Gus Simbanegavi Ferrex Plc

IRON ORE BENEFICIATION AFRICA– MARCH 2014

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Iron ore and manganese development in Africa

Company Overview

Iron Ore Projects Overview

Mabega Iron Ore Project: Gabon

Malelane Iron Ore Project: South Africa

Malelane Project Beneficiation

Orebody Type and Mineralogy

Beneficiation Model Development

Metallurgical Testwork

Malelane Process Flow

Future test work for Malelane

Malelane Project Outlook

Questions

Presentation Content

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Corporate Overview

PROFILE AIM quoted iron ore (‘Fe’) and manganese (‘Mn’) development

company focussed in Africa

PROJECTS Iron Ore: Mebaga, Gabon & Malelane, South Africa

Manganese: Nayega, Togo & Leinster, South Africa

STRATEGY To advance low capex deposits, near infrastructure, which offer

significant value uplift potential through resource delineation, into production

VALUE

1. Low capital DSO iron at Mebaga – Anglo American to fund - Gabon

2. Near term manganese production and cashflow at Nayega - Togo

3. Larger, future company maker iron prospect at Malelane - SA

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Corporate Structure

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1. Mebaga DSO Iron Ore Project - Gabon

6 assays to date

Best Assay

66.03% Fe All holes intersected DSO

material

Land Position

309 sq km 82 per cent holding

Binding Term Sheet

Anglo

American To fund exploration over 2 years

Initial drill

programme

complete & mapping

on-going to

evaluate the 19km

strike

DSO Material ‘Oxide Exploration Target’

90 – 150Mt @

35 – 65% Fe Over 50% of known strike

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Exploration Upside

Total exploration target, for just 11km of 19km strike of BIF, of 630Mt to 1,050Mt @ 25 – 65% Fe,

including 90 to 150Mt @ 35 – 65% of oxide target that will include DSO and bBSO material (easy

to beneficiate)

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Mebaga Iron Ore – On-going Exploration

Nine hole drill programme completed in Q4 2013 – best results

include:

Detailed geological mapping of the entire 19km strike of BIF

has recently recommenced to define additional drill targets

Portable XRF results up to 68% Fe recorded to date

Phase 2 of drilling will be aimed at better assessing the large-

scale potential of Mebaga

Close proximity to infrastructure to enable rapid

advancement of DSO resource potential

Hole From To Interval (m) Fe%

NGDH002 0 25.8 25.8 57.8

NGDH003 10.44 48.2 37.76 53.4

NGDH004 6.1 29.15 23.05 56.5

NGDH006 12.4 26.2 13.8 60.2

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Start-Up Operation

Gabon has excellent infrastructure

Sealed roads

Hydro plants

Operating Rail

Port

Plan to truck 100km south on upgraded

main forestry road to Booue

290km rail to port – lease train sets

Tranship with Rotainer – similar to

Ironbark in South Australia

Estimated FOB cost <$50/t

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3. Malelane Iron Ore Project – South Africa

CAPEX US$139m

OPEX US$53.5/t FOB

Exploration Target

1,600 – 2,000Mt 28-30% Fe

Incl 900 – 1,200 Mt 36-38% Fe

Inferred Resource

139Mt @ 37%

Fe Modelled on 1.1km of 14km

Pre-Tax NPV:

US$523m (10%)

Pre-Tax

IRR:72%

Proximity to Infrastructure

6km and 170km From rail and deep water port of Maputo respectively

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Malelane Iron Ore Project - Geology

Malelane Inferred Resource at various cut-offs

Cut-

Off

(%)

Tonnes

(m)

Fe

%

CaFe

%

Al2O3

%

SiO2

%

P

%

S

%

LOI

1000

50 4.9 52.2 56.7 1.4 10.8 0.08 0.018 8.0

40 50.9 44.3 47.7 2.0 22.3 0.07 0.020 7.3

20 138.9 36.9 40.1 4.0 30.1 0.06 0.029 8.0

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Malelane Scoping Study Results & Development

1.8mtpa output of iron ore fines, LOM16.6 years

Conventional open pit mining, strip ratio 1.55:1

Process plant crush and HPGR to 6mm, gravity separation

Concentrate conveyed to rail siding 6km away

Build a rapid load out station for rail loading at existing siding

Rail to Port of Maputo approx 170km. Requires port

expansion to 20mtpa to free up capacity in the existing

loading area

Pre-Feasibility Study

Physicals

Scoping Study Economics

NPV @10% - 523USD m (pre-tax)

IRR 72% (pre-tax)

Capital Cost USD139m

Capital Intensity USD77/t

Operating Cost USD53.5/t FOB

Revenue USD 95/t FOB

Payback 1.9 years

Starter DSO operation

Project Upside

Drill programme and preliminary

metallurgical testwork confirmed potential for

low capex iron-ore development at Malelane

Further detailed geological mapping of the

Spago ridge by structural geological

consultant completed to aid drill targeting to

update the resource

Environmental Studies and Social and

Labour Plan drafting has commenced in

preparation for a mining licence application

Positive preliminary metallurgical testwork -

very coarse grind size is optimal for pre-

concentration to 57% Fe

Larger, 3rd development project with strong

economics – robust NPV, IRR and low capital

intensity, as well as significant resource

upside potential with only 1.1 km of the 14km

BIF drilled

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Malelane Capital Intensity

*Source Macquarie March 2012 $0 $50 $100 $150 $200 $250 $300

Mt. Gibson Extension Hill

Macarthur Minerals Ularring

Atlas Iron North Pilbara

African Minerals Tonkolili Phase I

Malelane

Cliffs Bloom Lake phaseII

Atlas Iron McPhee Ck/SE Pilbara

Fortescue Pilbara expansion

London Mining Marampa

IOC Carol Lake

Northern Iron Sydvarangar Expansion

ArcelorMittal Liberia project phase I&II

Sundance Mbalam

Alderon Kami

Champion Fire Lake North

Rio Tinto Simandou

Northland Resources Kaunisvaara

Rio Tinto Pilbara expansion

BHP Billiton Inner harbour expansion

Northland Resources Hannukainen

New Millenium KeMag and LabMag

Oceanic Hopes Advance

ArcelorMittal Mont Wright

Black Iron Shymanivske

Aquila West Pilbara

Macarthur Minerals Lake Giles

BHP Billiton Outer harbour expansion

Gindalbie Karara

Grange Resources Southdown

Adriana Lac Otelnuk

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Exploration target could support a significantly larger operation than outlined in the Scoping Study with >20mtpa possible

Ferrex to investigate magnetic lows (possible higher grade) and old Dumanene mine area for large tonnage, higher grade areas to underpin an expanded option

Current plans for additional rail capacity through Swaziland

Could look at a pipeline to the coast, would have very low operating costs.

Malelane – The Bigger Picture

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MALELANE IRON ORE

PROJECT

UNIQUE METALLURGY

Case Study

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XRD analyses performed on the samples showed that the detectable crystalline

phases present are quartz (SiO2), hematite (Fe2O3), goethite (FeOOH), mica and a

clay mineral.

The hematite and goethite carry the bulk of the Fe.

Malelane Orebody Type and Mineralogy

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Test work included coarse grinding with tabling and WHIMS (wet high intensity magnetic separation) and fine grinding with WHIMS. A final step tested was to apply reverse flotation to the WHIMS concentrate to upgrade the final product.

A final concentrate of 57.8 per cent Fe (62% CaFe) and 5.3 per cent Silica was achieved with flotation of a WHIMS concentrate. This process has however a high energy requirement process

A very unusual outcome of this work was that the coarser the grind, the better the overall recoveries of the iron. The coarsest grind size tested was 425 micron. It is believed this counter intuitive result is due to the predominate mineral being weakly magnetic goethite that required a certain critical size to be affected by the magnetic field.

Another point to note is the consistent grade of the product. It is not greatly affected by grind size.

Initial Metallurgical Test work

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WHIMS RESULTS

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

425 250 150 45

GRIND SIZE

RECOVERY % FE GRADE %

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

7000 11000 15000 20000

GAUSS SETTING

RECOVERY % FE GRADE %

RESULTS FOR 11000 GAUSS RESULTS FOR 425MICRON GRIND

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Based on the results of the Phase 1 testwork, it was decided to

investigate coarser grind options.

The initial testwork and subsequent mineralogy showed that a large

portion of the silica was tied up in a coarse fragment with a residual

amount tied in the matrix of the iron at sizing of less than 10 micron.

It is believed that this is why a constant grade material was produced

at differing grind sizes.

Based on visual inspection of the core and the width of banding in

the banded iron, it was decided to investigate a potential sinter feed

product with material of less than 6mm in size.

2nd Batch of Metallurgical Test Work Done

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The size by assay work showed no preferential upgrade of the iron in

any fraction, so whole re processing would be required

Size by Assay

SAMPLE Mass Fe

g %

Size mm 45.156

+4.0 289.2 43.259

+3.35 93.1 47.104

+2.0 221.7 45.676

+1.0 264.9 45.768

+0.71 104.0 44.645

+0.5 93.5 44.030

+0.25 165.7 43.541

-0.25 712.3 46.046

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DMS testwork on the plus 1mm size fraction worked well with a similar grade product to the phase 1 testwork being produced at plus 50% yields. 66% of the feed will report to this section with the remainder reporting to the -1mm section.

DMS testwork on plus 1mm

0.000

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

2.8 2.9 3 3.1 3.2 3.3 3.4

SG

FE GRADE %

RECOVERY %

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Wet tabling testwork on the minus 1mm size fraction did not work

well with off spec grade being produced at low yields. HLS testwork

showed that the results should have been better than this, so various

fines separation options were investigated.

These included:

Flotation of the fines, with and without grinding

Spiral performance

Ludowici Reflux Classifiers

Recoveries or grades were not satisfactory using flotation or spirals

DMS testwork on minus 1mm

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The Ludowici reflux classifer produced the best results of any

separation mechanism tested.

This technology is currently employed in chrome and coal mines in

South Africa

The technology uses laminar flow in the angled section to provide a

better classification based on density alone rather than a combination

of density and particle mass/size.

Testwork showed that a 53% recovery of the -1mm was achievable at

a grade similar to the plus 1mm material

Ludowici Reflux Classifier

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The testwork program showed that a more conventional high capital and energy

process route of grinding the ore is not required for Malelane ore and that a simple

crush and gravity separation process will deliver similar grades at acceptable yields.

This has resulted in capital and operating costs savings and greatly enhanced the

NPV and IRR of the project

The deposit is unusual for South Africa with a high goethite and hence LOI content. It

produces a product similar to FMG in Australia which ships 150mtpa

A sinter feed product with the following parameters was produced at a Fe yield of 58%.

A value in use study shows that the product is comparable to a 62% Carajas fines in

value for a steel mill

Overall Testwork Results

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Proposed Malelane Process Design

• Closed circuit crushing with

Jaw and Cone crusher down to passing -8mm .

• Split into 2 streams coarse (-8mm +1mm) DMS beneficiation

• Fines (-1mm) Reflux classifier process

• Total mass yield of 43%

• Saleable Fe grade of 56.5%.

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Ferrex aims to progress the project to BFS over the next 2 years.

A large amount of work has been undertaken on the social and environmental aspects

of the possible operation in preparation for a mining permit application

The unique style of the orebody resulted in a long and complicated testwork program

that eventually yielded a very simple solution to maximise the economics of the project

Being well serviced by infrastructure (6km to rail and 170km to port), by having a

simple mining method and processing method, the project produces very robust

returns

The project is unique in South Africa for its geology and processing and highlights that

there exists other iron ore opportunities outside the well known Sishen and Limpopo

deposits that have better access to infrastructure and can economically be bought to

market

Malelane Project Outlook

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Questions

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Gus Simbanegavi Ferrex Plc