ASX CODE: UNV 16 February 2011 Pursuit Capital Research Note Valuation: $0.90; 80% Potential Uplift from Current Share Price
UNIVERSAL COAL PLC Ticker: UNV (ASX) Share Price: 49.5c Market Cap: A$101m
Universal has a portfolio of near term thermal coal development assets in South Africa that it intends to exploit in order to feed the continuing demand for coal in South Africa, India and China.

The first development project, Kangala, is expected to come into production in 2011 with Roodekop and Brakfontein from 2012.

With the commencement of mining in 2011 and an aggressive coking coal exploration programme, there is plenty of upside potential in Universal.
Nearly 1Bt of coal resources -- Universal holds 50--70.5% interest in three quality coal projects across South Africa for a total JORC-compliant thermal coal resource of 327Mt of local Eskom and export grade quality.

The Company is also earning into three coking coal properties with 491.5Mt of resources.

Coking coal properties add diversity -- The Limpopo coking coal properties are showing very encouraging signs with thick zones of coal intersected in 10 holes.

Assays are awaited to determine the amount of coking coal in the sequence.

Production in 2011 -- Production from the Kangala Project is expected to commence in mid 2011 with production from Roodekop and Brakfontein from 2012.

Proximity to other coal operations and infrastructure -- Universals coal assets are each located in established coal mining regions in South Africa presenting the Company with opportunities to fast track the pre-production process and quickly generate shareholder value.

Proven management team in place -- The management team in South Africa, headed up by Tony Weber (ex-Goldfields, Anglo Platinum) and Tony Harwood (ex-Placer), has a track-record of sourcing and developing high quality resources projects in South Africa.

Valuation of 90cps, with upside -- We value Universal Coal at 90cps, implying an 80% potential uplift from its current share price.

We have applied a time and development risk discount to Roodekop and Brakfontein, which should reduce over the coming year.

We also believe that there is very good potential for a re-rating of the coking coal assets as drilling information is received.


Pursuit Capital has a corporate relationship with Universal Coal and therefore this information should be viewed as Marketing Material.

Pursuit Capital does not publish recommendations on companies with which it has a corporate relationship.


For more information on the research note, please contact: Mr Andrew Rowell Director Pursuit Capital Ph: +61 8 6267 9032
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