� Blue chip

� Bulk commodities include iron ore, coal. Other non-bulks gold,

nickel and other

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Overview of JSW Australia Pty Ltd (cont)

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Blast-Hole Drilling REICHdrill Express Hydraulics Delineation Drilling JSW Australia

Overview Production drilling: Blast hole

drilling in-pit for open cut coal

Manufacture, sales and

distribution of REICHdrill drilling

rigs, drilling consumables and spares

Sales and distribution of drilling

consumables and spares

Production drilling: Drilling for

reserve delineation and structural

support for coal

Production related blast hole

drilling, grade control, delineation

drilling, mine dewatering, paste and U/G service holes, casing

advance drilling, drilling with a

Geo-thermal, BOP, water services.

FY12 Revenue Contribution ~70% ~0% ~6% ~23% N/A

FY13 Revenue ~82% ~4%

(3 months contribution, % after

elimination of sales to Hughes)

~3% ~11% Not applicable. Acquisition

expected to happen outside FY13

FY14 Revenue Contribution Forecast

~40% ~20% ~2 % Absorbed into JSW operations ~38%

Key Assets(30 June 2013)

40 Rigs:

• 17 x REICHdrill C750D

• 16 x REICHdrill C700D• 2 x REICHdrill C550DII

• 4 x Terex GD5000

• 1 x SKS

Global client base:

• USA

• Australia• Africa

• Indonesia

• Other major mining regions

Agencies/Distributor for:

• REICHdrill

• Torquato• Sullivan Palatek

• Thomson International

• Halco• Ryco

• N&N Drilling

13 Marketable Rigs: 24 Rigs:

• 1 x Strange Drilling SD1000

• 1 x Strange Drilling SD200• 1 x Strange Drilling SD400

• 1 x Strange Drilling SD100

• 1 x Strange Drilling SD800• 1 x Globe Drill SD850

• 1 x Miller Mining SD450

• 1 x Globe Drill SD350• 2 x Globe Drill KAL500-CP8

• 3 x Sandvick RCD450

• 3 x Atlas Copco TH60• 1 x Atlas Copco RD20

• 2 x CAT/Montabert 336D

• 2 x CAT/Montabert 336D #• 1 x VermeerD100x120Series 2

• 2 x Atlas Copco D65 #

Note: 4 above rigs subcontracted #

Contracts / Customers:• Anglo American

• BHP Mitsui Coal• Downer EDI Mining

• Hunter Valley Energy

• Jellinbah Mining• Leighton

• MacMahon Group

• Peabody Energy• Theiss Contractors

• Yancoal

• BHP Billiton• Karara Mining

• Rockwater

• Rio Tinto• Fortescue Mining Group

• Mt Magnet Gold

• Boggabri

• Callide

• Daunia• Eaglefield

• Foxleigh

• Goonyella• Jellinbah

• Lake Vermont

• Millennium• Mt Arthur

• North Dawson

• Poitrel• Sonoma

• Wilkie Creek

• Yarrabee

Global client base:

• USA

• Australia• Africa

• Indonesia

• Other major mining regions

• Other Hughes business units

• Peabody

• Sandvik

• Other Hughes business units

• Peabody

• Sandvik

• Mt Keith

• Boddington

• Karara• Wembley Downs

• Pilbara Mines

• Koolyanobbing• Newman Region

• Tom Price Region

• Mt Magnet• Collie

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Combined pro-forma profile

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Share price(1) 32cents

Shares on issue(1) 209.0m

Market capitalisation $66.88m

Debt(2) $47.32m

Cash(2) $7.23m

Enterprise value $106.97m

Capital Structure – Post Acquisition Register Composition Post Acquisition

(1) Share price as at 03 October 2013.There are 4,615,000 options on

issue and no performance shares outstanding.

(2) Cash balance as at 30 September 2013. Cash net of overdraft.

Bob Hughes,

35.4%

Directors,

Management &

Employees

(Current &

Former), 16.6%

Other

Shareholders,

48.0%

Hughes 53

JSW* 24

Combined 77

Drill rigs

Hughes 264

JSW* 140

Combined 404

Employees

FY13A FY14E

Hughes ~$50m ~$59m

JSW ~$30m ~$45m

Reichdrill* ~$2m ~$27m

Combined ~$80m ~$130m

FY13A & FY14E Revenue

* Includes 4 subcontracted rigs * Includes 20 subcontracted employees

* FY13 Only 3 mth revenue contribution

from Reichdrill

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Highly experienced Board

ROBERT HACKETT, Non-Executive Chairman

Robert is a former CEO of both an Asia Pacific onshore drilling contractor (minerals, drill and blast, geothermal, oil and gas) and a Middle Eastern based site services

contractor with turnover of $400 million and 5,000 employees. Robert has prior experience in project finance and investment banking and holds a Bachelor of

Engineering (Civil, Adelaide), an MBA (IMD, Switzerland) and MAICD.

BOB HUGHES, Executive Director and Managing Director

Bob is founder of the Hughes Drilling business and major shareholder of Hughes. Bob started drilling career 36 years ago, providing drilling and blasting services for

quarries and mining operations. Established Hughes Drilling Pty Limited in 1991, initially contracting to Leighton and has been the driving force in the Company’s

development.

ANDREW DRAKE, Chief Executive Officer (Executive Director)

Andrew joined Hughes Drilling in 2006 as General Manager and Chief Executive Officer. In the prior 16 years Andrew held managerial and business development

roles with Dyno Nobel, the world’s second largest explosives supplier.

BARRY O’CONNOR, Non-Executive Director

Barry has over 40 years experience in promoting and marketing premium mining, drilling and comparable products. Barry was previously Director and Head of

Construction and Mining at Sullair Pty Ltd, an international manufacturer of industrial compressors, until 2007. Prior to joining Sullair, headed the rotating

equipment division of BTR Nylex.

ANDREW WEBB, Non-Executive Director

Andrew has 24 years of banking and structuring financial solution experience. He was formerly Vice president – TSS- Treasury Services with JPMorgan Australia,

Head of Industry, Policy and Credit Support – SCF with National Australia Bank, and Regional Head of Trade & commodity Finance – Americas with Australia &

New Zealand Banking Group.

PAUL BRENTON, Chief financial Officer and Company Secretary

Paul is a CPA with 17 years experience in accounting, corporate finance and commerce. Paul previously held the position of Chief Financial Officer of a large

property development group prior to joining EDMS in 2010. Prior to this Paul started his career with PwC working across a range of business sectors including to

clients based in mining, manufacturing and construction.

JOHN SILVERTHORNE, Non-Executive Director

John was co-founder of NRW Holdings Ltd, a listed public company that had a market capitalisation in excess of $1.0bn. John has 35 years Contract & Civil Mining

Management and Drilling experience.

JEFF BRANSON, Chief Operations Officer - Drilling (Executive Director)

Jeff is a Civil Engineer and co-founder of Brandrill Limited, now part of Ausdrill, which was a 100 drill rig business with its primary focus being blast hole and presplit

drilling. Jeff has over 32 years Drilling & Contract Management Experience.For

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JSW LOCATIONS - GOLD

Mt Magnet

Laverton Gold Mine

Leonora Gold Mine

JSW LOCATIONS – IRON ORE

Tom Price

Newman

Karara

Kollyanobbing

JSW LOCATIONS – COAL

Collie

JSW LOCATIONS – NICKEL

Mt Keith

JSW LOCATIONS – OTHER COMMODITIES

Canning Basin

Boddington

Wembley Downs

JSW OFFICES & SUPPORT CENTRES

Bibra Lake

Kalgoorlie

Port Hedland

Boddington

Callide QLD

Daunia QLD

Eaglefield QLD

Foxleigh QLD

Goonyella QLD

Jellinbah QLD

Lake Vermont QLD

Millennium QLD

North Dawson QLD

Poitrel QLD

Sonoma QLD

Wilkie Creek QLD

Yarrabee QLD

Boggabri NSW

Mt Arthur NSW

Wambo NSW

HUGHES LOCATIONS - COAL

HUGHES OFFICES/DEPOTS

Not to scale

Geographic and commodity diversification

REICHdrill FACTORY

9

Mackay QLD

Yatala QLD

Singleton NSW

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Client diversification

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Global Exposure – REICHdrill Rigs

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REICHdrill FACTORY

United States - Phillipsburg PA

DISTRIBUTORS

Northern United States - TJM Inc. Aliquippa PA

North East United States - Northeast Drill Supply

Western United States - Komatsu Equipment Company

France & North West Africa - Eurofor SAS

Southern Africa - Mincon

Former Soviet Union - Global Technology Group Ltd

Indonesia & South East Asia - Fajar Mas Murni

Australia - Express Hydraulics (Aust)

TARGETED REGIONS

Central America

West Coast South America

India

China

FORMER SOVIET UNION

CHINA

INDIA

INDONESIA &

SOUTH EAST ASIA

AUSTRALIA

SOUTHERN AFRICA

NORTH WEST AFRICA

FRANCENORTH & NORTH EAST USA

CENTRAL AMERICA

WEST COAST SOUTH AMERICA

WESTERN USA

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Majority of FY14 revenue booked with significant upside

Mine Client RegionCore

Coal Type

Number of

Rigs

Contract

Expiry

Contract

Tenure

Production Drilling

Callide Anglo American Bowen Basin, Qld PCI, thermal 1 Dec-14 2 years

Foxleigh Anglo American Bowen Basin, Qld PCI, thermal 2 Jan-16 3 years

Mt Arthur BHP Hunter Valley, NSW Thermal 1 Aug-14 1 year

Goonyella BHP Billiton Mitsubishi Alliance Bowen Basin, Qld HCC 3 Jun-15 5 years

Poitrel BHP Billiton Mitsubishi Alliance Bowen Basin, Qld HCC / SHCC 2 Nov-15 2 years

Boggabri Downer EDI Gunnedah Basin, NSW Export thermal 5 Dec-16 1 year

Daunia Downer EDI Bowen Basin, Qld Thermal 2 Jun-15 2 years

Millennium Downer EDI Bowen Basin, Qld PCI, coking, thermal 3 Mar-15 2 years

Jellinbah Jellinbah Mining Bowen Basin, Qld PCI, SSCC 4 Apr-14 5 years

North Dawson Leighton Bowen Basin, Qld Coking, thermal 4 Dec-14 2 years

Sonoma Leighton Bowen Basin, Qld HCC, export thermal 5 Oct-15 7 years

Eaglefield MacMahon Group Bowen Basin, Qld HCC, PCI 1 Aug-14 1 year

Wilkie Creek Peabody Energy Surat Basin, Qld Export thermal 1 Dec-13 2 years

Lake Vermont Theiss Contractors Bowen Basin, Qld PCI, coking, thermal 1 Dec-13 1 year

Yarrabee Yancoal Bowen Basin, Qld PCI, export thermal 1 Dec-15 2 years

Total operational production rigs 36

Note: Excludes 2 rigs being commissioned at Yatala, 1 rig in for routine maintenance at Yatala and 1 rig in transit from REICHdrill Factory in USA to Yatala. Total Fleet = 40

Mine Client Region CommodityNumber of

RigsContract Expiry

Contract

Tenure

Mt Keith BHP Billiton Northern Goldfields Nickel 2 Feb-16 3 yrs

Mt Keith BHP Billiton Northern Goldfields Nickel 1 Feb-16 6 yrs

Mt Keith BHP Billiton Northern Goldfields Nickel 1 Feb-16 3 yrs

Boddington BHP Billiton South Western Australia Bauxite 4 Feb-16 3 yrs

Karara Gindalbie / Karara Midwest Iron Ore 1 Mar-15 4 yrs

Wembley Downs Rockwater Perth Metropolitan Geothermal 1 Sep-13 6 mths

Pilbara Mines Rio Tinto Pilbara Iron Ore 3 Jan-14 2 yrs

Koolyanobbing Rockwater Goldfields Iron Ore 1 Dec-12 2 yrs

Newman Region FMG Pilbara Iron Ore 3 Jul-16 3 yrs

Tom Price Region FMG Pilbara Iron Ore 3 Sep-16 3 yrs

Bunbury Department of water Pilbara water 1 Oct -14 1 yr

Mt Magnet Mt Magnet Gold NL Midwest Gold 1 Apr-14 3 yrs

Busselton City of Busselton South Western Australia water 1 Oct 14 2 yrs

Total operational rigs 23

Note: The above list includes 4 sub contracted rigs and excludes 1 rig in for routine maintenance at Bibra Lake

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Complementary service and drilling focus

Hughes JSW Combined

Revenue contribution by service

Revenue contribution by drilling sector

Hughes JSW Combined

61%

34%

5%

Production Drilling

Other (Supply Services)

Dilineation drilling

22%

39%

40%Production Drilling

Delineation drilling

Non Mining (Water

Services)

48%

16%

22%

14%Production Drilling

Delineation Drilling

Other (Supply Services)

Non Mining (Water Services)

61%5%

31%

3%

Production Drilling

Delineation Drilling

REICHdrill

Express Hydraulics

22%

39%

40% Production Drilling

Delineation Drilling

Water Services

48%

16%

14%

20%2%

Production Drilling

Delineation Drilling

Water Services

REICHdrill

Express Hydraulics

Note – The forecast figures above include 12 months of existing Hughes and REICHdrill business and 9 months of JSW.

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Complementary geographic and commodity focus - FY14

100%

Western Australia

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Revenue contribution by location

Revenue contribution by commodity

Hughes JSW Combined

Hughes JSW Combined

64%5%

31% Queensland

New South Wales

United States

42%

3%20%

35% Queensland

New South Wales

United States

Western Australia

66%

34%Coal

Supply - Rigs &

parts

Note – The forecast figures above include 12 months of existing Hughes and REICHdrill business and 9 months of JSW.

62%6%

10%

3%

14%5%

Iron Ore

Gold

Bauxite

Water

Nickel

Other

43%

22%

21%

2%4%

1%5% 2%

Coal

Supply - Rigs & parts

Iron Ore

Gold

Bauxite

Water

Nickel

Other

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Increased scale and profile

~A$130m - Revenue Business ~ 75 Rigs ~ 404 Skilled Operators

Revenue – FY(14) Estimated Rigs Estimated Employees / Contractors

59

27

45 130

0

20

40

60

80

100

120

140

Hughes Reichdrill JSW Total

$ M

illi

on

214

50

140 404

0

50

100

150

200

250

300

350

400

450

Hughes Reichdrill JSW Total

Em

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es

/ C

on

tra

cto

rs

38

13

4

24

79

0

10

20

30

40

50

60

70

80

90

FY13 -

Prodn

rigs

FY13 -

Delin.

rigs

New

Prodn

rigs

JSW Total

Rig

s

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Hughes is well positioned to increase profitability and accelerate growth

Strong performance from existing business (pre Acquisition)

� Revenue from ordinary activities relating to continuing operations UP 27.0%

� NPAT from ordinary activities attributable to equity holders UP 23.2%

� NTA backing per share UP 59.1%

Acquisition creates a leading Australian drilling contractor and provides services, sector, geographic and commodity expansion

� Complementary blue chip client base

� Significant synergies and additional benefits

� Specialist expertise across drilling contractor market

� Diversified earnings streams

� Positive financial impact

� Existing highly experienced Board and management team bolstered by new Directors

Reichdrill provides global exposure and expansion opportunities

Strong balance sheet with capacity to accelerate growth plans

� Gearing reduced to 27.7%

� Strong cash balance supported by profitable businessFor

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FY13 Results

October 2013

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High growth rates and profitability continued in FY13

� Margin Profiles: Underlying margin profiles from the blast hole activities remained stable. Modest fall in consolidated NPAT

margin from reduced contribution from completed delineation drilling contract and expensed non-recurring costs associated

with the acquisition of REICHdrill and corporate restructuring

� Debt management: Debt less cash (net debt), has reduced by $8.4m to $21.9m in June 2013, from peak debt in February 2013

of $30.4m, a reduction of, 27.7%

� Cash flow: Cash flow from operations before interest increased to $10.1m from $1.6m

� Operations: High equipment operating efficiency (high reliability with maintenance managed largely outside required

production times) + sustained high utilisation (95%+) = very high financial productivity of the blast hole production fleet for

both Hughes and its clients

� High growth rates and profitability continued in FY13 - Key contributors;

� Blast hole rigs purchased progressively during FY12 with full year of earnings in FY13

� New blast hole rigs commenced operations during FY13 (hence only working for part of FY13)

� Contribution by REICHdrill from 25 March 2013

Movement % change FY12 Result FY13 Result

$,000s $,000s

Revenue from ordinary activities relating to

continuing operations

Up 27.0% 39,187 49,756

Net profit/(loss) after tax from ordinary

activities attributable to equity holders

Up 23.2% 8,417 10,367

Net profit/(loss) after tax attributable to

equity holders

Up 23.2% 8,417 10,367

NTA backing per share Up 59.1% $0.22 $0.35

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Operational Overview

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Blast-Hole Drilling REICHdrill Express Hydraulics Delineation Drilling

Overview Production drilling: Blast hole drilling in-

pit for open cut coal

Sales and distribution of drilling

consumables and spares

Sales and distribution of drilling

consumables and spares

Production Drilling: Drilling for reserve

delineation and structural support for coal

FY12 Revenue Contribution ~70% 0% ~6% ~23%

FY13 Revenue Contribution ~82% ~4% (3 months contribution, % after

elimination of sales to Hughes)

~3% ~11%

FY14 Revenue Contribution Forecast

~62% (pre JSW) ~31% (pre JSW) ~3% (pre JSW) ~4% (pre JSW)

Key Assets 40 Rigs:

• 17 x REICHdrill C750D

• 16 x REICHdrill C700D• 2 x REICHdrill C550DII

• 4 x Terex GD5000

• 1 x SKS

Manufacturer and global distributor

(direct and through agents) of the

REICHdrill product range of rigs

Agencies/Distributor for:

• REICHdrill

• Torquato• Sullivan Palatek

• Thomson International

• Halco• Ryco

• N&N Drilling

13 Marketable Rigs

Contracts / Customers:• Anglo American

• BHP Mitsui Coal• Downer EDI Mining

• Hunter Valley Energy

• Jellinbah Mining• Leighton

• MacMahon Group

• Peabody Energy• Theiss Contractors

• Yancoal

• BHP Billiton

• Boggabri

• Callide

• Daunia• Eaglefield

• Foxleigh

• Goonyella• Jellinbah

• Lake Vermont

• Millennium• Mt Arthur

• North Dawson

• Poitrel• Sonoma

• Wilkie Creek

• Yarrabee

Global client base:

• USA

• Australia• Africa

• Indonesia

• Other major mining regions

• Other Hughes business units

• Peabody

• Sandvik

Hughes production drilling continued to contribute the vast majority of revenue in FY13 (REICHdrill’s contributed only for 3 months of FY13)

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Operational Overview – Production Drilling

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Hughes production drilling market: continuing sustained growth

Note 2: Australia Coal Production in Thermal Coal increased in FY11 by 7.8 Mt but was

offset by a decrease in Metallurgical Coal of 17.0 Mt resulting in a combined decrease of 9.2

Mt.

Note 1: Source: Australian Government Bureau of Resources and Energy Economics Resources

and Energy Quarterly March 2013.

300.0

320.0

340.0

360.0

380.0

400.0

420.0

440.0

460.0

0

5

10

15

20

25

30

35

40

45

FY09 FY10 FY11 FY12 FY13 FY14 (f)

A

U

S

C

O

A

L

P

R

O

D

U

C

T

I

O

N

M

t

N

O

O

F

R

I

G

S

Hughes Production Rig Fleet

Actual Production Rigs Forecasted production Rigs

Aust Coal Production (Mt) (2)

0.0

100.0

200.0

300.0

400.0

500.0

600.0

FY09 FY10 FY11 FY12 FY13 (f) FY14 (f) FY15 (f) FY16 (f) FY17 (f) FY18 (f)

Australian Coal Production

Thermal Coal (Mt) (1) Metallurgical Coal (Mt) (1)For

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Operational Overview – Production Drilling (cont)

21

Competitors

Driller Market Share

Hughes Drilling 45.9%

Coldwell 8.1%

Ausdrill 4.1%

Predrill 4.1%

Drill Pro 4.1%

AD&B 4.1%

SMW 4.1%

Others 25.5%

Total 100.0%

Source: Hughes market research estimates

Hughes’ high production drilling market share continues to reflect financial and operating productivity benefits for clients

Hughes

Drilling

27%

Other

Contractors

73%

Contracted Production Rig Market

Share NSW

Hughes Drilling Other Contractors

Hughes Drilling

47%

Other Contractors

53%

Contracted Production Rig Market Share QLD & NSW

Hughes Drilling Other Contractors

Hughes

Drilling

54%

Other

Contractors

46%

Contracted Production Rig

Market Share QLD

Hughes Drilling Other Contractors

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REICHdrill & Express Hydraulics

In March 2013 Hughes acquired REICHdrill following a longstanding relationship.

For several years REICHdrill has been the sole supplier of blast hole production rigs

to Hughes.

Outlook

� Enquires are increasing.

� FY14 order book from third parties is strong, the majority being sold outside the

USA, however, enquires within USA are increasing.

� The FY14 order book excludes all sales for Hughes/JSW.

Distribution network

� Continues to grow through re-engaging with existing agencies and approaching

new agencies in new regions.

� Is currently enjoying a rapid expansion. Notable areas include:

• USA: Komatsu, TJM Inc. Aliquippa & Northeast Drill Supply

• Africa: Mincon & Eurofor SAS

• Indonesia & South East Asia : Fajar Mas Murni

• Australia: Hughes Group

• Former Soviet Union: Global Technology Group

• France: Eurofor SAS

Manufacturing cost base

� Continues to remain low (considerably cheaper than Australia).

� Many major supply contracts favorably renegotiated.

� Very stable work force.

REICHdrill & Express Hydraulics continue growth

Express Hydraulics specialises in sales and distribution of Drilling rigs

spare parts and drilling consumables to Hughes group of companies

and external customers across Australia

Outlook

� Enquiries continue to increase year on year as the Hughes and

REICHdrill brand gain more exposure.

� Express hydraulics continues to represent new leading edge

mining equipment companies e.g. Palatek, Thompson

International, Tooltec and with this sales are expected to grow .

Distribution network

� EHA distribution network now expected to include Hunter Valley

and Bowen Basin with specialist Drill services depots and supply

centers now established.

� The network is also expected to expand further leveraging off the

JSW exposure and JSW facilities located in the Pilbara, Southwest

and Goldfields.

� Express Hydraulics is a major distributor for :

• REICHdrill Inc.

• Thompson International

• Dillco Industrial Inc.

• Tooltech

• N&N Drilling Supply

• Donaldson Filtrations Solutions

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FY13 Performance at a glance

($m) FY13 FY12 Change

Revenue 49.8 39.5 +27.0%

EBITDA 18.1 15.4 +17.8%

EBITDA % 36.3% 39.1% -2.8 points

EBIT 12.5 10.5 +19.8%

EBIT % 25.2% 26.7% -1.5 points

PBT 10.4 8.4 +23.5%

NPAT 10.4 8.4 +23.2%

NPAT Margin 20.8% 21.5% -0.7 points

Earnings per Share 7.8 cents 8.96 cents -12.9%

Notes: FY12 comprises full year of Hughes Drilling and 7 months of EDMS

FY13 comprises full year of Hughes Drilling and 3 months of REICHdrill Inc.

Revenue

� FY13 growth particularly reflects continued strong growth of

production drilling activities

� REICHdrill acquisition consolidated from 25 March. Non-

recurring distortion in this period from underlying high level of

sales to Hughes, rather than third parties. FY14 order book

overwhelmingly to third parties.

Margins

� EBITDA and subsequent margins were impacted by the

completion of delineation drilling activities at Wambo and

expensed non-recurring costs associated with corporate

restructuring and the acquisition of REICHdrill.

Continuing operations from established clients

� Hughes production drilling: Stable blue chip client base with

mines generally lower on the cost curve. Low counter party risk.

� REICHdrill: Revitalisation/renewal of the global distribution

network (USA, Africa, Indonesia, South America) is delivering an

order book dominated by third party clients (USA, Africa in

particular).

High level of operating consistency and hence predictability of

earnings and cash flow.

� High level of equipment on-ground availability through effective

and planned maintenance.

� Rates competitive and yet stable in real terms.

� Generally good matching of contract duration with asset

financing profiles.

Diversity of service/product offering is winning new contracts

• Hughes has won contracts in FY13 by offering existing and

new customers a variety of drilling solutions including:

� Traditional contract drilling services;

� Sale/supply of drill rig to mine owner operator, with a

service and supply of drill consumables contract through

Express Hydraulics; and

� A hybrid of contract drilling and direct sale of drill rig, with

a buy price after a period of time.

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Business Activities Review

Blast hole production operations:

� Revenue and profitability growth is driven by an expanding rig fleet,

full year contributions from rigs purchased part way through FY12 and

part year contributions from rigs purchased progressively during FY13.

� Rig fleet growth rate moderated in the second half FY13. A further

moderation in growth rates to 8%-12% is expected for FY14.

� Moderating demand for growth capital resulted in utilised debt

funding falling by $3.4m from a February peak of $30.6m to $27.3m

(debt less cash fell $8.4m, 27.7% in the same period).

� The recent blast hole related debt reduction profile is expected to

continue through FY14.

REICHdrill:

� FY13 contribution distorted by high percentage of June quarter sales to

Hughes which were eliminated on consolidation.

� FY14 order book overwhelmingly comprises sales to third parties.

� Global distribution network re-development well advanced and

generating sales.

Express Hydraulics:

� Refurbishment facility and key management team in place for non-

Hughes customers and eventually Hughes owned rigs being

established in Mackay, Queensland. Will service rigs in the Bowen

Basin and Queensland generally. Contribution will commence FY14.

� Australia focused agency and distribution activities on-going.

Delineation operations:

� There will be no expansion of asset base.

� Assets to be absorbed into the JSW operations post acquisition.

Financial benefits in 2HFY14.

� JSW management are currently seeking opportunities for these assets.

Revenue by business unit – FY12 & FY13 (A$m)

Activity FY12

$’m

FY13

$’m

Production Drilling 27.7 40.6

REICHdrill (FY13 from 25 March 2013) - 2.0

Delineation Drilling 7.1 5.6

Express Hydraulics 2.4 1.6

Other Income/Discontinued activities 2.3 0.1

Total Revenue 39.5 49.9

Notes: FY12 comprises full year of Hughes Drilling and 7 months of EDMS.

FY13 comprises full year of Hughes Drilling and 3 months of REICHdrill Inc.

0

10

20

30

40

50

60

FY12 FY13

$M

Other Income

REICHdrill

Express Hydraulics

Large Diameter Drilling

Delineation Drilling

Production Drilling

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Balance sheet

Depreciation profile:

� Depreciation of rigs for FY13 has decreased from 15% pa to

10% pa to better reflect the useful life of the rigs (useful life of rigs

is 11-14 years)

� Of the 40 rigs in the fleet (38 operational), 13 rigs are at zero book

value with an average age of 8 years and residual operating life of

3-6 years

Average age of rig fleet:

� Average age of rig fleet is 3.5 years

� Average rig life is 11 to 14 years

Increase in inventory reflects:

� Growth of production drilling fleet by 41%

� Some acceleration of inventory purchases when A$/US$ high

� Addition of REICHdrill inventory

Debt management:

� Debt less cash reduced by $8.4m from peak debt in February (to

$21.9m from $30.4m, a 27.7% reduction)

� In same 4 month period total debt (including bank overdraft

reduced) by $3.4m (~$850k/month) from operating cash flow

generated

Balance sheet FY12 FY13

Cash and cash equivalents 2.5 5.3

Trade and other receivables 9.5 9.1

Inventories 11.2 24.7

Other 1.1 1.1

Current assets 24.3 40.2

Property, plant and equipment 29.3 41.6

Deferred tax asset 1.3 1.3

Intangible assets 4 7.6

Non-current assets 34.6 50.5

TOTAL ASSETS 58.9 90.7

Trade and other payables 7.5 8.1

Bank overdraft 0.9 0.6

Borrowings 24.7 11.2

Provisions 0.5 0.6

Other 2.2 -

Current liabilities 35.8 20.5

Borrowings 0.1 15.5

Provisions 0.4 0.3

Non-current liabilities 0.5 15.8

TOTAL LIABILITIES 36.3 36.3

NET ASSETS 22.6 54.4

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Cash flow

FY2013 Cash flow:

� The strong growth in cash generated by operating activities is

consistent with expectations reflecting full year of “clean”

operations post the Hughes/EDMS merger.

� Modest drag on operating cash flow from a slowing of

payment cycles by some clients.

� Operating cash flow is net of $0.9m of non-recurring cash

costs associated with corporate restructuring and the

acquisition of REICHdrill.

� The majority of the increase in cash flow from investing

activities relates to the acquisition of 11 new blast hole rigs

and the acquisition of REICHdrill.

� The majority of cash flow from financing activities is from the

$18.5m net capital raising funds, and was utilised for the

acquisition of REICHdrill and for the purchase of new

production rigs.

($m) FY12 FY13

Receipts from customers 33.3 50.4

Payments to suppliers and employees -31.7 -40.4

Other -2 -2.1

Net cash (used in) / generated by operating activities -0.4 7.9

Purchase of plant and equipment -11.4 -17.2

Proceeds from sale of plant and equipment 2.4 -

Payment for acquisition of subsidiary - -5.1

Other 0.3 1.1

Net cash used in investing activities -8.7 -21.2

Net proceeds from issue of shares 2.0 18.0

Non controlling interest contribution - 0.2

Dividends Paid -1.3 -

Proceeds from borrowings 10.5 11.6

Repayment of borrowings -3.6 -13.4

Net cash generated by financing activities 7.6 16.4

Net (decrease) / increase in cash and cash equivalents -1.5 3.1

CASH AT THE BEGINNING OF YEAR 3.1 1.6

CASH AT THE END OF THE YEAR 1.6 4.7

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