Cokal Limited provided an update further to the Company's ASX releases of 20 December 2017 and 2 January 2018, in respect of its negotiations with Renjian International Trading (Shanghai) Co Ltd. (Renjian) in respect of a coal off-take agreement for 2.5 million tonnes of premium PCI coal from the BBM PCI Project. As a consequence of the intensive negotiations with Renjian, the outcome from extensive financial modeling demonstrated the proposed discounts requested by Renjian to secure pre- funding proved to be unacceptable to Cokal. While the proposed discounts discussed are workable in the current PCI market where the Platts LV PCI price is currently $146/tonne (FOB Australia), Cokal's Board is concerned that this unusually high price is most likely unsustainable. Consequently, Cokal believes these extensive discounts would leave the company exposed to losses over the 50 month period of the contract to supply coal to Renjian. The Platts PCI Index history clearly illustrates a considerable variation, even as recent as November last year the LV PCI price was stable at $118/tonne, and in the last 2 months it rose to a high of US156/tonne. With this in mind the Board is of the view that it is in the Company's and shareholders' best interests not to proceed with the current terms discussed with Renjian, and continue discussions with several parties who have engaged with the Company for a better deal subsequent to the Renjian proposal. In addition, Cokal has asked Renjian to submit a straight purchase price for the PCI product on offer. Not only is the Company's coal operations sufficiently advanced to attract strong interest from an international array of customers for its PCI, but the climate and pricing for all metallurgical coals have improved to a point where Cokal believes that a number of possible funding options discussed to date allow it flexibility to conclude a funding arrangement that has a better result for shareholder value and has an acceptable level of risk with respect to the coal price over the 4 year life of the PCI contract.