Huguenot Project Presentation

Northeastern British Columbia

Coal Projects

January 2011

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Legal Disclaimers

This presentation may contain forward-looking statements, and forward looking information under applicable securities laws including management’s expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks and uncertainties include, but are not limited to: the risks associated with the commodity industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Colonial Coal undertakes no duty to update any of the forward-looking information herein. The reader is cautioned not to place undue reliance on forward-looking statements.

The scientific and technical information relating to the Huguenot property has been derived from the Huguenot Technical Report dated May 19, 2010, a copy of which will be filed on sedar.com under Ananda Capital, copies of the technical report will be made available to investors on request.

The information contained in this document has not been reviewed or approved by the U.S. Securities and Exchange Commission or any provincial or state securities regulatory authority. Any representation to the contrary is unlawful. This document does not include a complete description of Colonial Coal or any offering. Any offer of securities Colonial Coal will be made only pursuant to a subscription agreement and the provisions of applicable law. Any securities to be offered for sale by Colonial Coal are not expected to be registered in the United States under the Securities Act or under any state securities laws.

Cautionary Note to US Investors Concerning Resource Estimate:

The resource estimates in this document were prepared in accordance with National Instrument 43-101, adopted by the Canadian Securities Administrators. The requirements of National Instrument 43-101 differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”). In this document, we use the terms “measured,” “indicated”, and “inferred” resources. Although these terms are required and recognized in Canada, the SEC does not recognize them. The SEC permits US mining companies, in their filings with the SEC, to disclose only those mineral deposits that constitute “reserves.” Under United States standards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally extracted at the time the determination is made. United States investors should not assume that all or any portion of a measured or indicated resource will ever be converted into “reserves”. Further, “inferred resources” have a great amount of uncertainty as to their existence and whether they can be mined economically or legally, and United States investors should not assume that “inferred resources” exist or can be legally or economically mined, or that they will ever be upgraded to a higher category.

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• Metallurgical coal developer– Two resource stage properties in strategic locations in Peace River Coal Field– Extensive historical work completed by Denison

• Increased activity in Peace River Coal Field– Four producing mines in the region with two other mines pending– Significant development and investment activity

• Huguenot Coal Project (100% interest)– Located adjacent to Western Coal - Peace River Coal’s Belcourt Saxon JV where $23mm

spent on project and taken to feasibility level– 45.5 million tonnes NI 43-101 compliant metallurgical coal resource in North Block– Additional 84 –113 million tonnes potential within Middle & South Block– Amenable to open pit mining

• Flatbed Coal Project (100% interest)– Adjacent to Trend and Quintette mines– Potential for large tonnage deposit– Teck looking at opening up mines in the area

Introduction

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Management and Board

David AustinChairman, President & CEO

• Founder of Colonial Coal, NEMI and Western Coal

William FiltnessCFO

• Over 20 years experience as a director or officer for mining companies

• CFO of High Desert Gold, South American Silver, and i-minerals. Former CFO of NEMI

John PerryCOO & Director

• Over 30 years experience as a geological consultant for coal projects in northeastern BC

Wayne WaltersDirector

• Geological consultant and director of Running Fox Resources. Former Director of NEMI

Tony HammondDirector

• Chairman and MD of Great Orme Mines and a Director for NEMI

Ian DownieDirector

• Professional negotiator with an established mediation and dispute resolution consulting company

Perry BraunCorporate Development

• Over 25 years of Capital Markets experience in Toronto, London, New York and Vancouver

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• Huguenot property located ~140 road-km from Quintette load-out

– Flatbed located 15 km from Quintette load out

• Well located for CN Rail to Ridley

– No infrastructure constraints

– Potential for increase in capacity at Ridley

Location and Infrastructure

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Location and Infrastructure

• 3 load-out facilities in the region

• Potential for a 3rd pipeline crossing of Rocky Mountains to bring in further infrastructure

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FLATBED

HUGUENOT

• Well positioned in a prolific coal belt

Northeast British Columbia Coal Deposits

COLONIAL COAL PROJECTS

PEACE RIVER COAL FIELD

MAJOR COAL DEPOSIT

COAL MINE

ROAD

RAILWAY

TOWN

Central South (First Coal)

Resource: 81 MM t

Production: 3 MM tpa

Production Start: 2016

Willow Creek (Western Coal)

Reserves: 30 MM t

Production: 1.7 MM tpa

Production Start: 2010

Brule (Western Coal)

Resource: 34 MM t

Production: 2.0 MM tpa

Wolverine (Western Coal)

Resource: 82 MM t

Production: 2.0 MM tpa

Quintette (Teck Mines)

Production: 2.0 MM tpa

Production Start: 2013

Trend (Peace River Coal)

Production: 1 MM tpa

Production Start: 2005

Belcourt Saxon

Western / Peace River Coal

Resource: 171 MM t

Production: 4 MM tpa

Production Start: 2013

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• Located adjacent to Western Coal and Peace River Coal’s Belcourt proposed South Pit– Similar coal characteristics

• 27 holes and 55 trenches completed in 2008

– Focused in the North Block

– Historical work by Denison - 8 drill holes, 138 trenches

• 45.5 million tonnes total metallurgical coal resource(1)

– NI 43-101 report completed in May 2010

– Overall strip ratio of 12.9:1(2) at 20:1(2) incremental strip ratio

• Amenable to open pit mining

• Additional 84 to 113 million tonnes potential in the Middle and South Blocks

• 1.5% royalty FOB Port (3)

Huguenot Coal Project – 100% interest

(1) Assumes 1.0 meter minimum seam thickness cut-off

(2) Ratio: in-situ volume of waste (BCM) divided by the mass of coal (tonnes)

(3) Owned by David Austin and others

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• Pit limit shown at incremental strip ratio limit of 20:1(1)

• 4 coal seams out of 9 represent 78% of inferred resource

Huguenot Resource Cross Section

(1) Ratio calculated in-situ volume of waste (BCM) divided by the mass of coal (tonnes)

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• Metallurgical quality; medium vol, FSI of 6.5, low to very low sulphur and phosphorous, washable to 8% ash

– 6BCD and 8A seams are high volatile A bituminous

Raw Coal Characteristics

Seam Data PointRM%

Ash%

VM%

FC%

S%

DmmfVM %

% Core Rec.

8A(1) HB08-8-C 0.81 25.49 21.15 52.55 0.37 26.54 94.66D HB08-6C-B 0.64 8.56 23.71 67.09 0.73 25.34 100.06BCD(1) HB08-6C-B 0.71 27.86 20.07 51.36 0.51 25.59 94.06BC HB08-6C-B 0.69 16.93 22.83 59.55 0.45 26.36 93.06B HB08-6C-B 0.66 11.08 23.83 64.43 0.47 26.12 100.06La HB08-6A-A 0.66 27.16 19.10 53.09 0.33 24.05 91.15 HB08-5-B 0.48 14.29 22.31 62.91 0.34 25.07 97.34 BD 7906(3) 0.62 7.60 22.72 69.06 0.56 24.09 85.0(4)

3B BD 7814 0.67 33.05(5) 18.54 47.74 0.31 25.85 84.31 HB08-1-A 0.68 11.91 22.39 65.02 0.43 24.66 90.3

(1) includes internal rock bands omitted from resource estimates but expected to be included as part of run-of-mine material(2) Adjusted to remove band above 6C(3) Located in Middle Block(4) Coal loss(5) Approximately 28% if adjusted for core loss

North Block In-Situ Coal Quality Summary

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• Initial studies on coal cleaning target ash rate of 7.5% to 8.0%

• Expected average theoretical yield of [72.9%]

Metallurgical Coal Characteristics

SeamAsh%

VM%

FC%

S%

FSI% P

(in coal)DmmfVM %

Theoretical Yield %

% Core Rec.

8A(1) 7.85 26.23 65.92 0.44 6.5 0.036 27.85 66.92 94.66BCD(1) 6.85 26.05 67.11 0.57 6.5 0.045 27.39 66.62 94.06La 9.11 22.92 67.97 0.39 6.0 0.070 24.50 62.94 91.15 8.04 23.74 68.22 0.36 6.0 0.036 25.19 85.47 97.33B 8.01 23.98 67.06 0.49 8.0 0.026 25.68 62.30 84.31 7.70 23.76 68.54 0.40 6.5 0.035 25.13 92.85 90.3

(1) includes internal rock bands omitted from resource estimates but expected to be included as part of run-of-mine material

North Block Clean Coal Quality Summary

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Flatbed Coal Project – 100% interest

• Property adjacent to Trend and Quintette mines

• Licenses pending

• Potential for large tonnage deposit

– 100 million tonnes metallurgical coal resource target

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• Experienced management team – Directly responsible for developing two producing coal mines

• Projects strategically located within the Peace River coal field– An area containing 4 producing coal mines with infrastructure in place

• Huguenot Coal Project (100% interest)– Located between Western Coal and Peace River Coal’s Belcourt Saxon JV – 45.5 million tonnes metallurgical coal resource plus 83 – 113 million tonnes of

potential– Amenable to open pit mining

• Flatbed Coal Project (100% interest)– Adjacent to Trend and Quintette mines– Potential for large tonnage deposit

• Strong metallurgical coal prices forecast throughout 2012

Colonial Coal Summary

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Capital Structure (Pro-Forma)

(C$ million, unless otherwise noted)

Shares Outstanding - (MM) 58,000,000

Quoted Price Jan/10/2011 $1.81

Implied Market Cap ($mm) $105.0

Cash ($mm) $12.6

Debt $0.0

Implied Enterprise Value ($mm) $92.4

Options & Warrants – (MM) 21.3

Weighted Average strike $1.00

Management Ownership 25.2%