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South Australian Minerals andEnergy Resources Overview

10th GMUSG / SACOME Annual ResourcesIndustry Conference & Trade Expo

Whyalla 3 September 2014

Dr Paul HeithersayDeputy Chief Executive

Resources and Energy

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South Australias Major Minesand Resource Projects

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South Australian Resources Industry Indicators

Petroleum ($531.3m) and Minerals ($116.3m)

$647.6 million EXPLORATION EXPENDITURE -2013/14

~$30 billion of potential capital for Minerals and Energyprojects in the Major Developments Directory RECORD HIGH

$1.8 billion new CAPITAL EXPENDITURE 12mth to June 2014

Minerals ($5.4 b) and Petroleum ($1.6 b) RECORD HIGH

$7.0 billion resources PRODUCTION - 2013

Minerals ($4.6 b) and Petroleum ($0.2 b) RECORD HIGH 39% of South Australias total exports ($12.4 b)

$4.8 billion EXPORTS 12mth to June 2014

Minerals ($157.4 m) and Petroleum ($133.9 m) RECORD HIGH

$291.3 million ROYALTIES 2013/14

more than double - 6,641 ten years ago RECORD HIGH

16,208 people EMPLOYED May 2014

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Exploration Expenditure

Minerals and Petroleum exploration expenditure 1998-99 to 2013-14

For 2013-14 was $647.6 million ($531.3m Petroleum and $116.3m Minerals)

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Source: ABS data cat. 8412.0 June 2014

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5

Onshore and Offshore Oil and Gas

ONSHORE COOPER EROMANGA BASINSThe Cooper-Eromanga basins represent a world class hydrocarbon province(Australias largest, most mature onshore basins for petroleum production) and hasbeen the centre of South Australia's exploration, development and productionactivities for 50+ years. Both the Western Flank oil play and several majorunconventional gas resource plays are, and will leverage on existing processing andtransport infrastructure connecting the basin nationally to major cities and LNG export

markets

ONSHORE OTWAY BASINOtway Basin contains both mature and immature conventional and unconventionaloil and gas plays, with high potential for further discoveries. The onshore area isregarded as the States second most prosperous petroleum basin

OFFSHORE BIGHT BASINThe Bight Basin is the largest, prospective but unexplored Cretaceous marine delta-play in the world. To date, most exploration drilling in the Bight Basin has focused onthe margins of the Ceduna and Duntroon Sub-basins. The BP Statoil Joint Venture isleading in exploration the offshore Bight Basin, with fast-followers Chevron, and theMurphy-Santos joint ventures

FRONTIER BASINSProspectivity is being explored in the Pedirka (including oil shows in the PoolowannaTrough), Officer and Arckaringa Basins

Emerging conventional and unconventional oil & gas boomSouth Australias history of oil and gas exploration extends back to 1866 with the first oil exploration in the Otway Basin. SouthAustralia has 14 petroleum basins (12 onshore, 1 offshore, 1 on-and-offshore), however currently only three are producingcommercial hydrocarbons

Source: Updated form of display from Invest in SA - Department of State Development

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Setting the Scene Oil and Gas

Parks with no petroleum exploration access

Officer Basin

Pedirka Basin

Cooper

Basin Arckaringa

Basin

Eromanga Basin

Arrowie

Basin

StansburyBasin

BightBasin

OtwayBasin

Petroleum exploration licence(Onshore: PEL Offshore EPP)Petroleum exploration licenceapplication (PELA)

Polda Basin

Moomba

Olympic

Dam Mine

SimpsonBasin

200 km

Gas pipelineGas and liquids pipelineOil pipeline

Acreage release blocks bids close 29 May 2014

Selected mine

Four Cooper CO2013 bid roundblocks offered versus aggregate $103million bids

Western Flank oil play in the Cooper-Eromanga continues with 50+ percentsuccess in finding average 2.5 millionbarrels of oil

Encourage results from Otway Basinexploration

Bight Basin attracting the majors

massive investment Frontier basins plays include:

Conventional oil and gasUnconventional regional plays

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Roadmap for Unconventional Gas

Designed to inform industry strategies,government policies, and regulations to facilitateunconventional gas projects in ways that SAcommunities welcome.

Working groups of the Roundtable:1. Training;

2. Supply hubs, roads, rail and airstrips for theCooper-Eromanga basins;

3. Water use in the Cooper-Eromanga basins;

4. SA-Qld wharf to well corridors for the Cooper-Eromanga basins;

5. Cost effective, trustworthy GHG detection; and

6. Suppliers forum to boost local content

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Now under the auspices of the Roundtable for Oil and Gas Projects

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0

1

2

3

4

5

6

7

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$ B

i l l i o n

Copper Hematite Magnetite Gold Uranium Coal

Other Metallics Industrial Construction Gemstones Caroline 1 CO2 (well) Condensate

Crude Oil Ethane LPG Natural Gas

Mineral and Petroleum Production

Record

Production

Production by commodity 2000 2013In 2013 was $7 billion ($5.4b Minerals and $1.6b Petroleum)

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South Australian Mining Industry Dimensions

Mineral Tenements - July 2014

Mining Leases (MLs) 866 Extractive MLs (EMLs) 655 Private Mines (PMs) 235 Operating Mines 450 Major Operating Mines ~20 Opal Mining Claims 391 Advanced Mineral Projects ~30 Former Mines 3500

Commodities mined copper, gold, coal, iron ore, zinc, lead, silver, uranium,

heavy mineral sands Industrial Minerals - salt, silica sand, gypsum Extractives, dimension stone, opal & other gemstones

Mining Methods : open cut, underground, in-situ recovery

Processing Methods : flotation, carbon in pulp, crushing andscreening, cyanide leaching, ion exchange, magneticseparation, salt harvesting, solvent extraction Middleback Ranges iron ore operations (courtesy Arrium Mining)

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Olympic Dam - long life

Olympic Dam massive 910 year resourcelife - longest life core asset of global miningmajor, BHP Billiton

Contained resource:78 Mt copper, 2.5 Mt uranium oxide,100 Moz gold & 307 Moz silver

worlds largest uranium deposit worlds 4th largest copper deposit ~65% of Australias copper resources

Premiers Award for Excellence in SocialInclusion 2014

Prisoner reintegration employmentopportunities program

Archeological program with Aboriginalcommunities

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Resource Life - BHP Billitons core assets

Minister Koutsantonis (right) presentingaward to Darryl Cuzzubbo (BHP Billiton)

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Olympic Dam way forward

2013-14 production

184 400t copper, 3988t uranium oxide,121 335 oz gold, 972 000 oz silver

Technology studies proceeding

Lab scale leach testing continues

BHPB now considering on-site HeapLeach Demonstration trial (smallscale)

Applications referred to State andFederal Governments

If approved, construction tocommence July 2015, operation tocommence Oct 2016 for 3 year trial

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GEO-MEMBRANE LINED COPPER HEAP LEACH IN ARIZONA, USA

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Carrapateena positive PFS

OZMinerals announcement - 18 AugustPre-Feasibility study confirms Carrapateena is a

technically and financially viable project

Capital cost $2.985 billion 12.4 Mtpa block caving via 2 x 500m lifts producing copper-gold concentrate 114,000 tpa copper and 117,000 ozpa gold

low operating costs and a 24 year mine life

potential to use Prominent Hill concentrator base case demonstrates ore exported via Port

Adelaide - closer ports to be investigated next stage feasibility study and development

of exploration decline

Ore reserve:270Mt at 0.9 %Cu, 0.4 g/t Au, 4.5 g/t Ag= 2.5Mt Copper, 3.5Moz Gold & 39Moz Silver

Government of South AustraliaPACE co-funded discovery in 2005

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Arrium Mining Iron Ore

South Australia - birthplace of Australias iron ore production and is countryssecond largest producer

Arrium leads South Australian production; stepping up production from 3mtpa a decade ago to 11.6 mtpa in 2013/14

Export capacity boosted with expanded port capacity at Whyalla complete

with rail-loops - delivered on time and on budget Expansion continues through Middleback Ranges - Government case managers

and regulators working closely in Iron Knob area

Source: Photographs by Sean Kelly, courtesy of Arrium Mining

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Central Eyre Iron Project (CEIP)

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Central Eyre Iron Project (CEIP)

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Nyrstar Port Pirie Smelter Transformation

Source: Courtesy of Nyrstar

Slag FumingPlant

Precious MetalsRefinery

Lead Refinery

Sinter Plant

Blast Furnace

New Acid Plant

Oxygen EnrichedBath Smelting

Furnace

Zinc Plant

Copper Plant

Closed end of July. Zincoxide transferred toHobart from August2014 onwards

Change due to Redevelopment process

Advanced metal recovery and refining facility3-D snapshot of Redevelopment on completion

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Government Initiatives

Creation of new Department of State Development

Premiers Economic Priority 1 Unlocking the full potential of South Australias resources, energy andrenewable assets

The Regional Mining and Infrastructure Plan &

Resources Infrastructure Taskforce (RIT) within theOlympic Dam Taskforce

Nyrstar Pt Pirie Smelter Transformation Govt.guarantee to underpin the $514 million investment

PACE 2020 further $4 m to launch PACE Frontiers

New Core Library underway at Tonsley

Mining and Petroleum Services Centre ofExcellence ...

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Resources Infrastructure Taskforce (RIT)

The Regional Mining and Infrastructure Planlaunched by the Minister for Transport andInfrastructure 12 June 2014

Resources Infrastructure Taskforce (RIT) within theOlympic Dam Taskforce, jointly chaired by senior stafffrom the Department of State Development and DPTI

The RIT will guide development of rail, road, port,water and electricity infrastructure supportingexpansion of States resources and energy sectors

In 12 months development of a business case for a 1 st port solution supporting increased export of iron orefrom prospective mines in SA

Work closely with key private sector stakeholders

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Eyre Peninsula Land UseSupport Program (EPLUS)

The objectives of the program include:

Shared commitment to multiple land use

Build capacity of Eyre Peninsulacommunities, farming businesses andlocal industries

Provide tools and support to fullyunderstand and realise the opportunitiesfor agribusiness by workingcollaboratively with the explorers andmine developers

Knowledge and understanding forlandowners to effectively participate inthe land access negotiation process

http://www.pir.sa.gov.au/eplus

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Land Access CommunityEngagement Program

Resources & Energy GroupStakeholder EngagementFramework

Community LandholderWorkshops

Field Days

Premiers Community ExcellenceAwards in Mining and Energy

Local Government workshops

Booklets Understanding MineralExploration & UnderstandingDryland Farming

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Future Farm Landscape Workshops

Targetedworkshops to assistpotentiallyimpactedlandholders to

assess the overallimpact ofexploration andmining on theirsustainability andidentify theopportunities fortheir farmingbusiness

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Aboriginal Economic Participation

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Working to identify all known Aboriginal Businesses in SA

Developed a Business list of 66 Businesses so far, available on request

Building a business network and proposing they link through ICN

Agency Aboriginal EconomicParticipation Strategy

Encouraging Industry leaders tosupport Aboriginal EconomicParticipation through:

Supporting Small BusinessDirect Employment; and

Training and Development viaSkills for All

Further information contact JasonDowns at jason.downs@sa.gov.au or 0428 830 473

mailto:jason.downs@sa.gov.aumailto:jason.downs@sa.gov.au

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WPA 166 ELs & 9 PELs

The Federal Parliament passed the

Defence Legislation Amendment(Woomera Prohibited Area) Bill 2014 on16 July 2014

Formally establishing an innovativecoexistence framework

Providing clarity and certainty in accessing

this world-class resources province

The WPA boundary will exclude the landknown as Section 400, placing its full careand control back to the Maralinga peoplewho are freehold landowners

Details of the permit system in the WPARules now available on the FederalRegister presentation forum inAdelaide planned

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Sample

Measure

Interp

Target

Drill

Greenfields Exploration Drilling

Current Practice Continual cycle over

many months

Delayed decisionmaking

Multiple drillingcampaigns

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Deep Exploration: Prospecting Drilling

Build out from initial targets using 5-10

km coiled tubing drilling array andresampling prior holes for consistentgeochemical data

Downhole & Lab-at-Rig tools definepetrophysics and geochemical halos real-

time Anomalies re-modelled and followed up

during same campaign

Targets based on broad bandwidth of

geophysical and geochemical datareduces false +ves and allowsrecognition of new deposit types

Start to map entire mineralising systemwith regional scale vector potential

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SA Mineral Systems Drilling Program

Funding ~$2M (PACE Frontiers)

Collaborative project involving DETCRC

Q1/Q2 2015 calendar year

Trial a new style of industrycollaboration

Aim Test geological questions in an

economic context

Test DET CRC technology in thefield

Test mineral systems mappingconcept

Test prospectivity indices

DET CRC / Boart Longyear diamond rig

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Cairn Hill

Jacinth-Ambrosia

Wilcherry Hill

Where to Drill ?

Emphasis is in the Olympic Cu-AuProvince and including the WPAbut other areas will beconsidered

GSSA Key areas of interest Coober Pedy Ridge Mt Woods Olympic Dam Region Southern margin Gawler Range

Volcanics Eastern Eyre Peninsula Yorke Peninsula

All proposed locationswill be considered

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Drilling Specifications

Regional drilling 5-10 km spacing Holes will be cored from surface

where practical

Diameter of drillholes will be largeenough to fit DET CRC probes

Preference for areas less than 500metres of cover (Max depth of1,200 m)

Areas with more than 1,000 m ofcover will be excluded

Minimum of 50 m of basementcore to be recovered

DET CRC drilling site at Brukunga

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Coiled Tubing Drill Rig

New coil tube rigdelivered to the DET CRCfor further in late 2013

Lab-at-RigTM Prototypedeployed during the Victorian regional drillingprogram in mid-2014

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Only 5 day period to apply

Follows the one monthmoratorium/publication period

Pre-defined assessment criteria are outlinedin Minerals Regulatory Guidelines MG17

Online application via SARIG is available

If multiple applications are received, validapplications will be assessed by an

assessment panel

Mineral Exploration Release Areas (ERAs)

New ground release process inSouth Australia

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Exploration opportunity

East Gairdner relinquished tenements area

Area of ~ 9000 km 2 subdivided into 10 separateExploration Release Areas (ERAs)

Mineral prospectivity: copper, gold, silver &

uranium Mineral potential:

IOCG style mineralisationEpithermal, porphyry and skarn style Ag, Au,Pb, Zn, Cu, Sn and uranium

Stratabound base and precious metalsUnconformity uraniumUnconformity related Cu, Ag, Co, Pb and Mnmineralisation

Applications open 6-10 October 2014

For further details visitwww.minerals.statedevelopment.sa.gov.au/east_gairdner_ERAs

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State-of-the-art training hub

The state-of-the-art TAFE SA traininghub at Regency Park was opened on28 August 2014

The $38.3 million Mining, Engineeringand Transport (MET) Centre will help

deliver training for the 25,000 newworkers projected required by mining,transport, defence, engineering andallied industries over the next fiveyears

The MET Centre consolidatesprograms delivered across severalcampuses in one centralised traininghub

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State Drill Core Library - Tonsley

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Free App for South Australia Mining Investors

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Disclaimer

The information contained in this presentation has been compiled by theDepartment of State Development and originates from a variety of sources.Although all reasonable care has been taken in the preparation and compilationof the information, it has been provided in good faith for general informationonly and does not purport to be a professional advice. No warranty, express orimplied, is given as to the completeness, correctness, accuracy, reliability or

currency of the materials.

The Department of State Development and the Crown in the right of the Stateof South Australia does not accept responsibility for and will not be held liableto any recipient of the information for any loss or damage however caused

(including negligence) which may be directly or indirectly suffered as aconsequence of use of these materials. The Department of State Developmentreserves the right to update, amend or supplement the information from timeto time at its discretion.