Merchant Pig Iron… for EAF Steel Mills and Foundries

North America’s first major merchant supplier

November 7, 2015

What we know… • Will produce pig iron in the bottom half of the global cost curve on a

delivered basis

• Will produce steel grade and/or foundry grade, including nodular

• Will be based in Ohio or Quebec - will deliver significant cost savings in shipping to mills and foundries north of Ohio River

• Before formally approaching capital markets or strategic partners, up to 60% of capital cost is in place

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Steel Grade % Nodular “Triple5” %

C 3.5-4.5 Si 1.5 Mn 1.5 max P 0.12 S 0.05

C 3.5-4.5 Si 0.5 Mn 0.05 P 0.005 S 0.002 max

Next decisions… • Configuration to start with

• 850ktpa (requires reduction furnace)

• 425ktpa (no natural gas required)

• 425ktpa with scalability to 850ktpa

• Smaller plant could satisfy nodular market in North America and Europe • Western Europe is less than 7 days by water from Quebec

• Focus on Steel Mills or Foundries

• Quebec or Ohio for location of first plant

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Final 2 Locations… 18 Port Communities Studied in Detail

QUEBEC, CANADA

• Half the cost for electricity

• Close shipping distance to Great Lakes, eastern USA and Europe

• Year round water access

• Access to low cost iron ore nearby

• Corporate income tax rate 15%

• Strong Government partner

OHIO, USA

• Half the cost for natural gas

• Trucking distance to mills and foundries

• 9 months water access

• Access to low cost coal nearby

• Corporate income tax rate 35%

• Strong Corporate partner

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Commercial Melt Tests Validating Operating Cost Model

• Successful multi day smelting campaign completed using submerged arc furnace (“SAF”) Oct 2013

• Witnessed by HATCH Engineering as part of an independent technical review for Feasibility work • Witnessed by major ferrous metal traders and potential off-take partners • Furnaces operated by extremely experiences metallurgists on staff • Low cost thermal coal used as a reductant in the manufacturing process of high value pig iron

Demonstration Facility in Forks, Pennsylvania

Photos taken during melt tests conducted in Easton, PA

Own Test Facility

Flow Sheet Combines Proven Technologies

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• Hot DRI is transferred to an electric submerged arc furnace (“SAF”)

• Two layers of material are created in the SAF, iron and slag

• Iron is tapped form the furnace and cast into pigs for sale as MPI

Iron fines Coal

Composite Briquetting Pre-reduction in RHF

CBQ with Goose Bay Fe

Pig iron smelting

• Raw material inputs are processed, mixed and briquetted to form CBQ

• CBQ strength is derived from pressure and binder

• CBQ will be transferred by conveyor to a rotary hearth furnace (“RHF”)

• Heat and reducing gas in the RHF causes pre-reduction of iron ore

Binder

Target Market North of the Ohio River 2 potential locations – Quebec, Canada and Ohio, USA (Blue Dots = EAF’s)

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Ohio River Mississippi River

Niagara Falls

Ohio River

Focus on the U.S. steel industry north of the Ohio River

Supply & Demand of MPI

EAF Consumption of merchant pig iron

N.A. Pig Iron imports by Destination N.A. Pig Iron Imports by Country of Origin

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32.2%

46.7%

14.8%

6.3%

Brazil

Russia

Ukraine

Other

0

2

4

6

8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

mtp

a

Source: CRU & IIMA

As of November 2014 imports were 4.3mt according to data from the IIMA and CRU. Demand has rebounded since 2009 and is moving back towards 5.0mtpa

Captive Iron Ore Resource – Eastern Canada

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At Surface Labrador Ironsands – Target Cost <C$30/tonne for Concentrate

• No blasting, No Crushing, No Grinding.

• Magnetite & Titanomagnetite alluvial sands

• At surface earth moving operation

• Low cost (spirals + magnetic separation)

• Environmentally benign - low remediation costs

• Low Cost Hydro Electricity – Adjacent to Hydro Generation

• Nearby Seaport - Full service community - existing labour

Logistical Competitive Advantages

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Transportation Cost MPI to USA ($/tonne) Raw Material Consumables

• Iron ore concentrate – 1.6mpta

• Reductant – 650ktpa

• Lime – 150ktpa

• Binder – c. 60ktpa

Outputs

• Merchant pig iron – 900-1,000ktpa

• Slag – 235ktpa

A plant based in Ohio or Quebec will have a significant cost advantage over imported material. In particular, it will avoid the significant costs of material movement from New Orleans to the Midwest

Brazil Russia Ohio Quebec

Freight to Port

$35 $22 $0 0

Port to NOLA

$15 $23 NA NA

To Midwest

$25 $25 $10 $20

TOTAL $75 $70 $10 $20

Positive Demand Factors for MPI

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Recent EAF Projects o Growth in global EAF steel production (4.8% CAGR for 2013-2015) especially in flat rolled steel and special grade steel (both require MPI) based on CRU estimates

o Global scrap supplies are deteriorating in quality accumulating hard to remove impurities with each recycling period. MPI needed to dilute these impurities

o New Russian, Asian & Middle Eastern EAF’s to draw Russian and Ukrainian MPI from North American market

Global EAF Steel Production

Big River Steel may increase U.S. AIU demand by 400-500ktpa

The Future US$300 million Pig Iron Plant

◦ BFS Fulfilled by May 2016 ◦ Permitting initiated December 2015 ◦ Secure Capital, raw material supply and off-take 1H 2016

Labrador ◦ Continue to advance the mineral sands of Labrador – smaller operating foot print of 10 mpta

of sands ◦ Focus on garnets and feldspars ◦ Work with community on port infrastructure ◦ Revisit an iron making plant after power supply has been stabilized and certainty on pricing Forks, PA ◦ Commercialize furnaces – e-scrap and other products that can be smelted Newfoundland and Labrador ◦ Target projects that have a product to be smelted, as well as early stage opportunities (with

a reasonable amount of drilling and definition0 ◦ Partner with opportunities that may be able to use our tools – GeoProbe’s for drilling in

unconsolidated materials; magnetometer/gradiometer and XRF Gun

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