Australia s Newest Iron Ore Producer A fresh chapter begins as Karara approaches full production Tim Netscher, Managing Director Diggers and Dealers, 7 August 2013
Disclaimer Presentation of General Background This document contains general background information about the activities of Gindalbie Metals Ltd ("Gindalbie", "Gindalbie Metals" or the "Company") current as at the date of this presentation. It is information in a summary form only and does not contain all the information necessary to fully evaluate any transaction or investment. It should be read in conjunction with Gindalbie's other periodic and continuous disclosure announcements to the ASX available at www.asx.com.au. Competent Person Compliance Statement The information in this presentation that relates to the Exploration results and data that was used to compile the Mineral Resource estimates is based upon information compiled by Ian Shackleton. Ian Shackleton is a member of the Australasian Institute of Geoscientists (MAIG) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a competent person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ian Shackleton is a full-time employee of Gindalbie Metals Limited. Ian Shackleton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this presentation that relates to the Mineral Resources is based upon information compiled by John Graindorge. John Graindorge is a member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a competent person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. John Graindorge is a full-time employee of Snowden Mining Industry Consultants Pty Ltd. John Graindorge consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this presentation that relates to the Ore Reserves is based upon information compiled by Mark Gell. Mark Gell is a member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a competent person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mark Gell is a full-time employee of Karara Mining Limited. Mark Gell consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. General Disclaimer This presentation may include forward-looking statements. These forward-looking statements are based on management s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Gindalbie Metals that could cause actual results to differ materially from such statements. Gindalbie Metals makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release. There are a number of risks, both specific to Gindalbie Metals and of a general nature which may affect the future operating and financial performance of Gindalbie Metals and the value of an investment in Gindalbie Metals including and not limited to economic conditions, stock market fluctuations, iron ore demand and price movements, timing of access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations, and mining development, construction and commissioning risk. All dollar amounts shown in this presentation are in Australian dollars unless otherwise stated. 2
Disclaimer Ore Reserves and Mineral Resources Reporting Requirements As a company with securities listed on the ASX, Gindalbie is required to report its ore reserves and mineral resources in compliance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code ). While Gindalbie s reserve and resource estimates comply with the JORC Code, they may not comply with the relevant guidelines in other countries, and do not comply with the U.S. SEC's Industry Guide 7, which, among other things, may require the use of different assumptions for the estimation of reserves, and does not recognise mineral resources. Accordingly, Gindalbie would not be permitted to report mineral resources in an SEC filing. Investors should note that Gindalbie's ore reserves may be lower if they were calculated under Industry Guide 7 and that its mineral resources are not proved or probable reserves, for the purposes of Industry Guide 7 and there can be no assurance that such mineral resources will ultimately be converted into such reserves or that Gindalbie will be able to legally and economically extract them. Future Performance This announcement contains certain forward looking statements. The words believe, anticipate, "expect, project, forecast, estimate, potential, could, may, target, consider and will and other similar expressions are intended to identify forward looking statements. Forward looking statements, opinions and estimates provided in this announcement are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements. To the full extent permitted by law, Gindalbie and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions. There are a number of risks, both specific to Gindalbie and of a general nature which may affect the future operating and financial performance of Gindalbie and the value of an investment in Gindalbie including and not limited to economic conditions, stock market fluctuations, iron ore demand and price movements, timing of access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations, and mining development, construction and commissioning risk. 3
Corporate Snapshot Share on issue: ~1.49 billion Market capitalisation: ~ A$235 million Cash reserves (as at 30 Jun 2013): A$8.9 million* Nil corporate debt Key asset 48% stake** in world-class Karara Project (52% Ansteel) Major shareholder (36%) & key supporter Ansteel Strong and experienced Board and Management Team * Prior to anticipated A$30 million cash injection from loan repayment. ** Following anticipated project ownership restructure. 4
Karara The Story So Far Australia s second magnetite project World-class project with ~2.5Bt resource* and 30+ year mine life A highly successful Joint Venture and partnership between Gindalbie and Ansteel A$1.46 billion in equity contributed to date by Gindalbie and Ansteel US$1.8 billion in project debt funding raised through China Development Bank and Bank of China on attractive commercial terms * See resource table on page 28 5
Karara The Story So Far Completed a lengthy approval process Completed construction in one of the most overheated construction markets ever seen in Australia, with an exceptional safety record Successfully completed and commissioned a +A$3 billion magnetite processing plant, port and rail infrastructure chain Successfully shipped 4.8 million tonnes to 31 July Premium 68% magnetite concentrate produced and steady state production anticipated in the December Quarter 2013 6
Karara The Story So Far Karara First Talks April, JV Signed February, Equity Funding Agreement November, Ground Breaking Ceremony; Construction starts July, Ansteel Placement April, Senior Debt Facility Signed September, Opening of Karara Export Terminal January, First magnetite concentrate shipped August, First batches of 68% Fe concentrate produced 2006 2007 2008 2009 2010 2011 2012 2013 September, BFS Completed October, Environmental Approval Received March, Offtake Agreement Signed March, First DSO Shipment April Karara Official Opening November, First magnetite concentrate Produced 7
Karara The Story So Far September 2009 8
Karara The Story So Far July 2010 May 2012 9
Karara The Story So Far April 2013 10
Karara The Story So Far Sep 2009 May 2012 11
Karara The Story So Far Power Rail 12
Mine and Concentrator Mining at a rate of 30Mtpa, one of WA s single biggest mining operations Construction completed and ramp-up well advanced Successfully produced premium quality, 68%Fe magnetite concentrate Stage One capacity 8Mtpa magnetite concentrate anticipated in the December Quarter 2013 13
Fully Integrated Rail and Port Logistics Chain Rail Four trains per day running between Karara and Geraldton Trains consist of 100 wagons and carry approximately 7000t Karara Export Terminal, Geraldton Proven ability to turn around vessels in 24hrs to achieve 16Mtpa capacity 80 ships loaded to 31 July 14
Realising WA s Iron Ore Processing Dream To 31 July, Karara has shipped 3.5Mt DSO, 1.3Mt magnetite concentrate 15
Premium Product for Global Market Security provided by Ansteel: 100% off-take However, Karara recently negotiated the ability to sell 30% outside the offtake to open market opportunities Concentrate pricing based on Platts IODEX 62% Fe CFR Index, plus premium for iron content and quality Karara A Premium Product Karara Concentrate Hamersley Pilbara Blend Fe% (Iron) 68.2% 62.2% SiO 2 % (Silica) 4.75% 3.6% Al 2 O 3 % (Alumina) 0.10% 2.1% P% (Phosphorus) 0.01% 0.1% High iron content, low impurities 16
The Next Chapter Karara Provides the Springboard for Gindalbie s Future Growth. 17
A Case Study North West Shelf Project Woodside originally took on the task of developing the North West Shelf Project, still Australia s biggest resource project Over time Woodside s stake has diluted to facilitate project funding and growth Woodside now owns one-sixth of a multi-billion dollar project and has a market capitalisation of +A$30 billion Woodside was supported throughout by oil giant Shell as a major shareholder and project partner Gindalbie and Karara share many similarities with Woodside and the North West Shelf Project 18
Karara Restructuring Securing the Project s future Existing Ownership Structure 50% 50% New Ownership Structure - Gindalbie to remain debt free with +A$35 million cash in hand - Well placed to progress its 100%-owned projects 47.84% 52.16% - Ansteel to provide bridging loan to Karara to fund any cashflow requirements in the next 12 months 19
Karara Growth Potential Karara resource of ~2.5Bt* supports future multi-stage expansions 16Mtpa expansion Feasibility Study nearing completion, timing and funding options being considered Optimisation of existing plant also being considered Any production expansions expected to drive lower operating costs * See resource table on page 28 20
Gindalbie Growth Opportunities Shine Project (DSO) JORC resource of 6.1Mt* @ 59.8% Fe Feasibility Study completed Robust project at current iron ore prices Finalising infrastructure access before Final Investment Decision Lodestone Project (magnetite) Large scale deposit maiden resource of ~1.5Bt** Strategic location and close to existing infrastructure Expressions of interest sought * See resource table on page 30 ** See resource table on page 28 21
A Fresh Chapter for Gindalbie: Our Key Strengths Experienced management team - project development, approvals and operations Local knowledge Strong Chinese relationship proven history of working constructively with Chinese partner 48%* stake in world-class, A$3 billion Karara Project * Following finalisation of proposed project restructure 22
A Fresh Chapter for Gindalbie: The Next Steps Now focusing on near-term growth opportunities: DSO Rail-hub opportunities Karara Stage Two expansion to 16Mtpa Positioned to pursue other opportunities 23
Appendix 24
Experienced Team Proven Track Record Gindalbie Metals Board Keith Jones Chairman Tim Netscher MD & CEO Tang Fuping Non-Executive Director Yu Wanyuan Non-Executive Director Chen Ping Non-Executive Director Michael O Neill Non-Executive Director Robin Marshall Non-Executive Director Paul Hallam Non-Executive Director Gindalbie Metals and Karara Senior Management David Richardson CFO Steve Abbott GM Business Development Christopher Gerrard General Counsel 25 Michael Weir Corp Affairs & Investor Relations Manager Paul Sims Acting CEO Karara Mining Ltd
Karara Operating Cost Estimate Operating Cash Cost * Stage One 10Mtpa A$/t Stage Two 16Mtpa A$/t Operating Cash Cost 72-76 64-68 * Forecast is estimated operating cash cost FOB Geraldton and excludes State royalty; Cash costs to be confirmed once steady state production has been achieved. 26
Karara Process Flow Sheet 27
Karara Process Flow Sheet 28
Magnetite Resources Karara Mining Ltd Magnetite Resources Inclusive of Ore Reserves as at 30 June 2012 Gindalbie Metals Ltd Magnetite Resources Inclusive of Ore Reserves as at 30 June 2012 29
Magnetite Reserve Karara Mining Ltd Magnetite Reserve as at 30 June 2012 30
Hematite Resource Karara Mining Ltd Hematite Resources Inclusive of Ore Reserves as at 30 June 2012 Gindalbie Metals Ltd Hematite Resources Inclusive of Ore Reserves as at 30 June 2012 31
Hematite Reserve Karara Mining Ltd Hematite Reserve as at 30 June 2012 32
Hinge Resource Karara Mining Ltd - Hinge Hematite Mineral Resource Reported above a 57% Fe cut-off grade as at Dec 31, 2012 JORC (2004) Oxidation Tonnes Fe SiO 2 Al 2 O 3 P S LOI State (Mt) (%) (%) (%) (%) (%) (%) Inferred Transitional 0.61 59.6 9.0 0.8 0.06 0.01 2.3 Inferred Fresh 0.75 60.7 7.7 0.8 0.06 0.01 2.4 Total 1.37 60.2 8.3 0.8 0.06 0.01 2.4 *Small discrepancies may occur due to rounding Karara Mining Ltd - Hinge Magnetite Mineral Resource Reported above a 0% Fe cut-off grade as at Dec 31, 2012 JORC (2004) Tonnes (Mt) Fe SiO 2 Al 2 O 3 P S LOI (%) (%) (%) (%) (%) (%) Measured 0.68 60.2 6.4 1.8 0.08 0.02 4.9 Indicated 0.99 60.4 6.9 1.8 0.07 0.01 4.0 Inferred 0.04 58.1 7.1 1.9 0.12 0.01 7.0 Total 1.70 60.3 6.7 1.8 0.07 0.02 4.4 33
Our Community Contribution Training partnership with Durack Institute and Morawa Education Industry Training Alliance Morawa hospital nurse development program 150-man power line construction village at Three Springs. Mingenew community water bore Housing generation Morawa (2), Perenjori (1) Mingenew (2) High School Apprentice Scholarships 2010, 2011, 2012 University/Graduate Scholarship Morawa doctor flight assistance package Morawa art exhibition Community Health Fund - Partnership with RFDS, ~$250k raised to-date. Target $450k 600 acre community farm. ~A$166k contribution to community groups in 2011 and 2012 Flora and fauna propagation programs Feral eradication, weed control, rehabilitation Solar technology trial for villages, airport and communication tower installation Waste cooking oil, bio mass energy generation program Mallee fowl protection and propagation program 34
Our Community Contribution Total 1,962 suppliers Rest of Australia 350, 18% Others 62, 3% Midwest 360, 18% Total Spend $3.35 billion Rest of Australia $613m, 18% Others $294m, 9% Mid West $345m,10% Rest of WA 1190, 61% Rest of WA $2.1b, 63% 1900 (97%) of 1962 businesses engaged to date are Australian, 360 (18%) of them are from the Mid West A$3.06 billion (91%) of A$3.35 billion of funds spent are with Australian companies 35
For more information contact Michael Weir Corporate Affairs & Investor Relations Manager T: +618 9480 8700 F:+618 9480 8799 michael.weir@gindalbie.com.au Level 9, London House 216 St Georges Tce, Perth WA 6000 www.gindalbie.com.au 36