#1RIO PARDO IRON ORE PROJECT, BRAZIL TECHNICAL PRESENTATION MINAS NORTE MINERACAO LTDA Brazil January 2011#2PROJECT LOCATION BRAZIL MINAS NORTE MINERACAO LTDA RIO PARDO PROJECT NORTH MINAS GERAIS IRON ORE PROVINCE MINAS RIO FERROUS RESOURCES US$600 Million 2007 ANGLO AMERICAN US$5.5 Billion 2#3WHY BRAZIL • Brazil has a very supportive economic environment. A stable political system and security of tenure on mineral licences. Brazil is in the top 5 producers in the world of primary products and commodities. Economy growing at 7.5% per annum. Real has appreciated some 14% against the USD this year. There is a very significant and growing level of foreign investment in the Brazilian mineral sector including investments in iron ore, gold, nickel, bauxite and oil & gas. Global funds are flowing into Brazil at a staggering pace. The national oil company, Petrobras, recently raised over $70 billion in record time. Brazil has sophisticated banking and finance systems. It also has good communications and a fast growing system of road, shipping and rail infrastructure. MINAS NORTE MINERACAO LTDA 3#4• • • • • . PROJECT HISTORY MIBA Bid Process & Due Diligence leads to acquisition of adjacent tenements Negotiated an Exclusivity Agreement on the MIBA project which adjoins the Rio Pardo tenement Did extensive financial and technical due diligence on the MIBA Project (2009- 2010) Commissioned independent Minproc Reports that demonstrated upgrade potential to pellet feed grade Provided good understanding of regional iron ore mineralisation, project parameters and economics Offered staged payments of US$250M over 2 years. Vendor rejected this offer in favour of cash up front offer from Steel do Brazil (May 2010) Geological due diligence on MIBA project identified the extension of the iron ore mineralisation onto adjacent ground Led to acquisition of Rio Pardo (adjacent to MIBA) with much more advantageous entry price MINAS NORTE MINERACAO LTDA 4#5. . PROJECT HISTORY 2 Iron ore projects at all levels are selling for very high prices in Brazil, usually with very large up front payments Salinas project was sold to Honbridge (backed by Chinese State owned Xinwen and Shandong Iron & Steel Group Co (SDIS) for US$430 million in April 2010. (JORC 2.8bn tonnes @ 20% Fe) MIBA sold to Steel do Brazil for US$250 million in May 2010. (Estimated 2.5bn tonnes @ 30% Fe). Resold in November 2010 for US$304 million to Eurasian National Resources Corp (ENRC) Bamin Project just north of Rio Pardo at Caetite sold for US$976M to Eurasian Natural Resources Corp on 21 September 2010 (Reserve of 1.8 billion tonnes grade of 32%) Ferrous Resources acquired package of small projects plus exploration ground for US$600m in 2007 and 2008. Raised US$1.4Bn in private equity. (JORC 4.5bn tonnes @ 33.5%Fe) MINAS NORTE MINERACAO LTDA 5#6• PROJECT FOOTPRINT Potential for multi billion tonnes of mineralization 156km² • Grade up to 40% hematite / magnetite Rio Pardo de Minas • Beneficiation to 68% Fe, low impurities • Adjacent to MIBA - sold for US$304M in November 2010 • Rio Pardo 1 340km2 Salinas US$430M MIBA US$250M Salinas deal signed 26th April 2010 US$430M Nova Aurora MINAS NORTE MINERACAO LTDA 383km² Taiobeiras 6#7CORPORATE SUMMARY Very extensive due diligence included successful scout drilling programme to verify iron ore mineralisation Phase 1 Drilling and feasibility programme has commenced to define JORC compliant resource Company relisted on 11 December 2010 on ASX. MINAS NORTE MINERACAO LTDA 7#8. • . • GROUND FLOOR ENTRY AND ACQUISITION TERMS Acquisition price for Rio Pardo US$56M Terms: US$1M paid, US$5M not before October 2011, balance spread in yearly payments over 5 years. Royalty to the Vendors of $1 per ton of exportable Fe material and $3 per ton of exportable Mn product Acquisition price for Granduvale US$59M (See ASX Announcement 13/12/2010) Subject to due diligence payment of US$1M in 2011 and further staged payments totaling US$59M over the subsequent 6 years with a right to withdraw from the project and any ongoing payment obligations at any time. The Company will also pay a royalty of US$1 per tonne of iron ore pellets, pellet feed or sinter feed produced over the life of any mine developed on the Granduvale Project. Drilling and feasibility work is at advanced planning stage to delineate initial JORC compliant resource and scope project feasibility - Cost of this initial work to confirm project value – estimated at US$4M Funds to be spent in the ground to create immediate additional value MINAS NORTE MINERACAO LTDA 80#9. LAND HOLDING CURRENT STATUS Rio Pardo Tenure 338.5Km²- initial tenement block Granduvale 383Km² New Peggings 156Km² . Total landholding 877Km² • Iron ore mineralization identified to the south traced into Rio Pardo tenure Geological reconnaissance, sampling and drilling shows extensive outcropping of iron mineralization as oxidised caps (canga) High grade Fe can be identified in surface outcrop Mineralization is stratabound and extending for tens of kilometers • Surface sampling and RAB drilling shows consistent iron grades over long strike lengths giving confidence to conceptual mineralization and grade extrapolation. Assay values up to 48% Fe with high grade average of 32.5% Fe. MINAS NORTE MINERACAO LTDA 9#10REGIONAL AEROMAGNETICS COMPLETED & IDENTIFIES MINERALISATION • Aeromagnetic interpretation completed • Assists in • identifying mineralization High trends identify ore bodies • Detailed interpretation shows subtle trends related to mineralization MINAS NORTE MINERACAO LTDA RIO PARDO PROJECT 110 10#11SUBTLE TRENDS in AEROMAG Recent detailed aeromagnetics interpreted over the project area showing structural and lithological iron ore targets 11 MINAS NORTE MINERACAO LTDA#12OXIDE CAPS - CANGA Oxidized caps readily identified in float and outcrop 12 MINAS NORTE MINERACAO LTDA#13DRILLING PROGRAM . . . Recent reconnaissance RAB drilling and surface sampling confirmed iron ore mineralisation with a 1,000 metre, 22 hole program, 18 of the 22 holes returned significant assays up to 48% Fe The magnetite-haematite diamictite ores in this area are different to Australian examples and beneficiate easily to product grades in excess of 65% Fe with low impurities suitable for high grade pellet feed Regional grades MIBA resource grades are ~30%Fe Salinas resource grades are ~ 20%Fe Bamin resource grades are ~32%Fe MINAS NORTE MINERACAO LTDA 13#14MINERALOGY & BENEFICIATION PROPERTIES Coarse grained Magnetite - Hematite mineralisation Siliceous fragments included in Diamictites Easily upgraded from 20 - 40% Fe to pellet feed at 65-68% Fe Process route with crushing, light grind Magnetic separation and flotation Resulting low process operating costs MINAS NORTE MINERACAO LTDA 14#15PROJECT POTENTIAL Project assumptions based on other operators in the area . Exploration target of 1.5 to 2.0 billion tonnes with 20-40% Fe . • • Mining operation (Stage 1) pellet feed 16mtpa at 68% Fe and low impurities over 25 years OPEX US$30/tonne CAPEX < US$2.8Billion (including 160km rail spur) MINAS NORTE MINERACAO LTDA 15#16Mato Verde Legend RioPardo 1 RioPardo 3 Rio Pardo 5 Rio Pardo 6 MINAS NORTE MINERACAO LTDA GROUND POSITION Legend Rio Pardo Group of tenements Nov 2010, Rio Pardo de Minas Taiobeiras 16#17PLANNED BRAZIL RAIL INFRASTRUSTURE BELÉM EF 151 BOQUEIRÃO DA ESPERANÇA FIGUEIRÓPOLIS CAETITÉO EF 334 •Implementation of west-east rail started •State owned open access or shared usage ILHÉUS •Rail Ilheus to Caetité Rio Pardo PORTO MURTINHO EF 267 I PANORAMA LITORAL DO RIO DE JANEIRO • finished July 2011 Project spur line 160km to Caetité Ilheus free access port capacity initially 50mtpa EF 234 VALEC DESENVOLVIMENTO SUSTENTÁVEL MINAS NORTE MINERAA CERRADO BRASILEIRO Ministério dos Transportes BROSL UM PAÍS DE TODOS GOVERNO FEDERAL#18PROJECT LOCATION RIO PARDO PROJECT – LEFROY - 150°0'0"W 120°00'W 90°0'0"W 60°00"W 30°0'0"W 0°0'0" 30°00'E 60°0'0"E 90°0'0"E 120000 Ε 150°0'0"E 150°0'0"W 120°00'W MINAS NORTE MINERACAO LTDA Brazil 90°0'0"W 60°00'W 30°0'0"W 2,500 0°0'0" 5,000 RIO PARDO PROJECT Minas Gerais, BRAZIL 30°00'E 10,000 60°0'0"E 90°0'0"E 15,000 120°00'E 20,000 Kilometers 150°0'0"E 18#19PROJECT OVERVIEW • Major iron ore project in world class iron ore province in Brazil Potential multi billion tonnes at 30-40% Fe with regional infrastructure being developed High acquisition prices paid recently for adjoining ground demonstrates value Ground floor entry with opportunity to build substantial value with money spent in ground Drilling & other work underway to define initial JORC compliant resource & scoping study by mid 2011 Upside of plus US$200M value added within 18 months Experienced management group MINAS NORTE MINERACAO LTDA 1994#20BMG CURRENT CORPORATE DIRECTORY Directors Robert Pett Malcolm Castle Anthony Trevisan Craig Bromley Thomas Kelly Share Registry Computershare Investor Services Pty Ltd. Level 2, Reserve Bank Building 45 St Georges Terrace PERTH WA 6000 Telephone 1300 787 272 Facsimile (08) 9323 2033 Company Secretary Fleur Hudson Registered Office & Principal Place of Business Level 14, 191 St George's Terrace PERTH WA 6000 Telephone (08) 9424 9390 Facsimile Auditor (08) 9321 5922 BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Investigating Accountant BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Australian Solicitors to the Company Minter Ellison Lawyers Level 49, 152 St George's Terrace PERTH WA 6000 Brazilian Solicitors to the Company - Solicitors Report on Brazilian Tenements Pinheiro Neto Advogado Rue Hungria, 1.100 01455-000, São Paulo, SP Independent Geologists Report Nicholas Revell 30 Canterbury Circle Currambine WA 6028 MINAS NORTE MINERACAO LTDA 20 20#21DISCLAIMERS While the Company remains optimistic that it will report resources and reserves in the future, any discussion in relation to exploration targets or resource potential is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Malcolm Castle, who is a Member of the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Castle is a minority shareholder in Brilliant City Holdings Limited and Star Castle Holdings Limited. He has sufficient experience relevant to the style of mineralisation and type of deposits 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 Castle consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. MINAS NORTE MINERACAO LTDA 21 27