Kalgoorlie Nickel Project

“a rare combination of size, amenability to pressure acid leaching, political security, and environmental stability”

Why nickel laterites are back in fashion!A Presentation To the Sydney Mining Club

March 2006

Mathew LongworthChief Operating Officer, Executive Director

Heron Resources Limited

ASX: HRR

Disclaimer Forward Looking StatementThe material used in this presentation is intended to be a summary of selected geological data, current and proposed activities, as well as resource estimates based on information available to Heron Resources at the time. It does not include all available information and should not be used in isolation as a basis to invest in Heron Resources. Any potential investor should refer to Heron Resources’ ASX releases and statutory reports before considering investing in the company.This presentation includes information relating to a completed independent scoping study, completed independent resource estimate and a feasibility study which is in progress and includes “forward looking statements” which include, without limitation, estimates of potential nickel in concentrate production based on mineral resources that are currently being evaluated. While the Company has a reasonable basis on which to express these estimates, any forward looking statement is subject to risk. Risks include, without limitation: nickel metal prices, foreign exchange rate movements, failure to meet joint venture milestones, project funding capacity, concentrate off-take contracts and estimates of future capital and operating costs.The Company does not undertake to release publicly any revisions to forward looking statements included in this presentation to reflect events or results after the date of this presentation, except as may be required under applicable securities laws.

Overview of PresentationWhy LateritesCompany Profile

Track Record and Nickel FocusKalgoorlie Nickel Project

the right Partnerthe right Projectthe right Location

Sulphide Nickel ProjectNickel and Corporate Strategy

Company Profile – CorporateListed ASX August 1996

Focus on acquisition and explorationAim to develop a long life nickel mine

Capital Structure165m shares at A$0.48, mkt cap A$79mA$11 million cash at bank, debt free

Significant ShareholdersDirectors and associates 25.5%Inco Limited 9.9%BHP Billiton 9.6%

Track Record of Value CreationA dollar invested In Heron on listing is worth $1.80In addition there have been two in specie distributions

Avoca in 2002 equal to 0.56 centsPioneer 2003 equal to 0.07 cents

Today’s value of a dollar invested in Heron on listing $2.43

Laterites never went out of fashion

If you are serious about nickel you are serious about nickel lateritesEach of Inco, BHPB, Falconbridge and Rio Tinto have assessed every laterite on the planet. WHY?

– Demand– Supply– Technology

Inco and BHPB have converged on the KNP

Demand is Driven by China“While global primary nickel demand for the 2004-08 period is forecast to increase at a moderate compound average growth rate of 3.5%, almost all of this is coming out of China.” source Alan Heap Citigroup “Outlook for supply and & demand- the China factor” AJM Conference, Sydney 8- 9 September 2005.

“Growth in sulphide ore sources will be insufficient to meet demand”

WA Production Year on Year Source GSWA 2005

Laterite

Sulphide

1998 1999 2000 2001 2002 2003 20040

40

80

120

160

200

DJF237 13.12.05

“Growth in sulphide ore sources will be insufficient to meet demand”

WA Resources and Reserves

Laterite

Sulphide

DJF239 13.12.05

1996 1997 1998 1999 2000 2001 2002 2003 20040

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Dominance of the laterites

0

1000

2000

3000

4000

5000

6000

7000

8000

1 2 3 4 5

Ranked on Contained Nickel (kt)

Cont

aine

d Ni

ckel

(kt)

SulphidesLaterites

Mt Margaret/Murrin

KNP

Ravensthorpe Weld RangeWingellina

Mt KeithLeinster Yakabindie

Honeymoon Well Cosmos

KNP Location

Located North and East of KalgoorlieCentred around a centralised processing plantTotal resource base of 903mt at 0.74% Ni and 0.04% Co

Inco – the Right Partner for KNPInco selected following global searchA premier integrated nickel producer

Market Capitalisation US$8 billionEstimated net cash US$1.8 billion200,000tpa nickel, second largest producerProposed merger Falconbridge, No 1

World leader in nickel laterite projectsPT Inco – 60,000tpa Ni productionGoro – planned 60,000tpa Ni production

Inco Farm-in & JV Attractive TermsSubject to meeting technical milestones, Inco sole funds Feasibility Study

Pre-Feasibility, minimum US$18mFull Feasibility, minimum US$50m

Inco earn 60% on completion of Feasibility and securing project funding

Inco procures all project debt fundingHeron equity fund cap 4.5% of total equityInco lends Heron its remaining equity funds

Inco JV – Funding MechanismsAssumptions

$1.4 billion$1.4 billion project construction costDebt : equity = 70 : 30, $980m Debt, $420m Equity

Debt project finance procured by IncoEquity finance

KNP JV 60:40, Inco $252m, Heron $168mHeron capped at 4.5% of equity, $19m$19mInco lends Heron $149m, repay cashflow

Inco Farm-in -Timing Milestones Step 1, confirm 120mt at 1.5% Ni

Diamond drilling, screening studiesCompletion deadline July 2006

Step 2, flow sheet selectionBatch metallurgy and mini-pilot, Sep 2007

Step 3, resource and engineeringResource drill out, plant design, Jan 2009

Feasibility StudyBankable, completion deadline July 2011

Inco Farm-in - Step 1 & 2 Metallurgy

Run-of-mine siliceous ore

Consisting of yellow-brown limonite

and coarse silica0.8% Ni

Scrubbed slurryinto pilot plant

trommel screen deck

Screened rejectsSilica fragments 60%Reject grade 0.3% Ni

Screened slurryLimonite 40%

Leach feed grade 1.5% Ni

Screen Upgrade

Inco Farm-in – Step 3 Resource Definition lots of Work for Inco

6658500 mN

6657000 mNSIBERIA NORTH PROJECT

RECENT DRILLINGMAX LEACH FEED GRADE NICKEL (%)

75 MICRON SCREENED

Max Ni (%)

1.5 to 10,0001 to 1.50.75 to 10.5 to 0.750.25 to 0.50 to 0.25

West MineralisedZone

East MineralisedZone

Weighted average leach feed gradesshown using a 1.0% Ni cutoff

0 500 1000

Metres

Cross Section

1.86% Ni (Avg) 1.61% Ni (Avg)

1.45% Ni (Avg) 1.2% Ni (Avg)

1.57% Ni (Avg)

Weighted average leach feed gradesShown using a 1.0% Ni cutoff

KNP – Nickel Screen Upgrade321200mE

12m @0.57% Ni

8m @0.96% Ni 24m @

1.00% Ni 8m @2.21% Ni

321600mE

400RL

4m @1.13% Ni18m @

0.75% Ni

4m @1.02% Ni

321400mE 321800mE

6m @0.67% Ni

321000mE

GOOGARRIE HILL PROJECTSection 6678320N

Nickel Head GradeNote x 4 vertical exaggeration

24m @1.00% Ni

24 metres at 1.00%Nickel grade withoutscreening

nontronite ore,no upgrade

KNP – Nickel Screen Upgrade321200mE

12m @0.57% Ni1.05% Ni

LFG

8m @0.96% Ni1.65% Ni

LFG

24m @1.00% Ni1.72% Ni

LFG

8m @2.21% Ni1.22% Ni

LFG

321600mE

400RL

4m @1.13% Ni1.19% Ni

LFG

18m @0.75% Ni1.68% Ni

LFG

4m @1.02% Ni2.09% Ni

LFG

321400mE 321800mE

6m @0.67% Ni0.95% Ni

LFG

321000mE

GOOGARRIE HILL PROJECTSection 6678320N

Nickel Screen UpgradeNote x 4 vertical exaggeration

24m @1.72% Ni

LFG

24 metres at 1.72%Nickel Leach feed gradeafter screening at0.075mm, based onbottle roll testwork

nontronite ore,no upgrade

KNP – the Right ProjectAmong largest undeveloped Ni projects

Heron’s vast nickel footprint is uniqueFocus on Goongarrie-Siberia siliceous ore455mt at 0.7% Ni and 0.05% CoScreen beneficiation 1.5% Ni leach feedTarget 120mt leach feed, >4mtpa for 25 yrs

Limonite ore, premium metallurgyPressure Acid Leach (PAL) processingPAL proven at Moa Bay and Cawse

KNP – the Right Project

MINARA

BHP BILLITON

Heron’s substantial tenement holdings underpin resource base

Mainly 100% owned and unencumberedHistorically under-exploredInco’s funding means this will change

HERON

Ravensthorpe

Kalpini

Bulong

Goongarrie

KALGOORLIE

MurrinMurrin

ESPERANCE

LEONORA

The Right Location

Infrastructure

KALGOORLIE

ESPERANCEKWINANA

RailGasRoadPorts

Esperance

Kalgoorlie

Leonora Laverton

Murrin MurrinRefinery

Kalpini

Bulong

Goongarrie

Milestone Driven Growth

0

20

40

60

80

100

120

140

160

01-Dec-03

01-Mar-04

01-Jun-04

01-Sep-04

01-Dec-04

01-Mar-05

01-Jun-05

01-Sep-05

01-Dec-05

Date

Mar

ket C

ap M

AU

D

Scoping study and resources

Inco JV, Placement

BHPB on Register

Execution of formal agreement

What laterites can deliver

Proposed Sulphide Nickel ProjectExplore Heron’s ultramafic holdingHeron will control initial explorationProposed that Inco will:

Fund 100% of costs on defined projectsKeep KNP land holding in good standing

GHOST ROCKS

0 40 80

Kilometres

WINDARRA

Laverton

MURRIN MURRINLeonora

CARR BOYD

CAWSE

Kalgoorlie

CARNILYA HILL

KAMBALDANEPEAN

WIDGIEMOOLTHA

GIBRALTAR

HIGHWAY

EMU LAKE

SNAKE HILL

LAKE REBECCA

PINNACLES SOUTH

YINDARLGOODA

ROE HILLS SOUTH

MINERAL PATCH

WILDARA NORTH

BARDOC

ACRA NORTH

Goongarrie

Bulong

Kalpini

Herontenements

Nickel mines

Yilgarn ultramafics

EMU LAKEHeronNi-SulphideProspect

Sulphide Laterite

Sulphide Nickel Project

Tenements and Nickel Sulphide

Targets

Nickel and Corporate StrategyHeron investment offers a unique mix of

Milestone driven upside, associated with developmentof world class nickel project

Ability to invest alongside major nickel players Inco & BHPB

Exposure to strong long term

nickel market

Sulphide Nickel

blue sky

Fully funded path towards

40% interest in long-life 50,000 tpa Ni operation

Strong shareholder

returns

Strong shareholder

returns

fundamentals, & long-termnear-term

Mathew LongworthChief Operating Officer and Executive Director

Phone: +61 8 9091 9253Email: mlongworth@heronresources.com.au

ASX: HRR