Newfoundland and Labrador, CanadaSite Selection Overview – September 2012

2014-15 producer of high purity pig iron –Top 10% globally for low cost and top of class environmentally

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Who we are…..• Grand River Ironsands Incorporated (GRI)

• 70.1% Privately held • 29.9% publicly held (Muskrat Minerals Inc.)• Currently the 83% owner of NAIC (r60% educing to

56.7% post earn-in by all partners)• Petmin investing $25 million to earn 40% of JV

• $10.5 million committed to date• Cardero Resources – iron making process

• to earn 5.5% of JV + 1% royalty on sales

North Atlantic Iron Corporation (NAIC) - 3

JV Partners – Fully Vested

• Ample resource to supply an estimated 10-15 iron making plants for 25+ years

• Low cost (cash) global producer of a high purity pig iron $188-217/t

• Will lead the environmental class globally for making iron

One of North Americas largest mineral sands

claims holders

• $320 million/plant - $80 million for mining component ($400 M total)

Will build 4 plants, strategically, in key

communities – 2

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At Surface Labrador IronsandsMother Nature (glaciers) did the hard partv No blasting, No Crushing, No Grinding.v Magnetite & Titanomagnetite alluvial sandsv High grade, at surface earth moving operationv 25yr mine life on only 3% of mineral claimsv Low cost (spirals + magnetic separation)v Environmentally benign - low remediation costsv 90% of raw sands (Silica) is returned to open pit v Full service community - existing labour

3• on Aerial (r)

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Direct Reduced Iron (DRI) • >90%Fe, higher impurities, less carbon recovery, metallization < PI• DRI/HBI has up to 4% silica, alumina, thus slag & flux volumes increase • DRI reacts more easily with water and attracts silica when in transportHot Briquetted Iron (HBI)• > Fe% than DRI and less impurities• Made by compressing DRI as it exits the module furnace• Facilitate easier transportation & handling

Scrap Metals• Ferrous, Busheling, shredded, and obsolete scrap are common • Market price is determined by Fe% and impurities (ex: Cu, Zn, Ld)• Blended clean iron feedstocks dilute impurities and increase Fe%

Sources: Midrex, IIMA

Iron FeedstocksPig Iron (PI)• > 96% Fe (high purity = 3-4% C) higher carbon recovery• More reliable & consistent feedstock; premium to DRI/HBI• > efficiency of chemical & electrical energy during EAF steelmaking• > improvement of iron yield, higher quality finished steel

Pig Iron = Higher Margins, Stable Markets

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Product Fe% US$/t Sept 2012

Iron Ore 62% $90

HBI 90-92% $320

Scrap >90% $350

DRI 90-92% $360

Pig Iron 96% $440

GRI to Produce Pig Iron at a Cost of $200-220/tonne

Our corporate focus…To finalize our team to advance to production…• Cardero have provided the iron making process• Petmin have provided cash to fulfill BFS and permitting• SRK Consultants on resource delineation• Tenova are the chosen technology provider• Hatch to independently monitor for capital markets• TWP, Peru – mine design and PFS• Eriez is the preferred provider of separation equipment• 3 shipping and logistics leaders in North American under

review• 13 potential communities with the basis for hosting a

plant

We require• Off takers – traders or

steel partners, take or pay, etc.

• Equity partner (30-40% of $400 million) –strategic or financial

• Debt providers (60-70% of CapEx) –Canadian government, governments, export agencies, etc.

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What we are also looking for….Host communities for a $320 million iron making plant

1. Access to low-cost electricity – stable 20-25 year commitment• Significant bonus in ranking if not fossil fuel• 120-130 Megawatts

2. 40 acres of land ideally near a port • Inbound is 800ktpa of iron ore concentrate and 220ktpa of anthracite (close

proximity to supply of the latter is a bonus)• Outbound 500ktpa of pig iron

and 400ktpa of slag3. Motivated community with

rapid permitting, labour availability, etc.

4. Solid Government leadership and an aggressive economic development approach

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Materials Movement rail/water/coveyance/road

• To the Iron Making Plant in the USA (In Bound) • Iron Ore Concentrate – from Goose Bay

• From separation plant at mine to Port 30-65 kms• Port of Happy Valley-Goose Bay (31 feet depth) to US Plant

• Reviewing locating Port < 10 kms to 80 metres depth (240 feet)• Finger Pier in HVGB• Rollout wharf

• Shipping minimum 800ktpa (to 1.5mtpa) of iron sands < 8% moisture• Shipping window is 220 days – May 15 – December 15

• Reductant (Coal) – likely from US supplier• 220ktpa to 450ktpa

• From the USA Pig Iron Plant• 500kta of pig iron (to 1 mtpa)• 400ktpa of inert slag (to 800ktpa)

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The Resource…..

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Minimal Investment on Mining Infrastructure…Massive Ironsands Deposit §450 sq kms under claim§Nature (glaciers) has done crushing and grinding §Will produce an iron ore concentrate for $20-28/tonne

Adjacent to Community§Full service community (Pop. 7,500)§Sea Port – 11 metres depth –handy max vessels§Low cost and abundant hydro electricity§Labour force

Minimal Infrastructure CostsNo road, rail and port investment required 10

GLOBAL ENVIRONMENTAL IRON MAKING LEADER1. Iron Ore Concentrate for $20-28/tonne2. Producer of high purity pig iron for$188-218/tonne3. “Green” hydro electricity and patented iron making process

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Happy Valley – Goose Bay

12Happy Valley-Goose Bay (pop. 7,568)320 kms south of Voisey’s Bay and 400 kms east of IOC

China (Dalian Port) would be 25 days by sea at a speed of 20 nautical miles or 42 days at a speed of 12 nautical miles

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MINERAL SANDS – SIGNIFICANT COST ADVANTAGENo blasting, no crushing – lower capital cost and minimal impact to land

reducing environmental remediation costs 14

Dredge and conveyor to the processor and a return circuit after separation of valuable minerals

100 % of River Sands

Sands (dried) from the river after dredging

Gravity Spiral—Uses WaterSilica Sands (returned to the river or land)

77-88% of River Sands

Magnetite (69% Fe)

Heavy Mineral Concentrate

12 - 23% of River Sands

Magnetic Separators and Rare Earth Drum Rollers— extracts magnetite & titanmagnetite and two other products of value

Titanmagnetite GarnetZircon

Overview of Producing Iron Ore Concentrate (Magnetite and Titanmagnetite)

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Iron Ore Concentrate - $25/tonneMagnetite

Fe 69.2%(1-2% of head feed)1

TitanmagnetiteFe 56% - 7-11% TiO2

(3-7% of head feed)

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High Purity Pig Iron

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Pig Iron - 95-97% Fe; 3-4.5% Carbon; Sulfur <0.05-1.0%; Silicon <0.1-0.5%; P <0.05-0.1%; Mn – Trace; TiO2 <0.1%

Slag – 24% TiO2 (TiO2 reports to the slag with melting)

Iron Button

Slag

Where we are today…..

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Key 2012 executable’s…Deep drilling

Up to now, generally to 12 metres. Geophysics and mining engineers suggest resource will be mineable

to 45 metres July 2012

Resource Statement Indicated Resource

October 2012

Tenova Report Conceptual design, pre-

engineering + triggers to initiate environmental permitting

September 2012

Bulk Sample 7,000 tonnes

July 2012

Site Selectionfrom 13 to 4 locations

November 2012Negotiations on 1st location completed – December 2012

Melt test 300 tonnes of IOC December 2012

Hatch Engineering to oversee on process and scalability for capital

markets

Mining plan PEA on mining

December 2012

Permitting to be initiated• Mining - December 2012 (45-120

days)• Iron making plant – January 2013

(120-240 days)

Pre-BFS Mining and Iron Making

March 201319

Projected Plants…• Based on market demand - First USA Merchant Pig Producer for USA

users – currently USA supports Russia and Brazilian merchant pig iron• Competitive with merchant pig iron producers and if needed a lower

cost substitute for scrap and HBI• May 25, 2012 Pricing (World Steel Weekly)

• Pig iron USA, import, C&F $470-475 • Scrap HMS 1&2 USA, export, FOB East Coast $410-415 • HBI Italy, import, C&F $395-400

4 plants planned

• Happy Valley-Goose Bay in 2017 (will be lowest cost producer)• Committed to community

• 2014-15 Production (shipping the IOC to USA plants)• One on Great Lakes - Oswego, Port of Conneaut (Erie), Toledo• One in Gulf/Mississippi River – Memphis, Arkansas, Plaquemine's

Parish (New Orleans), Tampa, Mississippi, Mobile• Iceland – Low cost geo-thermal; half way to Europe from resource• Potential for one plant in Quebec (max Gov’t $$$) or South Carolina

Locations

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Estimated Production Costs for Pig Iron Plant in Labrador – FOB Goose Bay

Cost CentreCost Based on Per Tonne

of Pig Iron

Iron Ore Concentrate (IOC)• IOC produced at $20-28/tonne (depending on grade)

with 1.7–1.9 tonnes of IOC to 1t of pig iron $34-53

Electricity – 120 MW - $0.03/kWh $36

Reductant (to plant in USA) $89

Labour $29

Credit for Slag ($7-17/tonne) 0

Estimated CASH COST/TONNE of PIG IRON PRODUCTION $188-20721

Estimated Production Costs for Pig Iron Plant in USA Locations (FOB USA Centre)

Cost CentreCost Based on Per

Tonne Pig Iron

Iron Ore Concentrate (IOC)• IOC produced at $20-28/tonne (depending on grade)

with 1.7–1.9 tonnes of IOC to 1t of pig iron • Shipping IOC to USA $15/tonne x 1.7 tonnes

$34-53

$26

Electricity – 120 MW - $0.03/kWh $36

Reductant (to plant in USA) $80

Labour $29

Credit for Slag ($7-17/tonne) ($7)

Estimated CASH COST/TONNE of PIG IRON PRODUCTION $198-21722

Potential for Other Cash Streams (Based on Mining 800ktpa of IOC = 500ktpa of Pig Iron)

• 300,000 tonnes per annum ($100-800/t)Garnet

• 25,000 tonnes per annum ($2,680/t)Zircon• 400,000 tonnes per annum• Slag prices fluctuate between $7-20/t in USA – with USA

slag Association indicating avg. 17/t• 25% is TiO2 (assessment to be done on economics of

separation) with potential for up to 100,000 tonnes/annum of TiO2

Slag

• Silica sands for cement making for nearby hydro damsSilica Sands• Low CO2 emissions assists reduce paying for CO2

penalties and possibly able to sell credits …EU forecasts $30/t in 2014-15 (currently at $10/t was $25 /t in 2011)

• CO2 trading schemes in effect in EU and Australia with China, Korea and Japan to roll out by 2014.

CO2 Values23

Next steps…� Prepare 300 tonnes of iron ore concentrate� Melt the concentrate to produce pig iron� Resource Permitting to commence Q4 2012� Finalize firs Pig Iron Plant location Q4 in 201� Finalize operating team in 2012

◦ Debt Financing/Equity Partners◦ Operating Team◦ Shipping solution◦ Off-take

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www.grandriverironsands.comThanks!