ASX Code: KRA

MD’s address to Shareholders 27 Nov 2013

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The Shareholders address will be in three sections

Section 1. A review of 2013

Section 2. A review of the 2013 financial accounts

Section 3. Killara’s business model and plans for 2014/15

Followed by any Questions

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Section 1. Review of 2013

2013 has been a period of significant change for Killara. • Over 400 potential projects, ranging from greenfield opportunities

to producing mining operations were reviewed.

• Reduced funds necessitated a refocus from seeking large company making projects to smaller mining opportunities.

• Leading to the acquisition of Killara’s interest in PT Borneo Emas Hitam and the attainment of several milestones.

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Major milestones for 2013 include: • Alliance with New Strategic Partner. The Zulkarnaen Family. • Successful completion of recapitalization of the company with two

placements and a 1:2 rights issue which was 100% taken up. • Building an in house geological team which now boasts a team of 6, both

technical and non technical staff. • Acquisition of Killara’s first coal project in an 80% interest in PT Borneo

Emas Hitam

• Successful commercialization of the BEH project, transitioning Killara from explorer to producer. F

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Indonesian Coal Projects

PT Borneo Emas Hitam

PT Pagun Taka

Map of Indonesia and project locations

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PT Borneo Emas Hitam (KRA 80% interest)

• Jetty access to Mahakam river on North and South boundary to concession less than 5km from production target areas.

• Coal quality from 32 outcrops submitted for analysis ranged from 5,459 cal/kg to 7,546 cal/kg with an average of 6,948 cal/kg

• Conclusion of forward sales of all coal from this project to Coal Operations & Assets Pte. Ltd.

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• Total Concession size is 1,002 ha, located in the

Tenggarong district, East Kalimantan Regency. • Current production license in place. With application of extension of licence now pending. • Infrastructure including roads, buildings and workshop in place.

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Progress to date. Existing Coal Pit’s and recent exploration activities.

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PT Pagun Taka (KRA has option to acquire a 60% equity interest).

Acquisition terms. • Killara has option to acquire a 60% equity interest in PT Pagun Taka subject to its own due diligence assessment over the next twelve months. • If Killara elects to proceed it will pay an acquisition cost of US$1.25 per minable ton.

Above image of concession location map. Barito river can also be seen on the East of the concession border.

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• PT Pagun Taka is located in North Barito District, Central Kalimantan. • The concession represents an area of 2,337ha of which 588ha within the concession area is listed as ‘other land use area’ which does not require a permit for exploration or mining activities. • Production permit is listed as “clean and clear” by Indonesian department of energy and mineral resources. • The concession adjoins several existing coal producers including PT Sumber Rejecki Ekonomi which has 40mt resource ‘across’ 14 seams at a strip ratio of 6:1, with typical coal quality of 5,000 CVad. • An existing local coal hauling road links the northern boundary of the concession with barge loading facilities on the Barito river. • Previous works carried out by the concession owner indicate the concession is host to coal from three coal formations. Killara’s due diligence will seek to verify this. • An economic assessment is being conducted.

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Section 2. The 2013 Financial Year Consolidated Statement of Profit & Loss 2012 2013 Change Operating Loss of $ 3.3m 3.6m The significant contributor to this is the write off of the Belu Manganese project of $1.77m The change in the strategy also flowed through to the financial statements whereby: Expenses in relation to: Employee Benefits Administration Expenses With a greater amount of shareholder funds spent on exploration and on the due diligence of prospective projects. This included: Exploration Expenditure Consulting, Legal fees

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Section 2. Continued

Consolidated Statement of Financial Position 2012 2013 Change Total Assets $ 3.8m 3.9m Net Assets $ 3.7m 3.0m The change in net assets is principally due the write off of the Belu Manganese project. Statement of Cash Flows for 2013 Inflows of $2.9 m raised via placements and the most recent 1:2 rights issue was invested in the acquisition of PT Borneo Emas Hitam. Cash at the 30 June 2013 stood at $589,002. Fortunately Killara has secured a loan facility of up to $600,000 from two directors being Mr Wim Zulkarnaen and Mr Matthew Driscoll. This short term funding has greatly assisted Killara and reduced the need for any immediate capital raising from shareholders.

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Section 3.

Killara’s business model and

plans for 2014.

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With thermal Coal demand continuing, supply from Indonesia increases y/y.

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Indonesia Coal Production (mil/t)

Source: BP Statistical Review of World Energy 2012

Thermal coal is principally used for the generation of electricity from power plants. Due to global demand, Indonesia will continue to make a major contribution to supply. In 2013 Indonesia’s coal production is expected to reach 400 m/t.

The International Energy Agency (IEA) estimates that global electricity demand could double between 2009 and 2035 as more people get access to electricity. Coal remains the cheapest form of electrical power generation, with China power being generated 70% from coal. Coal remains a key source of energy for power generation throughout the world including Australia and the U.S. Operating margins from thermal coal are amongst the best of major commodities.

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INDONESIAN HBA COAL REF US$ P/T

Prices now appearing to stabilize with small increase in prices.

The Indonesian HBA Coal reference price now appears to be stabilizing with probability of upside expected given continued demand.

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Killara’s 5yr Strategy (2013 – 2018) Develop a Coal Portfolio consisting of:

Green field Coal tenements/IUP’s

• Two greenfield concessions in the Killara Portfolio of assets with works progressing the tenements/ IUP’s to production

Producing Coal

tenements/IUP’s

• Two tenements/IUP’s in the production stage with exploration work progressing through to the exploitation stage

Exploitation Coal tenements/IUP’s

• Two tenements/IUP concessions in production generating positive cash flow for Killara

• Mine life of 2 – 10 years.

Timeline (2013 – 2018)

The portfolio composition will allow for continued cash flow operations and future capital growth.

KRA Strategy is to build a portfolio of coal assets.

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BEH fits into this segment

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Killara’s focus for 2014/2015

In 2014/2015 Killara will work towards: • Establishing positive cash flows from its BEH project. • Finalize an economic assessment on the Pagun Taka project. • Continue to review coal opportunities for potential

acquisition. • Seek to acquire an additional asset for the coal portfolio mix

and thereby continue to grow shareholder value. • Focus on becoming a dividend paying company in the

medium term.

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Thank you. Shareholder questions:

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