SO4.L Regulatory News (SO4)

31 January 2014

AIM/ASX Code: WHE

Wildhorse Energy ('WHE' or 'the Company'), the AIM and ASX listed company focussed on developing underground coal gasification ('UCG') and uranium projects in Central and Eastern Europe, is pleased to announce its Quarterly Report for the three months to 31 December 2013.

Overview:

· Progression of strategic partnership search with a view to securing a development blueprint for WHE's asset base

· Advancement of Hungarian Parliamentary support for UCG development through the adoption of UCG specific regulations - Mining Law modified post period end setting out legal framework for the development of UCG projects

· Successful completion of discussions with the Hungarian Government regarding the formerly requested studies for the Mecsek Hills Uranium Project (from the earlier Cabinet approval) - no red flags identified

· Continued discussions with the Hungarian State regarding the progression of the Mecsek Hills Uranium Project - various uranium related studies that will be needed for the licensing of the project have been initiated

· Signed non-binding indicative term sheet setting out the terms of a A$3m capital raising through the issue of unlisted unsecured convertible loan notes

WHE Managing Director Matt Swinney said, "In line with our strategic partner selection process to advance our UCG projects in Hungary, our sights remain firmly set on advancing these discussions. Together with these advancing negotiations, we have also been encouraged by the recent support from the Government of Hungary through the modification of the Mining Law to set out a legal framework for the development of UCG projects. The potential importance of UCG as a new economic fuel source, together with the environmental benefits inherent in the UCG process, have marked this technology as a priority consideration for many governments in the region.

"Our uranium interests remain a valuable component of our energy portfolio. We continue to progress discussions regarding the development of a joint venture with a range of Hungarian bodies in relation to the Mecsek Hills Uranium Project. This is a strategic asset with a total JORC Inferred Resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 and with government approval of the joint venture expected shortly, we have used this time to initiate licensing related studies to drive development forward once approval is received and a strategic partner secured to fund these initiatives."

UCG Interests

UCG Regulations

During the period the Hungarian Government progressed its modifications of the Mining Law to include specification legislation through which UCG projects can be developed. This legal framework was put into legal force as of 1 January 2014.

The Company was encouraged to note this support for UCG development by the Hungarian Parliament, representing the first legislation of its kind in Central Europe. This formalised development framework is an important component for a company looking to establish a European UCG operation, and the Board welcomes this progressive stance towards the adoption of this potentially revolutionary technology in Europe.

Strategic Partner Selection

Further to the announcement dated 5 March 2013, the Company continues to progress the strategic partner selection process. It would be the Company's intention that once a partner is secured, the Company intends to recommence the Bankable Feasibility Study and a further drilling programme to upgrade selected areas of its current JORC compliant Inferred resource at the at the Mecsek Hills UCG Project, the Company's most advanced UCG property. The Mecsek Hills UCG Project has a current JORC Inferred resource of 184.5Mt. Ahead of this and in line with its licence commitments, the Company has conducted c. 1,164m of drilling at the Mecsek Hill's Project.

Uranium Interests

WHE is progressing the development of the Mecsek Hills Uranium Project which combines WHE's 42.9km2 Pécs-Abaliget uranium licence and Hungarian state owned Mecsek-Öko ('MO') adjoining 19.6km2 MML-E uranium licence. The project has a total JORC Inferred Resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 and an Exploration Target[1] of an additional 55-90Mlbs of U3O8 with a grade range of 0.075-0.10% U3O8, making it one of the largest uranium deposits in Europe.

In June 2012 the Hungarian Government formally pledged its support for the development of a Joint Venture ('JV') between the Company, MO and Mecsekérc ('ME'), and Hungarian Electricity Ltd ('MVM'), the owner of Paks Nuclear Power Plant ('Paks NPP'), to evaluate the necessary conditions to restart uranium mining.

With this in mind, a Special Purpose Vehicle ('SPV') uranium entity was established in September 2012. In Q2 2013 all parties, namely ME, MVM and Kővágószőlős Municipality, joined the uranium administrative SPV and signed agreements to purchase an initial nominal shareholding in the SPV. The main objective of the SPV, in accordance with the Government Resolution of June 2012, is to conduct due diligence to assess the feasibility of the property ('the Study').

The Study was completed in November 2012 and following the joining of these shareholders as joint company partners, this has been shared with all parties and the competent ministries. These discussions have been completed and no concerns have been raised on its content.

The Company is continuing its discussions with the Hungarian State regarding the further development of the project and follow up Cabinet approval of the Joint Venture is expected in the near term. Ahead of this, various uranium related studies that will be needed for the licensing of the project have been initiated.

Corporate & Financial

The Company announced on 12 November 2013 that it had signed an indicative non-binding term sheet which set out the terms of a A$3m capital raising through the issue of unlisted unsecured convertible loan notes. The issue of the notes is conditional upon the execution of formal documentation for the notes as well as an escrow agreement. Initial funds of approximately A$1m shall be released from escrow to the Company upon lodgement by the Company of a notice of meeting (in a form approved by the note holder) to seek shareholder approval for the allotment of notes relating to the remaining A$2m.

The notes will have a 10% coupon per annum, capitalising and accruing and paid on conversion or redemption. The conversion price will be the lower of a fixed maximum conversion price of 2.8 cents or a 20% discount to the five day volume weighted average price prior to notice day of conversion.

To view the Company's Appendix 5B form, please click the following link: 

http://www.rns-pdf.londonstockexchange.com/rns/9359Y_1-2014-1-30.pdf 

**ENDS**

For further information please visit www.wildhorse.com.au or contact:

Further Information on Wildhorse:

Wildhorse Business Model

The WHE business model is focussed upon applying UCG technology to convert coal into syngas and then selling the syngas to power stations as a gas feedstock. The development and expansion of the UCG portfolio is underpinned by a potentially world class uranium project which the Company is advancing with its Hungarian uranium development partner Mecsekérc, with the support of the Hungarian Government.

Business Strategy

The Company's business strategy is to become a major supplier of gas feedstock to power stations in Central and Eastern Europe. WHE's project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central and Eastern Europe where gas markets are dominated by gas imports, energy security is a major factor for governments and large scale industrial consumers of gas and gas prices are correspondingly high.

Alongside its UCG assets, the Company also has a significant interest in a highly prospective uranium deposit in Hungary, which has a JORC Inferred resource of 48.3Mt at 0.072% uranium U3O8 for 77Mlbs of U3O8. As announced on 27 June 2012, the Government has issued a formal decree in support of the formation of a joint venture ('JV') company with the involvement of state-owned organisations, Mecsekérc and Hungarian Electricity Ltd ('MVM') (the owner of Paks Nuclear Power Plant). The JV's initial purpose will be to evaluate the necessary conditions to restart uranium mining in the Mecsek Hills with the ultimate aim of recommencing uranium mining at the Mecsek Hills Uranium Project.