#1Northern Iron Ltd Company Presentation October 2013 For personal use only CATERPILLAR 211733 L ୮ HTR11 A # NORTHERN IRON#2For personal use only Disclaimer Forward-looking Statements This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions, many of which are outside the control of NFE. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Any forward-looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, NFE does not undertake any obligation to update or revise any information or any of the forward-looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward- looking statement is based. No representation or warranty (express or implied) is made by NFE or any of its directors, officers, employees, advisers or agents that any forecasts, projections, intentions, expectations or plans set out in this document will be achieved, either totally or partially, or that any particular rate of return will be achieved. NORTHERN IRON-#3For personal use only 100% OWNED MINE WITH THE BEST INFRASTRUCTURE PACKAGE IN OUR SECTOR TROS ONE RH 120- Open Cut Mine - 25+ Year Mine Life Bente Geving Concentrator - High Quality Magnetite Concentrate Per Berntsen M 8km Railway - Owner and Sole User SMOKING Bente Geving Port - Efficient, Uncongested and Expandable Located in close proximity to a key iron ore market. 2 NORTHERN IRON#4For personal use only NORTHERN IRON OVERVIEW Corporate: ASX Code : ■ Ordinary Shares: ■Market capitalisation @ A$0.165 Unrestricted Cash @ 30 June: Total debt (incl. leases) @ 30 June: NFE 484.4m A$80m US$22.3m US$98.0m Top 10 Shareholders (as of 30 August 2013): Dalnor Assets Ltd Tschudi Mining ■ OM Holdings Ltd UBS AG (and clients) ■Bank Vontobel AG Northcape Capital Deutsche Bank AG London ~15.0% ~13.9 % ~10.8 % ~9.5% ~7.3% ~4.6% ~4.2% ■Renaissance Smaller Companies Pty Ltd ~3.5% ■ Ashwath Mehra ■ Thorney Investment Group ~3.2% ~2.9% The Top 20 shareholders hold 88.3% of the stock on issue. CATERPILLAR 01 NORTHERN IRON#5NFE BOARD AND SENIOR MANAGEMENT Chairman - Peter Bilbe □ Over 31 years experience in senior operational and corporate roles, with significant experience as a mining engineer Former MD and CEO of Aztec Resources, which successfully redeveloped the Koolan Island iron ore project Joined NFE in Nov-2007 Managing Director - Tony Beckmand 口 Accountant (CPA) or personal use or 。 □ 17 years industry experience, 9 in iron ore Joined NFE in Oct-2008 Non-Executive Director - Felix Tschudi 。 □ 。 Chairman and majority owner of Tschudi Shipping Company AS Prior to entering shipping focused on trade finance and countertrade structures in Eastern Europe and the former Soviet Union Joined NFE in Dec-2007 பட Non-Executive Director - Ashwath Mehra □ □ 26 years experience in the minerals industry Currently CEO of Astor Management, previously CEO of the MRI Group □ Joined NFE in May-2007 回 回 回 CEO Sydvaranger Gruve AS - Ismo Haaparanta О ㅁ 。 Experienced Nordic mining professional, with a degree in Process Engineering and an EMBA from Turku University Joins SVG from Yara International, where he was GM of a Finnish fertiliser mine, processing and port complex Joined SVG in May-2012, reporting to the MD of NFE and board of SVG Chief Development Officer - Harald Martinsen ㅁ О Experienced business development professional 25 years industry experience with Norsk Hydro Joined NFE in Sep-2011 Consultant Sales and Marketing- John Sanderson □ о MD / CEO of NFE from Nov-2009 to Jul-2013 Mining engineer with over 19 years industry experience in iron ore, gold and copper 4 NORTHERN IRON#6For personal use only • · • NORTHERN IRON OVERVIEW N 200km BARENTS SEA Sydvaranger Iron Project NORWEGIAN SEA Moi Rana (Fe) Rodsand (Fe) NORWAY OSLO Fosdalen: (Fe) SWEDEN Titania (Ti+Fe) STOCKHOLM Braastad (Fe) Kirkenesfjorden Langfjorden Uhcevuotna Concentrator Kiruna 739Mt46-48%Fe Malmberget 209Mt41%Fe Hesseng Gulf of Bothnia FINLAND Bjornevatn 8 km KIRKENES 0 2km BJORNEVATN OPEN PIT Cobbing Plant & HELSINKI 100% owner of Sydvaranger iron ore mine, Norway Operated from 1910 to 1997 (200Mt of ore mined) Listed on the ASX in Dec 2007, mining commenced in May 2009 and the first shipment was in Nov 2009. High quality magnetite concentrate Long term offtake contract with key European customer in place . Long mine life expected Town Railway Road AN GNO#7பட For personal use only RESOURCES AND ORE RESERVES Mineral Resource Summary as at 1 February 2013 (at 15% Fe total cut-off grade) Deposit Indicated (Mt) Fe Fe (Total%) (Mag%) Fe Inferred (Mt) Fe (Mag%) Fe Total (Mt) (Total Fe (Mag%) (Total %) %) Bjørnevatn 144.3 32 29 137.3 30 27 281.5 31 28 Kjellmannsåsen 11.8 33 27 4.2 30 24 17.4 32 27 Fisketind Øst 29.4 31 NA 22.0 30 Na 51.4 31 Na Tverrdalen 20.4 32 23 26.4 31 20 46.8 31 21 Bjornfell 17.5 30 NA 4.1 31 Na 21.6 30 Na Söstervann 4.7 37 31 4.7 37 31 Grundtjern 2.9 34 32 2.9 34 32 Oskarsmalm 18.1 33 NA 14.0 31 Na 32.1 32 Na Jerntoppen 17.0 31 24 17.0 31 24 Total 241.5 32 28 232.6 30 26 475.4 31 27 Current reserves provide for a 20+year mine life. The Company is currently reviewing its life of mine development strategy and pit optimisations and expects to complete this work in due course. Ore Reserve Summary as at 1 February 2013 (at 15% Fe total cut-off grade) Deposit Probable Reserve (Mt) Fe (Total%) Kjellmannsåsen 10.5 33 Bjørnevatn Tverdalen 134.4 30 11.2 31 Fisketind Øst 6.7 30 Total 162.8 30 6 NORTHERN IRON#8For personal use only OVERVIEW OF PROCESSING FACILITIES Open Pit Secondary Cyclone Secondary Grinding Magnetic Separators Ore Stockpile (ROM) Magnetic Separators Primary Grinding Screen Primary Cyclone Secondary Crusher Tailings Thickener Tailings Concentrate Screens Concentrate Storage Filter Plant Concentrate Storage Silos Tertiary Crusher Dump Hopper Gyratory Crusher Train Loader Shiploader Bulk Carrier Cape Size Bulk Carrier 7 NORTHERN IRON#9For personal use only Tonnes Mined (kt) 6000 2012-13 OPERATIONAL PERFORMANCE Production was consistent during 2012, with a new quarterly production record set in Q4. This was followed by record months in Feb and Mar'13 of 186kt & 187kt, and 201kt was achieved in July'13. A further improvement in product quality was realized at the start of the second quarter of 2012. The mine has steadily improved the productivity and utilization of the earthmoving fleet over the last 18 months, achieving significant quarter on quarter increases. Mine Production (Kt) Concentrate Produced (kt) 600 500 400 358 368 305 300 200 100 0 Mar-11 Jun-11 4961 5000 4427 4410 4190 14 3942 4000 3706 3385 3471 3515 10 3000 2000 பட 1000 0 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 1883 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Silica content (%) 0 Sep-11 Dec-11 Concentrate Production (Kt) 529 501 497 480 469 436 427 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Concentrate Iron and Silica Content (%) 70 Average Si in Concentrate (%) Average Fe in Concentrate (%) 12 68 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 66 64 ठ 62 60 58 Fe Content (%) 8 Jun-13 NORTHERN IRON#10OPERATING COST REDUCTION & CAPITAL DISCIPLINE Unit costs are strongly linked to production volumes and the Company expects unit cost reduction in line with increased production. In July 2013 Sydvaranger produced 201kt of concentrate at a C1 Cost of USD 70 / dry metric tonnes. In response to the decline in iron ore prices in 2H2012, the Company took steps to reduce costs, including reducing budgeted headcount by 5% and exercising restraint on capital expenditure. The Company remains focused on improving production costs and maintaining capital expenditure discipline. 90 85 80 75 70 65 60 $USD/t How Can Costs Reduce ? $USD/t C1 Cash Cost - Impact of higher Operating Rates US $83/t C1 $USD/t 2.0 Mt p.a. production rate A -$16 /t Production - Volume var A $5 /t Variable C1 Cost- Volume var A-$2/t Cost Reduction Initiatives, FX & Other personal use only 180 160 140 120 100 C1 and C2 Costs by Quarter 2011-2012 US$/dmt Kt US$m 600 10 9 500 8 7 400 6 300 5 80 60 40 20 0 4 200 3 100 2 1 0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 C1 Net Direct Cash Cost C2 Production Cost Production (kt) Cash Capital Expenditure by Quarter (source: Appendix 5B reports) US $70/t C1 $USD/t 2.5 Mt p.a. production rate ..الاس Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 ■CAPEX 6 NORTHERN IRON#11For personal use only PRODUCT SPECIFICATION 2013 (%) Chemical Composition (Dry Basis) Iron [Fe] 68.5 Expected 2014(%) 69.0 Silica [SiO2] 4.5 4.0 Alumina [Al2O3] 0.2 0.2 Phosphorus [P] 0.01 0.01 Sulphur [S] 0.02 0.02 Manganese [Mn] 0.05 0.05 Sodium Oxide [Na₂O] 0.04 0.04 Potassium Oxide [K₂O] 0.03 0.03 Titanium Dioxide [TiO2] 0.06 0.06 Calcium Oxide [CaO] 0.35 0.35 Magnesia [MgO] 0.45 0.45 LOI Zinc [Zn] Lead [Pb] Arsenic [As] -3.3 -3.3 0.004 0.004 0.005 0.005 0.002 0.002 Chrome [Cr] 0.03 0.03 Vanadium [V] 0.005 0.005 Copper [Cu] 0.001 0.001 Nickel [Ni] 0.04 0.04 Moisture, natural basis [H₂O] 7.8% 7.8% Physical +0.150 mm <0.2% <0.2% Properties |-0.150 mm + 0.053mm <20% <20% -0.053 mm >80% >80% 10 NORTHERN IRON#12For personal use only பட SALES AND MARKETING Tata Steel Europe Tata Steel Europe will buy approximately 1.4 Mt of Sydvaranger concentrate in the year ending 31st March 2014. Contract in place until 2016, with a further 2 year extension possible at Tata's discretion. Other NFE ships to Asian customers via its exclusive agency agreement with OM Holdings (through its subsidiary OM Materials Pte Ltd) Sales are offered on a CFR or FOB basis During recent months, 2 shipments were made to Bahrain Steel (formerly GIIC), following on from an initial trial shipment made in 2011. NFE is currently in discussion with a number of European steel makers regarding trials of Sydvaranger concentrate in sinter plants. NORTHERN IRON#13For personal use only DEVELOPING THE SINTER FINES MARKET First Trial Cargo to ThyssenKrupp Steel Europe (TKSE) The first trial cargo of 80,000 tonnes of Sydvaranger Concentrate left Kirkenes for EECV Rotterdam on the 29th September. The trial shipment is a culmination of a number of months of discussions and testwork between Studiengesellschaft für Eisenerz-Aufbereitung (SGA), TKSE and NFE on the sintering performance of Sydvaranger Concentrate and its handling performance through the logistics chain. The sintering strategy is aimed at offering a high quality concentrate located close to key European markets providing customers with an - opportunity to 'sweeten' their sinter blends, while allowing NFE to access markets with lower freight costs than more distant alternatives. The Company is evaluating additional shipments to other European steelmakers in the coming months and is hopeful of securing a longer term offtake contract with one of these parties, which will complement the existing relationship with Tata Steel. SEAN COURTESY 12 NORTHERN IRON#14பட for personal use only OPTIMIZING OUR ASSET The Company has previously outlined a growth strategy focusing on improving realised FOB price and lower operating costs. The key elements of this strategy are: ■Improved product quality - lowering Silica. Lowering freight costs through loading Cape size vessels. Doubling production volumes via a brownfields expansion of the Sydvaranger operation. Spending on these projects has been heavily reduced during the last 6 months but some progress continues to be made: ■ An improvement in quality with an expected 0.5-1.0% reduction in silica content expected in 2014. Work continues on the environmental critical path for the brownfields expansion project. The upgrading of the port is on hold while the company continues to pursue attractive European sales options. SURLING Bente Geving Bred last 13 13 NORTHERN IRON#15For personal use only COMPETENT PERSON'S STATEMENT The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Thomas Lindholm, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Thomas Lindholm is employed full time by GeoVista AB. Thomas Lindholm has 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'. Thomas Lindholm consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 14 NORTHERN IRON