Ground covering the known extent of three shallowly buried Eocene lignite deposits located in the Port Wakefield district was taken up to allow their delineation in tonnage and quality terms, to modern industry standards (i.e. meeting the Joint Ore Reserves Committee - JORC - Code for defining ore deposits), in order to gauge the viability of developing one or more large scale industrial plants for converting coal to premium diesel fuel, that would be fed from one or all of these deposits. During the reporting period Syngas Limited (of which Syngas Energy Pty Ltd is a 100% owned subsidiary company) commenced evaluating its Clinton Coal-to-Liquids (CTL) Project located on EL 3896/5186, which was central to the company’s strategic vision for achieving alternative fossil fuel energy production in South Australia. In the period since August 2007, when Syngas became involved in the Clinton Project, the following milestones have been reached: - a 39 hole drilling programme, including the construction of 3 ground water monitoring bores, was conducted between June and September 2008; - 558 Mt of JORC compliant resources were established for the Clinton lignite deposit in December 2008 (49% indicated, 51% inferred); - a comprehensive mining Pre-Feasibility Study (PFS) was completed in April 2009. In early 2009 the Clinton Project Bankable Feasibility Study (BFS) commenced. This began with first stage engineering studies that were needed to form the basis of plant design work. They included: a) a Feasibility Engineering Study (FES) was undertaken over the period March 2009 - September 2010 for the gasification section of the Clinton plant. This work was carried out by Siemens Fuel Gasification Technologies GmbH (Siemens) at their testwork facility in Freiberg, Germany. The FES determinations were based on a 30 kg drill core coal sample which was collected during Syngas’ 2008 drilling program and subsequently despatched. b) further post-FES gasification research was completed by Syngas’ engineers working together with Siemens personnel on the gasifier quench step for the proposed plant. This step established the likely pre-cleanup syngas quality for converted Clinton coal, and yielded data that can be used by commercial treatment technology providers for engineering downstream / subsequent syngas cleanup. c) between January and July 2010, preliminary engineering design was completed for the CTL plant Liquids Upgrading section by Rentech Inc., in conjunction with UOP LLC, a Honeywell process control company. A revised daily liquid fuel production rate for the CTL of 14,600 barrels per day, of mainly ultra-clean diesel, was announced to the ASX in August 2010. d) work with General Electric Company and General Electric International Inc. engineers was continued in relation to the power plant section of the CTL, further to a Heads of Agreement that was signed in October 2009. e) at this stage Syngas engineers also worked with technology providers on the preliminary engineering for the drying, oxygen production and water treatment sections of the plant. f) an integrated overall flowsheet model was developed, based on all of the preliminary engineering work completed, that allowed the energy, mass, carbon, and water balances to be modelled both by plant section and for the overall plant. This model is specific to the characteristics of Clinton deposit coal, and thus forms the core of Syngas’ Intellectual Property, with the following critical aspects: (i) the flowsheet modelling work identified significant issues relating to the removal of high levels of salt contamination which naturally occur within the Clinton coal, impinging to an extent not identified and fully catered for in the PFS. The quench system that had been designed to remove the salt would also result in significant energy losses occurring to the coal, thus impacting the project’s overall financial viability. Alternative salt management options were therefore identified and scoped for their development and use on the Clinton Project. Such commercial scale options include the use of additives, e.g. kaolin and limestone, which absorb the salt once it is released from the coal in the gasification process. Re-design of the quench process and integration aspects was also seen as an option. It is expected that the design of technically successful and cost effective salt management processes for the Clinton Project will be applicable to other projects. (ii) The full integration of the plant processes and more detailed financial modelling showed that there would be upfront capital costs in excess of A$3 billion required to implement the Clinton Project in a capital constrained, volatile oil price, technically risk averse capital market. This factor clearly creates significant commercial challenges for realising this project relative to other commodities, projects, etc. (iii) The flowsheet modelling work undertaken led to the recognition that smaller (around 3500 barrels per day, depending on coal quality), modularly expandable plants (with lower upfront capital cost) could be implemented as a way forward, particularly when fed by low salt content coals from established mines. At this stage of investigation, the feasibility of realising the Clinton Project requires significant further work, specifically in relation to the management (removal) of the inherent salt content of the Clinton coal measures through tailored steps built into the the gasification process in the overall coal-to-liquids production process. However, recent changes in the research personnel involved and difficulties in sourcing funding have delayed progrees with such work, and due to the current prevailing economic climate and uncertainty, the chance of the company now raising the funds required for continuing such work has been deemed impossible.