Australian Pacific Coal Limited provided the following update with respect to its proposal to re-commission the Dartbrook coal mine and its ongoing fully underwritten Entitlement Offer. Terms agreed to re-commission Dartbrook: Further to its recent announcements regarding its proposed alliance with M Resources Pty Ltd. for the re-commissioning of Dartbrook, its ongoing discussions with its largest shareholder, Trepang Services Pty Ltd. with respect to AQC's outstanding debts, and the receipt of a conditional non-binding indicative proposal from Tetra Resources Pty Ltd. and Javelin Private Capital Group LLC, AQC announced that it has agreed terms and entered into a binding term sheet with each of Trepang, M Resources and Tetra Resources for a strategic partnership between all of the parties that aims to see Dartbrook re-commissioned as a coal producing mine as soon as practicable (Strategic Partnership). Under the Strategic Partnership, each of M Resources and Tetra Resources will earn a 20% direct joint venture interest in Dartbrook.

In addition, Trepang, if it agrees to extend the existing AQC access and compensation agreement, various easement arrangements and term transfer of water rights on mutually agreeable commercial terms to allow underground mining operations to continue at Dartbrook for the duration of mine life extension approvals, will earn a 10% free-carried direct joint venture interest, subject to AQC obtaining any required shareholder approvals. AQC will retain a 50% direct joint venture interest in Dartbrook. If M Resources and Tetra Resources do not achieve production restart at Dartbrook within 27 months, each of M Resources and Tetra Resources will relinquish their joint venture interest and that interest will revert to AQC.

An entity jointly owned by M Resources and Tetra Resources will enter into a Mine Management Services Agreement with respect to Dartbrook. M Resources will enter into an exclusive Marketing Services Agreement to act as marketing agent of coal sales and an exclusive Logistics Services Agreement for all coal types produced at Dartbrook. Tetra Resources will be appointed as the operator of Dartbrook.

The Strategic Partnership is conditional on AQC's ongoing fully underwritten Entitlement Offer being completed successfully, AQC obtaining all required authorisations (including any shareholder approval) with respect to the Strategic Partnership within 120 days from the date of the binding term sheet, M Resources completing its sub- underwriting arrangements under the Entitlement Offer and no court order or other restraining order or injunction being in effect at the time of completion of the Entitlement Offer or the Strategic Partnership. As a result of the Strategic Partnership, AQC has agreed that M Resources will be entitled to appoint a director to the board of AQC. AQC is also currently negotiating with Trepang to have the right to nominate up to two directors to the board of AQC for so long as Trepang maintains a relevant interest of 20% in AQC, reducing to one director for so long as Trepang holds a relevant interest of less than 20% but more than 5%.

Any director appointments are subject to compliance with legal requirements. The parties have agreed to negotiate reasonably, to restate, reflect and expand on the key terms of the Strategic Partnership as soon as possible. The material terms of the Strategic Partnership are set out in the Annexure to this announcement.

Update on non-binding indicative proposal from Pacific Premium Coal: The Company refers to its announcement of 7 September 2022 in which it advised that it had received a non-binding indicative proposal from Pacific Premium Coal Pty Ltd. (PPC) (an entity associated with Nathan Tinkler) (NBIO) to acquire AQC at an offer price of $1.00 per share. The NBIO contained a number of pre-conditions to proceeding with a transaction, including, critically, that AQC enter into an agreement with Trepang, John Robinson and Nicholas Paspaley (together the Trepang Parties) to convert the existing debt owing to the Trepang parties (Trepang Debt) into a direct 40% interest in Dartbrook on terms acceptable to PPC, or should such an agreement not be forthcoming from the Trepang Parties, then PPC would repay all outstanding debts to the Trepang Parties (no detail was provided as to how this would actually occur). Following Trepang's support of the Strategic Partnership, the pre-condition to the NBIO cannot be satisfied, and the NBIO is not capable of being progressed in its current form.

Shareholders need not take any action with respect to the NBIO.