VIRGINIA (OLD HICKORY)

Lower production in Virginia during the March 2009 quarter mainly reflected production limitations associated with relocation of the Old Hickory concentrator to the Brink ore body and the commissioning of the Brink development. Brink development: • The development of the Brink deposit, associated with the company’s Virginia operations in the United States, was approved by the Board in December 2007. The Brink deposit will extend the economic life of the Virginia operations to 2015. • Approved capital expenditure for the project is US$27.5 million. • During the quarter, project development activities were completed and commissioning activities commenced, with first heavy mineral concentrate produced on schedule in April.

Higher unit cash costs of production compared to the year previous were due mainly to increases in fuel and power costs during the year, with costs for these two inputs reducing towards the end of 2008 in line with market conditions.

Reduced plant throughput and recoveries, and slightly lower feed grades resulted in decreased zircon production. Ilmenite production decreased during the June quarter, also due to reduced throughput and lower feed grades.