Pacific American Coal Ltd.: Quarterly Activities Report September 2016

Sydney - Pacific American Coal Limited (ASX:PAK) is pleased to provide its Quarterly Activities Report for the three months ended 30th September 2016.

Key activities the Company engaged in during the period include:

Elko Coking Coal Project

- Coal Licence renewals

- Hatch engaged to undertake CAPEX study

- Coking coal price surge

Imagine Intelligent Materials Investment

- Acquisition of additional 20% through share exchange

- Successful Field Trails

- Geelong Pilot Plant update

OPERATIONAL ACTIVITY

Elko Coking Coal Project Licence Renewal

During the period, the Company renewed the 3 x Coal Licences covering the Elko Coking Coal Project.

The Elko Coking Coal Project is PAK's flagship coal asset. It contains a 257.5 million tonne, JORC Code (2012), resource and is located in the East Kootenay Coal Basin of British Columbia, Canada. PAK holds a 100% interest in the Elko Coal Licenses, which covers a combined area of 3,571 Hectares.

The Elko Coking Coal Project is positioned within 20km of coal rail infrastructure at the southern base of the Basin. This makes it the closest project in the area to the coal ports of Vancouver.

The upper coal seams of the Elko Coking Coal Project have FSI ranging from 7-9 with low sulphur and ash. The Elko coal compares favourably with benchmark coals from around the world including Peak Downs

PAK is focusing on marketing Elko coking coal into the Asian region due to the suitability and favourable shipping location.

Hatch Limited engaged for Elko Coking Coal Project CAPEX study

During the period, the Company engaged Hatch Limited to complete a Concept level mine infrastructure and coal processing CAPEX study for the Elko Coking Coal Project. This package of work will deliver a greater understanding of the Elko Coking Coal Project, building on the 3D mine site modelling completed by Hatch earlier in the year.

Hatch has been engaged to provide capital estimates for the key capital components identified during the 3D mine site modelling package.

The capital will include:

- Materials handling system

- Workshops and mines infrastructure

- Site infrastructure including power and water

- Coal preparation system

- Tailings storage facility

- Execution phase construction costs

The information gained through the conceptual mine site capital study will assist with the planning and development of Elko. The Company is working with Hatch to finalising the CAPEX estimate and is expected to be release the results of this study in early October. The conceptual CAPEX will form part of a body of work that includes the exploration planning and budgeting PAK is currently quantifying.

The capital cost estimate for the Elko Mine will not be a comprehensive project estimate and will not include future capital underground expenditure.

Coking Coal Price Surge

The Company notes there has been a surge in the spot price for Low Volatile, Premium Hard Coking Coal (FOB Australia) and the December 2016 quarterly contract coking coal prices. During the period from 1 July 2016 to 28 October 2016, spot coking coal pricing has increased 274% from US$93 to US$255 per tonne, while contract prices have risen from 220% from US$90 to US$200 per tonne.

The Company continues to advance the Elko Coking Coal Project as the market rebalances through the commodity cycles. The Board remain committed to the Company's flagship Elko Coking Coal Project as it offers shareholders and investors direct exposure to hard coking coal.

Imagine Intelligent Materials

About Imagine Intelligent Materials

Imagine is the leading Australian developer of graphene-based coatings for industrial textiles and fibres. It was founded in 2014 by a group of scientists led by Chris Gilbey and Phil Aitchison, with a vision to create disruptive products and solutions that use graphene.

Imagine has developed a licensing and certification model to ensure that participants in the supply chain are required to meet a set of standards of materials quality. Imagine is the first company in the world to develop conductive geomaterials using functionalised graphene.

Imagine IM Share Exchange

On 2 August 2016, the Company announced the successful completion of the second 20% investment in Imagine Intelligent Materials (Imagine IM). This second acquisition takes PAK's holding in Imagine IM to 40%. The Share Exchange saw PAK issue 26,099,987 PAK ordinary fully paid shares in consideration for 783,766 Imagine IM ordinary fully paid shares.

Imagine IM Field Trials

During the period, Imagine IM successfully completed the first independent field trails of Imagine IM's X3 conductive textiles. The trials were conducted by ExcelPlas, a Nata accredited testing facility. The trials demonstrated the Imagine X3 coated conductive geotextiles are suitable for commercial application.

Imagine IM plan to conduct similar field tests with geotextiles producing companies to tailor the X3 materbatch to their products, product chemistries and production methodologies. These activities are anticipated to lead to short term revenues for Imagine IM.

Having successfully proven that the graphene enhanced non-woven textile is fit for purpose, Imagine IM will undertake a series of optimisation steps as part of a continuing research and development process that seeks to provide generational improvements in the functionalist and economics of the X3 product over time.

Key highlights from the fields trails are:

- Trails based on 2mm thick HDPE geomembrane in 2m wide x 25m long samples,

- Successful detection of holes down to 1mm in size using conductive properties of the X3 masterbatch coating,

- No special installation techniques were required and there were no welding or specialised joining techniques needed, and

- Confirmation that the X3 coated membrane offers an environmentally compelling outcome at reduced cost to industry.

Geelong Plant

Following the commencement of the pilot plant in Geelong on 14 June 2016, Imagine IM anticipates the plant to be at full production before the end of Q4 2016. The pilot plant has sufficient graphene output to meet the current Australian forecast demand and enable initial orders from foreign markets to be fulfilled.

Imagine IM actively pursued international opportunities during the period. Imagine IM have, and continue to build relationships with international organisations as part of the global agenda to accelerate the commercialisation of functional graphene.

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About Pacific American Coal Ltd:

Pacific American Coal Limited (ASX:PAK) is focused on the production, development and exploration of the metallurgical coal assets in North America. The Company's strategic focus is on the 100% owned Elko coking coal project in British Colombia and its investments in technological advanced opportunities



Contact:

Australia Mark Sykes Chief Executive Officer North America
Dom Hill Business Development Manager
E: dhill@texascoal.com
W: www.pamcoal.com