MAWSON IRON PROJECT

March 2017

DISCLAIMER AND COMPETENT PERSONS STATEMENT

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South Australia - well

located politically and

geographically to serve the

global steel industry

MAWSON IRON

PROJECT

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• Existing infrastructure

• Sheltered port sites

• Deep water at any tide

• Available workforce

• Supportive government

• Large magnetite potential

MAWSON IRON

PROJECT

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OUR SIMPLE AMBITIONS

• Largest magnetite resources

• Largest magnetite concentrate producer

• Highest quality magnetite concentrate

• Lowest cost magnetite delivered to steel mills

Outcropping magnetite ridges at the Mawson Iron Project

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MAWSON IRON PROJECT

LAND HOLDING

• Largest undeveloped magnetite

province in the world

• Consortium has exploration license

area of 3,922 km2 - major tenement

holder in the region

• Aeromagnetic surveys and outcrop

mapping demonstrate > 200 km of

strike length of magnetite–rich

Braemar Iron Formation

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MUCH SOFTER THAN OTHER MAGNETITE ORES

• Braemar Iron Formation is modestly metamorphosed

siltstone - NOT a banded iron formation

• The soft ore is less than half the rock strength and

crushing strength of banded iron formations

• This means lower cost in mining, crushing and

milling

Mawson Pilbara

Bond work index 9 kW/t > 24 kW/t

Crushing work index 10 kw/t > 16 kW/t

Compresive strength 80 Mpa > 200 Mpa

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JORC RESOURCES

- 4.6 BILLION

TONNES

• Razorback

• Ironback Hill

• Red Dam

1 ASX Announcement 11/06/13 - The Mineral Resource information for

the project was prepared and first disclosed under the JORC Code

2004 and the information has not been updated since to comply with

the JORC Code 2012 on the basis the information has not materially

changed since it was last reported;.2 Mineral Resource Information for the Olary Magnetite project based

on JORC Code 2012 Inferred resource produced by Mr. Simon Tear of

H&S Consultants in September 2016 for Lodestone Equities. Mr Tear is

a Member of the AusIMM having sufficient experience which is relevant

to the style of mineralisation and type of deposit under consideration

and to the activity which they are undertaking to qualify as a Competent

Persons as defined in the December 2012 edition of the “Australasian

Code for Reporting of Exploration Results, Mineral Resources and Ore

Reserves” (JORC Code). Results shown to demonstrate the extent or

resources for the SA Magnetite Consortium. Magnetite Mines Ltd.

takes no responsibility for the accuracy of the results as displayed.

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RAZORBACK - 2.7 BILLION TONNE JORC RESOURCE

Outcrop at Razorback

1 ASX Announcement 11/06/13 - The Mineral Resource information for the project was prepared and

first disclosed under the JORC Code 2004 and the information has not been updated since to comply

with the JORC Code 2012 on the basis the information has not materially changed since it was last

reported.

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RAZORBACK RESOURCE - FAVOURABLE MINING CONDITIONS

Characteristics Benefit

Simple layer cake geology Simple mine design

250 to 500 metres thick ore body, > 10km long Very low stripping ratio

Outcropping No pre-strip

Simple geology at Razorback Simple orebody model at Razorback

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RAZORBACK HIGH QUALITY CONCENTRATES

• Extensive testwork confirms the high quality of

concentrates

• This quality can be sustained over the mine

lifetime

Mass Recovery % Fe% FeO% SiO2% Al2O3% P% S% Na2O

16.8 68.9 29.9 3.3 0.4 0.01 nil 0.05

Results based on recent concentrate production test work - ASX Release: 13/09/16

Optimised Indicative Concentrate Grades

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IRONBACK HILL - 1.2 BILLION TONNE JORC RESOURCE

• Similar to Razorback geology

• Resource continues to the NE

1 ASX Announcement 21/11/12 - The Mineral Resource information for the project was prepared and first disclosed

under the JORC Code 2004 and the information has not been updated since to comply with the JORC Code 2012

on the basis the information has not materially changed since it was last reported.

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RED DAM - 0.6 BILLION TONNE

JORC RESOURCE

• High concentrate grade -

DTR shows 71% Fe

• Resource continues to the

west - exploration potential 4

- 7 billion tonnes

1 Mineral Resource Information for the Olary Magnetite project based on JORC Code 2012

Inferred resource produced by Mr. Simon Tear of H&S Consultants in September 2016 for

Lodestone Equities. Mr Tear is a Member of the AusIMM having sufficient experience which

is relevant to the style of mineralisation and type of deposit under consideration and to the

activity which they are undertaking to qualify as a Competent Persons as defined in the

December 2012 edition of the “Australasian Code for Reporting of Exploration Results,

Mineral Resources and Ore Reserves” (JORC Code). Results shown to demonstrate the

extent or resources for the SA Magnetite Consortium. Magnetite Mines Ltd. takes no

responsibility for the accuracy of the results as displayed.

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RED DAM - DR QUALITY CONCENTRATES

• Sighter metallurgical testwork confirms excellent DTR

results

• Concentrate grades suggest suitable for direct

reduction pellet making

Mass Recovery % Fe% FeO% SiO2% Al2O3% P% S% Na2O

25.6 70.0 29.4 1.8 0.2 0.01 nil 0.06

1 Concentrate assay grades based on concentrate production metallurgical testwork completed at Bureau Veritas Laboratories August 2016 for Lodestone Equities

Olary Magnetite – Concentrate production results from 60kg of representative diamond core samples1

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PELLET FEED & SINTER BLEND STUDIES

• Testing by CISRI of Razorback ore

indicates that very strong and highly

reducible pellets can be made from

100% MGT concentrate

• Grade higher than average grade of

Chinese Domestic Pellets

• Studies continue on pellet optimisation

and sinter blend additions

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TARGET MARKETS

• Direct Reduction Pellet Feed – no real

competition from big four – premium

market

• Blast Furnace Pellet Feed - Grade

higher than average grade of pellet

feed. Impurity levels much lower –

replacement market

• Sinter Blend component to blend down

P and other deleterious contaminants –

iron ore mainstream market

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LOWEST CFR COST CONCENTRATES

Sustainable, low cost delivery chain configuration

• Ultra high powder factor blasting

• In-pit crushing and conveying (IPCC)

• Intelligent comminution and concentration

• Slurry pipeline transportation of concentrate

• Offshore iron ore port in deep water (+25 m)

Artist impression of In Pit Crushing and Conveying systems at

Mawson Iron Project

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• Fully mobile in-pit crushing

and conveying (IPCC)

replaces conventional truck

and shovel

• Ore body geometry and

characteristics facilitate

application of this mining

method

• Up to 1/8 cheaper than

conventional mining

IN-PIT CRUSHING AND CONVEYING

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RAZORBACK DEPOSIT – SIMPLISTIC BENEFICIATION

High powder factor blasting

+ In-Pit Crushing

Convey to ROM

Tertiary Crusher + HPGR

Hydraulic Classifier 3 stage LIMS Ball Mill to 38 micron> 68% Fe Concentrate

Rougher LIMS

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Fully integrated logistics >

seamless materials flow from

mine face to ocean going bulk

carriers > lowest unit costs

Infrastructure Corridor -

• Concentrate slurry pipeline

• Water pipe from sea to mine

• Power lines to mine

• Communications

• Road from Burra to MineProposed infrastructure corridor pathway

INFRASTRUCTURE CORRIDOR

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Offshore Port - designed by

DHHI and Bohai Ship Building

Proposed Floating Iron Ore Port in the Spencer Gulf loading Valemax sized ships

OFFSHORE IRON ORE PORT

MAGNETITE MINES ON THE PATH TO PRODUCTION

• 6 MoU’s or LOI with International Steel Mills relating to-off take and/or finance of project

• 11 MoU’s with Chinese equipment manufactures/infrastructure providers

• Detailed engineering already in progress

• DHHI - Bohai Ship Building doing DFS & detailed design of floating Iron Ore Port (FIOP)

• Offering a unique co-operative opportunity for the Steel Industry

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OUR SIMPLE AMBITIONS

• Largest magnetite resources

• Largest magnetite concentrate producer

• Highest quality magnetite concentrate

• Lowest cost magnetite delivered to steel mills

Outcropping magnetite ridges at the Mawson Iron Project