Northern Territory Minerals Investment Opportunities for Japan

Ian Scrimgeour

Executive Director

Northern Territory Geological Survey

The Territory’s resources industry

• Eight major operating mines

• Major commodities produced (2014/15)

Gold 14.5 t Au

Uranium 2000t U3O8

Zinc-lead concentrate >600,000t

Bauxite 7 Mt

Manganese 5.7 Mt

• Major exporter of LNG (Darwin LNG, with Ichthys LNG to commence in 2017) – production capacity of 12 Mtpa

The growing Northern Territory-Japan relationship

• Annual NT Government-led minerals and energy delegations to Tokyo • Inpex – Ichthys LNG project:

US$34B project 883 km gas pipeline Completion scheduled for 2017; production capacity 8.4 Mtpa LNG

The Northern Territory Government strongly welcomes Japanese investment

Infrastructure

North-south infrastructure corridor • Railway (Darwin-Adelaide) • Highway • Gas pipeline

Australia’s closest deep-water port to Japan Potential to link gas and rail network to Australia’s east coast Northern Australian Development policy - A$5 billion concessional loan facility from Australian Government for construction of infrastructure

Darwin

Northern Territory

Gateway to Asia

Distances from Darwin

Darwin to Sydney

Tokyo 5400km

Seoul 5574km

Beijing 6000km

Shanghai 5056km

Taipei 4288km

Hong Kong 4250km

Singapore 3350km

Manila 3150km

Melbourne 3150km

Sydney 3150km

Brisbane 2850km

Jakarta 2700km

Darwin to Singapore

4 Hours

Darwin

Strong pipeline of emerging projects seeking investment

• Exploration boom in 2007-2011 led to new discoveries and identified resources

• 16 mining projects currently in feasibility, approvals or construction processes

• Many are long-term projects (>20 year mine life)

• Main commodities for developing projects include copper, phosphate, vanadium, rare earths, gold, zinc, potash, tungsten and uranium

• Junior to mid-tier companies struggling to raise capital to progress projects

The NT Government has compiled information on minerals and energy projects seeking Japanese investment, including 17 advanced projects, and numerous early stage exploration projects

Projects seeking investment

uranium rare earths copper gold phosphate zinc-lead salt

magnesium oil and gas potash vanadium titanium tungsten molybdenum

The McArthur Basin is a world-class zinc basin with new discoveries still being made

Teena discovery

Teck Australia-Rox Resources

• ‘Sedex’ style deposit 10 km west of McArthur River

2013 drilling:

• 26.4m @ 13.3% Zn+Pb, from 1060m

• 20.1m @ 15.0% Zn+Pb from 944m including 12.5m @ 19.5% Zn+Pb

2015 drilling:

• 38.8m @ 16.9% Zn+Pb from 1069m including 20.0m @ 22.43% Zn+Pb

Mineralisation extends over 1.9km x 0.8km

MMG also actively exploring Batten Fault Zone

Zinc-lead

TNG Ltd – Mount Peake

• 160 Mt @ 0.28% V2O5 , 5.3% TiO2, 23% Fe

• Mafic-hosted vanadium magnetite

• Close to railway and gas pipeline

• Potential production of V2O5, Fe2O3 and TiO2 through patented hydrometallurgical technique

Definitive Feasibility Study (DFS) released July 2015:

• pre-tax internal rate of return of 41%

• pre-production capital cost of A$970 million,

• estimated life-of-mine net cash flow of A$11.6B

• operating cash flows of A$13.6 billion

• initial 17-year project life

• 3 Mtpa ramping up to 6 Mtpa

• proposed Darwin location for refinery

Vanadium-titanium-iron

Copper

Rox Resources – Bonya Cu

• New high-grade copper discovery, west of Jervois

38m @ 4.4% Cu from 60m

13m @ 5.4% Cu from 111m

KGL Resources Ltd – Jervois Cu-Ag-Pb-Zn-Au

• 30.5 Mt @ 1.07% Cu, 23.0 g/t Ag

• 327,000t contained Cu, 22.6 Moz Ag, 190,000t contained Pb-Zn

• 12 km long mineralised zone, open at depth

• Notice of Intent submitted, PFS being finalised

• Mineralisation drilled to >800m from surface

Resource includes:

• Bellbird – 5.4 Mt @ 1.62% Cu

• Marshall-Reward 10.6 Mt @ 1.37% Cu

Gold-zinc-silver-lead

Iron Blow JORC 2012 resource: 2.6 Mt @ 2.4 g/t Au, 130 g/t Ag, 4.8% Zn, 0.9% Pb, 0.3% Cu 2014 drilling: • 50.39m @ 10.12% Zn, 2.66 g/t Au, 283

g/t Ag, 0.57% Cu, 1.39% Pb Mount Bonnie 2015 drilling: • 8m @ 12.3% Zn, 2.41g/t Au, 321g/t

Ag, 0.5% Cu, 2.5% Pb

Phoenix Copper Ltd High grade polymetallic massive sulfide deposits located immmediately adjacent to railway

Phosphate and potash

Australia’s largest undeveloped phosphate resources Rum Jungle Resources Ammaroo phosphate 1.14 Bt @ 14% P2O5 (at 10% cutoff) including 338 Mt @ 18% P2O5 (at 15% cutoff) Development options include: • 2 Mtpa beneficiated phosphate rock (33% P2O5 ) • 0.5 Mtpa phosphoric acid • 1 Mtpa DAP and MAP fertiliser production Karinga Lakes potash • Upgraded resource: 8.4 Mt K2SO4 • Equivalent to 19 Mt of schoenite • Resources in brines in acquifers beneath salt lakes

Other phosphate projects seeking investment: Phosphate Australia Ltd

Other investment opportunities

Thessaly Resources – 9 Mt @ 44% MgO, close to railway and port, suitable for caustic calcined magnesia

Phosphate Australia - >50 Mt phosphate resource, potential to slurry to north coast

Arafura Resources – Large REE resource at Nolans, plans for 2019 development

Thor Mining – Undeveloped tungsten-molybdenum resource, approvals in place

Tellus Holdings – >4 Bt underground salt resource

Numerous earlier stage opportunities for exploration for copper, lead-zinc, uranium, gold

Shale gas

• Numerous large basins with highly prospective gas- and oil-bearing shales

• Onshore shale gas exploration boom underway

• Drilling in Beetaloo Sub-basin of McArthur Basin is intersecting thick gas columns over a vast area

• More than 200 Tcf potential resources of shale gas

• Potential to supply additional LNG export capacity in Darwin

• Investment opportunities in early to mid-stage exploration in areas with demonstrated potential

• Pro-development Government; regulatory certainty

• Pipeline of emerging mining projects and associated infrastructure

• Highly prospective shale gas and oil opportunities

• World-class, publicly available geoscience data

• Commitment from NT Government to support Japanese investors in identifying suitable opportunities

Australia’s Northern Territory

For more information: Ian Scrimgeour Executive Director NT Geological Survey Ph: +61 8 8999 5377 ian.scrimgeour@nt.gov.au

Fiona Park Director Investment Attraction Ph: +61 8 8999 1385 fiona.park@nt.gov.au

Dorothy Close Director Regional Geoscience Ph: +61 8 8999 5389 dorothy.close@nt.gov.au