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TERRAMIN AUSTRALIA LIMITED

October 2011 Investor Presentation

TERRAMIN AUSTRALIA LIMITED SLIDE No. 2

Disclaimer

No representation or warranty is or will be made by any person (including Terramin Australia Limited ACN 062 576238 (Terramin) and its officers, directors,

employees, advisers and agents) in relation to the accuracy or completeness of all or part of this document (the Presentation), or the accuracy, likelihood of

achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, the Presentation or any part of it. The Presentation includes

information derived from third party sources that has not been independently verified.

The Presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of Terramin and certain

plans and objectives of the management of Terramin. Indications of, and guidance on, production targets, targeted export output, expansion and mine

development timelines, infrastructure alternatives and financial position and performance are also forward-looking statements. Any forecast or other forward-

looking statement contained in the Presentation involves known and unknown risks and uncertainties and may involve significant elements of subjective

judgment and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance

and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Terramin, and may cause actual results to differ

materially from those expressed or implied in such statements.

There can be no assurance that actual outcomes will not differ materially from these statements. Factors that could cause actual results or performance to differ

materially include without limitation the following: credit risk; levels of supply and demand and market prices; legislation or regulations throughout the world that

affect Terramin's business; insurance expenses; the risk of an adverse decision or other outcome relating to governmental investigations; class actions or other

claims; growth in costs and expenses; risk of adverse or unanticipated market, financial or political developments (including without limitation in relation to

commodity markets).

You are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements are based on information available to us as of

the date of this presentation. Except as required by law, regulation or ASX Listing Rules, no undertaking is made that these forward looking statements will be

updated.

The Presentation is provided for informational purposes only and is subject to change without notice. Subject to any obligations under applicable laws,

regulations or ASX Listing Rules, Terramin disclaims any obligation or undertaking to release any updates or revisions to the Presentation to reflect any change

in expectations or assumptions. Nothing in the Presentation should be interpreted to mean that future earnings per share of Terramin will necessarily match or

exceed its historical published earnings per share, or that there has been no change in the affairs of Terramin since the date of the Presentation.

Nothing contained in the Presentation constitutes investment, legal, tax or other advice. The information in the Presentation does not take into account the

investment objectives, financial situation or particular needs of any recipient. Before making an investment decision, each recipient of the Presentation should

make their own assessment and take independent professional advice in relation to the Presentation and any action taken on the basis of the Presentation.


Competent Person Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Eric Whittaker. The information that relates

to Mineral Resources for Menninnie Dam and Tala Hamza is based on information compiled by Mr Robert Singer. The information that relates to

Mineral Resources for Angas is based on information compiled by Mr Eric Whittaker. The information that relates to Ore Reserves for Tala Hamza

is based on information compiled by Dr David Allison and for Angas by Mr Ian Holman. Mr Whittaker and Mr Singer are Members of The

Australasian Institute of Mining and Metallurgy and Dr Allison and Mr Holman are Members of the Institute on Materials, Minerals and Mining. Mr

Holman is Chief Engineer and Mr Whittaker is Principal Resource Geologist and both full time employees of Terramin Australia Limited. Mr Singer

was Chief Geologist of Terramin Australia Limited, Dr Allison was Senior Mining Engineer at Golder Associates (UK) Ltd at the time of their

respective estimates. All have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to

the activity 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’. Mr Whittaker, Mr Singer, Mr Holman and Dr Allison consent to the inclusion in the

report of the matters based on his information in the form and context in which it appears.


Terramin Australia Limited

3 billion pounds of zinc in low cost (32c/lb) ore reserve

All projects close to infrastructure with low capex benefits

4Mtpa Tala Hamza lead-zinc project ready to permit

400,000tpa Angas Zinc Mine in operation

7.7Mt Menninnie project set to grow

Management and Board with extensive practical and commercial

experience in all stages of project development and mining

…a low zinc cost producer with a world class project


Projects

Oued Amizour & Tala Hamza

Menninnie Zinc Project Angas Zinc Mine & Fleurieu ELs


Operations

Zinc Market Outlook Zinc Market Overview

Company Overview


ASX Listed - Market Capitalisation: ~$30m

Shares on Issue: 190.3m and 6.6m Options

Employees ~200

Cash ~$10m and debt $53m (incl. bank $23m and

con notes)

Convertible Notes:

5 yr $5.0m at $2.21/share – Sept. 2013

5 yr US$10.0m at VWAP – minimum

$1.70/share (off-take partner) – Sept. 2014

5 yr US$15.0m at VWAP (JPMorgan off-take

partner) – March 2013

2010 positive operating cash flow: $13m

Hedging/Forward sales:

A$15m gold and silver 50% fix to Q2 2013

Over 4000 shareholders

Fast facts

1993 - Terramin was incorporated as Playford

Resources NL

1997 – Terramin acquired the Fleurieu project in

Adelaide including the Angas lead, zinc and sliver

resource

2003 – Terramin acquired Menninnie Dam, South

Australia’s largest lead, zinc and silver deposit

2003 – Terramin was listed on the ASX

2006 – Terramin acquired a 65% interest in the

world class Oued Amizour Project in Algeria

2008 – Angas zinc mine commissioned -

produces circa 50,000 tonnes of zinc and circa

20,000 lead-copper-silver-gold concentrates

2010 – Tala Hamza Definitive Feasibility

completed for 4Mtpa block cave mine producing

400Ktpa Pb + Zn concentrates


Management

Strong management team with commercial and technical expertise

Nic Clift

Managing Director

Mark Terry

Chief Financial Officer

John Burgess

GM – Tala Hamza

Project

TBC

General Manager,

Exploration

Robert Howie

GM – Angas Zinc Mine

Sam Hewitt

Principal Engineer

Charlotte Hy

Principal Geologist

Ken Cross

Principal Geologist

Stephane Gauducheau

Legal Counsel and Co.

Sec.

Norman Dinevski

Commercial & Marketing

Manager

Shaun Reincke

Financial Controller

Eric Whittaker

Principal Resource

Geologist

Ian Holman

Chief Engineer

Patricia Williams

HR Manager

Finance &

Commercial Tala Hamza Angas Geology

Block Cave

Experience


Financials

0

5

10

15

20

25

0

10

20

30

40

50

60

70

2008 2009 2010

Revenue [LHS] EBITDA [RHS]

2010 Financial Year Highlights

Angas revenue from operations - $59.5m

Angas EBITDA - $17.0m

Cash flow from operations - $12.9m

Cash balance at 30 June 2011 - $9.6m

Angas Revenue and EBITDA ($’m)

Strong Revenue and EBITDA growth


Zinc Market Outlook Zinc Market Overview

Operations

Company Overview


Location

Infrastructure

deep water port

international airport

plentiful water on lease

Workforce

proximity to city

local universities

high unemployment

iron and zinc mining history

Cheap power and fuel (US$)

power approximately 4c/kWh

low cost fuel – diesel – 20c/l

Excellent regional potential

125 km2 prospective tenement

Oued Amizour Zinc Project - Algeria

65% Terramin : 35% Government Companies


-

100

200

300

400

500

600

700

Rampura

Agucha

Red Dog Century Antamina Mt Isa San Cristobal Brunswick Tala Hamza Skorpion Lisheen Tara McArthur

River

Perseverance

Project ranking

Tala Hamza in the top ten zinc mines....

Zinc Mine Output (Zn Metal ‘000tpa) – Total forecast zinc production ‘2011 – 13.61mt

Mine closures by 2015

Continuing mines

Source: BNP Paribas and RBC for forecast closures; Company sources for 2010 production amounts

Based on 2010 production

2015

2013

2014 2015


The Block Caving Method

Financial •Low mining costs – US$2.97/t – very low in a world context

•C1 costs of US32c/lb of payable zinc – low cost production

Technical •Less development required in poor to very poor orebody rock mass conditions

•No filling required

•Does not require large open stopes

Operational •Potential for higher production rate

•Longer life operations

•Block caving is considered a non-entry mining method. This method is generally considered safer than entry mining methods.

Whilst Block Cave mining methods generally involve higher mine development and a longer

lead-time to production there are numerous benefits…

The Definitive Feasibility Study completed on Tala Hamza concluded that… Block caving is the most viable method of mining for Tala Hamza; and

The primary factor in determining the mining method was geotechnical conditions... Extremely weak orebody doesn’t support development within the mineralisation but

minimises risks associated with a caving method;

Competent footwall rock conditions beneath the orebody supports long term development and infrastructure


MEASURED & INDICATED

RESOURCE

Extraction

level

Undercut level

Ore conveyor

incline

Access and

waste trucking

decline

Ore Passes and

vent rises

Ventilation

shaft

Crusher

station

Tala Hamza Block Cave

4Mtpa with peak zinc and lead concentrate production of 425,000t (230,000t Zn & Pb metal)

The block cave design incorporates stepped undercut and extraction levels so that the

development of the infrastructure follows the footwall of the orebody

WMZ have suitable block cave experience for the Tala Hamza project

Mineral Resource Measured, Indicated and

Inferred

68.6 Mt at 4.6% Zn, 1.1% Pb

Ore Reserve Probable

38.1Mt @ 4.8% Zn, 1.4% Pb

(5 billion lb’s Zn+Pb)

250 metres


Production profile

First concentrate production is scheduled for the fourth quarter of 2016 – however advanced

roadheader studies and design variations could save at least a year of development time

Output from the mine and plant will quickly ramp up to 4Mtpa with peak zinc and lead

concentrate production of 425,000t (230,000t zinc and lead metal) in 2018

The current mine life is based on the DFS mine design however if the orebody is extended to

the south or any other direction the mine life will be extended beyond 2027

0

50

100

150

200

250

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Contained Zinc

Contained Lead

Tala Hamza Concentrate Production Profile (Zn Metal ‘000tpa)


Low Operating costs

One of the most compelling features of the project is the low operating cost which is due to the

block cave mining method, the scale of the processing plant and location close to

infrastructure

The estimated C1 cash cost of US32.1cents /lb are due to low diesel, power and labour costs

Production Costs US cents/lb

Payable Zinc Operating Cost by Facility

US$/t

Ore

Mining 3.8 Mining 3.0

Processing 12.2 Processing 9.6

Administration 3.1 Other Production Costs 1.5

Realisation Costs Other Non Production Costs 4.6

Transport & Handling 3.9 Sub-Total 18.7

Zinc Treatment Charge 23.9 Royalties 0.7

Total Costs 46.9 Other Government Charges 0.0

Net By-Product Credit -14.8 Rehabilitation Charge 0.2

Total C1 Costs 32.1 Total Cash Costs 19.6


Capital Funding Requirement

Note: All capital estimates exclude VAT and custom duties; no allowance for escalation in above amounts

2011 2012 2013 2014 2015 2016

Terramin Commitment 8 11 14 31 28 21

Other Funding 32 46 58 129 116 86

0

40

80

120

160

200

Terramin Funding Profile for Tala Hamza Project (US$’m)

Competitive capital cost - US$580 million for 4Mtpa mine and back ended

Terramin capital funding requirement estimated at US$113m based on 70% local

debt funding on pro-rata basis

Total

113

467


Tala Hamza – Status and Milestones

1. JV partner has received its consultants report – currently being reviewed

2. Once reviewed, report to be forwarded to Terramin for response

3. Workshops held to resolve issues raised in the review

4. JV company WMZ moves decision to mine

5. Application to Mine to Algerian Department of Mines – maximum five months process – parallel activities include:

• Tendering process formulation

• Key land access process

• Development of organisational capability

• Financial concession negotiations and local debt financing

• Community consultation

6. Government issues mining concession through decree

7. Construction phase begins

8. Commissioning phase


Angas Zinc Mine – South Australia

Angas Zinc Mine

Production from 2008

Current mine life 2014

Fleurieu Licences

1,000km2

Cu-Au and Pb-Zn

prospects could provide ore

for Angas mill

Nearby Cu-Au mine


Angas Zinc Mine Operation

400,000tpa operation producing zinc and

lead-copper-silver-gold concentrates

De-risked – fully developed by 2012 - major

cash flow generator in 2012-14

Strong C1 cash cost performance to date with

expectation of strong improvement

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50

100

150

200

250

300

350

400

450

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10

20

30

40

50

2008 2009 2010 2011FC

Zinc concentrate

Lead-copper-silver-gold concentrate

Ore Treated

Concentrate Produced and Ore Treated (‘000t)

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60

70

80

90

Peer Group Terramin

C1 Cash Cost Comparison (USc/lb)

Forecast

Note: C1 cash cost based on prevailing market forward prices at

June 2011. Improvement from Q3 2011 due to increased access

to higher grade stopes, prevailing by-product precious metal

prices and reduction in operating development from 2012.


Angas Zinc Mine Operation

Exciting near mine potential –

zones of high grade

mineralisation within close

proximity to existing mining

operations

Life of mine off-take agreements

for zinc and lead concentrates

Potential for mine life extension

Rankine Garwood Sunter

Prospective zone for Rankine type


Menninnie – Strong Foundation

Menninnie Central Zone - Inferred

Resource of 7.7Mt @ 3.1% Zn and

2.6% Pb, and 27g/t Ag (March

2011)

160km from Pt Pirie lead smelter

High lead/zinc ratio

Further prospective targets

identified with drilling planned

1,609km2 tenement holding

Project well positioned to attract

a substantial JV partner


Menninnie – Ready to Move

Extensions to Menninnie Central and three larger undrilled targets


Operations

Company Overview

Zinc Market Overview


Zinc Market Outlook

(1,000)

(800)

(600)

(400)

(200)

0

200

400

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Deficit

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Price Lift

Forecast Zinc market supply imbalance to increase prices…

Zinc implied surplus/(deficit) ‘000 mt LME Zinc cash price US$/lb

Zinc supply about to fall of a cliff from 2012 Zinc Price forecast to respond strongly to supply

shortfall

Tala Hamza project start up will capture a period

of high zinc prices

Source: RBC Capital Markets, Zinc Metal Prospects June 2011


Zinc Price and Terramin EV

Correlation

There is a strong

correlation

between the zinc

price and the

enterprise value of

Terramin

With the medium

term zinc price

outlook positive it

should translate

into a higher

enterprise value -

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

-

50

100

150

200

250

300

350

400

HY2005 FY2005 HY2006 FY2006 HY2007 FY2007 HY2008 FY2008 HY2009 FY2009 HY2010 FY2010 HY2011

Enterprise Value $'m (Closing [LHS] Zinc Price (AUD) [RHS]

Enterprise Value ($’m) and Zinc Price (AUD) Correlation


Capability for Further Growth

Angas Zinc Mine - South Australia (100%)

400Ktpa operation developed on time and budget

Major cash flow generator to 2015 at prevailing prices

Development and operating capability

Tala Hamza Zinc Project – Algeria (65%)

DFS completed, development decision pending for 4Mtpa operation - $40m spent to date

Terramin capital contribution only US$29m up to 2014

Proven project management capability

Menninnie Dam Project - South Australia (100%)

7.7Mt Inferred Resource with high lead-silver content near Port Pirie smelter

3+ targets with similar characteristics provide significant upside

Proven exploration capability

Existing mine operation providing cash flow for growth

TERRAMIN AUSTRALIA LIMITED

October 2011 Investor Presentation

terramin australia limited · terramin australia limited slide no. 4 terramin australia limited 3...

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