Dr Gavin England - December2016

RAZORBACK GEOMETALLURGY 101

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DISCLAIMER AND COMPETANT PERSONS STATEMENT

This presentation has been prepared by Magnetite Mines Limited (ABN 34 108 102 432) (“MGT”) based on information available to it. No representation or warranty, express or implied, is made as to thefairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of MGT, its related bodiescorporate, its or their directors, employees or agents, advisers, nor any other person accepts any liability for any loss arising from the use of or reliance on this presentation or anything contained in, omittedfrom or otherwise arising in connection with it, including, without limitation, any liability arising from fault or negligence on the part of MGT, its related bodies corporate or its or their directors, employees oragents.

The details contained in this report that pertain to ore and mineralisation are based upon information compiled by Dr Gavin England, a full-time employee of the Company. Dr England is a Member of of theAustralasian Institute of Geosciences (AIG) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking toqualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Dr England consents to theinclusion in this report of the matters based upon his information in the form and context in which it appears. The Information for the Razorback Deposit was prepared and first disclosed under the JORCCode 2004. The information has not been updated since to comply with the JOPRC Code 2012 on the basis that the information has not materially changed since it was last reported.

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RAZORBACK GEOMETALLURGY 101

• Geometallurgy?

• Razorback Geology and Beneficiation

• Razorbacks Orebody Variability

• What do we do?

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Geologist wearing a metallurgists hat at sinter plant, china

GEOMETALLURGY?

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Geometallurgy relates to the practice of combining geology or geostatistics with

metallurgy, or, more specifically, extractive metallurgy, to create a spatially or

geologically based predictive model for mineral processing plants.

Wikipedia

GEOMETALLURGY?

Managing ore body

variability to ensure best economic viability

Geology

Mineralogy

Geostatistics

Ore Resources

Mine Planning

Metallurgy

Plant Design

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HOW DOES UNDERSTANDING THE ORE BODY VARIABILITY HELP US?

• Improve flowsheet and equipment design

• Optimise mine to plant performance

• Forecast production

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Razorback Magnetite concentrate in LIMS

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RAZORBACK DEPOSIT – MAWSON IRON PROJECT

• Razorback is a low grade - high tonnage sedimentary-hosted magnetite deposit

• Produces high grade concentrate >68% Fe

• Hosted in Neoproterozoic Braemar Iron Formation - Adelaide Geosyncline

• Deposited during Sturtian Glaciation –“Snowball Earth”

• 280 km northeast of Adelaide

Modified after Lottermoser and Ashley, 2000

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MAWSON IRON PROJECT • Largest undeveloped magnetite

province in the world• Consortium has exploration license

area of ~4000 km2 - major tenement holder in the region

• Aeromagnetic surveys and outcrop mapping demonstrate > 200 km of strike length of magnetite–rich Braemar Iron Formation

• 3 JORC Resources1,2,3

1 ASX Announcement 11/06/13 - The Mineral Resource information for the project was prepared and first disclosed under the JORC Code 2004 and the information has not been updated since to comply with the JORC Code 2012 on the basis the information has not materially changed since it was last reported;.2 Mineral Resource Information for the Olary Magnetite project based on JORC Code 2012 Inferred resource produced by Mr. Simon Tear of H&S Consultants in September 2016 for Lodestone Equities. Mr Tear is a Member of the AusIMM having sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Results shown to demonstrate the extent or resources for the SA Magnetite Consortium. Magnetite Mines Ltd. takes no responsibility for the accuracy of the results as displayed.

RAZORBACK RESOURCE 2.7 BILLION TONNES @ 15% MAGNETITE*

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2013 Optimisation study sample location

* ASX Announcement 11/06/13 - The Mineral Resource information for the project was prepared and first disclosed under the JORC Code 2004 and the information has not been updated since to comply with the JORC Code 2012 on the basis the information has not materially changed since it was last reported.

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RAZORBACK STRATIGRAPHY

2013 Optimisation study sample location

RAZORBACK MINERALISED LITHOFACIES

Modified after Lottermoser and Ashley, 2000

IRON SPECIES MINERALOGY AT RAZORBACK

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MagnetiteMagnetite

HematiteHematite

• Magnetite - 10 to 120 (average ~45 micron) micron subhedral, equant grains

• Hematite – 1) sub 10 micron laths; 2) minor > 10 micron overgrowths; and3) martite replacement of magnetite 20 microns

CAN’T USE FE HEAD GRADE AS A GUIDE TO MAGNETITE GRADE

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RAZORBACK DEPOSIT – SIMPLISTIC BENEFICIATION

High powder factor blasting + In-Pit Crushing

Convey to ROM

Tertiary Crusher + HPGR

Hydraulic Classifier 3 stage LIMS Ball Mill to 38 micron> 68% Fe Concentrate

Rougher LIMS

VARIABILITY IN THE RAZORBACK OREBODY

• effects on plant efficiencyChanges in mass recovery of magnetite

• affects product consistency promised to the steel millChanges in Fe grade of the concentrate

• affects product consistency promised to the steel millChanges in Deleterious Alkaline Elements

• affects plant efficiency and wear and tear of equipmentChanges in comminution

• affects water and waste managementChanges in tailing product

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VARIABILITY IN THE OREBODY (FE CON AND MASS RECOVERY) IN METALLURGICAL TESTWORK- MORE REPRESENTED WHEN BULK SAMPLE

2013 metallurgical study of representative bulk samples taken from across the ore body demonstrated a variation in mass recovery of 10 to 21% and Fe Concentrate of 67.1 to 69.1%Razorback Ridge Iron Peak Razorback West

Mass Recovery

Concentrate Grade

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VARIABILITY IN THE OREBODY (SODIUM)• Na content in concentrate linked

to Na content in Head• Na content strong relationship

with Plagioclase content

Razorback Ridge Iron Peak Razorback West

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BULK SAMPLE XRD – ALSO DEPICTS VARIABILITY IN MINERALOGY

Razorback Ridge Iron Peak Razorback West

Hylogger and mag sus used to characterise ore body during drilling

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VARIABILITY IN ROCK STRENGTH BY UNIT – STRONGLY LINKED TO DEGREE OF LAMINATION

Footwall Hangingwall

Contains Massive diamicritic units

Point load tester is a good, cheap method of measuring hardness variability in the ore body

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VARIABILITY IN ROCK STRENGTH VERSUS XRF GEOCHEMISTRY PREDICTIVE TOOL TO HARDNESS?

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DISTRIBUTION OF VARIABILITY- PRELIMINARY

Higher mass recovery,low concentrate Fe% , moderate Na

Higher mass recovery,moderate concentrate Fe%, variable Na

lower mass recovery,high concentrate Fe, high Na

Very soft, low mass recovery

Mod Hard, v high mass recovery

Hard, low mass recovery

Very soft, low mass recovery

Hard, low mass recovery

Mod Hard, high mass recovery

Mod Hard, high mass recovery

Mod Hard, variable mass recovery

Mod Hard, high mass recovery

Variable hard, mod mass recovery

Stratigraphy

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MANAGING THE ORE BODY VARIABILITY

Reflux Classifier bench study* Fe% Na2O%Grade after 3 stage mag separation (LIMS) 66.07 0.133

Flowrate - 500L/hr 66.94 0.101Flowrate - 700/hr 67.8 0.081Flowrate - 850/hr 68.85 0.053

Blending in the pit with using multiple IPPC Managing concentrate grade from the Processing Flowsheet

Example of using various flowrate in the Reflux Classifier after LIMS to give various concentrate

FUTURE IN GEOMETALLURICAL STUDIES – IN HOUSE COST EFFECT TOOLS AND QUICK TURN AROUND

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IMPTEC

IMPTEC Super fine Crusher IMPTEC Cyclomag

IMPTEC

Handheld XRF

MAGNASAT

Laser particle sizer

RAZORBACK GEOMETALLURGY 101

• We know there is variability in key parameters in the orebody that may effect operation efficiencies -• Mass Recovery• Fe concentrate grade & Na%• Rock hardness

• Begun modelling distribution of these parameters in the orebody• Study the effects of this variability and how best to manage in plant design and

mine planning in DFS

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FINAL THOUGHTS - GEOMETALLURGY

• Starting thinking about ore body variability at exploration / Scoping level

• Have good understanding at the Prefeasibility - Feasibility Study

• A good understanding of geometallurgy should provide a well run operation

• Geologist need to be in the driving seat

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Geologist in the driving seat of a conveyor system, Pingshou Coal mine, China