CANEGRASS AND SIBERIA

Work on the statutory mining proposal for a demonstration plant to test the leachability of the laterite material at Canegrass was advanced. The mining proposal will be submitted next quarter. Subject to funding, the proposal for Stage 1 aims to mine ore from two trial pits at the ‘Patch-Gulch’ and SM7 areas and temporarily stockpile 50,000t of leachable ore products for subsequent crushing, agglomeration and trial heap leaching on site within an existing Tailings Storage Facility. The mining at the SM7 site is within the existing SM7 pit, while the mining at Patch-Gulch is between two existing pits.

Reported the following updates for the scoping study: • Nickelore’s Canegrass Scoping study results support plans for a 20,000 tpa heap leach project • Project delivers A$182 million net cash per annum (before tax) at long term nickel price of US$18,600/t Nickel • NPV of A$757 million (before tax, discount rate of 8%) • Technical studies show Canegrass ore is well suited to heap leach treatment • Capital cost estimate of A$865 million for a 20,000 tpa Nickel extraction plant • Cash operating costs of US$2.67/lb Nickel (after Cobalt credits)

Nickelore released the results of its heap leaching scoping study for the Canegrass nickel cobalt project in Australia. Using project nickel price assumptions of US$18,600/tonne (or US$8.45/lb) based on IBIS long term forecasting, the project has a net present value (real and non-geared, before tax) of A$757 million at a discount rate of 8% and an internal rate of return of 18%. Based on the results of the study, the 20,000 tpa nickel and 1,400 tpa cobalt plant would generate around A$182 million net cash per annum (before tax) at the long term nickel price. The cash operating cost is estimated at US$2.67/lb nickel, after cobalt credits, averaged over a 20 year mine life.