24 december 2008 ms elizabeth harris for personal use only ... · 24/12/2008 · 24 december 2008...

24 December 2008 Ms Elizabeth Harris Australian Securities Exchange Ltd Level 8, Exchange Plaza 2 The Esplanade PERTH WA 6000 Dear Elizabeth INDEPENDENT EXPERTS REPORT I refer to our conversation earlier today. As discussed please find attached a replacement version of the Independent Experts Report lodged today. The replacement version has a higher resolution and so the graphics and tables will be easier to read. There has been no change to the detail of the report. Yours faithfully GINDALBIE METALS LTD

DAVID STOKES Company Secretary

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Gindalbie Metals Limited Independent expert’s report 19 December 2008

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Financial services guide

19 December 2008

2 Deloitte: Gindalbie IER

Deloitte Corporate Finance Pty Limited A.B.N. 19 003 833 127 AFSL No. 241457

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001

www.deloitte.com.au

What is a Financial Services Guide? This Financial Services Guide (FSG) provides important information to assist you in deciding whether to use any of the general financial product advice provided by Deloitte Corporate Finance Pty Limited (Deloitte Corporate Finance, we, us or our) the holder of Australian Financial Services Licence (AFSL) No. 241457. The contents of this FSG include:

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Information about us We have been engaged by Gindalbie Metals Limited to give general financial product advice in the form of a report to be provided to you in connection with the proposed share placement to Anshan Iron and Steel Group Corporation’s investment vehicle Angang Hong Kong (Holdings) Limited. You are not the party or parties who engaged us to prepare this report. We are not acting for any person other than the party or parties who engaged us. We are required to give you an FSG by law because our report is being provided to you. You may contact us using the details located above.

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Deloitte Corporate Finance Pty Limited ACN 003 833 127 AFSL 241457 Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia DX 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

The Directors Gindalbie Metals Limited Level 9, London House 216 St Georges Terrace Perth WA 6000 19 December 2008 Dear Directors

Independent expert’s report Introduction On 7 November 2008, Gindalbie Metals Limited (Gindalbie) announced a proposed share placement of 190,658,824 shares to Angang Group Hong Kong (Holdings) Limited a wholly-owned subsidiary of Anshan Iron and Steel Group Corporation (collectively referred to as Ansteel in this report), to be issued at a price of AUD0.85 per share to raise AUD162.06 million (the Proposed Share Placement). The Proposed Share Placement will increase Ansteel’s relevant interest in Gindalbie from 12.65% to 36.28%.

Purpose of the report The directors of Gindalbie (the Directors) have requested that Deloitte Corporate Finance Pty Limited (Deloitte) provide an independent expert’s report advising whether, in our opinion, the Proposed Share Placement is fair and reasonable to the shareholders who are not associated with Ansteel (Non-Associated Shareholders).

This independent expert’s report is prepared pursuant to section 611 of the Corporations Act 2001 (Corporations Act) in order to assist the Non-Associated Shareholders in their decision whether to approve the Proposed Share Placement.

We have prepared this report having regard to Australian Securities and Investments Commission (ASIC) Regulatory Guide 111 (RG 111) in relation to the content of expert’s reports and ASIC Regulatory Guide 112 (RG 112) in respect of the independence of experts.

This report is to be included in the explanatory statement (the Explanatory Statement) accompanying the notice of Gindalbie’s extraordinary general meeting (EGM) where shareholder approval will be sought for the Proposed Share Placement. We are not responsible to you, or any one else, whether for our negligence or otherwise, if the report is used by any other person for any other purpose. F

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Basis of evaluation In order to assess whether the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders we have:

• assessed whether the Proposed Share Placement is fair by estimating the fair market value of a share in Gindalbie on a control basis prior to the Proposed Share Placement and comparing that value with the issue price of AUD0.85 proposed to be paid by Ansteel pursuant to the Proposed Share Placement

• assessed the reasonableness of the Proposed Share Placement by considering the other benefits of the Proposed Share Placement.

Summary and conclusion In our opinion the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders. In arriving at this opinion, we have had regard to the following factors:

The Proposed Share Placement is fair Set out in the table below is a comparison of our assessment of the fair market value of a Gindalbie share with the proposed issue price under the Proposed Share Placement of AUD0.85.

Table 1: Evaluation of fairness

Low

(AUD) High

(AUD) Estimated fair market value of a Gindalbie share 0.71 1.00 Proposed issue price 0.85 0.85

Source: Deloitte analysis

RG 111 specifies that an issue of shares that results in the allottee and its associates acquiring over 20% of the company should be analysed as if it was a control transaction. Accordingly RG 111 requires the expert to assess fairness by comparing the issue price of the shares to the estimated fair market value of a share in the company assuming 100% ownership of the company. Accordingly our assessment of fairness has been prepared on a control basis.

The proposed issue price is within the range of our estimate of the fair market value of a Gindalbie share. Accordingly it is our opinion that the Proposed Share Placement is fair.

Valuation of a share in Gindalbie before the Proposed Share Placement We have estimated the fair market value of a share in Gindalbie before the Proposed Share Placement using a sum of the parts methodology.

We have estimated the fair market value of Gindalbie’s 50% interest in the Karara iron ore project (the Karara Project) using the discounted cash flow method, which estimates the value of the Karara Project by discounting its estimated future cash flows to their present value.

The discounted cash flow method requires the determination of an appropriate discount rate and the projection of future cash flows. We have selected a nominal after tax discount rate in the range of 15.0% to 17.0% to discount the estimated future cash flows of the Karara Project to their present value. A detailed financial model, which was prepared as part of the bankable feasibility study (BFS) completed in August 2007 (the Model), formed the basis of our estimated future cash flows. Deloitte engaged ProMet Engineers Pty Limited (ProMet), an independent mining expert, to provide a technical assessment of the operating and capital costs contained in the Model. We have undertaken sufficient work to assess whether the financial projections are suitable for the purposes of assessing the fairness and reasonableness of the Proposed Share Placement.

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In addition, we have engaged Coffey Mining Pty Limited (Coffey Mining) to value Gindalbie’s exploration assets.

The Proposed Share Placement is reasonable In accordance with RG111 an offer is reasonable if it is fair. Accordingly the Proposed Share Placement is reasonable.

We have also considered the following matters in relation to the Proposed Share Placement.

Premium to share trading The issue price represents a premium of 102% to the closing price of Gindalbie shares on 31 October 2008 (the last day on which Gindalbie shares traded prior to the announcement of the Proposed Share Placement) and a 100% premium to the volume weighted average price (VWAP) for the 4 weeks up to 31 October 2008.

The control premium implied by our assessed value for a share in Gindalbie is high, when compared with the 31 October share price and 1 month VWAP. The current general economic downturn and market volatility has had an adverse impact on share trading prices. Other factors also contributing to the current market price for Gindalbie shares could relate to expectations of future iron ore prices, the likelihood of obtaining environmental approvals, financing and other factors that could affect the anticipated start date of the project.

Ansteel is obtaining significant influence We have considered whether Ansteel is acquiring practical control over Gindalbie through the Proposed Share Placement given the following circumstances:

• Ansteel already owns 50% of the Karara Project, subject to completion of conditions subsequent in the Joint Venture Development Agreement (JVDA), and shares joint control of the project with Gindalbie. Gindalbie does not have unilateral control over the project and there is no change to this position as a result of the Proposed Share Placement

• although Ansteel will become entitled to appoint two additional non-executive directors to the Gindalbie board, it will not control the board as only three of nine board members will be nominees of Ansteel

• with a 12.65% interest Ansteel was not able to block a special resolution. If the Proposed Share Placement proceeds Ansteel will have the ability to block a special resolution.

On balance, it is our view that whilst Ansteel will have significant influence over Gindalbie, it is not obtaining practical control as a result of the Proposed Share Placement.

Gindalbie remains debt free The Proposed Share Placement will enable Gindalbie to make its final equity contribution of AUD143.68 million which was due to be made in October 2008 under the JVDA with Ansteel. The remaining AUD18.38 million will be retained by Gindalbie and will be available for general corporate, operational and working capital purposes at the absolute discretion of the Directors, including for the development of Gindalbie’s other iron ore projects.

The Proposed Share Placement will result in Gindalbie remaining debt free with considerable cash reserves. Gindalbie’s share of the cash flows generated in the early years of the Karara Project can be used for further development of the Karara Project and for the development of other iron ore projects in Gindalbie’s portfolio.

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Avoids having to raise debt or further equity in a difficult market If the Proposed Share Placement is not approved by shareholders, Ansteel will continue to have an obligation, if requested by Gindalbie, to arrange debt finance for Gindalbie’s equity contribution on acceptable terms. The arrangement of this loan is a condition subsequent to the JVDA, which Ansteel is obliged to meet in order to retain its 50% interest in the joint venture.

However, should Ansteel not be able to meet its obligation to arrange the debt before the later of 3 months after approval for the Karara magnetite project under Part IV of the Environmental Protection Act 1986 and 6 June 2009, and the parties cannot agree to an extension, Gindalbie will be required to refund to Ansteel all of its equity contributions to Karara Mining Limited (Karara Mining) under the JVDA subscription program, less 50% of all costs expended in relation to the Karara Project. Ansteel will be required to transfer its shares in Karara Mining to Gindalbie and refund to Gindalbie all of its equity contributions to Karara Pellet Plant Limited for the development of the joint venture pellet plant (JV Pellet Plant) in China, less 50% of costs expended in relation to the JV Pellet Plant. Gindalbie will then hold 100% of the issued shares in Karara Mining (including the Karara Iron Ore Project mining tenements) and Ansteel will hold 100% of the issued shares in Karara Pellet Plant Limited. To date there have been no equity contributions made in respect of the Karara Pellet Plant Limited.

Given the current turbulence and uncertainty in the debt markets, raising new debt for an iron ore project is likely to be difficult and at a higher cost and subject to more stringent security arrangements than previously anticipated. It may therefore not be possible to raise the debt on acceptable terms. In the current market, Gindalbie may also be unable to raise the required funds through an equity raising. The potential consequence of shareholders not approving the Proposed Share Placement is therefore that the joint venture and the Karara Project could fail due to lack of funding.

Diluted participation in future growth of Gindalbie Non-Associated Shareholders will have their exposure to Gindalbie’s expected earnings diluted as their interest in Gindalbie will reduce from 87.35% to 63.72%. While Non-Associated Shareholders have not been given the opportunity to participate in the Proposed Share Placement, Non-Associated Shareholders could purchase shares on market at the prevailing share price, which is currently significantly lower than the issue price of AUD0.85.

Conclusion on reasonableness As the Proposed Share Placement is fair, it is also reasonable.

Opinion In our opinion, the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders. An individual shareholder’s decision in relation to the Proposed Share Placement may be influenced by his or her particular circumstances. If in doubt the shareholder should consult an independent adviser.

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This opinion should be read in conjunction with our detailed report which sets out our scope and findings.

Yours faithfully DELOITTE CORPORATE FINANCE PTY LIMITED Keith Jones Nicki Ivory Director Director

Note: All amounts stated in this report are AUD unless otherwise stated.

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Contents 1 Terms of the Proposed Share Placement 11 1.1 Summary 11

1.2 Ansteel’s intentions 12

2 Scope of the report 13 2.1 Purpose of the report 13

2.2 Basis of evaluation 13

2.3 Limitations and reliance on information 14

3 Iron ore industry 15 3.1 Overview 15

3.2 Products 15

3.3 Key regions 16

3.4 Demand 17

3.5 Supply 18

3.6 Pricing 20

4 Profile of Gindalbie 21 4.1 Company history 21

4.2 Legal structure 22

4.3 Principal activities 22

4.4 Exploration assets 24

4.5 Directors and Management 25

4.6 Competitive position of Gindalbie 26

4.7 Capital structure and shareholders 27

4.8 Share price performance 27

4.9 Financial performance 29

4.10 Financial position 30

5 Valuation methodology 31

5.1 Valuation methodologies 31

5.2 Selection of valuation methodologies 32

6 Future cash flows 33 6.1 Financial model 33

6.2 Key assumptions 33

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7 Valuation of Gindalbie 39 7.1 Valuation of Gindalbie before the Proposed Share Placement 39

7.2 Valuation of the Karara Project 39

7.3 Valuation of exploration assets 43

7.4 Surplus assets 43

7.5 Net cash position 43

7.6 Number of shares outstanding 44

7.7 Valuation summary 44

7.8 Valuation cross check: investment in the Karara Project 44

7.9 Valuation cross check: EV/tonne multiples 45

7.10 Analysis of recent share trading 47

7.11 Conclusions 49

8 Evaluation and conclusion 50 8.1 Fairness 50

8.2 Reasonableness 50

8.3 Opinion 52

Appendices

Appendix 1 Glossary 53

Appendix 2 Discount rate 56

Appendix 3 Comparable companies 64

Appendix 4 Comparable transactions 66

Appendix 5 Sources of information 69

Appendix 6 Qualifications, declarations and consents 70

Appendix 7 Coffey Mining report 72

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1 Terms of the Proposed Share Placement 1.1 Summary In September 2007, Gindalbie and Ansteel executed a wide-ranging JVDA which set out the detailed framework surrounding the financing and development of the Karara Project.

Under the JVDA, the parties agreed a subscription program in January 2008 setting out the timing of the combined AUD534.12 million (30%) equity component of the AUD1.8 billion project. Gindalbie is required to contribute AUD143.68 million, having already contributed AUD18.38 million in July 2008. Under the JVDA, Gindalbie has the option to raise this amount itself or require Ansteel, upon request, to arrange debt for Gindalbie’s equity contribution on acceptable terms. This amount was originally due to be paid in October 2008, however Ansteel and Gindalbie have agreed that this contribution will be made by Gindalbie upon completion of the Proposed Share Placement.

In June 2008, Gindalbie announced to the market that it had elected to request Ansteel to complete the debt arrangements for its equity contributions of AUD162.06 million. Ansteel subsequently approached Gindalbie to propose a share placement in Gindalbie to raise AUD162.06 million..

The Directors have decided that it is in the best interests of Gindalbie shareholders to accept the Ansteel proposal and Gindalbie has therefore entered into a share subscription agreement in respect of the Proposed Share Placement (Subscription Agreement) and a deed of amendment to the subscription program and JVDA (Deed of Amendment).

The Proposed Share Placement will comprise 190,658,824 shares to be issued at AUD0.85 per share, to raise AUD162.06 million. The issue price represents a premium of 102% to the closing price of Gindalbie shares on 31 October 2008 (the last day on which Gindalbie shares traded prior to the announcement of the Proposed Share Placement) and a 100% premium to the VWAP of Gindalbie’s shares for the 4 weeks up to 31 October 2008.

Following completion of the share placement, Gindalbie will have 704,637,674 shares on issue and Ansteel will increase its total shareholding to 255,658,824 shares, representing a shareholding of 36.28% (compared with 12.65% currently).

Other terms of the Subscription Agreement and Deed of Amendment include:

• conditional upon Chinese and Australian regulatory approvals

• Ansteel is entitled to appoint two more Non-Executive Directors to the Board of Gindalbie, increasing its total representation to three out of nine Directors

• Ansteel and Gindalbie will enter into a standstill arrangement whereby Ansteel agrees not to make a takeover bid for Gindalbie prior to completion of the Proposed Share Placement and similarly Gindalbie agrees not to solicit any bids during this period

• the Proposed Share Placement must be made within three months of shareholder approval being granted, unless otherwise agreed to accommodate regulatory approvals

• if the conditions are not satisfied by Ansteel within three months of shareholder approval being granted for the Proposed Share Placement, Ansteel will expedite arrangement of the debt facilities for Gindalbie’s equity contribution under the terms of the JVDA

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• Ansteel’s final contribution of AUD143.68 million to the JDVA which was due in October 2008 is postponed until completion of the Proposed Share Placement or earlier if required by Karara Mining

• subject to Shareholders approving the Proposed Share Placement, Gindalbie and Ansteel will each continue to have 50% of the voting rights in the Karara Project, notwithstanding that Ansteel may make its final contribution to the Karara Project prior to the completion of the Proposed Share Placement. If Shareholders do not approve the Proposed Share Placement then Gindalbie and Ansteel will continue to have voting rights in the Karara Project in proportion to their respective shareholdings (subject to certain matters requiring unanimous consent of both shareholders) until such time as Ansteel has arranged finance for Gindalbie’s final equity contribution. If Shareholders do not approve the Proposed Share Placement, Ansteel’s obligation to arrange finance for Gindalbie’s final equity contribution remains unchanged

• no material adverse change between the date of the Subscription Agreement and the date of the EGM

• limited material adverse change between the date of the EGM and completion of the Proposed Share Placement, only as a result of events that are under Gindalbie’s control.

If the Proposed Share Placement takes place, AUD143.68 million will be paid immediately to the joint venture company, Karara Mining.

This will allow the parties to progress with the next stages of securing project finance from China Development Bank (CDB) to complete the funding of the Karara Project.

The remaining AUD18.38 million will be retained by Gindalbie and will be available for general corporate, operational and working capital purposes at the absolute discretion of the Directors, including for the development of Gindalbie’s other iron ore projects.

We note that the offtake arrangements under the JVDA will be unaffected by the Proposed Share Placement and will remain at or above benchmark prices.

1.2 Ansteel’s intentions Other than as disclosed in the Explanatory Statement, we understand that Ansteel has advised Gindalbie that, if shareholders approve the Proposed Share Placement, Ansteel has no current intention to do any of the following:

• make any significant changes to the business of Gindalbie

• inject further capital into Gindalbie

• make changes regarding the future employment of the present employees of Gindalbie

• transfer any property between Gindalbie and Ansteel or any person associated with any of them

• otherwise redeploy any fixed assets of Gindalbie

• change Gindalbie's existing policies in relation to financial matters or dividends. For

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2 Scope of the report 2.1 Purpose of the report An issue of shares by a company to an allottee that will increase the allottee’s relevant interest in the company to over 20% is prohibited under section 606 of the Corporations Act. However, there is an exception to this prohibition where an acquisition is approved by shareholders at a general meeting, in accordance with item 7 of section 611 of the Corporations Act.

In evaluating whether the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders we have considered the Australian Securities Exchange Limited (ASX) Listing Rules, ASIC Regulatory Guides and common market practice.

For the purpose of reports under item 7 of section 611 of the Corporations Act relating to the approval of an issue of shares by non-associated shareholders, RG 111 provides guidelines to assist in determining whether a proposed issue of shares is fair and reasonable. RG 111 provides that such an issue of shares should be analysed as if it was a control transaction. Pursuant to RG 111 fairness relates to price whereas reasonableness includes the consideration of factors other than price. An issue of shares for cash may have other benefits that should be considered in deciding whether the transaction is reasonable.

This report is to be included in the Explanatory Statement accompanying the notice of the EGM. It will be sent to Gindalbie’s shareholders and has been prepared for the exclusive purpose of assisting Non-Associated Shareholders in their consideration of the Proposed Share Placement. We are not responsible to you, or any one else, whether for our negligence or otherwise, if the report is used by any other person for any other purpose.

2.2 Basis of evaluation

2.2.1 Guidance In order to assess whether the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders we have:



2.2.2 Fairness RG 111 defines an issue of shares under item 7 of section 611 of the Corporations Act as being fair if the issue price is equal to or greater than the value of the shares the subject of the issue. The comparison must be made, for a control transaction, assuming 100% ownership of the target company.

We have considered the fairness of the Proposed Share Placement by comparing the value of a Gindalbie share with the consideration to be received from Ansteel. We assessed the value of each Gindalbie share by determining the current value of Gindalbie on a control basis prior to the Proposed Share Placement and divided this value by the fully diluted number of shares on issue.

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Gindalbie’s shares have been valued at fair market value, which we have defined as the amount at which the shares would be expected to change hands between a knowledgeable willing buyer and a knowledgeable willing seller, neither of whom is under any compulsion to buy or sell. Special purchasers may be willing to pay higher prices to reduce or eliminate competition, to ensure a source of material supply or sales, or to achieve cost savings or other synergies arising on business combinations, which could only be enjoyed by the special purchaser. Our valuation of Gindalbie’s shares has not been premised on the existence of a special purchaser.

The Proposed Share Placement will result in Ansteel controlling 36.28% of Gindalbie’s total shares on issue.

2.2.3 Reasonableness RG 111 considers an offer to be reasonable if either:

• the offer is fair

• despite not being fair, but considering other significant factors, the Non-Associated Shareholders should accept the offer in the absence of any higher bid before the close of the offer.

To assess the reasonableness of the Proposed Share Placement we have considered the following significant factors in addition to determining whether the Proposed Share Placement is fair:

• whether Ansteel is obtaining practical control over Gindalbie

• the existing shareholding of Ansteel in Gindalbie

• the existing interest Ansteel has in the Karara Project

• the impact of the Proposed Share Placement on the overall risk of Gindalbie and the Karara Project.

2.2.4 Individual circumstances We have evaluated the Proposed Share Placement for Non-Associated Shareholders as a whole and have not considered the effect of the Proposed Share Placement on the particular circumstances of individual investors. Due to their particular circumstances, individual investors may place a different emphasis on various aspects of the Proposed Share Placement from the one adopted in this report. Accordingly, individuals may reach different conclusions to ours on whether the Proposed Share Placement is fair and reasonable. If in doubt investors should consult an independent adviser.

2.3 Limitations and reliance on information The opinion of Deloitte is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time. This report should be read in conjunction with the declarations outlined in Appendix 6.

Our procedures and enquiries do not include verification work nor constitute an audit or a review engagement in accordance with Australian Auditing Standards (AUS). F

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3 Iron ore industry 3.1 Overview Iron ore is found in its raw form as hematite, magnetite, goethite, limonite, itabirite, pisolite and taconite ores. Hematite and magnetite are normally used in steel making. Hematite in its raw form or magnetite concentrate are generally preferred in steel making due to their higher iron content. Lower grade hematite ores generally require a greater level of beneficiation, usually in the form of crushing, milling and liquid separation.

The majority of the world’s high grade iron ore resources (greater than 60% iron content) are hematite deposits, which either require a small amount of beneficiation or can be fed directly into blast furnaces. High grade hematite direct shipping ore (DSO) only requires crushing and screening, prior to being used in the steel making process. Notwithstanding this fact, approximately 50% of global steel production is sourced from magnetite concentrate.

Magnetite ores are generally of a lower grade (between 25% to 40% iron content) and require beneficiation involving crushing, milling and magnetic separation. Magnetically beneficiated ore can then be pelletised for use as a high grade raw material in the steel making process. Outside of Japan, there is acceptability of magnetite ores with the declining supply and increasing level of impurities found in higher grade hematites.

The main impurities that are found in naturally occurring magnetite and hematite resources are silica (SiO2), alumina (Al2O3), sulphur and phosphorous – the levels of these impurities is one of the main determinants of whether an iron ore resource is commercially viable. High levels of moisture are also considered undesirable.

The geological features of each ore deposit affect the mineability and cost of production. Production costs increase where ore bodies are deeper (requiring higher stripping ratios) or where the ore bodies are below the water table.

3.2 Products There are four principal types of iron ore products – lump, fines, concentrate and pellets. The demand for each product is driven by availability, price differentials and blast furnace requirements.

Although fines and lump ores cost approximately the same to produce, fines are priced lower than lump because they must be sintered by the steel mill before they can be added to the blast furnace. Demand for fines ore has been increasing in recent years as Chinese steel mills, in particular, have invested heavily in sinter making and pelletising capacity.

Magnetite ores are generally beneficiated to improve iron ore content and then sold as a concentrate or undergo further processing into pellets.

The pelletising process involves mixing a concentrated product with a binding agent, usually clay, and a small amount of limestone. This mixture is rolled into small balls and hardened at high temperatures. Due to the high temperatures required in the pelletising process, it is very energy intensive.

In Japan, lump ore is generally perceived as the preferred source of iron for hot metal as there are no pre smelter processing costs. The productivity of blast furnaces is determined by the chemical composition of the ore such as iron content and levels of impurities. Steelmakers are willing to pay a premium for high grade ore with low levels of impurities.

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Impurities in ore is a growing issue for steelmakers as high grade, low impurity ore resources are being depleted. Steelmakers are able to reduce the average impurity levels of the ores going into steel furnaces by blending ores with different characteristics.

3.3 Key regions

Australia The majority of ore currently exported by Australia is from the Pilbara region in Western Australia (WA) and consists of high grade hematite DSO material. The Mid West region is an emerging iron ore producing province, with a mixture of hematite DSO and magnetite projects planned over the next 3 years.

Australia’s iron ore exports increased from 247 million tonnes (Mt) in 2006 to 267 Mt in 2007, with this tonnage expected to increase further as additional capacity from recently completed and current expansion projects takes effect.

Iron ore from the Pilbara is shipped from three ports, Dampier, Cape Lambert and Port Hedland, to predominantly Asian customers. Current production from the Mid West region is exported through Geraldton. Oakajee Port and Rail, a joint venture between Murchison Metals Limited (Murchison Metals), Mitsubishi Development Pty Limited (Mitsubishi Development) and Crosslands Resources Limited, was recently selected as the preferred tenderer to build an open access deep water port at Oakajee, near Geraldton, to service the developing Mid West iron ore region.

The existing rail infrastructure in the Mid West region is owned and operated by WestNet Rail Pty Limited (WestNet). This network requires a significant upgrade in order to service the region’s forecast production. It is expected that a complementary rail system will be built to service the port at Oakajee.

A mining project in WA requires State Government approvals, as well as Aboriginal, heritage and environmental approvals. A lead time of several years is generally required to obtain all these approvals.

China China is forecast to produce 384 Mt of iron ore in 2008, which is an increase of 16% on 2007 production of 331 Mt. These figures are adjusted to an average iron content of 63%, as most of China’s iron ore supply is of a low grade, around 30% iron content. The majority of China’s iron ore is located in the inland regions of the country and is primarily used in domestic steel production.

China’s low grade ores are predominantly goethite and limonite, which cannot be easily beneficiated and are generally sintered into fines for use in the steel making process. China also has a number of high cost producers who are expected to maintain production while prices are high and then reduce production as prices decline.

Infrastructure constraints and the low quality of ore mean that steel mills located on the coast rely heavily on high grade ores imported primarily from Brazil and Australia.

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Brazil Brazil is the world’s largest exporter of iron ore, with exports increasing from 247 Mt in 2006 to 285 Mt in 2007, predominantly supplying customers in Europe and Asia. Brazil’s iron ore producers include Companhia Vale do Rio Doce (Vale), MMX Mineracao e Metalicos, BHP Billiton Limited (BHP), Rio Tinto Limited (Rio Tinto) and integrated steel makers, Companhia Siderurgica Nacional and Mittal Steel NV (ArcelorMittal). Production occurs in two main regions, the Southern System or so called Iron Quadrangle in the south eastern state of Minas Gerais and the Northern or Carajas system in the northern state of Para.

The types of iron ore found in Brazil are a high grade hematite ore and an intermediate grade itabiritic ore. The high grade hematite found in this region is some of the highest quality in the world, with greater than 64% iron content, while the itabirite ore is typically concentrated to attain an increased iron content suitable for export.

India Most of India’s iron ore is found in the eastern, central and southern parts of the country in the regions of Orissa, Jharkhand, Chhattisgarh, Karnataka and Goa, with the highest grades and quantities of iron ore being located in the eastern part of the country. India exported 93 Mt in 2007, up from 86 Mt in 2006, with exports expected to decrease to around 89 Mt in the short to medium term.

Indian ores generally have high levels of impurities, which can cause difficulty in the steelmaking process, meaning Indian ore, despite its high grade, is less desirable than similarly high grade ores from Brazil and Australia. Due to their smaller scale, Indian iron ore operations are also considered relatively high cost producers.

Due to the high level of government control over iron ore resources, the export tax on iron ore and increasing domestic consumption in India, it is likely that an increasing proportion of Indian iron ore production will be utilised domestically. Port and rail infrastructure constraints and political bureaucracy also pose a problem in increasing production for the export market.

3.4 Demand In recent years, the global iron ore market has experienced an imbalance with demand exceeding supply.

Global steel consumption is forecast to reach 1.4 billion tonnes (Bt) in 2008 and 1.8 Bt by 2013 at an average annual growth rate of 5%. Growth in world steel consumption is expected to come mainly from rapidly developing countries such as China and India.

China’s consumption of steel is projected to grow to 715 Mt in 2013 from 438 Mt in 2007, representing average annual growth of 8.5%. This increase in consumption is expected to be underpinned by China’s rapid urbanisation and industrialisation.

Steel consumption in India is projected to grow to 87 Mt in 2013 from 54 Mt in 2007, representing average annual growth of 8.3%. This growth is expected to come from large investments in road, rail, port, airport, power generation and pipeline infrastructure.

The Russian Federation’s steel consumption is also expected to grow strongly, supported by the replacement of ageing infrastructure, growth in the oil and gas industry and rising household incomes. Steel consumption is expected to grow from 46 Mt in 2007 to 67 Mt in 2013, representing average annual growth of 6.5%.

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Growth in steel consumption in developed countries including the United States, Japan and the European Union, is expected to slow over the medium term.

The figure below shows historical and forecast global steel consumption by region.

Figure 1: Global steel consumption

0

300

600

900

1,200

1,500

1,800

2,100

1997 1999 2001 2003 2005 2007 2009 2011 2013

Con

sum

ptio

n (M

t)

Other EU 27 United States Brazil RussiaChina Japan Korea Taiwan India

Actual Forecast

Source: ABARE Australian Commodity Statistics 2007

There is currently significant uncertainty surrounding the short to medium term demand for iron ore, given recent volatility in global financial and commodity markets. Nonetheless, medium to long term demand for iron ore is expected to remain strong, underpinned by continued growth in China and India. While Chinese economic growth fell below 9% p.a. in October 2008 for the first time in five years, the USD586 billion stimulus package announced by the Chinese government on 9 November 2008 is widely expected to limit any further slowdown in Chinese economic growth.

3.5 Supply Iron ore supplied by the three largest global producers, BHP and Rio Tinto from Australia and Vale from Brazil, dominates the global seaborne iron ore trade. However, China remains the largest producer of iron ore. China’s domestic steel making requirements consume almost all of its production of iron ore with only a small percentage of ore produced being exported, which is generally of a lower quality and used as a blending ore. China’s domestic supply cannot meet its demand for iron ore and therefore China imports a significant amount of iron ore from other regions.

In recent years, supply has been unable to keep pace with the increase in demand brought about by the strength and prolonged nature of China’s economic growth. Until very recently, most producers were undertaking rapid expansion projects to increase supply.

Global iron ore production is expected to increase to 2.4 Bt in 2013 from 1.61 Bt in 2007. This increase is expected to be delivered primarily through significant investment by BHP, Rio Tinto and Vale. The remaining supply is expected to be met by a number of smaller near term producers with development projects currently underway.

In Australia, Rio Tinto plans to increase its Pilbara iron ore production from 179 Mt in 2007 to 320 million tonnes per annum (Mtpa) by 2013, while BHP currently has plans to expand its iron ore capacity from 99 Mt in 2007 to 200 Mtpa by 2011. In November, Rio Tinto announced it was reducing production from the Pilbara in 2008 by 10% (on an annualised basis) due to reduced demand from customers.

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Fortescue Metals Group Limited (FMG) commenced production in May 2008 from its Cloudbreak mine site, located in the Pilbara. FMG had planned to expand capacity to 45 Mtpa by the end of 2008 and 55 Mtpa by the end of the first quarter 2009. FMG has delayed previously announced expansion plans of 55 to 100 Mtpa in 2009/2010 and 100 to 200 Mtpa in 2010.

China is forecast to expand its iron ore production to 450 Mt (63% iron content equivalent) in 2013 from around 320 Mtpa currently. Due to the low grade of Chinese ore, growth in Chinese production is expected to occur while prices are high and slow significantly if prices decline as high cost producers reduce output.

Due to the development of India’s steel industry, infrastructure constraints and export taxes on iron ore, it is projected that supply of Indian ore for export will decrease from 93 Mt in 2007 to 88 Mt by 2013.

The figure below shows historical and forecast global iron ore production.

Figure 2: Global iron ore production

0350700

1,0501,4001,7502,1002,450

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Prod

uctio

n (M

tpa)

Australia Brazil Canada ChinaIndia Russian Federation South Africa SwedenUkraine United States Venezuela OtherForecast

Actual Forecast

Source: ABARE Australian Commodity Statistics 2007

The figure below shows historical and forecast global iron ore exports.

Figure 3: Global iron ore exports

0

200

400

600

800

1,000

1,200

1,400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Expo

rts (M

tpa)

Australia Brazil India Canada South Africa Sweden Other

Actual Forecast

Source: ABARE Australian Commodity Statistics 2007 F

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3.6 Pricing Iron ore is primarily sold through long term contracts of between 10 and 25 years duration. These contracts bind the parties to the volume of iron ore sold but prices are based on the benchmark price.

The ‘benchmark’ price is set on an annual basis through individual negotiations between the major producers (BHP, Rio Tinto and Vale) and global steel mills. Once one of BHP, Rio Tinto or Vale has agreed a price with an individual (or consortium) steel mill, this generally becomes the benchmark price for the next Japanese financial year (JFY) and is replicated throughout the industry. The JFY runs from 1 April to 31 March. If the price is not set by April there is an understanding that the producers will recoup the shortfall of any price increase on tonnes already shipped and vice versa.

In February 2008, Vale negotiated a price increase with Asian and European steel mills of 65% to 71%. Subsequently, Rio Tinto negotiated a price increase of 96.5% for lump and 79.9% for fines. This settlement recognised for the first time a sharing between the iron ore supplier and the steel mill of the freight advantage that Australian iron ore landed in China has over supplies from Brazil. BHP agreed to the Rio Tinto benchmark.

Vale responded to the higher settlement achieved by Rio Tinto and BHP by negotiating a 12% higher price for its fines product with Japanese, Korean and Taiwanese steel mills. Chinese steel mills refused to accept a price rise and Vale refused to deliver to Chinese customers without a 12% price increase. Following recent market instability and uncertainty as to the short to medium term outlook for iron ore, on 3 November 2008 Vale announced it had dropped its demand for higher prices from Chinese customers.

Lump, concentrate and pellet products are generally priced at a premium to the benchmark fines price. Concentrate and pellet products attract a premium to the fines price due to the higher iron content and lower impurity levels of the product. Pellets also attract a premium due to their high value in use, which is essentially the cost savings from not having to incur the extra processing and handling costs incurred in sintering as well as the cost of the sinter plant.

The figure below shows historical benchmark prices for Hamersley/Newman lump and fines and the historical pellet prices for Vale Tubarao pellets free-on-board (FOB) into the Asian market.

Figure 4: Historical Hamersley/Newman lump and fines and Vale Tubarao pellet prices (nominal)

0255075

100125150175200225

2000 2001 2002 2003 2004 2005 2006 2007 2008

JFY beginning

Pric

e (U

Sc/d

mtu

)

Fines Lump Pellets

Source: ABARE, Tex Report Iron Ore Manual 2007

Note 1: 2008 lump and fines prices are for Hamersley only

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4 Profile of Gindalbie Gindalbie is an iron ore exploration and development company based in WA, which is developing a portfolio of projects in the Mid West region of WA. Gindalbie had a market capitalisation of AUD236 million at 16 December 2008.

Gindalbie’s core asset is the Karara Project which is currently under development and is being undertaken as a 50:50 joint venture with Ansteel.

4.1 Company history An overview of Gindalbie’s company history is provided in Figure 5 below.

Figure 5: Company history 1993 1994 2005

• Incorporated as Gindalbie Gold NL • Listed on the ASX • Renamed Gindalbie Metals Limited • Decision to divest gold and base metal assets • Geraldton Iron Ore Alliance formed

2006 • Joint Venture Development Agreement reached with Ansteel pending execution

• Sale of Minjar gold and base metal assets to Monarch Gold Mining Company Limited for AUD10m

• Warriedar Iron Ore JV agreement signed with Royal Resources Limited • Delineation of Karara Project magnetite resource of 1.29bt • Karara magnetite project granted major project status by federal government

2007 • Delineation of Karara Project hematite resource of 14.1Mt • Upgrade of Karara hematite and magnetite resources to 22.8Mt and 1.43bt

respectively

• Warriedar Iron Ore JV hematite discoveries in the Mid West region • Completion of Karara Project Bankable Feasibility Study • Execution of the Ansteel Joint Venture Development Agreement • Decision to mine • Proposed merger with Sundance Resources Limited, however the companies

subsequently agreed not to proceed • Karara Project power supply contract finalised with Verve Energy

2008 • Equity Subscription Program finalised outlining terms for Ansteel’s involvement in the joint venture

• Feasibility study commenced to expand Karara Project magnetite concentrate capacity to 12 Mtpa

• Commencement of expanded regional exploration program in the Mid West region

• Orders placed for long lead time items for Karara Project • AUD228.4m in project equity funding contributed by Ansteel in three

instalments (February, April and July 2008). AUD18.4m contributed by Gindalbie in July 2008

• Increase in Karara Project magnetite resource (inclusive of reserves) to 2.59 Bt

Source: Gindalbie, Company Announcements

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4.2 Legal structure Figure 6 sets out the group structure for Gindalbie.

Figure 6: Gindalbie group structure

Source: Gindalbie

4.3 Principal activities Gindalbie is currently focussed on the development of the Karara Project. It also holds interests (some wholly owned and some in joint venture) in 1,900 square kilometres (km2) of prospective tenements in the Mid West region. These assets are described in further detail below.

4.3.1 Karara Project The Karara Project, located 225 km east of Geraldton in WA, is a 50:50 joint venture with Ansteel. This project comprises of a staged DSO hematite and magnetite mine. Karara Mining, in which Gindalbie has a 50% interest, holds the assets for the Karara Project and is the operator of the joint venture.

A BFS for the Karara Project was completed in August 2007. It assessed a combined DSO hematite and magnetite production rate of 10 Mtpa.

The DSO hematite operation is targeting an initial rate of production of 2 Mtpa commencing in the third quarter of 2009, with lump and fines products from an open cut mining operation initially being transported via road and rail to Geraldton for shipment to China. Transportation of DSO hematite material will transition to full rail in the second half of 2010 with the commencement of the magnetite operation.

The magnetite phase of the Karara Project is targeting an initial production rate of 8 Mtpa of magnetite concentrate commencing in the third quarter of 2010. It is proposed that production from an open cut mining operation of 20 Mtpa will be used to produce 8 Mtpa of magnetite concentrate on site at Karara prior to being railed to Geraldton. At Geraldton, the magnetite concentrate will be transferred to vessels for transport to China. The parties intend to construct the JV Pellet Plant near Ansteel’s new 6.5 Mtpa steel-making facility at BaYuQuan in north-eastern China.

Gindalbie Metals Limited

Interests in Mt Mulgine, Windaning and

Warriedar UJVs1

Karara Energy Pty Ltd

(Electrical Trading Contracts)

Karara Rail Pty Ltd

(Rail assets)

Karara Mining Ltd

(Magnetite assets)

Karara Pellet Plant Ltd

(GBG Pellet Plant Interest)

100% 100% 50% 100%

Yingkou Ansteel –Gindalbie Pellet Plant Co

Ltd

50%

Karara Infrastructure Pty Ltd

(Rail and Slurry Pipeline)

Karara Management Services Pty Ltd

(To become a shell company)

Karara Port Services Pty Ltd

(Port assets)

100%100%100%

100%

DSO Ventures Pty Ltd(Hematite tenements)

Note 1: 70% interest in Mt Mulgine UJV, 78% interest in Windaning UJV and 60% interest in Warriedar UJV


Interests in Mt Mulgine, Windaning and

Warriedar UJVs1

Karara Energy Pty Ltd

(Electrical Trading Contracts)

Karara Rail Pty Ltd

(Rail assets)

Karara Mining Ltd

(Magnetite assets)

Karara Pellet Plant Ltd

(GBG Pellet Plant Interest)

100% 100% 50% 100%

Yingkou Ansteel –Gindalbie Pellet Plant Co

Ltd

50%

Karara Infrastructure Pty Ltd

(Rail and Slurry Pipeline)

Karara Management Services Pty Ltd

(To become a shell company)

Karara Port Services Pty Ltd

(Port assets)

100%100%100%

100%

DSO Ventures Pty Ltd(Hematite tenements)

Note 1: 70% interest in Mt Mulgine UJV, 78% interest in Windaning UJV and 60% interest in Warriedar UJV

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The Karara Project will supply 4 Mtpa of magnetite concentrate to the JV Pellet Plant to produce 4 Mtpa of blast furnace (BF) pellets, with the remaining 4 Mtpa of concentrate being sold directly to Ansteel for use as sinter feed. Ansteel has an agreement in place to take all of the production from the Karara Project.

The BFS did not consider any expansion beyond total combined magnetite and hematite production of 10 Mtpa. It is unlikely that production would remain at this level if sufficient infrastructure is in place. In April 2008 a feasibility study was commenced to examine the expansion of magnetite concentrate production to 12 Mtpa. This study is expected to be completed towards the end of 2008.

In September 2008, a Public Environmental Review (PER) was released on the magnetite phase of the Karara Project. Following closure of the 4 week public comment period, the Environmental Protection Authority (EPA) will make a recommendation to the Minister for the Environment. The PER process for the hematite phase of the Karara Project was completed in July 2008 and Karara Mining is awaiting the final EPA assessment.

The table below shows iron ore reserves and resources for the Karara Project as at 1 September 2008.

Table 2: Total JORC reserve and resource estimates as at 1 September 2008 for the Karara Project 1

Reserves Resources 2

Tonnes (Mt) Grade (%Fe) Tonnes (Mt) Grade (%Fe) Hematite 10.9 61.7 25.6 61.6 Magnetite 544.0 36.6 2,596.0 35.9 Source: Gindalbie

Notes:

1. JORC: Joint Ore Reserves Committee

2. Resources are quoted inclusive of reserves

4.3.2 Ansteel Gindalbie executed a JVDA with Ansteel in September 2007 to develop the Karara Project.

The JVDA sets out a detailed framework surrounding the financing and development of the Karara Project. To retain its 50% stake in the Karara Project Ansteel must:

• arrange and underwrite the project debt (proposed funding is on a 70/30 debt to equity ratio)

• arrange debt finance for Gindalbie’s share of equity if requested on acceptable terms

• purchase all of the production of the Karara Project at market values.

In January 2008, Gindalbie and Ansteel agreed a subscription program which finalised the equity funding. We note that the offtake arrangements under the JVDA will be unaffected by the Proposed Share Placement, and will remain at or above benchmark prices. F

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The schedule of equity subscription payments is as follows:

Table 3: Equity subscription payments

Status Ansteel

AUDm Gindalbie

AUDm Feb 08 Paid 50.0 - Apr 08 Paid 55.5 - Jul 08 Paid 123.4 18.4 Oct 08 Unpaid 143.7 143.7 372.1 162.1

Source: Gindalbie

Note: Ansteel and Gindalbie have agreed that the October 2008 payment will be made by Gindalbie upon completion of the Proposed Share Placement Detailed discussions are in progress with CDB to provide project finance of approximately AUD1.4 billion.

4.4 Exploration assets

Hematite Gindalbie has commenced a regional exploration program across its 1,900km2 tenement portfolio in the Mid West region of WA aimed at delineating exploration targets of DSO hematite. It has approved an exploration budget of AUD10m for 2008. Gindalbie’s hematite exploration assets include the following:

Shine Prospect The Shine Prospect is located 40 km north of the Karara Project and is partially located on land owned 100% by Gindalbie and extends into the land holding of the Warriedar Iron Ore Joint Venture with Royal Resources Limited (Royal Resources). Gindalbie operates the joint venture and earned a 60% stake in the project, by spending AUD1m on exploration and drilling over the past three years.

Four priority exploration targets including Shine, Gap, Lister and Hippo, have been identified as being prospective for hematite mineralisation in the Warriedar Iron Ore Joint Venture land and the 100% Gindalbie owned land.

Mt Mulgine Tungsten Project Gindalbie has a joint venture agreement with Vital Metals Limited (Vital Metals) covering molybdenum and tungsten mineralisation at the Mt Mulgine Project. Vital Metals has earned a 70% interest in the project by spending AUD750,000 on exploration and development.

Porcupine Prospect The Porcupine Prospect is located 10 km north east of the Karara Project and is prospective for hematite mineralisation, with mapping and sampling indicating a potential strike length of 5 km and up to 300 meters in width. The project area is a combination of 100% Gindalbie ownership, 78% ownership in the Falcon Joint Venture and 60% ownerships in the Warriedar Iron Ore Joint Venture. The majority of the mineralisation lies in the tenements where Gindalbie owns 100% of the iron ore rights.

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Magnetite The main magnetite exploration prospect is the Lodestone Prospect.

Lodestone Prospect The Lodestone Prospect, which is 100% owned by Gindalbie, is located 50km south-east of the Karara Project and is currently in the early exploration stage of development. Gindalbie is targeting both magnetite and hematite mineralisation at Lodestone and believes the prospect has the potential to host a Karara-style magnetite deposit.

4.5 Directors and Management Gindalbie’s directors and key management include:

Table 4: Directors and management

Name Title George Jones Non-Executive Chairman Garret Dixon Managing Director and Chief Executive Officer Didier Murcia Non-Executive Director Tunku Ya’acob Bin Tunku Abdullah Non-Executive Director Michael O’Neil Non-Executive Director Wang Heng Non-Executive Director Geoff Wedlock Non-Executive Director David Southam Chief Financial Officer David Stokes General Counsel and Company Secretary

Source: Gindalbie

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4.6 Competitive position of Gindalbie An analysis of Gindalbie’s competitive position is set out below, showing the company’s strengths, weaknesses, opportunities and threats (SWOT).

Table 5: SWOT analysis

Strengths Weaknesses • Experienced management team • Joint venture partner, Ansteel, is

committed to developing the project and has already committed capital

• Joint venture partner, Ansteel, is underwriting project financing and has an agreement to take all production

• Substantial and consistent magnetite resource with low impurities

• Further exploration potential within Karara Mining

• Initial cash flows from Karara Mining DSO hematite production can be used to partially fund the Karara Mining magnetite operation

• Potential to expand total production capacity to over 30 Mtpa

• Long term electricity supply agreement with Verve Energy. Infrastructure solutions in place for rail and Geraldton port

• Proximity to Geraldton and support of the local community

• Does not control the Karara Project, it shares joint control with Ansteel

• Significant capital investment required to develop project

• Financing risk, given the current state of the financial markets

• Dependence on third party rail, port and power infrastructure providers

• Key government and environmental approvals still to be obtained

• Mining in areas of high biodiversity and environmental significance

• Initial cash flow delayed until the end of 2009

• Relatively high cost producer at the mine gate (however not at the port as relatively low transport costs)

• Aggressive schedule in current tight market for the supply of materials, labour and equipment

Threats Opportunities • Uncertainty over shared infrastructure in the

Mid West region for expansion plans which rely on Oakagee

• Concentrated market share of top producers • Major mining and environmental approval

process requirements • Sensitivity of the project economics to

changes in iron ore prices and foreign exchange rates

• Possibility of prolonged instability in the iron ore market

• Forecast strong long term demand for iron ore from developing economies such as China, India and South East Asia

• Reduction in quality and supply of domestic Chinese iron ore, increasing the demand for imported iron ore

• Pellet and concentrate are premium priced products with a niche market

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4.7 Capital structure and shareholders As at 12 December 2008, Gindalbie had 513,978,850 ordinary shares on issue.

Gindalbie also has 16,950,000 unlisted employee options.

Gindalbie’s top 5 shareholders as at 12 December 2008 are listed below.

Table 6: Top 5 shareholders

Shareholders Number of shares

(m)

% of total shares on

issue Angang Group Hong Kong 65.0 12.65 Melewar Steel Ventures 39.0 7.59 Citi Corp Nominees 27.3 5.32 JP Morgan Nominees Australia 25.6 4.98 HSBC Custodian Nominees 23.3 4.53 Sub Total 180.2 35.06 Source: Gindalbie

The top 5 shareholders account for 35.06% of Gindalbie’s issued share capital as at 12 December 2008.

4.8 Share price performance A summary of Gindalbie’s share price performance is provided in the table below.

Table 7: Gindalbie’s quarterly ordinary share price information

Quarter end date High (AUD) Low (AUD) Last Trade (AUD) Volume (m) 30 September 2008 1.44 0.65 0.69 175.9 30 June 2008 1.82 0.72 1.45 280.0 31 March 2008 1.19 0.62 0.71 161.0 31 December 2007 1.70 1.16 1.20 148.2 30 September 2007 1.82 0.96 1.70 336.4 30 June 2007 1.11 0.53 1.03 189.1 31 March 2007 0.79 0.48 0.58 94.0 Source: Bloomberg

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The Gindalbie share price has been highly volatile. These share price movements and trading volumes are presented graphically in the figure below.

Figure 7: Gindalbie share price and volume

Source: Bloomberg

Notes 1. Ansteel takes a strategic stake in Gindalbie

2. Updated magnetite and hematite reserves and resources announced

3. JVDA signed with Ansteel

4. Proposed merger with Sundance announced

5. Proposed merger with Sundance cancelled

6. Market downturn due to credit crisis in the US

7. Expansion plans announced

8. Market downturn due to weakness in global financial markets

During the year to 7 November 2008, 132% of Gindalbie’s total issued capital was traded, which indicates a high level of liquidity.

0.000.200.400.600.801.001.201.401.601.802.00

Jan-0

6

Apr-06

Jul-0

6

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Jan-0

7

Apr-07

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7

Oct-07

Jan-0

8

Apr-08

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8

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)

02468101214161820

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(Mill

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1

2

3

4

5

6

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8

0.000.200.400.600.801.001.201.401.601.802.00

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4.9 Financial performance The audited financial results of Gindalbie for the years ended 30 June 2006 (FY06), 30 June 2007 (FY07) and 30 June 2008 (FY08) are summarised in the table below.

Table 8: Financial performance of Gindalbie

FY06

(AUD’000) FY07

(AUD’000) FY08

(AUD’000) Income 784 2,295 57,675 EBITDA (4,303) (4,864) 47,437 Depreciation and amortisation 101 124 157 EBIT (4,404) (4,988) 47,280 Net interest income 841 2,110 4,987 Profit (loss) before tax (3,563) (2,878) 52,267 Source: Gindalbie financial reports for the years ended 30 June 2007 and 30 June 2008

Notes: 1. EBITDA = Earnings before interest, tax, depreciation and amortisation

2. EBIT = Earnings before interest and tax

During the financial year ended 30 June 2008, Gindalbie recorded a gain of AUD56.37m relating to the dilution of its interest in Karara Mining from 100% to 50%.

Gindalbie continues to incur losses as the company progresses with the development of the Karara Project which is due to commence DSO hematite production in the third quarter of 2009.

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4.10 Financial position The audited statements of financial position for Gindalbie for FY06, FY07 and FY08 are summarised in the table below:

Table 9: Financial position of Gindalbie

FY06

(AUD’000) FY07

(AUD’000) FY081

(AUD’000) Cash 36,165 16,099 102,650 Receivables 10,921 13,668 1,929 Other 523 81 138 Total current assets 47,609 29,848 104,717 Exploration and evaluation assets 9,673 29,761 5,501 Property, plant and equipment 1,198 2,600 49,430 Other - - 1,718 Total non-current assets 10,871 32,361 56,649 Payables 6,100 6,912 8,326 Employee benefits 362 420 434 Total current liabilities 6,462 7,332 8,760 Deferred tax liabilities - - 7,746 Employee benefits 17 25 23 Total non-current liabilities 17 25 7,769 Net assets 52,001 54,852 144,837

Source: Gindalbie financial reports for the years ended FY06, FY07 and FY08

Note 1: FY08 is the first period that Gindalbie proportionately consolidated Karara Mining at 66.67%

Cash increased during FY08 due to the cash contributions of Ansteel to Karara Mining.

Gindalbie capitalised exploration and development expenses relating to the Karara Project on completion of the BFS, resulting in an increase in property, plant and equipment on the balance sheet.

Other significant items include the recognition of a deferred tax liability.

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5 Valuation methodology 5.1 Valuation methodologies To estimate the fair market value of the shares in Gindalbie we have considered common market practice and the valuation methodologies recommended by RG 111, which deals with the content of independent expert’s reports. These are discussed below.

5.1.1 Market based methods Market based methods estimate a company’s fair market value by considering the market price of transactions in its shares or the market value of comparable companies. Market based methods include:

• capitalisation of maintainable earnings

• analysis of a company’s recent security trading history

• industry specific methods.

The capitalisation of maintainable earnings method estimates fair market value based on the company’s future maintainable earnings and an appropriate earnings multiple. An appropriate earnings multiple is derived from market transactions involving comparable companies. The capitalisation of maintainable earnings method is appropriate where the company’s earnings are relatively stable.

The most recent security trading history provides evidence of the fair market value of the securities in a company where they are publicly traded in an informed and liquid market.

Industry specific methods estimate market value using rules of thumb for a particular industry. Generally rules of thumb provide less persuasive evidence of the market value of a company than other valuation methods because they may not account for company specific factors.

5.1.2 Discounted cash flow methods Discounted cash flow methods estimate market value by discounting a company’s future cash flows to a net present value. These methods are appropriate where a projection of future cash flows can be made with a reasonable degree of confidence. Discounted cash flow methods are commonly used to value early stage companies or projects with a finite life.

5.1.3 Asset based methods Asset based methods estimate the market value of a company’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

• orderly realisation of assets method

• liquidation of assets method

• net assets on a going concern basis.

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to securityholders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner.

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The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the company may not be contemplated, these methods in their strictest form may not necessarily be appropriate. The net assets on a going concern basis method estimates the market values of the net assets of a company but does not take account of realisation costs.

These asset based methods ignore the possibility that the company’s value could exceed the realisable value of its assets as they ignore the value of intangible assets such as customer lists, management, supply arrangements and goodwill. Asset based methods are appropriate when companies are not profitable, a significant proportion of a company’s assets are liquid, or for asset holding companies.

5.2 Selection of valuation methodologies We have applied a sum of the parts methodology to determine the value of a Gindalbie share. We are of the opinion that the most appropriate methodology to value the Karara Project is the discounted cash flow method due to the following factors:

• Gindalbie’s management have prepared long term cash flow forecasts based on the BFS

• the Karara Project has a finite life and thus it is not possible to use a capitalisation of maintainable earnings approach

• Gindalbie is at an early stage in its development

• significant capital expenditure will be required by the Karara Project in the near future.

We engaged Coffey Mining to value Gindalbie’s exploration assets.

We have considered the implied enterprise value (EV) per tonne of contained Fe (EV/tonne) compared with the EV/tonne for comparable companies and observed in recent comparable transactions to provide additional evidence of the fair market value of a share in Gindalbie. We have also considered recent share market trading activity in Gindalbie shares.

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6 Future cash flows 6.1 Financial model Gindalbie management has prepared a detailed financial model based on the life of mine plan for the Karara Project. The Model includes nominal, ungeared, after-tax cash flows up to the year ending 30 June 2035.

Deloitte engaged ProMet, an independent mining expert, to provide a technical assessment of the operating and capital costs contained in the Model. The scope of their work was controlled by Deloitte.

ProMet held discussions with Gindalbie management and utilised the Karara Magnetite Project (including the pellet plant), 8 Mtpa Bankable Feasibility Study Report, August 2007 (Karara BFS) and the Mungada Hematite Project, Bankable Feasibility Study Report, August 2007 (Mungada BFS). The Karara BFS and the Mungada BFS were prepared by Gindalbie with the assistance of various technical experts.

Deloitte has made adjustments to the cash flows in the Model where it was considered appropriate. These adjustments included, but were not limited to costs, volumes, pricing, exchange rates and discount rates.

We have valued the Karara Project based on the inputs provided by Gindalbie and ProMet and our assessment of commodity prices, exchange rates and discount rate.

We have undertaken an analysis of the cash flow projections in the Model which included:

• analysing the Model, including limited procedures regarding mathematical accuracy (but we have neither formally reviewed nor audited the Model)

• analysing the reasonableness of assumptions such as production profile, capital expenditure, operating costs, site rehabilitation, abandonment costs and royalties

• holding discussions with Gindalbie management regarding the preparation of the projections and their views regarding the assumptions on which the projections are based.

We have not undertaken a review of the Model. However, nothing has come to our attention as a result of our analysis that suggests the assumptions on which the projections are based have not been prepared on a reasonable basis.

6.2 Key assumptions This main assumptions underpinning the Model include:

• production volumes (Section 6.2.1)

• iron ore prices (Section 6.2.2)

• capital expenditure (Section 6.2.3)

• operating costs (Section 6.2.4)

• selling costs, abandonment costs, royalties and income tax. For

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• Karara – hematite production commencing in 2009 at an initial rate of 1 Mtpa increasing to 3 Mtpa by 2010 and magnetite concentrate production commencing in Q3 2010 at an initial rate of 6 Mtpa increasing to 8 Mtpa in 2011, with production continuing until current reserves run out

• Pellet Plant – production commencing in 2010 at an initial rate of 3.2 Mtpa, increasing to 4 Mtpa in 2011.

All of the above volumes are stated on a 100% basis.

6.2.1 Production The Model is based on 511 Mt of reserves, dry saleable production of 196.9 Mt of magnetite concentrate at an average grade of 68.2% Fe and dry saleable production of 14.1 Mt (probable reserves and inferred resource) of hematite at an average grade of 62.0% Fe. The Model reflects the Karara Project’s probable magnetite and hematite JORC reserves as well as a portion of inferred hematite resources as at the time of the BFS.

The following figure illustrates the total saleable production of hematite and magnetite over the life of the Model.

Figure 8: Production by ore type (calendar years)

Source: Model

Note: 8 Mtpa rate achieved in last half of 2011

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6.2.2 Iron ore prices Karara Mining has an agreement to sell its iron ore production to Ansteel with prices linked to benchmarks negotiated annually by the industry.

Karara Mining expects to sell the following types of iron ore product:

• hematite (fines and lump)

• magnetite concentrate

• pellets.

Lump, concentrate and pellet products are generally settled at a premium with reference to the benchmark fines price. Lump products attract a premium over fines, as fines must be sintered before being used in the steel making process. Concentrate and pellet products attract a premium over fines due to the higher iron content, lower impurity levels and the ability to use pellets directly in the steel making process.

In considering appropriate sale prices, we have had regard to consensus brokers forecasts and current market trends.

Consensus price estimates for lump, fines and pellets are shown in the graphs below:

Figure 9: Historical and forecast iron ore prices (real USc/dmtu)

Source: TEX report, analyst reports, Bloomberg

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Based on our consideration of the above information, we have adopted the iron ore price assumptions shown in the table below. The fines prices adopted assume that current prices will decline to a long term flat real price by 2012. The premiums to fines for lump, concentrate and pellets are based on consensus estimates. Our pellet price assumptions include freight from Brazil to China, as per the pricing agreement between Gindalbie and Ansteel.

Table 10: Forecast benchmark iron ore prices (real, USc/dmtu) (JFY)

2008 2009 2010 2011 LT Fines (FOB) 145 115 100 85 70 Lump (FOB) 202 155 135 115 95 Concentrate (FOB) 175 135 115 95 80 Pellets (CIF) 265 225 200 175 150 Source: Deloitte

Notes: LT = Long term

JFY 2008 = Year from 1 April 2008 to 31 March 2009

6.2.3 Capital expenditure The capital expenditure profile is illustrated in Figure 10.

Figure 10: Capital expenditure

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The most significant items of capital expenditure are:

• crushing and concentrating plant

• rail infrastructure

• port infrastructure

• power infrastructure

• magnetite pre-strip costs

• pellet plant.

Sustaining capital expenditure to maintain the Karara Project has been included in operating costs.

6.2.4 Operating costs Operating costs consist of mining, processing, rail, port, support and infrastructure, closure costs (including rehabilitation and site restoration costs), pellet plant operations and freight costs from Geraldton to China.

The profile of operating costs (excluding closure costs) on an AUD per wet metric tonne (wmt) basis for the Karara Project is illustrated in the figure below.

Figure 11: Magnetite, hematite and pellet plant operating costs (excluding closure costs) (AUD/wmt)

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6.2.5 Royalties Royalty payments include WA government iron ore royalties of 7.5% of FOB lump revenues, 5.63% of FOB fines revenues and 5.00% of FOB magnetite concentrate revenues. F

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6.2.6 Other The following key economic assumptions have been adopted in the valuation of the Karara Project:

• inflation rate profile for Australia, the US and China as shown in the following table.

Table 11: Inflation rates

2008 2009 2010 2011 LT

Australia 4.7% 3.1% 2.6% 2.4% 2.5% US 4.0% 0.5% 1.2% 1.9% 2.5% China 6.2% 2.9% 3.5% 4.2% 4.0%

Source: EIU December 2008 country forecasts, brokers reports The long term Australian inflation rate of 2.5% is consistent with the mid point of the Reserve Bank of Australia (RBA) target range of 2-3% per annum.

• tax rate – we have assumed the following company income tax rates:

- Australia: 30%

- China: 25%

• exchange rate – we have considered forecast rates contained in consensus analyst reports, the October 2008 Economist Intelligence Unit (EIU) country forecast for Australia as well as the forward curve. The AUD/USD (United States dollar) and AUD/CNY (Chinese yuan) foreign exchange rates we have adopted are shown in the following table:

Table 12: Foreign exchange rates

2008 2009 2010 2011 LT

AUD / USD 0.67 0.66 0.66 0.66 0.65 AUD / CNY 4.53 4.53 4.52 4.51 4.50

Source: Bloomberg, brokers reports, EIU

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7 Valuation of Gindalbie 7.1 Valuation of Gindalbie before the Proposed

Share Placement Deloitte has estimated the fair market value of a share in Gindalbie before the Proposed Share Placement to be in the range of AUD0.71 to AUD1.00.

For the purpose of our opinion fair market value is defined as the amount at which the shares would be expected to change hands between a knowledgeable willing buyer and a knowledgeable willing seller, neither being under a compulsion to buy or sell. We have not considered special value in this assessment.

In determining this amount, we estimated the fair market value of a share in Gindalbie before the Proposed Share Placement using the discounted cash flow method to value the Karara Project and we engaged Coffey Mining to value Gindalbie’s exploration assets.

We have cross checked the valuation using the following methods:

• the resource multiple industry rule of thumb, whereby we have compared the resource multiple implied by our discounted cash flow valuation of Gindalbie with the resource multiples of listed comparable companies and the resource multiples implied by recent transactions involving comparable companies

• recent share market trading activity in Gindalbie shares.

These are discussed in Sections 7.2 to 7.10 respectively.

7.2 Valuation of the Karara Project The discounted cash flow method estimates market value by discounting a company’s future cash flows to their net present value. To value the Karara Project using the discounted cash flow method requires the determination of the following:

• future cash flows

• an appropriate discount rate to be applied to the cash flows

• an estimate of the terminal value

• the value of any surplus assets

• the level of net debt outstanding.

Our consideration on each of these factors is presented below.

7.2.1 Future cash flows The future cash flows relied on for the purpose of the valuation have been described in Section 6.

7.2.2 Discount rates The discount rate used to equate the future cash flows to a present value reflects the risk adjusted rate of return demanded by a hypothetical investor. We have selected a nominal after tax discount rate in the range of 15.0% to 17.0% to discount the future cash flows of the Karara Project to their present value.

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In selecting this range we considered the following:

• the rates of return for comparable listed Australian iron ore companies

• asset specific issues with respect to the Karara Project including environmental approvals, early stage of development, exposure to risks of operating in the Mid West region (including reliance on an upgrade to the WestNet rail infrastructure), high cost producer and financing risks

• the debt to equity ratios of comparable listed Australian iron ore companies

• a reasonable cost of debt

• an appropriate target debt to equity ratio.

A detailed consideration of these matters is provided in Appendix 2.

7.2.3 Terminal value The Model reflects the Karara Project’s proven and probable reserves at the time of the BFS. However, the Karara Project has extensive resources located below and along strike from the reserves. It is reasonably likely that a significant proportion of these resources will be converted to reserves, either towards the end of the projection period to extend the life of the mine or earlier to underpin an expansion project.

The extent to which these resources can be converted into reserves depends on the outcomes of future exploration drilling, analysis of the geology of the resources, the capacity of the plant and infrastructure and future iron ore prices. These resources therefore represent additional upside potential for the Karara Project, which is not reflected in the discounted cash flow analysis.

We have valued Gindalbie’s 50% share of the 2,052 Mt JORC resource (exclusive of reserves) and the remaining 33 Mt of reserves as at 1 September 2008 not included in the Model by extending the discounted cash flow by 35 years to 2070 to model the additional tonnes based on the average free cash flow profile between 2014 and 2023. The extension of the discounted cash flow for a period of 35 years was determined based on an assessment of the ultimate recovery of those resources. The period 2014 to 2023 was chosen as a basis for average free cash flows as it is expected that the Karara Project will be operating within sustainable stable levels of production, operating and capital costs, working capital and taxation. We have assumed a production rate of 8 Mtpa to produce 280 Mt of magnetite concentrate from the additional tonnes mined over the 35 years to 2070.

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7.2.4 Valuation summary Our range of values for Gindalbie’s 50% interest in the Karara Project are summarised in the table below:

Table 13: Sensitivity of value of Gindalbie’s 50% interest in the Karara Project to changes in

assumptions (AUDm)

Discount rate Long term fines price (USc/dmtu)

Long term pellet price (USc/dmtu) 14.0% 15.0% 16.0% 17.0% 18.0%

70.00 145.00 445 351 269 198 136 70.00 150.00 496 398 312 238 173 75.00 155.00 536 433 344 267 199


Note: Base case is long-term fines price of 70.00 USc/dmtu, long-term pellet price of 150.00 USc/dmtu and discount rate in the range of 15.0% to 17.0%

The value of Gindalbie’s 50% interest in the Karara Project using our base price assumptions but applying higher and lower discount rates and exchange rates is summarised in the table below.

Table 14: Sensitivity of value of Gindalbie’s 50% interest in the Karara Project to changes in long term

exchange rate assumptions (AUDm)

Discount rate Long termAUD/USD exchange rate 14.0% 15.0% 16.0% 17.0% 18.0% 60.00 1 686 571 473 387 311 65.00 496 398 312 238 173 70.00 2 332 247 173 109 53


Notes:

1. AUD/USD exchange rate of 0.60 is similar to the forward curve

2. AUD/USD exchange rate of 0.70 is similar to brokers’ forecasts

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The value of Gindalbie’s 50% interest in the Karara Project using our base price assumptions but applying higher and lower discount rates and assuming a delay in the commencement of construction of the Karara Project is summarised in the table below.

Table 15: Sensitivity of value of Gindalbie’s 50% interest in the Karara Project to delays in timing

(AUDm)

Timing of construction (months delay) Discount rate 6 12 18 24 14.0% 409 342 295 260 15.0% 315 252 210 179 16.0% 234 176 138 111 17.0% 165 111 77 54 18.0% 104 55 25 5


Note: Based on base case prices of long-term fines price of 70.00 USc/dmtu, long-term pellet price of 150.00 USc/dmtu

The value of Gindalbie’s 50% interest in the Karara Project using our base price assumptions but applying higher and lower discount rates and assuming an increase in capital expenditure required for the construction of the Karara Project is summarised in the table below.

Table 16: Sensitivity of the value of Gindalbie’s 50% interest in the Karara Project to an increase in

capital expenditure (AUDm)

% increase in capital expenditure Discount rate 10% 20% 14.0% 394 291 15.0% 296 194 16.0% 211 110 17.0% 138 37 18.0% 73 -27


Note: Based on base case prices of long-term fines price of 70.00 USc/dmtu, long-term pellet price of 150.00 USc/dmtu

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The value of Gindalbie’s 50% interest in the Karara Project using our base price assumptions but applying higher and lower discount rates and assuming an expansion of the production rate to 12 Mtpa in 2011 is summarised in the table below. Capital expenditure for the 12 Mtpa expansion scenario includes an additional AUD47 million in pre-strip costs and an additional AUD600 million in costs to upgrade plant throughput.

Table 17: Sensitivity of value of Gindalbie’s 50% interest in the Karara Project to expansion to 12 Mtpa

in 2011 (AUDm)

Discount rate 12mtpa upside scenario

14.0% 667 15.0% 570 16.0% 485 17.0% 411 18.0% 347

Source: Deloitte analysis Note: Based on base case prices of long-term fines price of 70.00 USc/dmtu, long-term pellet price of 150.00 USc/dmtu

Based on the above analyses, we have selected a value of AUD225 million to AUD350 million for Gindalbie’s 50% interest in the Karara Project. In selecting this range, we have particularly had regard to the base case assumptions and probability of the Karara Project reaching the stage of production on schedule and on budget, and the probability of the 12 Mtpa upside scenario being achieved.

7.3 Valuation of exploration assets Coffey Mining has valued Gindalbie’s share of its exploration assets at between AUD16.5 million and AUD49.6 million. Coffey Mining’s detailed report is included in Appendix 7.

7.4 Surplus assets Gindalbie does not have any surplus assets.

7.5 Net cash position Gindalbie’s net cash at 31 October 2008 was as follows:

Table 18: Net cash

AUDm

Cash 124.1 Discounted cash proceeds from exercise of options 8.9 Net cash 133.0


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Cash comprises of 100% of Gindalbie’s cash of AUD25.1 million and 50% of the cash in Karara Mining, amounting to AUD99.8 million.

7.6 Number of shares outstanding We have adjusted the number of shares outstanding of 513,978,850 to take into consideration the 16,950,000 employee options on issue. The total shares outstanding including the dilutive effect of the employee options is 530,928,850.

Total cash proceeds of AUD10.7 million from the exercise of the employee options has been discounted and included in net cash in Table 18.

7.7 Valuation summary A summary of our assessed value of a share in Gindalbie is shown in the table below:

Table 19: Assessed value of a share in Gindalbie

Low High Karara Project (50%) (AUDm) 225.0 350.0 Exploration assets (Gindalbie share) (AUDm) 16.5 49.6 Total enterprise value (AUDm) 241.5 399.6 Surplus assets (AUDm) - - Net cash (AUDm) 133.0 133.0 Equity value - control basis (AUDm) 374.5 532.6 Number of shares (millions) 530.9 530.9 Per share - control basis 0.71 1.00


7.8 Valuation cross check: investment in the Karara Project

In September 2007, Gindalbie and Ansteel entered into the JVDA. The terms of the agreement stated the Karara Project would be funded on a 70/30 debt to equity ratio, with Ansteel contributing AUD372.1 million for its 50% of the Karara Project and Gindalbie contributing AUD162 million to maintain its 50% interest in the project. In our analysis, this funding arrangement implies that Ansteel has paid an effective amount of AUD210 million to earn its 50% interest in the project.

Our current valuation range of AUD225 million to AUD350 million for 50% of the Karara Project appears reasonable given the project is now significantly more advanced, which is to some extent offset by changed market sentiment. F

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7.9 Valuation cross check: EV/tonne multiples Our assessed enterprise valuation range for Gindalbie of AUD242 million to AUD400 million implies an EV/tonne of AUD0.51 to AUD0.84 based on Gindalbie’s share of contained Fe of 474 Mt as at 1 September 2008. We have compared the EV/tonne implied by the sum of the parts valuation of Gindalbie to the EV/tonne for comparable companies and comparable transactions.

The market valuation of listed companies provides evidence of an appropriate EV per tonne for Gindalbie. The price of a listed company represents the market value of a minority equity interest in that company. We have compiled EV per tonne calculations for companies comparable to Gindalbie, which are summarised in the following table.

Table 20: Comparable companies

Company EV

(AUD m)

Market capitalisation

(AUD m) Contained

Fe2 (Mt) EV / tonne

(AUD/t) Pre Production Atlas Iron Limited 70 213 553.9 0.1 Australasian Resources Limited 172 190 350.4 0.5 Brockman Resources Limited 38 74 695.8 0.1 Golden West Resources Limited 47 59 72.7 0.6 Grange Resources Limited 50 58 125.2 0.4 Sphere Investments Limited 60 89 155.0 0.4 Average 73 114 325 0.3 High 172 213 696 0.6 Low 38 58 73 0.1 Producing Fortescue Metals Group Limited 13,413 7,299 2392.2 5.6 Murchison Metals Limited 251 293 104.9 2.4 Mount Gibson Iron Limited 415 306 65.7 6.3 Average 4,693 2,633 854.3 4.8 High 13,413 7,299 2,392.2 6.3 Low 251 293 65.7 2.4 Average 1,613 953 501.3 1.8 High 13,413 7,299 2,392.2 6.3 Low 38 58 65.7 0.1

Source: Bloomberg

Note:

1. EV is calculated as market capitalisation as at 7 November 2008 plus net debt (short and long term debt less cash) from the latest financial statements

2. Contained Fe is calculated as attributable share of JORC compliant resources inclusive of reserves multiplied by the grade of material

Specific details regarding the above comparable companies are provided in Appendix 3.

The price achieved in mergers or acquisitions of comparable companies also provides evidence of an appropriate EV per tonne for Gindalbie. The acquisition price of a company represents the market value of a controlling interest in that company.

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We compiled merger and acquisition multiples for companies most comparable to Gindalbie. These companies, together with the EV/tonne implied by the transactions, are summarised in the following table.

Table 21: Comparable transactions

Company/ Asset Acquirer Location

Effectivedate/ Status

Interestacquired

%Consideration

AUDm EBITDA Multiple

EV/ tonne

Completed transactions:

Company: Portman Cleveland

Cliffs Pilbara / Mid West

19-Apr-05 80.39% 544 12.3 7.16

FMG Leucadia Pilbara 21-Aug-06 9.99% 401 n/m 3.03

Aztec Resources

Mount Gibson Pilbara 22-Dec-06 100% 208 n/m 12.84

Midwest Sinosteel Mid West 18-Sept-08 80.1%1 1,089 n/m 4.49 Portman Cleveland

Cliffs Pilbara / Mid West

04-Nov-08 14.81% 559 21.3 43.122

Company Average 560 6.88 Asset:

Hope Downs Rio Tinto Pilbara 01-Jul-05 50% 4353 n/a 1.624 Mt Gibson / Shougang JV

Mount Gibson Pilbara / Mid West

15-Sep-05 50% 174 n/a 5.12

Southdown Project

Sojitz South West 25-Jul-07 30% 17 n/a 0.32

Murchison Mitsubishi Development

Mid West 19-Sep-07 50% 150 n/m 9.78

Cape Lambert Project

MCC Pilbara 06-Aug-08 100% 400 n/a 1.21

Asset Average 235 3.61 Pending transactions: Company: ABM Grange Tasmania Pending 100% 718 n/av 4.40 AusQuest Cleveland

Cliffs Pilbara Pending 30% 27 n/m 6.00

Australasian Resource Devel. Int.

Pilbara Pending 100% 972 n/m 2.77

Mount Gibson APAC & Shougang

Pilbara / Mid West

Pending 20.1%5 1635 3.1 12.34

Strike Gallagher Holdings

Peru Pending 30.3% 103 n/m 4.66

Pending Average 397 6.03 Average 397 5.41 Source: Mergermarket, company announcements

n/m = not meaningful, n/a = not applicable, n/av = not available

Note

1. Sinosteel had an existing 19.89% shareholding in Midwest. On 18 September 2008, Sinosteel announced it had acquired a 98.52% stake in Midwest and would move to compulsorily acquire the remaining 1.48% outstanding shareholding in the company. Midwest has since been delisted.

2. Considered an outlier and excluded in calculating the average EV/tonne

3. Consideration taken as the average of the range of analyst estimates of between USD300-350m or AUD400-465m, based on the AUD/USD exchange rate as at 1 July 2005 of 0.75

4. Based on non-JORC compliant resources statement

5. Prior to the transaction, APAC held approximately 20.41% of the issued share capital of Mount Gibson. Assuming APAC and Shougang take up 100% of the AUD96.5 million rights issue, combined with the AUD66 million placement to Shougang, they will together own approximately 40.46% of the issued share capital of Mount Gibson.

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Specific details regarding the above comparable transactions are provided in Appendix 4.

In assessing the reasonableness of the implied multiples compared with the above transaction and comparable company multiples, we have also considered the following:

• the stage of development of the target companies or comparable companies

• the relative value of the transactions or the relative size of the comparable companies

• the different products produced by each of the companies

• the demand for the products produced by each of the companies

• the sovereign risk of the companies involved in the transaction or the comparable companies

• the location of the relevant resources

• the timing of the transaction.

The above analysis produces a very wide range of multiples, which results in this cross check providing only weak evidence of the value of Gindalbie. However, in our opinion, the multiples implied for Gindalbie are not inconsistent with the above transaction and comparable company trading multiples.

7.10 Analysis of recent share trading The market can be expected to provide an objective assessment of the fair market value of a listed entity, where the market is well informed and liquid. Market prices incorporate the influence of all publicly known information relevant to the value of an entity’s shares. We believe that the share price is an appropriate measure of the fair market value of a minority equity interest in Gindalbie’s shares for the following reasons:

• Gindalbie provides regular updates to the market regarding the progress of development of the Karara Project and its other iron ore interests

• Gindalbie’s shares are liquid, with 132% of issued shares traded over the period 1 January 2008 to 7 November 2008

• Gindalbie is followed by a number of equity analysts including CCZ Equities, Southern Cross Equities and BBY Limited.

Accordingly, we believe that it is reasonable to assume that the share price represents an objective assessment of the value of a minority interest in Gindalbie’s shares.

Gindalbie’s share price has traded within a range of AUD0.33 to AUD1.82 for the 12 months prior to the announcement of the Proposed Share Placement on 7 November 2008. The share price on 31 October 2008 (the last day on which Gindalbie shares traded prior to the announcement of the Proposed Share Placement) was AUD0.42. Gindalbie’s VWAP for the three months, one month and one week prior to 31 October 2008 is AUD0.69, AUD 0.43 and AUD0.37 respectively.

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The control premium of the issue price of AUD0.85 to the share price on 31 October 2008, the 1 month VWAP and the 3 month VWAP is shown in the following table.

Table 22: Implied control premium

Share price as at 31 October 2008 1 month VWAP 3 month VWAP

Premium implied by the issue price of AUD0.85

102% 100% 24%


Gindalbie’s VWAP since it resumed trading on 10 November 2008 to 16 December 2008 is 0.41. Accordingly, the issue price represents a premium of 107% over post-announcement share trading.

Share prices from market trading do not reflect the market value for control of a company as they are for portfolio holdings. Australian studies indicate the premiums required to obtain control of companies range between 20% and 40% of the portfolio holding values. The control premiums implied by comparable transactions are summarised in the table below:

Table 23: Control premiums

Control premium

Company/ Asset Acquirer

Effectivedate/ Status

Interestacquired

(%) 1 day (%) 1 week (%) 1 month (%)

Completed transactions: Portman Cleveland

Cliffs 19-Apr-05 80.39% 26 37 36

Aztec Resources

Mount Gibson

22-Dec-06 100% 21 41 37

Midwest Sinosteel 18-Sept-08 80.1% 54 36 32 Portman Cleveland

Cliffs 04-Nov-08 14.81% 21 20 17

Average 31 33 30 Pending transactions: Australasian Resource

Devel. Int. Pending 100% 57 76 77

Mount Gibson APAC & Shougang

Pending 20.1% 48 27 (45)1

Average 52 52 77 Overall Average

38 39 40

Source: Mergermarket, company announcements, Deloitte analysis

Note

1. Considered an outlier and excluded in calculating the average 1 month control premium.

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The following factors have been taken into consideration in considering the implied control premium for Gindalbie:

• the average one day control premium paid in completed mergers and acquisitions of comparable companies was 31% and for pending transactions it is 52%

• the industry is subject to significant competition, with a high level of demand for iron ore projects

• the discounted cash flow method of valuation, which in our view measures a control value, produces a result which is significantly higher than the current share trading which is on a minority interest basis

• Gindalbie owns 50% of the Karara Project and shares control of the project with Ansteel. A prospective purchaser of a controlling interest in Gindalbie does not obtain control over the major contributor to Gindalbie’s future cash flows

• under the terms of the Proposed Share Placement, Ansteel will be entitled to appoint two additional non-executive directors to the Gindalbie board resulting in Ansteel holding three of the nine board seats compared with one of the seven seats prior to the Proposed Share Placement.

Based on these considerations, we believe that the control premium implied by our assessed value for a share in Gindalbie is very high, when compared with the 31 October 2008 share price and 1 month VWAP of Gindalbie.

After taking into consideration a typical control premium of between 20% and 40%, the market price of Gindalbie appears to reflect a more pessimistic view of Gindalbie’s Karara Project than we have in our discounted cash flow valuation. This could relate to the current general economic downturn and market volatility, the market’s expectations of future iron ore prices, the likelihood of obtaining environmental approvals, financing and other factors that could affect the anticipated start date of the project.

7.11 Conclusions In our opinion, the value per share in Gindalbie on a control basis prior to the Proposed Share Placement is AUD0.71 to AUD1.00.

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8 Evaluation and conclusion In order to assess whether the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders we have:



8.1 Fairness Set out in the table below is a comparison of our assessment of the fair market value of a Gindalbie share with the proposed issue price under the Proposed Share Placement of AUD0.85.

Table 24: Evaluation of fairness

Low

(AUD) High

(AUD) Estimated fair market value of a Gindalbie share 0.71 1.00 Proposed issue price 0.85 0.85


RG111 specifies that an issue of shares that results in the allottee and its associates acquiring over 20% of the company should be analysed as if it was a control transaction. Accordingly RG111 requires the expert to assess fairness by comparing the issue price of the shares with the estimated fair market value of a share in the company assuming 100% ownership of the company. Accordingly our assessment of fairness has been prepared on a control basis.

The proposed issue price is within the range of our estimate of the fair market value of a Gindalbie share. Accordingly it is our opinion that the Proposed Share Placement is fair.

8.2 Reasonableness In accordance with RG111 an offer is reasonable if it is fair. Accordingly the Proposed Share Placement is reasonable.

We have also considered the following matters in relation to the Proposed Share Placement.

Premium to share trading The issue price represents a premium of 102% to the closing price of Gindalbie shares on 31 October 2008 (the last day on which Gindalbie shares traded prior to the announcement of the Proposed Share Placement) and a 100% premium to the VWAP for the 4 weeks up to 31 October 2008.

The control premium implied by our assessed value for a share in Gindalbie is high, when compared with the 31 October share price and 1 month VWAP. The current general economic downturn and market volatility has had an adverse impact on share trading

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prices. Other factors also contributing to the current market price for Gindalbie shares could relate to expectations of future iron ore prices, the likelihood of obtaining environmental approvals, financing and other factors that could affect the anticipated start date of the project.

Ansteel is obtaining significant influence We have considered whether Ansteel is acquiring practical control over Gindalbie through the Proposed Share Placement given the following circumstances:

• Ansteel already owns 50% of the Karara Project, subject to completion of conditions subsequent in the JVDA, and shares joint control of the project with Gindalbie. Gindalbie does not have unilateral control over the project and there is no change to this position as a result of the Proposed Share Placement

• although Ansteel will become entitled to appoint two additional non-executive directors to the Gindalbie board, it will not control the board as only three of nine board members will be nominees of Ansteel

• with a 12.65% interest Ansteel was not able to block a special resolution. If the Proposed Share Placement proceeds Ansteel will have the ability to block a special resolution.

On balance, it is our view that whilst Ansteel will have significant influence over Gindalbie, it is not obtaining practical control as a result of the Proposed Share Placement.

Gindalbie remains debt free The Proposed Share Placement will enable Gindalbie to make its final equity contribution of AUD143.68 million which was due to be made in October 2008 under the JVDA with Ansteel. The remaining AUD18.38 million will be retained by Gindalbie and will be available for general corporate, operational and working capital purposes at the absolute discretion of the Directors, including for the development of Gindalbie’s other iron ore projects.

The Proposed Share Placement will result in Gindalbie remaining debt free with considerable cash reserves. Gindalbie’s share of the cash flows generated in the early years of the Karara Project can be used for further development of the Karara Project and for the development of other iron ore projects in Gindalbie’s portfolio.

Avoids having to raise debt or further equity in a difficult market If the Proposed Share Placement is not approved by shareholders, Ansteel will continue to have an obligation, if requested by Gindalbie, to arrange debt finance for Gindalbie’s equity contribution on acceptable terms. The arrangement of this loan is a condition subsequent to the JVDA, which Ansteel is obliged to meet in order to retain its 50% interest in the joint venture.

However, should Ansteel not be able to meet its obligation to arrange the debt before the later of 3 months after approval for the Karara magnetite project under Part IV of the Environmental Protection Act 1986 and 6 June 2009, and the parties cannot agree to an extension, Gindalbie will be required to refund Ansteel all of its equity contributions to Karara Mining under the JVDA subscription program, less 50% of all costs expended in relation to the Karara Project. Ansteel will be required to transfer its shares in Karara Mining to Gindalbie and refund to Gindalbie all of its equity contributions to Karara Pellet Plant Limited for the development of the JV Pellet Plant in China less 50% of costs expended in relation to the JV Pellet Plant. Gindalbie will then hold 100% of the issued shares in Karara Mining (including the Karara Iron Ore Project mining tenements) and

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Ansteel will hold 100% of the issued shares in Karara Pellet Plant Limited. To date there have been no equity contributions made in respect of the Karara Pellet Plant Limited.

Given the current turbulence and uncertainty in the debt markets, raising new debt for an iron ore project is likely to be difficult and at a higher cost and subject to more stringent security arrangements than previously anticipated. It may therefore not be possible to raise the debt on acceptable terms. In the current market, Gindalbie may also be unable to raise the required funds through an equity raising. The potential consequence of shareholders not approving the Proposed Share Placement is therefore that the joint venture and the Karara Project could fail due to lack of funding.

Diluted participation in future growth of Gindalbie Non-Associated Shareholders will have their exposure to Gindalbie’s expected earnings diluted as their interest in Gindalbie will reduce from 87.35% to 63.72%. While Non-Associated Shareholders have not been given the opportunity to participate in the Proposed Share Placement, Non-Associated Shareholders could purchase shares on market at the prevailing share price, which is currently significantly lower than the issue price of AUD0.85.

Conclusion on reasonableness As the Proposed Share Placement is fair, it is also reasonable.

8.3 Opinion In our opinion, the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders.

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Appendix 1 Glossary

Reference Definition ABARE Australian Bureau of Agricultural and Resource Economics ABM Australian Bulk Minerals AFSL Australian Financial Services Licence AGSM Australian Graduate School of Management Ansteel collective reference for Anshan Iron and Steel Group

Corporation and Angang Group Hong Kong (Holdings) Limited

APAC APAC Resources Limited ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange Limited Atlas Iron Atlas Iron Limited AUD Australian dollars AUS Australian Auditing Standards AusQuest AusQuest Limited Australasian Australasian Resources Limited Aztec Resources Aztec Resources Limited b billion BF blast furnace BFS bankable feasibility study BHP BHP Billiton Limited bps basis points Brockman Brockman Resources Limited Bt billion tonnes Cape Lambert Cape Lambert Iron Ore Limited CAPM capital asset pricing model CDB China Development Bank Cleveland-Cliffs Cleveland-Cliffs Inc Coffey Mining Coffey Mining Pty Limited Corporations Act Corporations Act 2001 CNY Chinese yuan Deed of Amendment Deed of Amendment to Subscription Program and Joint

Venture Development Agreement dated 16 December 2008 Directors Directors of Gindalbie Deloitte Deloitte Corporate Finance Pty Limited dmtu dry metric tonne unit Domestic Index S&P/ASX 200 Accumulation Index DSO direct shipping ore EBIT earnings before interest and tax EBITDA earnings before interest, tax, depreciation and amortisation EGM extraordinary general meeting at which shareholder approval

will be sought for the Proposed Share Placement EIU Economist Intelligence Unit EMRP equity market risk premium EPA Environmental Protection Authority EV enterprise value EV/tonne enterprise value per tonne of contained Fe

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Reference Definition Explanatory Statement Explanatory Statement accompanying the notice of

Gindalbie’s extraordinary general meeting Fairstar Fairstar Resources Limited FIRB Foreign Investment Review Board FMG Fortescue Metals Group Limited FOB free-on-board FSG Financial Services Guide FY financial year Gallagher Gallagher Holdings Limited Gindalbie Gindalbie Metals Limited Golden West Golden West Resources Limited Grange Grange Resources Limited Hancock Hancock Prospecting Pty Limited HKSE Hong Kong Stock Exchange JFY Japanese financial year JORC Joint Ore Reserves Committee JV Pellet Plant Joint Venture Pellet Plant JVDA Joint Venture Development Agreement Karara BFS Karara Magnetite Project, 8 mtpa Bankable Feasibility Study

Report, August 2007 Karara Mining Karara Mining Limited Karara Project Karara Iron Ore Project Kd cost of debt capital Ke cost of equity capital km2 square kilometres Kumba Resources Kumba Resources Limited Leucadia Leucadia National Corporation MCC China Metallurgical Group Corporation Midwest Midwest Corporation Limited Mitsubishi Development Mitsubishi Development Pty Limited Model financial model based on the life of mine plan for the Karara

Project Morningstar Morningstar Inc Mount Gibson Mount Gibson Iron Limited MSCI Index Morgan Stanley Capital International Accumulation Index Mt million tonnes Mtpa million tonnes per annum Mungada BFS Mungada Hematite Project, Bankable Feasibility Study

Report, August 2007 Murchison Metals Murchison Metals Limited Non-Associated Shareholders

shareholders of Gindalbie who are not associated with Ansteel

PER Public Environmental Review Portman Portman Limited ProMet ProMet Engineers Pty Limited Proposed Share Placement

proposed share placement of 190.7m shares in Gindalbie at AUD0.85 to Ansteel

RDI Resource Development International Limited RBA Reserve Bank of Australia

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Reference Definition Rf risk free rate of return RG 111 ASIC Regulatory Guide 111 RG 112 ASIC Regulatory Guide 112 Rio Tinto Rio Tinto Limited Rm expected return on the market portfolio Royal Resources Royal Resources Limited Shougang Shougang Corporation Shougang Concord Shougang Concord International Enterprises Company

Limited Sinosteel Sinosteel Corporation Sojitz Sojitz Corporation Sphere Investments Sphere Investments Limited Strike Strike Resources Limited SWOT strengths, weaknesses, opportunities and threats Subscription Agreement Share Subscription Agreement between Gindalbie and Ansteel

dated 16 December 2008 USD United States dollar Vale Companhia Vale do Rio Doce Vital Metals Vital Metals Limited VWAP volume weighted average price WA Western Australia WACC weighted average cost of capital WestNet WestNet Rail Pty Limited wmt wet metric tonne β beta

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( ) ( )WACC EV

KeDV

Kd= + −* * ( )1 tc( ) ( )WACC EV

KeDV

Kd= + −* * ( )1 tc( ) ( )WACC EV

KeDV

Kd= + −* * ( )1 tc

aRRRK fmfe ++= − )(β

Appendix 2 Discount rate The discount rate used to equate the future cash flows to their present value reflects the risk adjusted rate of return demanded by a hypothetical investor. Discount rates are determined based on the cost of an entity’s debt and equity weighted by the proportion of debt and equity used. This is commonly referred to as the weighted average cost of capital (WACC). The WACC can be derived using the following formula:

The components of the formula are: Ke = cost of equity capital Kd = cost of debt tc = corporate tax rate E/V = proportion of company funded by equity D/V = proportion of company funded by debt The adjustment of Kd by (1- tc) reflects the tax deductibility of interest payments on debt funding. The corporate tax rate has been assumed to be 30% in Australia.

Cost of equity capital (Ke) The cost of equity, Ke, is the rate of return that investors require to make an equity investment in a firm.

We have used the Capital Asset Pricing Model (CAPM) to estimate the Ke for the Karara Project. CAPM calculates the minimum rate of return that the company must earn on the equity-financed portion of its capital to leave the market price of its shares unchanged. The CAPM is the most widely accepted and used methodology for determining the cost of equity capital.

The cost of equity capital under CAPM is determined using the following formula:

The components of the formula are: Ke = required return on equity Rf = the risk free rate of return Rm = the expected return on the market portfolio β = beta, the systematic risk of a stock α = specific company risk premium Each of the components in the above equation is discussed below.

Risk free rate (Rf) The risk free rate compensates the investor for the time value of money and the expected inflation rate over the investment period. The frequently adopted proxy for the risk free rate is the long-term government bond rate.

In determining Rf we have taken the 10-year Australian Government Bond yield on 11 December 2008 of 4.33%. The 10-year bond rate is a widely used and accepted benchmark for the risk free rate. This rate represents a nominal rate and thus includes inflation.

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Equity market risk premium (EMRP) The Equity Market Risk Premium (EMRP) (Rm – Rf) represents the risk associated with holding a market portfolio of investments, that is, the difference between the expected return on holding the market portfolio and the risk free rate. It is the excess return above the risk free rate that investors demand for their increased exposure to risk when investing in equity securities.

In selecting an appropriate EMRP to include in the estimation of the cost of equity a number of factors need to be considered:

• whether to use historical or prospective measures

• the use of arithmetic or geometric averaging for historical data

• selection of an appropriate benchmark risk free rate

• the impact of franking tax credits

• exclusion or inclusion of extreme observations.

Historical and prospective EMRP In evaluating the EMRP, we have considered both the historically observed and the prospective EMRP. The most appropriate EMRP to use in our analysis is the prospective risk premium that investors are using to evaluate current investment opportunities. However, while being theoretically preferable, it is not possible to reliably measure prospective EMRP.

The historically observed EMRP is typically used as a proxy for the prospective EMRP. The historical EMRP is estimated by comparing the historical returns on equities against the returns on risk free assets such as Government bonds. The historical EMRP has the benefit of being capable of estimation from reliable data; however it is possible that historical returns achieved on stocks were different from those that were expected by investors when making investment decisions in the past and thus the use of historical market returns to estimate the EMRP would be inappropriate.

It is also likely that the EMRP is not constant over time. The forward-looking EMRP will be influenced by several factors such as population demographics, savings rates and the increase globalisation of world markets. In particular, relatively pessimistic investors believe that the days of high EMRPs have passed and that in the future, the share market will perform similarly to the bond market. However, these views are balanced by optimistic investors who believe that the returns on shares will continue to outperform the returns on bonds by a similar margin to the past. It does seem likely that equity investors will continue to be rewarded for the additional risk of their investment and so, in the absence of any conclusive evidence to the contrary, we have placed most emphasis on the historically observed risk premium in our analysis and choice of EMRP.

We have used the historically observed EMRP as a guideline in determining the appropriate EMRP to use in this report. In particular, we have considered the recent studies undertaken by the Centre for Research in Finance at the Australian Graduate School of Management (AGSM), Morningstar Inc (Morningstar) and ABN AMRO/London Business School.

Arithmetic or geometric averaging of historical returns Empirical studies seeking to measure the historical EMRP typically average the results using either an arithmetic or geometric averaging process. Geometric averaging assumes that returns are reinvested in later periods and will be less than the arithmetic average if the returns show some variance between periods.

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We consider the arithmetic average equity risk premium to be more appropriate when discounting future cash flows. The geometric average is more appropriate when reporting past performance, since it represents the compound average return, but we believe that investors today would demand a higher premium than that calculated using a geometric average.

Risk free rate used in the analysis of historical returns To match the risk free rate included in the CAPM and discussed above, we have considered the premium calculated over the return on 10-year Government bonds.

Franking tax credits The return on the market portfolio used in calculating the EMRP may include a return that shareholders receive through franking tax credits. The evidence on franking tax credits is inconclusive and therefore we have not adjusted the cost of capital for the impact of dividend imputation.

Extreme observations – October 1987, December 2007 and October 2008 Some observers consider that the severe market movements in October 1987, December 2007 and October 2008 (and shown in the graph of the ASX 100 Accumulation Index below) were extreme observations, which are unlikely to regularly repeat themselves.

Figure 12: ASX 100 Accumulation Index

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

January1984

January1986

January1988

January1990

January1992

January1994

January1996

January1998

January2000

January2002

January2004

January2006

January2008

Source: Bloomberg

A large fall in value, such as in October 1987, will decrease the returns to equity holders and therefore the EMRP. Accordingly, ignoring this observation tends to increase the historically observed EMRP by approximately 1.4% based on the AGSM study. On balance, we favour the inclusion of October 1987, December 2007 and October 2008 within the observations as it appears that these movements merely returned the market to its longer term trend.

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Selected EMRP Three recent studies undertaken by the Centre for Research in Finance at the AGSM, Morningstar and ABN AMRO/London Business School detailed a number of estimates for the EMRP. The EMRP calculated by AGSM and Morningstar using arithmetic averaging of returns between January 1974 and December 2006, including October 1987, without adjusting for franking credits was 4.9% and 6.9% respectively. Another study undertaken by ABN AMRO/London Business School, estimated the EMRP to be 6.4% between 1900 and December 2007.

Based on the above we have adopted 6% as the EMRP which is consistent with common market practice.

This EMRP is consistent with other studies in developed markets. In particular, Roger Ibbotson and Peng Chen, of Ibbotson Associates and the Yale School of Management respectively, estimated the expected long-term equity risk premium in the US (relative to the long-term government bond yield) to be about 6% arithmetically and 4% geometrically (Financial Analysis Journal, Vol. 59, No.1, February 2003).

Beta estimate (β)

Description The beta coefficient measures the systematic risk of a company in comparison to the market as a whole. A beta of greater than one indicates greater market related risk than average, while a beta of less than one indicates less risk than average. The betas of various Australian industries listed on the ASX are reproduced below.

Figure 13: Betas for various industries (as at 30 June 2008)

-

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Div

ersi

fied

finan

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g in

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Tech

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are

& eq

uipm

ent

Cap

ital g

oods

Met

als

& m

inin

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Ret

ailin

g

Con

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ervi

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Con

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urab

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Auto

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Tran

spor

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Insu

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Com

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Med

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Pha

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bio

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stm

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xclu

ding

met

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Food

, bev

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e &

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Hea

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are

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ervi

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Food

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Util

ities

Tele

com

mun

icat

ion

serv

ices

Source: AGSM Risk Management Service

The differences are related to the business risks associated with the industry. For example, the above diagram indicates the media industry is riskier than the utilities industry. The beta for an asset can be estimated by regressing the returns on any asset against returns on an index representing the market portfolio, over a reasonable time period.

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Market evidence In estimating an appropriate beta for the Karara Project we have considered the betas of listed companies that are comparable to the Karara Project. These betas, which are presented below, have been calculated based on weekly returns, over a two year period, compared to the S&P/ASX 200 Accumulation Index (Domestic Index) and the global Morgan Stanley Capital International Accumulation Index (MSCI Index).

Table 25: Analysis of betas for listed companies with comparable operations to the Karara Project

Domestic Index MSCI Index

Company Name Ore type1

Enterprise value2

(AUDm) Gearing3

(%) Levered

Beta Unlevered

Beta Levered

Beta Unlevered

Beta Gindalbie Metals Limited H & M 111 (93) 2.84 2.84 2.25 2.25 Pre Production Atlas Iron Limited H & M 70 (206) 1.98 1.98 1.57 1.57 Australasian Resources Limited M 172 (11) 2.07 2.07 2.12 2.12 Brockman Resources Limited H 38 (96) 1.80 1.80 1.81 1.81 Golden West Resources Limited H 47 (27) 1.88 1.88 1.33 1.33 Grange Resources Limited M 50 (15) 1.38 1.38 1.02 1.02 Sphere Investments Limited M 60 (49) 1.31 1.31 1.38 1.38 Average 73 (67) 1.73 1.73 1.53 1.53 High 172 (11) 2.06 2.06 2.11 2.11 Low 38 (206) 1.31 1.31 1.01 1.01 Producing Fortescue Metals Group Limited H 13,413 46 2.22 1.40 1.75 1.10 Murchison Metals Limited H & M 251 (17) 2.61 2.60 1.87 1.87 Mount Gibson Iron Limited H 415 26 2.25 1.80 1.92 1.54 Average 4,693 18 2.36 1.93 1.84 1.50 High 13,413 46 2.60 2.60 1.92 1.87 Low 251 (17) 2.22 1.40 1.74 1.10 Average 1,613 (39) 1.94 1.80 1.64 1.52 High 13,413 46 2.60 2.60 2.11 2.11 Low 38 (206) 1.31 1.31 1.01 1.01

Source: Bloomberg

Note

1. H = hematite, M = magnetite

2. Enterprise values based on share price as at 7 November 2008 and net debt from the latest financial statements

3. Negative gearing positions arise as a consequence of cash reserves exceeding total debt

The observed beta is a function of the underlying risk of the cash flows of the company, together with the capital structure and tax position of that company. This is described as the levered beta.

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The capital structure and tax position of the entities in the table above may not be the same as the Karara Project. The levered beta is often adjusted for the effect of the capital structure and tax position. This adjusted beta is referred to as the unlevered beta. The unlevered beta is a reflection of the underlying risk of the pre-financing cash flows of the entity.

Selected beta (β) In selecting an appropriate beta for the Karara Project we have considered the following:

• the comparable companies provide a relatively broad range in terms of size, operations, ore type, geographic location and maturity

• the comparable companies selected are all Australian listed, liquid stocks which are either early stage producers or are focussing on projects currently in their developmental stages

• the comparable companies which are currently developing combined hematite and magnetite projects include Murchison and Atlas Iron. They have an average unlevered beta of 2.29 against the Domestic Index and 1.72 against the MSCI Index. Australasian, Grange and Sphere Investments are focussing solely on magnetite projects, however Sphere’s project is located in West Africa. These companies have an average unlevered beta of 1.58 against the Domestic Index and 1.50 against the MSCI Index. FMG, Mount Gibson, Brockman and Golden West are focussing solely on hematite projects and the average unlevered beta of these companies is 1.72 against the Domestic Index and 1.44 against the MSCI Index

• the comparable companies operating in the Mid West region include Murchison, Golden West and Mount Gibson. The average unlevered beta of these companies is 2.09 against the Domestic Index and 1.58 against the MSCI Index

• FMG is considerably larger than the Karara Project and this has been taken into consideration when assessing the comparability to the Karara Project

• we consider Murchison, Atlas Iron and Australasian to be most comparable to the Karara Project in terms of their proposed projects, development stage, geographical location and ore type. The unlevered betas for these companies range between 1.98 and 2.60 against the Domestic Index and 1.57 to 2.11 against the MSCI Index

• Gindalbie’s current observed beta is 2.84 against the Domestic Index and 2.24 against the MSCI Index

• assuming an unlevered beta of 1.8 to 2.1, a corporate tax rate of 30% and gearing of 25% gives a relevered beta of 2.2 to 2.6

• this relevered beta is in line with the levered betas observed for Gindalbie and the unlevered beta is within the range of observed unlevered betas for comparable companies

• this beta also reflects the Karara Project’s current risk profile. This beta is expected to decrease in line with its risk profile on completion of development of the Karara Project, once the project obtains the required government and environmental approvals and finance is secured.

On this basis we have selected a levered beta of 2.2 to 2.6 for the Karara Project.

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Dividend imputation Dividends paid by Australian corporations may be franked, unfranked, or partly franked. A franked dividend is one that is paid out of company profits which have borne tax at the company rate, currently 30%. Where the shareholder is an Australian resident individual or complying superannuation fund, it will generally be entitled to a tax credit (called an imputation credit) in respect of the tax paid by the company on the profits out of which the dividend was paid. If the recipient of the dividend is another company, the dividend will give rise to a credit in that company’s franking account thereby increasing the potential of the company to pay a franked dividend at a later stage.

We have not adjusted the cost of capital or the projected cashflows for the impact of dividend imputation due to the diverse views as to the value of imputation credits and the appropriate method that should be employed to calculate this value. Determining the value of franking credits requires an understanding of shareholders’ personal tax profiles to determine the ability of shareholders to use franking credits to offset personal income. Furthermore, the observed EMRP already includes the value that shareholders ascribe to franking credits in the market as a whole. In our view, the evidence relating to the value that the market ascribes to imputation credits is inconclusive.

Conclusion on cost of equity Based on the above factors we arrive at a cost of equity, Ke, as follows:

Table 26: Ke applied to the valuation of the Karara Project

Input Low High Risk free rate (%) 4.3 4.3 EMRP (%) 6.0 6.0 Beta 2.2 2.6 Cost of equity capital (Ke) 17.6 19.9


Cost of debt capital (Kd) We have selected a pre-tax cost of debt of between 9.5% and 10.0% as a reasonable measure of the cost of debt for the Karara Project. This rate has been determined based on our consideration of the following:

• Gindalbie’s current risk of default according to Dun and Bradstreet, the credit rating applied to a similar risk of default by Standard & Poor’s and Moody’s of approximately BB and current credit spreads for BB rated borrowers, which range from 350 to 450 basis points (bps) above the risk free rate

• the average cost of debt of listed comparable companies.

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Debt and equity mix Selecting an appropriate gearing level for valuation purposes requires a subjective judgement having regard to the quality of the cash flows of the business and the nature of the industry.

In selecting the debt to EV ratio, we have had regard to the gearing levels of companies operating in the iron ore sector as well as the nature, timing and quality of the future cash flows of the Karara Project.

Securing and underwriting the project debt is one of Ansteel’s contributions to the joint venture and discussions are continuing with CDB to provide a AUD1.4 billion senior debt facility. This debt will be in Karara Mining’s name, with Ansteel as guarantor until project completion. However, as the terms of this debt were not finalised at the time of our report we have given this less consideration in our selection of a debt to EV ratio. In addition, this represents the target debt for the project rather than the hypothetical debt level applied to the Karara Project by a potential purchaser.

In recent years a number of companies operating in the iron ore sector have had a net cash position reflecting the significant levels of operating cash flows generated by high commodity prices. Companies with comparable operations to the Karara Project currently have negative debt to EV ratios. This negative level of gearing is likely to be cyclical in nature and not reflective of the level of gearing that could be achievable in the long term. We have adopted a debt to EV ratio of 25%.

Calculation of WACC Based on the above, we have assessed the nominal post-tax WACC for the Karara Project to be:

Table 27: WACC applied to valuation of the Karara Project

Low (%) High (%) Cost of equity capital 17.6 19.9 Cost of debt capital 9.5 10.0 Debt to enterprise value ratio 25.0 25.0 Tax rate 30.0 30.0 WACC 14.9 16.6 Selected WACC 15.0 17.0


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Appendix 3 Comparable companies We provide the descriptions for each of the comparable companies as follows:

Murchison Metals Murchison Metals is an early stage iron ore producer focussing on the Mid West region of WA. The company’s Jack Hills Project, currently in stage one, produces 1.5 Mtpa, with expansion to 2 Mtpa expected in 2008. Murchison Metals is currently undertaking feasibility studies on stage two of the Jack Hills Project which would see production increase to 25 Mtpa in late 2011. Mitsubishi Corporation has a 50% interest in the Jack Hills Project. A supply agreement for 10 Mtpa from stage two of Jack Hills has been signed with Pohang Iron and Steel Company, a Korean steel maker and shareholder of Murchison.

In July 2008, Oakajee Port and Rail, a 50:50 joint venture between Murchison Metals and Mitsubishi Development, was selected as the preferred party to develop the Oakajee Port in the Mid West region of WA.

Atlas Iron Atlas Iron (Atlas Iron Limited) is an iron ore development company with projects in the Pilbara and Mid West region of WA. Atlas Iron recently commenced mining at its Pardoo project, located in the Pilbara, with production expected to reach a rate of 1 Mtpa within 12 months. Atlas Iron has entered into an agreement with a Chinese steel mill for the first shipment of iron ore from Pardoo, however the company is yet to secure a long-term offtake partner. The Abydos project, also located in the Pilbara, is planned to begin production late in 2009 at an initial production rate of 3 Mtpa. Atlas Iron is also carrying out a pre feasibility study of the Ridley magnetite project.

Australasian Australasian Resources Limited (Australasian) is a developing mining company with the company’s core asset being the Balmoral South Iron Ore Project in the Pilbara region of WA. Australasian has the right to mine 1 Bt of magnetite ore from the Susan Palmer deposit, which is part of the Balmoral deposit held by private company Mineralogy Pty Limited. Australasian is currently completing a BFS with joint venture partner Shougang Corporation (Shougang), which has the right to earn a 50% interest in the project at the completion of the study, subject to the decision to proceed.

Australasian is currently the subject of a proposed merger with private company Resource Development International Limited (RDI).

Sphere Investments Sphere Investments Limited (Sphere Investments) is a developing iron ore company which is focussing on the Guelb el Aouj Iron Ore Project in Mauritania, West Africa. The company is developing the magnetite project in partnership with the state owned iron ore producer Société Nationale Industrielle et Minière . The joint venture partners completed a Definitive Feasibility Study in April 2008, which assessed direct reduction pellet production at a rate of 7 Mtpa.

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Grange Grange Resources Limited (Grange) is a developing iron ore company which is focussing on the development of the Southdown Magnetite Project in the South West region of WA. Grange is targeting a full production rate of 6.6 Mtpa of magnetite concentrate in 2011, with mining operations scheduled to commence in 2010. Sojitz Corporation (Sojitz), a Japanese trading house, is a 30% equity participant in the project.

On 25 September 2008, Grange announced a proposed merger with Australian Bulk Minerals (ABM) subject to Grange shareholder, Foreign Investment Review Board (FIRB) and Chinese authority approval.

Brockman Brockman Resources Limited (Brockman) is a developing mining company focussing on projects in the Pilbara and Mid West region of WA. The company’s main focus is the Marillana Iron Ore Project, located in the Pilbara, which is currently the subject of a scoping study for a potential 10 Mtpa combined hematite DSO and beneficiation feed operation.

Brockman’s other projects include a 51% interest in the Carr Boyd Nickel-Copper Project north of Kalgoorlie in WA and a 40% interest in the Irwin-Coglia Nickel-Cobalt Project near Laverton in WA.

Golden West Golden West Resources Limited (Golden West) is a developing iron ore company focussed on the Wiluna West Project, a high grade hematite development located in the Mid West region of WA. Golden West is currently completing a Scoping/Pre Feasibility Study and is targeting a 10 Mtpa operation by mid 2011.

On 4 September 2007, Fairstar Resources Limited (Fairstar) announced an unsolicited, hostile bid for Golden West and had acquired a stake of approximately 22.9% when the offer expired on 11 June 2008. Concurrently, on 4 April 2008, Portman Limited (Portman) announced it had acquired an initial stake of 10% in Golden West, and over the period to 26 August 2008 increased this stake to 19.2%.

Mount Gibson Mount Gibson Iron Limited (Mount Gibson) is an Australian based iron ore mining company, with operations in mid and north-west WA. The company currently produces 3 Mtpa from its Tallering Peak operations located in the Mid West region of WA and 3 Mtpa from Koolan Island, located north-east of Broome. In October 2008, Mount Gibson announced that three of its customers had defaulted on binding offtake agreements and that it had entered into Heads of Agreements with APAC Resources Limited (APAC) and Shougang Concord International Enterprises Company Limited (Shougang Concord) to purchase iron ore under offtake agreements at a discount to the benchmark iron ore price. APAC and Shougang Concord also agreed to underwrite a AUD96.5m rights issue and Shougang Concord agreed to subscribe for AUD66m of Mount Gibson shares. As part of this underwriting and subscription agreement, Mount Gibson has agreed to accept lower prices for its iron ore production from Shougang Concord under the offtake agreement. Mount Gibson has deferred development activities at the main pit of Koolan Island and the Extension Hill magnetite project.

FMG FMG is an Australian based iron ore mining company focussed on operations in the Pilbara region of WA. Established in 2003, FMG delivered its first shipment of iron ore from the Cloudbreak mine site in May 2008. FMG is expanding capacity to 45 Mtpa by the end of 2008, and 55 Mtpa by the end of the first quarter 2009. FMG has delayed previously announced expansion plans of 55 to 100 Mtpa in 2009/2010 and 100 to 200 Mtpa in 2010.

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Appendix 4 Comparable transactions Below are the details of recent comparable transactions.

Completed transactions

Portman On 12 January 2005, Cleveland-Cliffs Inc (Cleveland-Cliffs) announced a takeover for Portman. The initial offer price was AUD3.40 per share, which was increased to AUD3.85 per share on 25 February 2005. The offer closed on 19 April 2005, with Cleveland-Cliffs attaining an 80.39% stake in Portman at a total cost of AUD544m.

Aztec Resources On 24 July 2006, Mount Gibson announced an unsolicited, hostile bid for Aztec Resources Limited (Aztec Resources), an early stage iron ore producer. Aztec Resources’ major project was the Koolan Island hematite operation. The transaction was completed on 22 December 2006 and valued Aztec at AUD208m.

Murchison Metals On 18 June 2007, Mitsubishi Development, a subsidiary of Mitsubishi Corporation, acquired a 50% stake in the iron ore assets of Murchison Metals. Under the terms of the agreement, Mitsubishi Development made an initial payment of AUD150m, while a further payment would be made on the completion of the BFS for the expansion of the Jack Hills project.

The transaction was completed on 19 September 2007, and Mitsubishi Development has pledged assistance regarding development of the required mine, road, rail and port infrastructure.

Midwest On 14 March 2008, Sinosteel Corporation (Sinosteel), a Chinese metallurgical mineral resources and mining company, made an unsolicited, all cash bid for the remaining 80.1% stake in Midwest Corporation Limited ( Midwest) that it did not already own. The offer of AUD5.60 was raised to AUD6.38 on 29 April 2008. Total consideration to acquire the 80.1% stake is AUD1,089m.

On 18 September 2008, Sinosteel announced it has acquired a 98.52% stake in Midwest, and that it will move to compulsorily acquire the remaining Midwest shares and de-list the company from the ASX.

FMG On 21 August 2006, FMG announced that Leucadia National Corporation (Leucadia) had invested AUD401m for a 9.99% stake in the company as part of a AUD3.2b capital raising. Leucadia subscribed for 26.4m shares at AUD15.20 each.

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Hope Downs Hancock Prospecting Pty Limited (Hancock) and Rio Tinto entered into a joint venture to develop the Hope Downs iron ore assets. The transaction was announced on 1 July 2005 and coincided with Hancock exercising its right to purchase Kumba Resources Limited’s (Kumba Resources) 49% stake in Hope Downs.

Rio Tinto provided the funding to buy out the option from Kumba Resources for AUD231m in addition to a further undisclosed amount. While Rio Tinto was not required to disclose the value of the transaction, analysts estimate total consideration for the 50% stake to be between USD300m and USD350m or between AUD400m and AUD465m, based on the AUD/USD exchange rate of 0.75 as at 1 July 2005.

Mount Gibson/Shougang JV On 15 September 2005, Shougang, a listed Chinese steel manufacturer, and Mount Gibson established a joint venture to develop the Extension Hill magnetite project. Shougang will contribute AUD74m along with historical costs, funding for the BFS and the mining leases for a 50% share in the JV. Mount Gibson will invest AUD174m for the remaining 50% share in the joint venture.

Cape Lambert On 26 August 2008, Cape Lambert Iron Ore Limited (Cape Lambert) announced that it had settled a sale agreement with China Metallurgical Group Corporation (MCC) for the sale of the Cape Lambert Project to MCC for a total consideration of AUD400m. The purchase consideration is payable in three tranches of AUD240m, AUD80m and AUD80m, with the last payment due on the granting of a mining lease and related construction approvals.

Southdown On 25 July 2007, Grange announced that Sojitz had agreed to acquire a 30% stake in the Southdown Project for a total consideration of AUD17m. Under the agreement, Sojitz will acquire an initial 10% stake for a AUD4.85m cash payment and earn an additional 20% stake through spending AUD12.15m on pre-committed capital expenditure.

Portman On 11 September 2008, Cleveland-Cliffs made an offer of AUD21.50 per Portman share to acquire the remaining 14.81% of the company that it did not already own. The total consideration for the 14.81% stake is AUD559m (USD452m).

On 4 November 2008, Cleveland-Cliffs announced it had acquired 97% of Portman and would compulsorily acquire the remaining shares.

Pending Transactions

ABM On 25 September 2008, Grange announced a proposed merger with privately owned ABM, the owner and operator of the Savage River Project, which comprises an open cut magnetite mine, slurry pipeline and pellet plant and port facilities located at Port Latta in Tasmania. Under the proposed merger, Grange will acquire the entire share capital of the entities which control the assets of ABM and as consideration will issue approximately 380m Grange shares, with a value of AUD1.89 per share based on the Grange share price on 24 September 2008. The merger is subject to Grange shareholder, FIRB and Chinese authority approval.

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AusQuest On 11 September 2008, AusQuest Limited (AusQuest) announced that it has entered into a strategic alliance with Cleveland-Cliffs, whereby Cleveland-Cliffs will acquire a 30% stake in AusQuest for a total consideration of AUD27m, through a staged issue of shares and options. AusQuest will initially issue 21.59m options to Cleveland-Cliffs at an exercise price of AUD0.40. Subject to shareholder and FIRB approval, Cleveland-Cliffs will subscribe for 66.7m shares at AUD0.40 per share and receive 29m additional options with an exercise price of AUD0.40 per share post the placement.

Australasian On 6 August 2008, Australasian announced it had entered into a scheme of arrangement with RDI. Australasian shareholders are to receive a share exchange to the value of AUD2.20 per share after RDI is listed on the Hong Kong Stock Exchange (HKSE). The merger is subject to a satisfactory independent expert’s report, shareholder and court approval and RDI being granted approval to list on the HKSE. The merger values Australasian at AUD972m.

On 31 October 2008, Australasian announced it was continuing discussions and activities with RDI regarding the proposed merger.

Mount Gibson In October 2008, Mount Gibson announced it entered into Heads of Agreements with APAC and Shougang Concord to purchase iron ore under offtake agreements at a discount to the benchmark iron ore price. APAC and Shougang Concord also agreed to underwrite a AUD96.5m rights issue and Shougang Concord agreed to subscribe for AUD66m of Mount Gibson shares.

Strike On 28 July 2008, Strike Resources Limited (Strike) announced that Gallagher Holdings Limited (Gallagher) had agreed to acquire a 30.3% stake in the company for a total consideration of AUD103m. Under the terms of the agreement Strike will issue 37.48m shares at an issue price of AUD2.75 per share. The transaction is subject to shareholder and FIRB approval and the successful completion of due diligence by Gallagher.

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Appendix 5 Sources of information In preparing this report we have had access to the following principal sources of information:

• audited financial statements for Gindalbie for the years ending 30 June 2006, 30 June 2007 and 30 June 2008

• annual reports for Gindalbie for the year ending 30 June 2007 and 30 June 2008

• Subscription Program for the purposes of the Agreement for the Joint Development of the Karara Iron Ore Project between Ansteel and Gindalbie

• Share Subscription Agreement Gindalbie Metals Limited and Angang Group Hong Kong (Holdings) Limited dated 16 December 2008

• Deed of Amendment to Subscription Program and Joint Venture Development Agreement dated 16 December 2008

• Joint Venture Development Agreement between Gindalbie Metals Limited, Anshan Iron and Steel Group Corporation, Angang Group Investment (Australia) Pty Limited and Karara Mining Limited

• Draft Hematite Sales Agreement Karara Mining Limited and Angang Group International Trade Corporation 1 September 2008

• Draft Concentrate Sales Agreement Karara Mining Limited and Angang Group International Trade Corporation 1 September 2008

• Draft pellet Sales Agreement Yingkou Ansteel-Gindalbie Pellet Co Limited and Angang Group International Trade Corporation 1 September 2008

• Karara Mining Limited Mungada Iron Ore Project Response to Submissions Vol 1

• annual reports for comparable companies

• company websites for Gindalbie, Ansteel and comparable companies

• publicly available information on comparable companies and market transactions published by Bloomberg Financial markets and Mergermarket

• ABARE Australian Commodities Statistics 2007

• The Tex Report Limited Iron Ore Report 2007

• other publicly available information, media releases and brokers reports on Gindalbie, Ansteel, comparable companies and the iron ore industry.

In addition, we have had discussions and correspondence with certain directors and executives, including George Jones, Chairman; Garret Dixon, Managing Director; David Southam, Chief Financial Officer; David Stokes, Company Secretary and Andrew Munckton, General Manager Operations in relation to the above information and to current operations and prospects.

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Appendix 6 Qualifications, declarations and consents

The report has been prepared at the request of the Directors of Gindalbie and is to be included in the Explanatory Statement to be given to Non-Associated Shareholders for approval of the Proposed Share Placement in accordance with Section 611.

Accordingly, it has been prepared only for the benefit of the Directors and those persons entitled to receive the Explanatory Statement in their assessment of the Proposed Share Placement outlined in the report and should not be used for any other purpose. We are not responsible to you, or any one else, whether for our negligence or otherwise, if the report is used by any other person for any other purpose. Further, recipients of this report should be aware that it has been prepared without taking account of their individual objectives, financial situation or needs. Accordingly, each recipient should consider these factors before acting on the Proposed Share Placement.

The report represents solely the expression by Deloitte of its opinion as to whether the Proposed Share Placement is fair and reasonable to the Non-Associated Shareholders.

Statements and opinions contained in this report are given in good faith but, in the preparation of this report, Deloitte has relied upon the completeness of the information provided by Gindalbie and its officers, employees, agents or advisors which Deloitte believes, on reasonable grounds, to be reliable, complete and not misleading. Deloitte does not imply, nor should it be construed, that it has carried out any form of audit or verification on the information and records supplied to us. Drafts of our report were issued to Gindalbie management for confirmation of factual accuracy.

In recognition that Deloitte may rely on information provided by Gindalbie and its officers, employees, agents or advisors, Gindalbie has agreed that it will not make any claim against Deloitte to recover any loss or damage which Gindalbie may suffer as a result of that reliance and that it will indemnify Deloitte against any liability that arises out of either Deloitte’s reliance on the information provided by Gindalbie and its officers, employees, agents or advisors or the failure by Gindalbie and its officers, employees, agents or advisors to provide Deloitte with any material information relating to the Proposed Share Placement.

Deloitte has also relied on the valuation report prepared by Coffey Mining. Deloitte has received consent from Coffey Mining for reliance in the preparation of this report.

To the extent that this report refers to prospective financial information we have considered the prospective financial information and the basis of the underlying assumptions. The procedures involved in Deloitte’s consideration of this information consisted of assistance from ProMet to provide a technical assessment of the Karara Project’s operating and capital costs up to and including 30 June 2035 in nominal AUD terms, enquiries of Gindalbie personnel and analytical procedures applied to the financial data. These procedures and enquiries did not include verification work nor constitute an audit or a review engagement in accordance with Australian Auditing Standards.

Based on these procedures and enquiries, Deloitte considers that there are reasonable grounds to believe that the prospective financial information for Gindalbie included in this report has been prepared on a reasonable basis. In relation to the prospective financial information, actual results may be different from the prospective financial information of Gindalbie referred to in this report since anticipated events frequently do not occur as expected and the variation may be material. The achievement of the prospective financial information is dependent on the outcome of the assumptions. Accordingly, we express no opinion as to whether the prospective financial information will be achieved.

Deloitte holds the appropriate Australian Financial Services licence to issue this report and is owned by the Australian Partnership Deloitte Touche Tohmatsu.

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Neither Deloitte, Deloitte Touche Tohmatsu, nor any partner or executive or employee thereof has any financial interest in the outcome of the Proposed Share Placement which could be considered to affect our ability to render an unbiased opinion in this report. Deloitte will receive a fee of AUD245,000 exclusive of GST in relation to the preparation of this report. This fee is based upon time spent at our normal hourly rates and is not contingent upon the success or otherwise of the Proposed Share Placement.

Consent to being named in disclosure document Deloitte Corporate Finance Pty Limited (ACN 003 833 127) of 240 St Georges Terrace, Perth WA 6000 acknowledges that:

• Gindalbie proposes to issue an Explanatory Statement in respect of the Proposed Share Placement

• the Explanatory Statement will be issued in hard copy and be available in electronic format

• it has previously received a copy of the draft Explanatory Statement (draft Explanatory Statement) for review

• it is named in the Explanatory Statement as the ‘independent expert’ and the Explanatory Statement includes its independent expert’s report in the Annexure to the Explanatory Statement.

On the basis that the Explanatory Statement is consistent in all material respects with the draft Explanatory Statement received, Deloitte Corporate Finance Pty Limited consents to it being named in the Explanatory Statement in the form and context in which it is so named, to the inclusion of its independent expert’s report in the Annexure to the Explanatory Statement and to all references to its independent expert’s report in the form and context in which they are included, whether the Explanatory Statement is issued in hard copy or electronic format or both.

Deloitte Corporate Finance Pty Limited has not authorised or caused the issue of the Explanatory Statement and takes no responsibility for any part of the Explanatory Statement, other than any references to its name and the independent expert’s report as included in the Annexure.

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Appendix 7 Coffey Mining report

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Coffey Mining Pty Ltd ABN 52 065 481 209 1162 Hay Street, West Perth WA 6005 Australia

www.coffey.com/mining

Independent Technical Report


Deloitte Corporate Finance Pty Limited

MWP307AL

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Coffey Mining Pty Ltd

DOCUMENT INFORMATION

Deloitte Corporate Finance Pty Limited – MWP307AL Independent Technical Report – November 2008

Author(s): Richard Hyde Associate Consultant - Geology BSc (Geol.) MAIG

John Hearne Manager Mining Perth BEng (Mining), MBA, GradDipAFI, MAusIMM

Date: 12 November 2008

Project Number: MWP307AL

Version / Status: Final

Path & File Name: F:\MINE\PROJECTS\Gindalbie Metals\MINEWPER00307AL_Gindalbie(Deloitte)_Valuation\Report\CMWPr_MWP307AL_GBG_ITR_Nov08_final.doc

Print Date: Friday, 19 December 2008

Copies: Deloitte Corporate Finance Pty Limited (2)

Coffey Mining – Perth (1)

Document Change Control

Version Description (section(s) amended) Author(s) Date

Document Review and Sign Off

Primary Author Richard Hyde

Supervising Principal John Hearne

This document has been prepared for the exclusive use of Deloitte Corporate Finance Pty Limited (“Client”) on the basis of instructions, information and data supplied by them. No warranty or guarantee, whether express or implied, is made by Coffey Mining with respect to the completeness or accuracy of any aspect of this document and no party, other than the Client, is authorised to or should place any reliance whatsoever on the whole or any part or parts of the document. Coffey Mining does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever.

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Table of Contents

EXECUTIVE SUMMARY...........................................................................................................................i

1 Introduction ................................................................................................................................. 1 1.1 Terms of Reference................................................................................................................. 1 1.2 Qualifications, Experience and Independence ........................................................................ 1 1.3 Principal Sources of Information.............................................................................................. 2 1.4 Projects Reviewed................................................................................................................... 2

2 Iron Ore Exploration Assets....................................................................................................... 3 2.1 Introduction.............................................................................................................................. 3 2.2 Tenure ..................................................................................................................................... 3 2.3 Geology and Mineralisation ..................................................................................................... 5

2.3.1 Hypogene Mineralisation ................................................................................................6 2.3.2 Supergene Mineralisation...............................................................................................6

2.4 Historic Exploration.................................................................................................................. 6 2.5 Exploration Potential................................................................................................................ 7

3 Mt Mulgine Joint Venture.......................................................................................................... 11 3.1 Introduction............................................................................................................................ 11 3.2 Tenure ................................................................................................................................... 11 3.3 Geology and Mineralisation ................................................................................................... 11 3.4 Exploration History ................................................................................................................ 12 3.5 Mineral Resources................................................................................................................. 13

3.5.1 Hill Deposit ...................................................................................................................13 3.5.2 Trench Deposit .............................................................................................................14

3.6 Exploration Potential.............................................................................................................. 15 4 Technical Valuation Background ............................................................................................ 16

4.1 Introduction............................................................................................................................ 16 4.2 Fair Market Value of Mineral Assets...................................................................................... 16 4.3 Valuation Methods................................................................................................................. 16

5 Iron Ore Assets.......................................................................................................................... 19 5.1 Valuation Method................................................................................................................... 19 5.2 Comparable Transactions ..................................................................................................... 19 5.3 Gindalbie 100% Iron Ore Rights............................................................................................ 19 5.4 Warriedar Joint Venture (Gindalbie 60%).............................................................................. 21

6 Mt Mulgine JV ............................................................................................................................ 23 6.1 Valuation Method................................................................................................................... 23 6.2 Valuation................................................................................................................................ 23

7 Material Agreements................................................................................................................. 24 7.1 Iron Ore ................................................................................................................................. 24 7.2 Other Assets.......................................................................................................................... 24

8 Valuation Summary................................................................................................................... 25

9 Glossary of Technical Terms ................................................................................................... 26

10 References ................................................................................................................................. 30

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List of Tables Table 2.5_1 – Shine Prospect – Significant Results 8 Table 2.5_2 – Lodestone Prospect – Significant Results 10 Table 3.5.1_1 – Hill Deposit - Resource Estimate 14 Table 3.6_1 – Mt Mulgine – Significant Results 2008 RC Drilling 15 Table 5.2_1 – Recent Iron Exploration Project Transactions 20 Table 8_1 – Gindalbie Metals Exploration Assets - Valuation Summary 25

List of Figures Figure 1.4_1 – Gindalbie Project Location Plan 2 Figure 2.2_1 – Gindalbie Metals Ltd - Tenement Plan 4 Figure 2.5_1 – Shine Trend Prospects 9 Figure 2.5_2 – Lodestone Prospect - Magnetics 10

List of Appendices Appendix 1 – Permit Details : Gindalbie 100% Ground Appendix 2 – Permit Details : Minjar JV Appendix 3 – Permit Details : Warriedar JV Appendix 4 – Permit Details : Mt Mulgine JV

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Deloitte Corporate Finance Pty Limited – MWP307AL Page: i Independent Technical Report – November 2008

EXECUTIVE SUMMARY

Coffey Mining Pty Ltd (Coffey Mining) has been commissioned by Deloitte Corporate Finance Pty Limited (Deloitte) to provide an Independent Technical Valuation of the Gindalbie Metals Limited (Gindalbie) assets, located in Western Australia.

The objective of this work is to provide a Valmin compliant valuation and technical assessment of the Gindalbie assets. The work has been commissioned by Deloitte with the full support of Gindalbie. Deloitte will rely upon and use the report to separately form an opinion about the value of Gindalbie in relation to a transaction with major shareholder Anshan Iron and Steel Group Corp (AnSteel), whereby AnSteel is providing funding to Gindalbie to advance the Karara Iron Ore Project and associated permits. This report does not provide a valuation of Gindalbie as a whole, nor does it make any comment on the fairness and reasonableness of any aspect of the AnSteel transaction.

Tenure

Gindalbie has a number of permits in the Midwest region of Western Australia that complement the 1.9Bt Karara Iron Ore Project. For the purposes of this valuation, the permits are separated into three groups where Gindalbie has 100% iron ore rights, 60% iron ore rights and interests in other metals at the Mt Mulgine tungsten and molybdenum prospect (Vital Metals earning 70%). Permits associated with the 50:50 joint venture with AnSteel (Karara Joint Venture) have not been reviewed by Coffey Mining.

Geology and Mineralisation

Iron Ore Properties

The Gindalbie iron ore exploration permits are located within the Yalgoo - Singleton greenstone belt. The greenstones are a supracrustal sequence embedding an older crystalline basement complex of gneissic and granitoid rocks. The supracrustal rocks from the Murchison Supergroup are subdivided into two units, the lowermost being the Luke Creek Group; the uppermost is the Mount Farmer Group.

Iron occurrences in the region are hosted by the Windanning Formation which is upper most and younger of the two member of the Luke Creek Group, containing banded iron-formation (BIF) rocks. The lower BIF is hosted by the Golconda Formation. The Luke Creek Group is tightly folded in a belt trending NNW. Work conducted by Gindalbie in the region has identified two main types of enriched BIF mineralisation, high-grade hypogene hematite mineralisation and supergene goethite ± hematite enrichment.

Mt Mulgine

The Mt Mulgine prospect area is located within the southern Yalgoo Greenstone Belt of the Archaean Yilgarn Craton. The Mt Mulgine Anticline is central to the prospect area with the core dominated by the Mulgine Granite, which is approximately 2km in diameter and is interpreted as the source of fluids associated with the tungsten-molybdenum mineralisation. The Mulgine Granite is mapped as an inner core of massive granite, surrounded by a selvage of foliated granite. The granite is variably altered to greisen, particularly close to the contact zone between the granite and enveloping stratigraphy. The surrounding contact rocks are intruded by various dykes and masses of aplite, granite and porphyritic granite.

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Deloitte Corporate Finance Pty Limited – MWP307AL Page: ii Independent Technical Report – November 2008

Exploration Potential

Iron Ore Properties

The Gindalbie properties have been the focus of intensive gold by numerous workers over the past 30 years. The region hosts significant economic mineralisation across a range of commodities including the Minjar Gold deposits, the Golden Grove copper-zinc deposit, and gold mineralisation at Mount Gibson. In 2004 and 2005, Gindalbie shifted focus from the gold and base metals potential of the group of permits to focus on iron ore mineralisation at what is now called the Karara Iron Ore Project.

The Karara Iron Ore Projects hosts some 1.9Bt of magnetite mineralisation. Since 2005, Gindalbie has, through a number of transactions, secured iron ore rights to a large holding proximal to the Karara Iron Ore Project. Work completed has included significant mapping and rock-chipping programs, which has located and delineated important hematite mineralisation at near surface at the Shine, Lister and Gap prospects. Significant magnetite mineralisation has also been located at the Lodestone prospect, some 60km southeast of the Karara Iron Ore Project.

Mt Mulgine

The Mt Mulgine prospect is located within the Murchison Region of Western Australia, and is centred on two tungsten deposits, the Hill and Trench deposits, that received significant exploration up until 1985. The prospect covers approximately 70km2, located around the margin of a granite-greisen body intruding metamorphosed and strongly altered Archaean greenstone stratigraphy. Both the Hill and Trench deposits display low dips, and have been outlined in previous drilling to only approximately 130m depth. Mineralisation comprises scheelite, associated with variable amounts of sulphide minerals, including molybdenum sulphide.

Valuation Summary

The Gindalbie properties can be classified as Exploration Areas. Having considered the various methods used in the valuation of exploration properties, Coffey Mining is of the opinion that the Multiple of Exploration Expenditure (MEE) method provides the most appropriate approach to the technical valuation of the exploration potential of mineral properties, particularly as no resources have been defined on the Gindalbie properties. A summary of the adjusted property valuations is provided in the table below.


Valuation Summary (31 October 2008)

Valuation (to three significant figures)

Properties Gindalbie

Equity Interest % Low

$M High $M

Preferred $M

Gindalbie 100% Iron Ore Exploration Potential 100% $14.4 $43.3 $26.0 Warriedar JV Exploration Potential 60% $1.75 $5.26 $3.15 Mt Mulgine JV Exploration Potential 30% $0.34 $1.03 $0.62 Total $16.5 $49.6 $29.8

The value of Gindalbie Metals Limited’s various equity interests in the Properties, at the Valuation Date (31 October 2008), is considered to lie in a range from $16.5 Million to $49.6 Million, within which range Coffey Mining has selected a preferred technical value of $29.8 Million.

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Deloitte Corporate Finance Pty Limited – MWP307AL Page: 1 Independent Technical Report – November 2008

1 INTRODUCTION

1.1 Terms of Reference

Coffey Mining Pty Ltd (Coffey Mining) has been commissioned by Deloitte Corporate Finance Pty Limited (Deloitte) to provide an Independent Technical Valuation of the Gindalbie Metals Limited (Gindalbie) assets, located in Western Australia.

The objective of this work is to provide a Valmin compliant valuation and technical assessment of the Gindalbie assets. The work has been commissioned by Deloitte with the full support of Gindalbie. Deloitte will rely upon and use the report to separately form an opinion about the value of Gindalbie in relation to a transaction with major shareholder Anshan Iron and Steel Group Corp (AnSteel), whereby AnSteel is providing funding to Gindalbie to advance the Karara Project and associated permits. This report does not provide a valuation of Gindalbie as a whole, nor does it make any comment on the fairness and reasonableness of any aspect of the AnSteel transaction.

The conclusions expressed in this Independent Technical Valuation are appropriate as at the Valuation Date (31 October 2008). The valuation is therefore only valid for this date and may change with time in response to variations in economic, market, legal or political factors, in addition to ongoing exploration results. Furthermore, Coffey Mining has not reviewed any information relating to corporate, taxation and gearing matters, nor is it qualified to do so and, as such, these have not been considered in this technical valuation.

All monetary values included in this report are expressed in Australian dollars (A$) unless otherwise stated.

This valuation represents a technical valuation which, with the exception of the application of corporate, taxation and gearing issues, has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (The Valmin Code) as adopted by the Australasian Institute of Mining and Metallurgy (AusIMM) in April 2005.

1.2 Qualifications, Experience and Independence

The primary author, Mr Richard Hyde, is a professional geologist with over 14 years international experience in the mining industry. Mr Hyde is an Associate Consultant – Geology with Coffey Mining and a Member of the AusIMM, appropriately qualified to act as a “Competent Person” as defined in the JORC Code and has the appropriate qualifications, experience and independence to satisfy the requirements as an “Expert” as defined under the Valmin Code.

In addition, Mr John Hearne was retained by the primary author as “Specialist” to respectively advise and report on mining issues associated with the Gindalbie assets. Mr Hearne is appropriately qualified and experienced to act as “Specialist” as defined in the Valmin Code.

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1.3 Principal Sources of Information

The principal sources of information used to compile this report comprise technical reports and data variously compiled by Gindalbie and its consultants, and discussions with Gindalbie technical and corporate management. A listing of the principal sources of information is included in Section 10 of this report.

No site visits were was undertaken to Gindalbie’s exploration prospects as they are at an early stage of development and no resource estimates have been completed on the prospects to date. Mr Hearne visited the Karara Iron Ore Project site in 2006.

All reasonable enquiries have been made to confirm the authenticity and completeness of the technical data upon which this report is based. A final draft of this report was also provided to Gindalbie, along with a request to identify any material errors or omissions prior to final submission.

1.4 Projects Reviewed

Gindalbie has a number of permits in the Midwest region of Western Australia that complement the 1.9Bt Karara Iron Ore Project (Figure 1.4_1). For the purposes of this valuation, permits are separated into three groups where Gindalbie has 100% iron ore rights, 60% iron ore rights and interests in other metals at the Mt Mulgine tungsten and molybdenum prospect (Vital Metals earning 70%). Permits associated with the 50:50 joint venture with AnSteel (Karara Joint Venture) have not been reviewed by Coffey Mining.

Figure 1.4_1

Gindalbie Metals Limited Project Location Plan

Over the past three years, Gindalbie has divested interests in precious and base metals to focus on developing the iron ore potential of the area surrounding the Karara Iron Ore Project via a number of transactions. These transactions are discussed in detail in Section 2.2.

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2 IRON ORE EXPLORATION ASSETS

2.1 Introduction

Gindalbie’s iron ore properties are located some 90km east of the town of Morawa and 220km inland from the Port of Geraldton on the Perenjori (SH50-06) 1:250,000 and Rothsay (SH50-06-2239) 1:100,000 scale map sheets, within the Yalgoo Mineral Field.

Access to the area is from the towns of Morawa or Perenjori along the Munckton Road. Access within the leases is via gazetted gravel roads, existing station tracks, haul roads and grid lines built by previous explorers.

2.2 Tenure

Gindalbie’s iron ore exploration permits can be separated into three groups governed by various agreements as shown in Figure 2.2_1 and detailed below:

Gindalbie Metals Ltd (100% all metals)

Minjar Joint Venture (100% iron ore rights).

Warriedar Joint Venture (60% iron ore rights).

Gindalbie Metals Ltd 100% ground was formerly subject to a joint venture agreement (Minjar JV) with Monarch Gold Ltd (15/09/2005), whereby Gindalbie had previously been the owner and operator of the permits and had divested gold and base metal interests, while retaining 100% rights to iron ore potential. On 20/03/2006, Gindalbie purchased the tenements back from Monarch as they are strategically located immediately south and southeast of the Karara Iron Ore Project. While under the Minjar JV agreement, Gindalbie had already secured the iron ore rights to the permits with the overriding purpose of the transaction being to secure ownership and management of the permits to enable Gindalbie to locate infrastructure required for the development of the Karara Iron Ore Project. Whilst these permits are prospective for metals other than iron ore, at the date of reporting, the transaction has not settled and therefore only the iron ore potential is being considered for the purposes of this valuation. The group of permits cover a total of some 593km2. Permit details for the Gindalbie 100% ground are presented in Appendix 1.

The Minjar JV ground is subject to a joint venture agreement between Gindalbie and Monarch Gold Ltd where Gindalbie holds 100% iron ore rights and Monarch Gold Ltd holds 100% gold and base metal rights. The group of permits cover a total of some 1,305km2. Permit details for the Minjar JV permits are presented in Appendix 2.

The Warriedar JV ground is subject to a joint venture agreement between Gindalbie and Royal Resources Ltd (18/05/2006) where Gindalbie has earned a 60% interest in the iron ore rights by spending a minimum of $1M over three years. The group of permits cover a total of some 220km2. Permit details for the Warriedar JV are presented in Appendix 3.

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Figure 2.2_1 Gindalbie Metals Limited

Project Location Plan

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2.3 Geology and Mineralisation

The Gindalbie iron ore exploration permits are located within the Yalgoo-Singleton greenstone belt. The greenstones are a supracrustal sequence embedding an older crystalline basement complex of gneissic and granitoid rocks. The supracrustal rocks from the Murchison Supergroup are subdivided into two units, the lowermost being the Luke Creek Group; the uppermost is the Mount Farmer Group.

Iron occurrences in the region are hosted by the Windanning Formation which is upper most and younger of the two member of the Luke Creek Group, containing banded iron-formation (BIF) rocks. The lower BIF is hosted by the Golconda Formation. The Luke Creek Group is tightly folded in a belt trending NNW.

The Windanning Formation is a succession of abundant jaspilitic BIF and grey-white chert units interlayered with felsic volcanic, volcanoclasitic, and volcanogenic rocks, and minor amounts of basalt, overlying the Gabanintha Formation. The Windanning Formation BIF units range in thickness from a few metres to 150m with interbedded felsic tuffs of a few centimetres to a few metres in thickness. The BIF is recorded as being jaspilitic, that is, with red jasper bands interlayered with grey to black hematite and/or magnetic-rich bands with white chert bands a few millimetres to a few centimetres thick. The presence of jasper bands in the Windanning formation differentiates if from the older Golconda Formation BIF.

The Windanning Formation reaches thicknesses of up to 1,000m and in the Windanning Hill area this is thickened by complex folding. The general structure of the area is an elongate NNW trending fold belt that has been intruded by post-folding granites that would appear to have further deformed and complicated the structure.

The major faulting trends are NNW to N and these faults are oblique to the regional greenstone fold axes. The dominant rock in the BIFs is chert (including jasper) which may be recrystallised to quartzite. The iron mineralogy of the unweathered BIFs is magnetite with lesser hematite. In the surface weathering profile, magnetite has been martitised (hematite pseudomorphing magnetite) up to a maximum depth of 100m below natural surface.

The iron oxides in the green schist facies BIF horizons are usually fine-grained and range between 0.05mm to 1mm and generally average around 0.3mm. Silicate intergrowths in the magnetite grains are common where iron-rich bands comprise both magnetite and iron amphiboles. Accessory minerals, mostly associated with the Fe-rich bands, include iron-silicates as aegerine augite, cummingtonite, grunerite and minnesotaite. The interbedded felsic volcanic rocks and associated rocks are of varied mineralogy; no details of these are noted in the literature. In the weathered zone, these will probably be represented by quartzose and kaolinitic weathering products with the possibility of some gibbsitic development in the near surface zone if impacted by lateritisation.

Work conducted by Gindalbie in the region has identified two main types of enriched BIF mineralisation, high-grade hypogene hematite mineralisation and supergene goethite ± hematite enrichment.

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2.3.1 Hypogene Mineralisation

The first type is structurally controlled and at present appears to be small to medium tonnage high-grade hematite mineralisation. Mineralisation is controlled by strike parallel structures commonly with an increase in grain size. Mineralisation is a combination of primary enrichment overprinted by further upgrading by supergene processes.

Mineralisation is interpreted as hypogene enrichment by dissolution of silica and partial to complete oxidation of magnetite. Structures introducing the fluids are at present not well understood, but shearing and zones of quartz veining on the margins of enrichment, brecciation and increased porosity are commonly associated with these zones of primary.

2.3.2 Supergene Mineralisation

The second style of mineralisation is dominantly goethite and appears to be supergene enrichment of favourable facies of BIF units. Given significant strike lengths and widths to prospects associated with this style of mineralisation, there is potential to yield larger tonnage deposits.

Mineralisation tends to form low to medium grade supergene goethite ± hematite mineralisation with 55% Fe, less that 8% silica with generally high LOI and low phosphorous grade.

2.4 Historic Exploration

The Gindalbie properties have been the focus of intensive gold and base metals exploration by numerous entities over the past 30 years. The region hosts significant economic mineralisation across a range of commodities including the Minjar Gold deposits, the Golden Grove copper-zinc deposit and gold mineralisation at Mount Gibson. In 2004 and 2005, Gindalbie shifted focus from the gold and base metals potential of the group of permits to focus on iron ore mineralisation.

Since 2005, Gindalbie has through a number of transactions secured iron ore rights to a large holding proximal to the Karara Iron Ore Project. Work completed has included significant geophysical interpretation programs, mapping and rock-chipping programs, which has located and delineated important hematite mineralisation at near surface at the Shine, Lister and Gap prospects (Figure 2.5_1). This work has led to Gindalbie undertaking a number of reverse circulation (RC) and diamond drilling (DD) drilling programs over thier tenement holdings. Whilst initial focus has been on the Karara Iron Ore Project, more recent focus has been on identifying and testing potential DSO targets within 100% and JV ground.

Significant magnetite mineralisation has also been located at the Lodestone prospect, some 60km southeast of the Karara Iron Ore Project. Initial Davis Tube Results (DTR) indicates that recoveries of greater than 30% may be achieved. F

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2.5 Exploration Potential

Gindalbie’s 100% and JV iron ore permits have significant economic potential. Gindalbie’s recent focus on iron ore mineralisation has produced a number of targets outside the Karara JV. Discoveries along the Shine Trend and more recently at Lodestone have been worked up from first principals, via target selection following aeromagnetic interpretation, prospect mapping and rock chip sampling, followed by a logical sequence of RAB, RC and DD drilling.

The Shine Trend prospects include Shine, Lister and Gap, amongst other early stage targets (Figure 2.5_1). With further work, it is likely that geological continuity relating to the high grade hematite mineralisation will be better understood which will lead to the definition of economic resources. A summary of significant results from drilling at the Shine Prospect is presented below in Table 2.5_1.

Gindalbie discovered the Lodestone Prospect in 2007. The Lodestone Prospect consists of a BIF that is about 6km long, with a similar magnetic intensity to the Karara magnetite deposit (Figure 2.5_2). Mapping confirmed that the aeromagnetic anomaly is associated with multiple BIF units interbedded with shale across a width of 500m. Rock chip sampling also encountered areas of hematite-goethite enrichment at surface. RC drilling was completed on approximately 800m by 200m centres over a strike length of roughly 4km in mid 2007. A number of significant results were returned (Table 2.5_2) and metallurgical testwork indicates that recoveries exceeding 30% may be achieved.

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Figure 2.5_1 Gindalbie Metals Limited Shine Trend Prospects

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Figure 2.5_2 Gindalbie Metals Limited

Lodestone Prospect (Magnetics)

Table 2.5_2 Gindalbie Metals Limited

Lodestone Prospect - Significant Results

Concentrate Grade Head Grade Hole ID From

m To m

Interval m

Recovery% Fe% Si02% P% S% Fe% Si02% P% S%

LSC002 54 70 16 36.1 69.6 3.6 0.011 0.018 34.7 42.3 0.068 0.193 LSD003 116 156 40 24.6 64.3 9.7 0.011 0.121 25.6 48.8 0.049 0.253 LSD004 80 172 92 27.9 64.6 8.1 0.022 0.123 32.8 40.5 0.06 0.433 LSD005 80 353 273.2 36.6 66.7 6.7 0.015 0.057 33.9 43.9 0.063 0.282 LSC009 68 100 32 30.8 68.1 4.9 0.022 0.116 31.2 46.2 0.047 0.175 LSC009 144 168 24 22.6 65.7 7.3 0.035 0.683 28.4 48 0.043 0.245 LSC009 188 204 16 31.8 68.4 4.3 0.024 0.398 32.2 44.8 0.05 0.175 LSC012 104 248 144 32.9 70.1 3 0.015 0.095 32.5 44.7 0.06 0.308 LSC013 32 72 40 19.2 66 6.7 0.015 0.389 24.3 48.9 0.037 0.183 LSC013 204 240 36 25 67.9 4.8 0.02 0.878 29.1 47.1 0.054 0.342 LSC018 92 248 156 41.2 66 8.1 0.017 0.06 35.2 42.6 0.073 0.066

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3 MT MULGINE JOINT VENTURE

3.1 Introduction

The Mt Mulgine prospect covers an area 70km2 within the Murchison District of Western Australia. The prospect is located 350km north-northeast of Perth, and 300km east-southeast of the regional port of Geraldton.

Access to the prospect is via the Great Northern Highway north from Perth, or via sealed highway from Geraldton. The nearest townships are Yalgoo, located 45km to the north, and Payne’s Find, located 35km to the east on the Great Northern Highway.

The prospect area is within a semi-arid subtropical continental climatic regime, and the terrain is flat to gently undulating, dominated by dense low acacia scrub. Mt Mulgine is the highest point in the prospect area, rising approximately 50m above the surrounding plain.

3.2 Tenure

The Mt Mulgine JV prospect comprises two granted Exploration Licences, one Exploration Licence Application, four granted Mining Leases, three Mining Lease Applications, and six granted Prospecting Licences (Appendix 4), all held in the name of Gindalbie Metals Limited. All tenements are held in the name of Gindalbie Metals Limited.

Vital Metals has agreed to farm-in to earn 40% equity in the Mt Mulgine properties by issuing Gindalbie two million fully paid shares and by spending $500,000 on exploration within three years of listing on ASX. Vital Metals is obliged to spend $250,000 on exploration before it can withdraw. Vital Metals can earn an additional 30% via expenditure of a total of $750,000 on exploration within the three years. Coffey Mining understands that these conditions have been met. Subsequently, Gindalbie is contributing to expenditure consistent with its proportion of equity. Gindalbie can however, dilute its interest to a minimum of 5%, after which it is required to relinquish its equity in favour of a 2% net royalty.

3.3 Geology and Mineralisation

The Mt Mulgine Prospect area is located within the southern Yalgoo Greenstone Belt of the Archaean Yilgarn Craton. The Yalgoo Greenstone Belt comprises typical supracrustal greenstone rocks, including mafic and felsic volcanic rocks, banded iron formation and clastic sedimentary rocks. The belt is north-south trending, and broadens to the south where it is cored by a high-level, multi-phase granitoid that has metamorphosed and invaded the surrounding greenstone sequence.

The regional structure is dominated by the north-south trending Yalgoo Greenstone Belt, which records the multi-phase deformation characteristic of Archaean greenstone sequences. This belt opens to the south into the regional scale Mt Mulgine Anticline. The north-south Minjar Shear, which hosts gold mineralisation to the north at Minjar, is interpreted to diverge to the southeast, defining the eastern margin of the Mt Mulgine Anticline, while north to north-northeast trending faults disrupt the stratigraphy on the western margin of the anticline.

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In addition to the Minjar Gold deposits, the Yalgoo Greenstone Belt hosts the Golden Grove copper-zinc deposit on its eastern margin, and gold mineralisation at Mount Gibson, approximately 60km south of Mt Mulgine.

The greenstone sequence within the Mt Mulgine prospect area is dominated a layered sequence of contact metamorphic rocks comprising mica schist, amphibolite and talc-chlorite schist, representing metasedimentary rocks and mafic and ultramafic volcanic rocks. The sequence trends broadly east-west across the hinge of the Mt Mulgine Anticline, and is interpreted from exploration drilling to dip at a shallow angle away from the core of the anticline.

The Mt Mulgine Anticline is cored by the Mulgine Granite, a stock of leucocratic granite, which is approximately 2km in diameter and is interpreted as the source of fluids associated with the tungsten-molybdenum mineralisation. The Mulgine Granite gives dates of approximately 2.7 billion years, consistent with the overall age of the greenstone belts.

The Mulgine Granite is mapped as an inner core of massive granite, surrounded by a selvage of foliated granite. The granite is variably altered to greisen, particularly close the contact zone between the granite and enveloping stratigraphy. The surrounding contact rocks are intruded by various dykes and masses of aplite, granite and porphyritic granite. The Mulgine Granite and Yalgoo Greenstone Belt are confined to the south and southeast by a post-tectonic granite batholith. Dolerite dykes of presumed Proterozoic age are recorded to intrude the Mulgine Granite and adjacent supracrustal rocks.

The emplacement of the Mt Mulgine Granite is interpreted to have been accompanied by widespread tungsten and molybdenum mineralisation within both the carapace of the granite itself and the surrounding contact metamorphic rocks. A wide zone of contact metamorphism is described surrounding parts of the granite, and the association of the Trench and Hill deposits with a broad area of low magnetic response suggests that the granite lies at shallow depth beneath much of the mineralised area.

3.4 Exploration History

Molybdenum mineralisation hosted by Mulgine Granite was first exploited by small scale mining between 1910 and 1920, however there is no record of production from this period. The only other significant recorded historic activity was during 1938, when Big Bell Mines Limited excavated a series of shallow trenches over the molybdenum mineralisation.

Modern exploration within the area commenced in 1965, when Westfield Minerals tested two separate areas in the vicinity of the original molybdenum occurrence at Mt Mulgine. A total of 47 shallow inclined percussion drillholes were completed. No records of the results of this work are available. F

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Between 1968 and 1969, Newmont Pty Ltd tested the molybdenum mineralisation with soil sampling. Twenty six vertical percussion drillholes, to depths of between 30m and 60m, and 16 diamond drillholes, to depths up to 120m, were completed. The best intercepts from this drilling included 40m averaging 0.11% Mo and 15m averaging 0.2% Mo from percussion drillholes, and 15m averaging 0.10% Mo in diamond drilling.

Minefields Exploration NL (Minefields) conducted exploration between 1970 and 1976, and in joint venture with the Union Carbide subsidiary, Australia and New Zealand Exploration Company (ANZECO), between 1976 and 1982. Minefields analysed earlier soil samples for tungsten and completed 187 diamond drillholes between 1970 and 1973, 116 of which evaluated the Hill deposit. A detailed pre-feasibility study was initiated in 1974, incorporating metallurgical and processing studies based on a combination of gravity and flotation separation, and proposed mining by underground methods based on a polygonal estimate of mineralisation. The study led to a graphical estimate of grade-tonnage for mineralisation. Underground drives were excavated to provide geological data and bulk samples for metallurgical testwork.

The Trench deposit was the subject of soil sampling between 1967 and 1971, and was confirmed by diamond drilling during 1972. Systematic auger soil sampling over the Trench deposit in 1976 led to the discovery of an extension to mineralisation. Mineralisation was delineated over a strike length of 4,500m, dipping between 35º and 45º to the northwest, over a thickness of approximately 30m. Significant metallurgical testwork was undertaken based on underground sampling.

Additional drilling was conducted at the Hill deposit during 1977. A best intercept of 1.5m averaging 0.5% Mo was encountered beneath the tungsten zone and another intercept of 9m averaging 0.34% Mo within greisen. The main body of mineralisation was delineated as dipping 20º northwest over a strike length of 1,500m, and between 1.5m and 18m in thickness.

Gindalbie acquired the licences over the Mt Mulgine prospect in 1994 as part of their previous strategy to explore for gold in the region. Gindalbie completed a review of previous work and a resource estimate of the Hill Deposit based on historic data resulting in estimations of mineralisation are consistent with an Inferred Resource of 5.1Mt averaging 0.24% WO3 at a cutoff grade of 0.1% WO3, for 1.2 Million MTU of tungsten oxide. In May 2005, Gindalbie entered into a joint venture agreement with Vital Metals.

3.5 Mineral Resources

3.5.1 Hill Deposit

Gindalbie published a resource estimate for the Hill deposit in July 2004. Utilising entirely historic exploration data, Gindalbie estimated and classified Mineral Resources (Table 3.5.1_1). Gindalbie outlined three zones of mineralisation based on a cutoff grade of approximately 0.1% WO3 and a minimum drillhole intersection of 3m. Historic quality control data was assessed. The study used a kriging estimate into 20m x 20m x 5m blocks and a minimum of three data points.

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Table 3.5.1_1 Gindalbie Metals Ltd

Hill Deposit Resource Estimate

Category Tonnes Grade (% WO3)

Cutoff Grade (% WO3)

Metal (MTU1 WO3)

Indicated 4,140,000 0.25 0.1 1,041,000 Inferred 949,000 0.21 0.1 203,000 Total 5,089,000 0.24 0.1 1,244,000

The Gindalbie resource study completed on the Hill deposit was undertaken in a diligent manner by suitably experienced practitioners. Coffey Mining previously reviewed this study in an Independent Geologist’s Report used to support the listing of Vital Metals Ltd in 2006 and considered that the resource classification assigned by Gindalbie was optimistic on the following basis:

Gindalbie developed a mineralisation model but did not prepare a geological model for the deposit.

The historic exploration results were not been validated by recent exploration activities or surveying.

Gindalbie applied generic, rather than measured, bulk density values.

No estimate was made to differentiate mineralisation either above or below the base of oxidation.

Coffey Mining considers that a programme of data validation may result in the Gindalbie estimate for resources at the Hill Deposit being sustained, however the level of confidence in the outcomes is significantly reduced by those parameters not well constrained in the present study. On this basis, Coffey Mining considers the results as only consistent with classification of the total reported mineralisation as Inferred Resources, as set down in guidelines under the JORC Code.

3.5.2 Trench Deposit

An estimate of the tonnage and grade of the Trench deposit was reported by Minefields in 1981. Historic estimates for the Trench deposit suggest the potential for 83Mt averaging 0.14% WO3 at a cutoff grade of 0.1% WO3. This estimate was reported as “insitu drill indicated reserves”, which is not consistent with current reporting guidelines as set down in the JORC Code. Two zones (Zone A and Zone B) were delineated on the basis of relative tungsten and molybdenum contents. Both zones were further classified as either scheelite-rich and molybdenum-poor (less than 0.025% Mo) or as scheelite-poor and molybdenum-rich (greater than 0.025% Mo). F

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3.6 Exploration Potential

The Hill and Trench deposits at Mt Mulgine have the potential to be advanced with limited additional exploration. At the Hill Deposit, estimations of mineralisation are consistent with an Inferred Resource of 5.1Mt averaging 0.24% WO3 at a cutoff grade of 0.1% WO3, for 1.2 Million MTU of tungsten oxide. Historic estimates for the Trench deposit suggest the potential for 83Mt averaging 0.14% WO3 at a cutoff grade of 0.1% WO3, which is significantly lower in grade relative to the Hill deposit. Based on good comparison between historic and recent estimates for the Hill Deposit, Coffey Mining considers that historic assessments of the Trench Deposit provide a reasonable estimate of the quantum and grade of mineralisation outlined by the existing drilling.

Recent work completed by Vital Metals returned low grade tungsten and molybdenum mineralisation (Table 3.6_1). The results confirmed the tenor of mineralisation at the Trench deposit as indicated by historic drilling and indicate mineralisation extends to the south-east towards the Hill deposit. The results also indicate there are further tungsten and/or molybdenum prospects within the property area that warrant further exploration.

Table 3.6_1

Gindalbie Metals Limited Mt Mulgine - Significant Results 2008 RC Drilling

Hole ID From To WO3 % Mo % Au g/t VMRC006 0 149 0.13 including 68 78 0.23 and 92 100 0.21 and 112 116 0.55 VMRC006 44 149 0.03 VMRC006 12 16 0.53 VMRC006 68 82 1.5 VMRC007 0 52 0.1 VMRC007 0 54 0.05 VMRC007 64 72 0.034 VMRC007 106 179 0.026 VMRC004 108 112 0.1 VMRC004 120 124 0.16 VMRC012 60 76 0.05 VMRC012 96 104 0.034

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4 TECHNICAL VALUATION BACKGROUND

4.1 Introduction

The opinions expressed and conclusions drawn with respect to this valuation are appropriate at the valuation date. The valuation is only valid for this date and may change with time in response to variations in economic, market, legal or political conditions in addition to on going exploration results. The objective of a mineral asset valuation is to establish a “fair market” value for an asset in the context of all the foregoing factors.

4.2 Fair Market Value of Mineral Assets

Mineral assets are defined in the Valmin Code as all property including, but not limited to real property, mining and exploration tenements held or acquired in connection with the exploration, the development of and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

Regardless of the valuation techniques adopted, the consideration must reflect the perceived “fair market value”, which is described in Definition 41 of the Valmin Code as “the estimated amount of money, or the cash equivalent of some other consideration for which, in the opinion of the Expert reached in accordance with the provisions of the Valmin Code, the mineral asset or security should change hands on the Valuation Date between a willing buyer and a willing seller in an ‘arm’s length’ transaction, wherein each party had acted knowledgeably, prudently and without compulsion”.

In effect, therefore, the valuation expert is assumed to have the knowledge and experience necessary to establish a realistic value for a mineral asset. The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change. Other factors that can influence the valuation of a specific asset include the size of the company’s interest, whether it has sound management and the professional competence of the asset’s management. All these issues can influence the market’s perception of a mineral asset over and above its technical value.

4.3 Valuation Methods

When valuing an exploration or mining tenement, the Expert is attempting to derive a value that reflects the potential of the tenement to yield an ore reserve and which is, at the same time, in line with what the tenement will be judged to be worth when assessed by the market. Arriving at the value estimate by way of a desktop study is somewhat difficult because there are no hard and fast rules and no single industry-accepted approach.

It is obvious that on such a matter, based entirely on professional judgement, where the judgement reflects the valuation Expert’s previous geological experience, local knowledge of the area, knowledge of the market and so on, that no two valuers are likely to have identical opinions on the merits of a particular property and therefore, their assessments of value are likely to differ, sometimes markedly.

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There are numerous recognised methods used in valuing “mineral assets”. The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset, and the quantity and type of information available in relation to any particular asset.

The Valmin Code, which is binding upon “Experts” and “Specialists” involved in the valuation of mineral assets and mineral securities, defines the level of asset maturity under the following categories:

“Exploration Areas” refer to properties where mineralisation may or may not have been identified, but where a mineral resource has not been identified.

“Advanced Exploration Areas and Pre-Development Projects” are those where Mineral Resources have been identified and their extent estimated, but where a positive development decision has not been made.

“Development Projects” refers to properties which have been committed to production, but which have not been commissioned or are not operating at design levels.

“Operating Mines” are those mineral properties, which have been fully commissioned and are in production.

The various recognised valuation techniques are designed to provide the most accurate estimate of the asset value in each of these categories of project maturity. In some instances, a particular mineral property or project may include assets that logically fall under more than one of these categories.

In the case of Pre-development, Development and Mining Projects, where Measured and Indicated Resources have been estimated and mining and processing considerations are known or can be reasonably determined, valuations can be derived with a reasonable degree of confidence by compiling a discounted cash flow (DCF) and determining the net present value (NPV).

Where mineral resources remain in the Inferred category, reflecting a lower perceived level of technical confidence, the application of mining parameters is inappropriate and their economic value can therefore not be demonstrated using the more conventional DCF/NPV approach. A similar situation may apply where economic viability cannot be readily demonstrated for a resource assigned to a higher confidence category. In these instances it is frequently appropriate to adopt the in situ Resource (or "Yardstick") method of valuation for these assets. This technique involves application of a heavily discounted valuation of the total in-situ metal contained within the resource. This may vary substantially in response to a range of additional factors including physiography, infrastructure and the proximity of a suitable processing facility.

In the case of Exploration Areas, and to a lesser extent Advanced Exploration Areas, however, the potential is more speculative and the valuation is dependent to a large extent on the informed, professional opinion of the valuer.

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Where useful previous and committed future exploration expenditure is known or can be reasonably estimated, the Multiple of Exploration Expenditure (“MEE”) method is considered to represent one of the more appropriate valuation techniques. This method involves assigning a premium or discount to the relevant effective Expenditure Base (“EB”), represented by past and future committed expenditure, through application of a Prospectivity Enhancement Multiplier (“PEM”). This factor directly relates to the success or failure of exploration completed to date, and to an assessment of the future potential of the asset. The method is based on the premise that a “grass roots” project commences with a nominal value that increases with positive exploration results from increasing exploration expenditure. Conversely, where exploration results are consistently negative, exploration expenditure will decrease along with the value.

Other valuation methods can be adopted to assist in confirming conclusions drawn from the MEE approach. Where sale transactions relating to mineral assets that are comparable in terms of location, timing and commodity, and where the terms of the sale are suitably “arms length” in accordance with the Valmin Code, such transactions may be used as a guide to, or a means of, valuation.

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5 IRON ORE ASSETS

5.1 Valuation Method

The Gindalbie iron exploration properties can be classified as Exploration Areas. Having considered the various methods used in the valuation of exploration properties, Coffey Mining is of the opinion that the Multiple of Exploration Expenditure (MEE) method provides the most appropriate approach to the technical valuation of the exploration potential of mineral properties, particularly as no resources have been defined on the properties to date.

5.2 Comparable Transactions

Coffey Mining has completed a search for recent publicly available market transactions involving iron ore exploration properties in Western Australia, which have been summarised in Table 5.2_1 below. The transactions identified have specifically targeted sizeable tenement holdings over historic mineral fields in western and northern Australia which are considered prospective for either low to high-grade structurally iron ore deposits. The transactions identified along with the implied cash-equivalent values are summarised in Table 5.2_1.

Analysis of these market transactions indicates that the implied value of advanced iron exploration properties have implied values generally between $25,000/km2 and $60,000/km2.

While the majority of these transactions predate the significant rises in spot and contract iron ore prices in 2006 and 2007, the continued recent contraction in the equity and debt markets and subsequent fall in the spot iron ore price, has had a significant effect on mineral asset values, and the ability of companies to raise capital required to finance the development of major projects.. The current global financial crisis has caused equity prices to contract over much of 2008, with a sharp drops experienced in the previous quarter particularly for iron ore producers and explorers. This has resulted in listed iron ore producers and explorers trading at share prices consistent with the previous levels within the date ranges of the selected comparative transactions. Therefore Coffey Mining considers that the implied value ranges provided by the publicly available market transactions are appropriate in the current market.

5.3 Gindalbie 100% Iron Ore Rights

For the purposes of this valuation, Coffey Mining has combined the Gindalbie Metals 100% and Minjar JV ground as these permits retain 100% interest with respect to iron ore potential. Through a series of transaction in 2005 and 2006, Gindalbie divested interests in gold and base metals, although as discussed earlier, in March 2008, Gindalbie purchased back interests in all metals/commodities from Monarch Gold Ltd over a number of permits included in the Minjar JV. As at the date of this valuation, the transaction is yet to settle. Therefore for the permits affected by the agreement, only the iron ore potential is being considered.

Permits in which Gindalbie retain 100% iron ore interests include Lodestone and a portion of the Shine prospect. The Shine Project straddles two permits, the southern permit of which is included in the Warriedar JV in which Gindalbie retains a 60% interest. The permits cover some 743km2 of granted prospective iron ore tenements and a cumulative strike of exceeding 100km of BIF stratigraphy.

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In valuing the exploration potential associated with the Gindalbie 100% owned iron ore potential, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method. As far as can be reasonably ascertained, exploration expenditure on the Gindalbie’s 100% iron ore interest permit since 2005 approximates $14.4M. Most of this exploration expenditure has been spent on regional programs including airborne and ground geophysical surveys, prospect mapping and rock chip sampling which has led to a number of RC and DD drilling programs.

Coffey Mining has reasonably elected to assign a range of productivity enhancement multipliers (PEMs) from 1.0 to 3.0 to the EB of $14.4M to derive a range of provisional values for the exploration potential associated with the Gindalbie’s 100% interest iron ore permits from $14.4M to $43.3M, within which range we have selected a preferred provisional value of $26.0M towards the middle of this range.

The preferred value reflects the significant potential the Shine and Lodestone prospects. Gindalbie’s recent work has directly led to the discovery of these prospects, which with further work is likely to add to the Company’s mineral inventory, and ultimately the resource base for the Karara Iron Ore Project. The Shine prospect has potential for near surface DSO which would be beneficial to any start-up operation. Lodestone has the potential to be developed into a significant magnetite resource with further work and exploration success. The preferred value also takes into account the recent contraction within the iron ore market, and recent sharp fall in the spot iron ore price.

Coffey Mining’s analysis of the market transactions summarised in Section 5.2 indicates that the implied value of strategically located iron ore exploration projects in Western Australia generally lies in the range $25,000/km2 to $60,000/km2, which relates to approximately $18.6M to $44.6M for the granted permits (743km2). On this basis, Coffey Mining considers that its valuation derived via the Multiple of Exploration Expenditure method is consistent with the values implied by the various market transactions.

Coffey Mining considers that the value of a 100% interest in the Gindalbie’s 100% interest iron ore permits as at the Valuation Date (31 October 2008) lies within a range from $14.4M to $43.3M, within which range we have selected a preferred value of $26.0M.

5.4 Warriedar Joint Venture (Gindalbie 60%)

The Warriedar JV permits includes a significant portion of the Shine prospect. The Shine Project straddles two permits, the southern permit of which is included in the Warriedar JV in which Gindalbie retains a 60% interest. Importantly, the Warriedar JV permits contain significant potential along strike to south. The permits cover some 179km2 of granted prospective iron ore tenements and a cumulative strike of exceeding some 15km of BIF stratigraphy.

In valuing the exploration potential associated with the Warriedar JV iron ore permits, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method. As far as can be reasonably ascertained, exploration expenditure on the Gindalbie’s 100% iron ore interest permit since 2005 approximates $2.92M. Most of this exploration expenditure has been spent on regional programs including airborne and ground geophysical surveys, prospect mapping and rock chip sampling which has led to a number of RC and DD drilling programs.

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Coffey Mining has reasonably elected to assign a range of productivity enhancement multipliers (PEMs) from 1.0 to 3.0 to the EB of $2.92M to derive a range of provisional values for a 100% interest in the exploration potential associated with the Warriedar JV permits from $2.92M to $8.76M, within which range we have selected a preferred provisional value of $5.26M towards the middle of this range.

While the preferred value reflects the significant potential the Shine Prospect, and the Gap and Lister prospects along strike to the south, it also takes into account the recent contraction within the iron ore market, and recent sharp fall in the spot iron ore price. Gindalbie’s recent work has directly led to the discovery of the Shine, Gap and Lister prospects, which with further work, is likely to add to Gindalbie’s mineral inventory, and ultimately to the resource base for the Karara Iron Ore Project.

Coffey Mining’s analysis of the market transactions, summarised in Section 5.2, indicates that the implied value of an iron ore exploration properties in Western Australia generally lies in the range $25,000/km2 to $60,000/km2, which relates to approximately $4.46M to $10.7M for a 100% interest in the iron ore potential of the granted permits (179km2). On this basis, Coffey Mining considers that its valuation derived via the Multiple of Exploration Expenditure method is consistent with the values implied by the various market transactions.

Coffey Mining considers that the value of a Gindalbie’s 60% interest in the Warriedar JV iron ore permits as at the Valuation Date (31 October 2008) lies within a range from $1.75M to $5.26M, within which range we have selected a preferred value of $3.15M.

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6 MT MULGINE JV

6.1 Valuation Method

The Mt Mulgine prospect can be classified as Exploration Area. Having considered the various methods used in the valuation of exploration properties, Coffey Mining is of the opinion that the Multiple of Exploration Expenditure (MEE) method provides the most appropriate approach to the technical valuation of the exploration potential of mineral properties, particularly as no resources have been defined on the properties to date.

6.2 Valuation

In valuing the exploration potential associated with the Mt Mulgine JV permits, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method. As far as can be reasonably ascertained, exploration expenditure on the prospect since 2005 approximates $1.145M. Most of this exploration expenditure has been spent on data compilation and confirmatory RC and DD drilling programs by Vital Metals.

Coffey Mining has reasonably elected to assign a range of productivity enhancement multipliers (PEMs) from 1.0 to 3.0 to the EB of $1.15M to derive a range of provisional values for a 100% interest in the exploration potential associated with the Mt Mulgine JV permits from $1.15M to $3.44M, within which range, Coffey Mining has selected a preferred provisional value of $2.06M towards the middle of this range.

The preferred value reflects the significant work require to update historic resource estimates, and the general low grade nature of the tungsten and molybdenum mineralisation.

Coffey Mining considers that the value of a Gindalbie’s 30% interest in the Mt Mulgine JV as at the Valuation Date (31 October 2008) lies within a range from $0.34M to $1.03M, within which range we have selected a preferred value of $0.62M.

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7 MATERIAL AGREEMENTS

7.1 Iron Ore

Gindalbie’s iron ore exploration permits can be separated into three groups governed by various agreements as shown below and detailed in Section 2.2:

Gindalbie Metals Ltd (100% all metals)

Minjar Joint Venture (100% iron ore rights)

Warriedar Joint Venture (60% iron ore rights)

7.2 Other Assets

The Mt Mulgine (Tungsten and Molybdenum) is subject to a joint venture agreement between Gindalbie and Royal Resources Ltd Vital Metals has farmed into the permits and earned 70% equity. This transaction is described in detail in Section 3.2.

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8 VALUATION SUMMARY

The Gindalbie properties can be classified as Exploration Areas. Having considered the various methods used in the valuation of exploration properties, Coffey Mining is of the opinion that the Multiple of Exploration Expenditure (MEE) method provides the most appropriate approach to the technical valuation of the exploration potential of mineral properties, particularly as no resources have been defined on the Gindalbie properties. A summary of the adjusted property valuations is provided in the table below.

Table 8_1


Valuation Summary (31 October 2008)

Valuation (to three significant figures)

Properties Gindalbie

Equity Interest% Low

$M High $M

Preferred$M

Gindalbie 100% Iron Ore Exploration Potential 100% $14.4 $43.3 $26.0 Warriedar JV Exploration Potential 60% $1.75 $5.26 $3.15 Mt Mulgine JV Exploration Potential 30% $0.34 $1.03 $0.62 Total $16.5 $49.6 $29.8

The value of Gindalbie Metals Limited’s various equity interests in the properties is considered to lie in a range from $16.5 Million to $49.6 Million, within which range Coffey Mining has selected a preferred technical value of $29.8 Million.

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9 GLOSSARY OF TECHNICAL TERMS

anomaly An area where results are higher (or sometimes lower) than expected.

anticline A convex fold-like structure.

axial plane The geometric plane that intersects the crest or trough of a fold, about which the limbs are more or less symmetrically arranged.

backfill The practice of filling underground voids created by mining, usually with mullock.

basement Crust of the earth underlying younger sedimentary deposits.

BIF Banded iron-formation - an iron-rich (+/- 30% Fe) and siliceous (+/- 50% SiO2) sedimentary rock. Host rock for the iron ores

breccia Rock comprising angular fragments enclosed in a matrix, usually the result of persistent fracturing by tectonic or hydraulic means.

capital costs Costs assigned to the purchase of plant and equipment for a project, or for the development of infrastructure, which can be depreciated or amortised.

chert Fine grained sedimentary rock composed of cryptocrystalline silica.

chlorite A green coloured hydrated aluminium-iron-magnesium silicate mineral common in metamorphic rocks.

competent Refers to a rock, which tends to deform in a brittle, rather than ductile manner when stress is applied.

composite A statistical technique wherein all sampled intervals are given the same length or alternatively, combining more than one sample interval or result to provide an average.

concentrate In processing, the product which contains a higher concentration.

Cutoff grade The grade used in grade tonnage reporting wherein only blocks which return a value above the particular cutoff grade are reported.

deleterious impurities Elements in concentrates for which a charge is made because the cost of separation during smelting exceeds their sale value.

dilation zones Zone of tension developed within rocks during deformation, and which may localise the flow of fluids through the rock sequence.

diluted resource Model of a mineralised zone that includes waste, to account for minimum mining parameters.

dilution The proportion of material which is planned or inadvertently included during mining operations, and which is generally of a significantly lower grade than the ore zone of interest.

disseminated Distributed finely and evenly throughout.

dolerite A medium grained basic intrusive rock composed mostly of the minerals pyroxene and sodium-calcium feldspar.

downhole survey The electronic or physical measurement of the three dimensional position and orientation of a drillhole, measured by means of lowering instruments down the hole.

dyke A tabular body of intrusive igneous rock, crosscutting the host strata at an angle.

EM A geophysical technique whereby transmitted electromagnetic fields are used to energise and detect conductive material beneath the earth’s surface.

feasibility study An advanced study undertaken to determine the economic viability of a mineral deposit to a reasonable degree of accuracy.

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fines This crushed iron ore of a size less than a nominal 6mm

footwall The mass of rock lying below a fault, vein or zone of mineralisation.

geophysical survey The exploration of an area in which geophysical properties and relationships unique to the area are mapped by one or more geophysical methods.

geotechnical Rock quality and structural investigations of rock masses.

gossan A ferruginous deposit remaining after the oxidation of the original sulphide minerals in a vein or ore zone.

ground support Materials such as rock bolts, meshing, pillar supports and concrete used to prevent rocks from spalling from underground openings.

ha A hectare is a measure of area.

hangingwall The mass of rock above a fault, vein or zone of mineralisation.

hematite An iron oxide mineral Fe2O3.

Indicated Resource Insitu mineral resource calculated with a moderate confidence level, and to which economic parameters have not been applied.

Inferred Resource Insitu mineral resource calculated with a low confidence level, and to which economic parameters cannot be applied.

iron ore This is generic term used in exploration and mining in the Pilbara to describe anomalous concentrations of hematite, goethite and limonite minerals. The term as used does not imply ore and is not associated with Ore Reserves as defined by JORC Code (2004).

isoclinal Folds with relatively long, parallel limbs.

JORC Code Guidelines published by the Joint Ore Reserves Committee (JORC), which relate to the requirements and standards applicable to reporting of mineral resources and ore reserves to the Australian Stock Exchange.

lag Residual surficial material, comprising resistant fragments, such as quartz and ironstone.

level A main underground roadway or passage driven along a level course to afford access to stopes or workings and to provide ventilation and a haulage way for the removal of ore or waste.

lump This crushed iron ore of a size greater than a nominal 6mm

lump:fines Lump to Fines ratio expressed as percentages.

lump:fines split Grade split (or difference) between lump and fine iron ores

mafic Descriptive of rocks composed dominantly of magnesium, iron and calcium-rich minerals.

magnetite A naturally occurring oxide of iron (FeO4) which produces a strong magnetic response.

massive sulphide Rock containing abundant sulphides that can form close to 100% of the mass.

mean grade estimate Average estimated grade of an element or mineral within a deformed block of rock.

Measured Resource That portion of Mineral Resource of which tonnage or volumes is estimated from dimensions revealed in outcrops, pits, trenches, drillholes or mine workings, supported where appropriate by other exploration techniques The sites used for inspection, sampling and measurement are so spaced that the geological character, continuity, grades and nature of the material are so well defined that the physical character, size, shape, quality and mineral content are established with a high degree of certainty.

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metallurgical recovery Proportion of a metal or mineral of economic interested recovered during processing.

metallurgical test work The testing of ore samples in order to define the metallurgical characteristics of the ore.

Mineral Resource A concentration or occurrence of material of intrinsic economic interest in or on the earth’s crust in such form and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

mining costs Cash cost of extracting ore on an on-going basis, exclusive of the capital cost of infrastructure, plant and equipment.

mining recovery The proportion of material which is successfully mined and transported to the processing facility.

operating costs The sum of the costs of mining, beneficiation, and administration gives the operating cost of a mine.

Ore Reserve That part of the resource that meets minimum physical and chemical criteria related to specified mining and production practices, including those of grade, quality, thickness and depth, and can be reasonably assumed to be economically and legally extractable or producible at the time of determination. The feasibility of the specified mining and production practices must have been demonstrated or can be reasonably assumed on the basis of tests and measurements.

parasitic fold Small scale fold on the limb of a layer fold.

Probable Reserve A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in some circumstances Measured, Mineral Resource. It includes diluting minerals and allowances for losses that may occur when the material is mined, processed and sold.

process plant Referring to the plant and equipment associated with the crushing and extraction of metals or minerals from ore, and disposal of waste.

production rate Rate of extraction during mining, usually expressed in terms of tonnes of ore or amount of contained metal per year.

Proved Reserve A ‘Proved Ore Reserve’ is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined, processed and sold.

pyrite A sulphide mineral of iron, FeS2.

quartzite A sandstone composed predominantly of grains of quartz.

regolith The layer of fragmental and unconsolidated material, which overlies or covers insitu basement rock.

resources Insitu mineral occurrence from which valuable or useful minerals may be recovered.

Reverse Circulation (RC) A drilling method in which the fragmented sample is brought to the surface inside the drill rods, thereby reducing contamination. Commonly used with a percussion hammer bit.

Rotary Air Blast (RAB) Drilling method employing a repeated rotary on a drill bit, which yields sample material delivered to the surface outside the rod string by compressed air.

schist A micaceous crystalline metamorphic rock having a foliated or parallel structure due to the recrystallisation of the constituent minerals.

shale A fine grained, laminated sedimentary rock formed from clay, mud and silt.

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siderite An iron carbonate, FeCO3.

silicification Replacement by, or introduction of, appreciable quantities of silica (e.g. quartz, SiO2).

silicified The alteration or replacement of primary minerals by silica.

spot price Price for which a commodity is sold on at-call basis.

stockpile Dump of broken and transported waste, or ore awaiting processing.

stope An underground excavation formed by the extraction of ore.

stratigraphic horizon Horizon defined by a single sedimentary layer.

sulphide A general term to cover minerals containing sulphur and commonly associated with mineralisation.

tailings The finely-ground waste product from ore processing.

thrusts A reverse fault or shear that has a low angle inclination to the horizontal.

ultramafic Igneous rocks consisting essentially of ferromagnesium minerals with trace quartz and feldspar.

variograms A plot of the variance (one-half the mean squared difference) of paired sample measurements as a function of the distance (and optionally of the direction) between samples.

wireframe A computer technique to form a surface, or enclose a volume, with an imaginary, continuous array of two dimensional shapes.

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10 REFERENCES

AusIMM 1998. Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports.

AusIMM 2005. Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports.

Gindalbie Metals Ltd 2005. Media Release: Gindalbie joint ventures Mt Mulgine tungsten deposits.

Gindalbie Metals Ltd 2005. Media release: Gindalbie to divest gold and base metals and appoint Mr George Jones as a Director to strengthen iron ore business.

Gindalbie Metals Ltd 2007. Annual Report 2007.

Gindalbie Metals Ltd 2007. December 2007 Quarterly Report.

Gindalbie Metals Ltd 2007. E59 1002 Annual Report 2007.

Gindalbie Metals Ltd 2007. E59/817 Annual Report 2007.

Gindalbie Metals Ltd 2007. September 2007 Quarterly Report.

Gindalbie Metals Ltd 2008. E59 1002 Annual Report 2008.

Gindalbie Metals Ltd 2008. June 2008 Quarterly Report.

Gindalbie Metals Ltd 2008. March 2008 Quarterly Report.

Gindalbie Metals Ltd 2008. Memorandum: Lodestone Prospect.

Gindalbie Metals Ltd 2008. Memorandum: Shine Prospect.

Gindalbie Metals Ltd 2008. Presentation: Energing Iron Ore Producer.

Metal Bulletin 2008. http://www.mbironoreindex.com.

Minjar Gold Pty Ltd 2008. Annual Report: E59/887.

Minjar Gold Pty Ltd 2008. Annual Report: Karara Iron Ore Project, Minjar Joint Venture; E59/991, E59/983, E59/1012, E59/1021, 59/1023, E59/1139, M59/379, M59/380, M59/406, M59/420 2008.

Monarch Gold Mining Company Ltd 2007. Annual Report: E59/935.

Monarch Resources Ltd 2006. Media Release: Monarch acquires Minjar Gold Project.

Royal Resources Ltd 2006. Media Release: Iron ore rights - Warriedar Joint Venture.

Royal Resources Ltd 2007. Media Release: High grade hematite discovery at Shine Prospect.

RSG Global 2005. Vital Metals: Independent Geologists Report.

Vital Metals Ltd 2005. Prospectus.

Vital Metals Ltd 2007. Annual Report.

Vital Metals Ltd 2007. Annual Report: Mount Mulgine Project; E59/428, E59/566, E59/1057, M59/386, M59/387, M59/425, M59/460, P59/1083, P59/1084, P59/1085, P59/1086, P59/1087 and P59/1088

Vital Metals Ltd 2008. Report for the quarter ended 20 June 2008.

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Appendix 1 Permit Details : Gindalbie 100% Ground

For

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App

endi

x 1

– P

erm

it D

etai

ls :

Gin

dalb

ie 1

00%

Gro

und

Pag

e: 1

Tene

men

t Pr

ojec

t St

atus

A

pplic

atio

n D

ate

Gra

nted

D

ate

Term

(Y

ears

) Ex

piry

D

ate

Man

ager

Co

Com

b R

ep ID

Ta

g A

rea

Are

a U

nits

R

ent

Com

mitm

ent

Hol

ders

A

rea

(Ha)

Pr

ojec

t Sh

ire R

ates

E59

/852

M

ess

App

licat

ion

10/1

0/19

97

5

M

onar

ch

M

onar

ch

22

BLO

C

$2,5

04.7

0 $2

2,00

0.00

S

hepp

ard,

Rob

ijn, A

shcr

oft

6589

.0

MG

78

7.38

E

59/9

85

Min

jarn

A

pplic

atio

n 12

/11/

1999

5

Mon

arch

Mon

arch

18

B

LOC

$2

,049

.30

$18,

000.

00

Gin

dalb

ie

5391

.0

MG

64

4.22

E

59/1

042

Min

jarn

A

pplic

atio

n 2/

02/2

001

5

M

onar

ch

M

onar

ch

15

BLO

C

$1,7

07.7

5 $2

0,00

0.00

H

arm

ony

Gol

d 44

92.5

M

G

536.

85

E59

/115

2 C

hul

App

licat

ion

22/1

2/20

03

5

M

onar

ch

M

onar

ch

16

BLO

C

$1,8

21.6

0 $2

0,00

0.00

G

inda

lbie

47

92.0

M

G

572.

64

E59

/118

1 N

ing

App

licat

ion

24/0

9/20

04

5

M

onar

ch

M

onar

ch

68

BLO

C

$7,7

41.8

0 $6

8,00

0.00

G

inda

lbie

20

365.

9 M

G

2433

.72

E59

/119

9 M

inja

rn

App

licat

ion

26/0

5/20

05

5

M

onar

ch

M

onar

ch

30

BLO

C

$3,4

15.5

0 $3

0,00

0.00

D

igita

l Map

ping

89

84.9

M

G

1073

.70

E59

/132

7 M

inja

rs

App

licat

ion

30/0

1/20

07

5

M

onar

ch

M

onar

ch

39

BLO

C

$4,4

40.1

5 $3

9,00

0.00

M

inja

r Gol

d 11

680.

4 M

G

1395

.81

E59

/132

8 M

inja

rn

App

licat

ion

30/0

1/20

07

5

M

onar

ch

M

onar

ch

29

BLO

C

$3,3

01.6

5 $2

9,00

0.00

M

inja

r Gol

d 86

85.4

M

G

1037

.91

M59

/497

M

inja

rn

App

licat

ion

27/0

2/19

98

21

Mon

arch

Mon

arch

70

7.28

H

a $1

0,58

0.91

$7

0,72

8.00

G

inda

lbie

70

7.28

M

G

1083

5.53

M

59/5

85

Min

jarn

A

pplic

atio

n 30

/09/

2003

21

M

onar

ch

M

onar

ch

994

Ha

$14,

870.

24

$99,

400.

00

Min

jar G

old

994

MG

15

228.

08

M59

/586

M

inja

rn

App

licat

ion

30/0

9/20

03

21

Mon

arch

Mon

arch

99

8 H

a $1

4,93

0.08

$9

9,80

0.00

M

inja

r Gol

d 99

8 M

G

1528

9.36

M

59/5

88

Min

jarn

A

pplic

atio

n 30

/09/

2003

21

M

onar

ch

M

onar

ch

991

Ha

$14,

825.

36

$99,

100.

00

Min

jar G

old

991

MG

15

182.

12

M59

/589

M

inja

rn

App

licat

ion

30/0

9/20

03

21

Mon

arch

Mon

arch

97

9 H

a $1

4,64

5.84

$9

7,90

0.00

M

inja

r Gol

d 97

9 M

G

1499

8.28

M

59/5

90

Min

jarn

A

pplic

atio

n 30

/09/

2003

4

Mon

arch

Mon

arch

90

3 H

a $1

3,50

8.88

$9

0,30

0.00

M

inja

r Gol

d 90

3 M

G

1383

3.96

M

59/5

91

Min

jarn

A

pplic

atio

n 30

/09/

2003

4

Mon

arch

Mon

arch

97

3 H

a $1

4,55

6.08

$9

7,30

0.00

M

inja

r Gol

d 97

3 M

G

1490

6.36

M

59/6

53

Min

jars

A

pplic

atio

n 20

/07/

2005

21

M

onar

ch

M

onar

ch

899

Ha

$13,

449.

04

$89,

900.

00

Min

jar G

old

899

MG

13

772.

68

M59

/654

M

inja

rs

App

licat

ion

20/0

7/20

05

21

Mon

arch

Mon

arch

66

9 H

a $1

0,00

8.24

$6

6,90

0.00

M

inja

r Gol

d 66

9 M

G

1024

9.08

M

59/6

55

Min

jars

A

pplic

atio

n 20

/07/

2005

21

M

onar

ch

M

onar

ch

775

Ha

$11,

594.

00

$77,

500.

00

Min

jar G

old

775

MG

11

873.

00

M59

/656

M

inja

rs

App

licat

ion

20/0

7/20

05

21

Mon

arch

Mon

arch

89

9 H

a $1

3,44

9.04

$8

9,90

0.00

M

inja

r Gol

d 89

9 M

G

1377

2.68

M

59/6

57

Min

jars

A

pplic

atio

n 20

/07/

2005

21

M

onar

ch

M

onar

ch

899

Ha

$13,

449.

04

$89,

900.

00

Min

jar G

old

899

MG

13

772.

68

M59

/658

M

inja

rs

App

licat

ion

20/0

7/20

05

21

Mon

arch

Mon

arch

89

9 H

a $1

3,44

9.04

$8

9,90

0.00

M

inja

r Gol

d 89

9 M

G

1377

2.68

M

59/6

59

Min

jars

A

pplic

atio

n 20

/07/

2005

21

M

onar

ch

M

onar

ch

899

Ha

$13,

449.

04

$89,

900.

00

Min

jar G

old

899

MG

13

772.

68

M59

/660

M

inja

rs

App

licat

ion

20/0

7/20

05

21

Mon

arch

Mon

arch

89

9 H

a $1

3,44

9.04

$8

9,90

0.00

M

inja

r Gol

d 89

9 M

G

1377

2.68

P

59/1

706

Min

jars

A

pplic

atio

n 26

/10/

2004

4

Mon

arch

Gin

dalb

ie

149

Ha

$327

.80

$5,9

60.0

0 M

inja

r Gol

d 14

9 M

G

328.

40

P59

/170

7 M

inja

rs

App

licat

ion

26/1

0/20

04

4

M

onar

ch

G

inda

lbie

14

9 H

a $3

27.8

0 $5

,960

.00

Min

jar G

old

149

MG

32

8.40

P

59/1

791

Min

jars

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

14

4 H

a $3

16.8

0 $5

,760

.00

Min

jar G

old

144

MG

31

7.38

P

59/1

792

Min

jars

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

15

1 H

a $3

32.2

0 $6

,040

.00

Min

jar G

old

151

MG

33

2.80

P

59/1

793

Min

jars

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

21

H

a $4

6.20

$2

,000

.00

Min

jar G

old

21

MG

26

3.75

P

59/1

801

Min

jarn

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

14

H

a $3

0.80

$2

,000

M

inja

r Gol

d 14

M

G

263.

75

P59

/180

2 M

inja

rn

App

licat

ion

30/0

1/20

07

4

M

onar

ch

M

onar

ch

24

Ha

$52.

80

$2,0

00

Min

jar G

old

24

MG

26

3.75

P

59/1

804

Min

jarn

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

20

0 H

a $4

40.0

0 $8

,000

S

hepp

ard,

Min

jar G

old,

Eas

t, R

objn

, Ash

crof

t 20

0 M

G

440.

80

P59

/180

5 M

inja

rn

App

licat

ion

30/0

1/20

07

4

M

onar

ch

M

onar

ch

179

Ha

$393

.80

$7,1

60

She

ppar

d, M

inja

r Gol

d, E

ast,

Rob

jn, A

shcr

oft

179

MG

39

4.52

E

59/1

012

Min

jarn

G

rant

ed

13/0

7/20

00

29/0

5/20

03

5 28

/05/

2008

M

onar

ch

C33

/200

2 M

onar

ch

11

BLO

C

$721

.05

$30,

000.

00

Min

jar G

old

3294

.5

MG

39

3.69

E

59/1

021

Min

jars

G

rant

ed

31/0

8/20

00

28/0

8/20

02

5 27

/08/

2008

M

onar

ch

C23

2/20

07

Mon

arch

1

BLO

C

$274

.12

$15,

000.

00

Min

jar G

old

299.

5 M

G

263.

75

E59

/102

3 M

inja

rs

Gra

nted

11

/09/

2000

25

/07/

2002

5

24/0

7/20

08

Mon

arch

C

232/

2007

M

onar

ch

58

BLO

C

$12,

498.

00

$104

,000

.00

Min

jar G

old

1737

0.9

MG

20

75.8

2 E

59/1

122

Min

jarn

G

rant

ed

9/09

/200

2 12

/09/

2003

5

11/0

9/20

08

Mon

arch

C

233/

2007

M

onar

ch

4 B

LOC

$9

61.4

0 $2

0,00

0.00

M

inja

r Gol

d 11

98.0

M

G

263.

75

E59

/112

5 M

inja

rn

Gra

nted

16

/10/

2002

2/

02/2

004

5 1/

02/2

009

Mon

arch

C

233/

2007

M

onar

ch

1 B

LOC

$2

74.1

2 $1

0,00

0.00

M

inja

r Gol

d 29

9.5

MG

26

3.75

E

59/1

169

Min

jars

G

rant

ed

16/0

6/20

04

6/01

/200

6 5

5/01

/201

1 M

onar

ch

C23

2/20

07

Mon

arch

9

BLO

C

$1,5

93.9

0 $2

0,00

0.00

M

inja

r Gol

d 26

95.5

M

G

322.

11

E59

/118

9 M

inja

rn

Gra

nted

24

/01/

2005

6/

01/2

006

5 5/

01/2

011

Mon

arch

C

233/

2007

M

onar

ch

12

BLO

C

$2,1

25.2

0 $2

0,00

0.00

M

inja

r Gol

d 35

94.0

M

G

429.

48

E59

/120

0 M

inja

rn

Gra

nted

26

/05/

2005

28

/11/

2006

5

27/1

1/20

11

Mon

arch

C

233/

2007

M

onar

ch

2 B

LOC

$2

27.7

0 $1

5,00

0.00

M

inja

r Gol

d 59

9.0

MG

26

3.75

E

59/1

201

Min

jarn

G

rant

ed

26/0

5/20

05

2/02

/200

7 5

2/02

/201

2 M

onar

ch

C23

3/20

07

Mon

arch

4

BLO

C

$455

.40

$15,

000.

00

Min

jar G

old

1198

.0

MG

26

3.75

E

59/1

202

Min

jarn

G

rant

ed

26/0

5/20

05

22/0

1/20

07

5 21

/01/

2012

M

onar

ch

C23

2/20

07

Mon

arch

2

BLO

C

$227

.70

$15,

000.

00

Min

jar G

old

599.

0 M

G

263.

75

E59

/132

9 M

inja

rn

Gra

nted

30

/01/

2007

9/

04/2

008

5 8/

04/2

013

Mon

arch

Mon

arch

3

BLO

C

341.

55

$15,

000.

00

Gin

dalb

ie

898.

5 M

G

263.

75

L59/

44

Min

jarn

G

rant

ed

16/1

2/19

96

30/1

0/19

97

5 29

/10/

2012

M

onar

ch

N/A

M

onar

ch

3.32

H

a $5

3.24

Gin

dalb

ie

3.32

M

G

263.

75

L59/

54

Min

jarn

G

rant

ed

21/0

8/20

00

14/0

1/20

03

21

13/0

1/20

24

Mon

arch

N

/A

Mon

arch

21

.252

9 H

a $2

92.8

2

Gin

dalb

ie

21.2

529

MG

26

3.75

L5

9/56

M

inja

rn

Gra

nted

21

/03/

2001

16

/08/

2001

21

15

/08/

2022

M

onar

ch

N/A

M

onar

ch

13.0

537

Ha

$186

.34

G

inda

lbie

13

.053

7 M

G

263.

75

L59/

61

Min

jars

G

rant

ed

20/0

6/20

03

3/10

/200

3 21

2/

10/2

024

Mon

arch

N

/A

Mon

arch

21

H

a $2

58.7

2

Gin

dalb

ie

21

MG

26

3.75

M

59/2

19

Min

jarn

G

rant

ed

14/0

9/19

90

15/1

1/19

90

21

14/1

1/20

11

Mon

arch

C

232/

2007

M

onar

ch

36.2

3 H

a $5

53.5

2 $1

0,00

0.00

M

inja

r Gol

d 36

.23

MG

55

5.04

M

59/4

06

Min

jarn

G

rant

ed

29/0

4/19

96

24/0

5/19

99

21

23/0

5/20

20

Mon

arch

C

232/

2007

M

onar

ch

898.

85

Ha

$13,

449.

04

$89,

900.

00

Min

jar G

old

898.

85

MG

13

770.

38

M59

/420

M

inja

rn

Gra

nted

2/

07/1

996

24/0

5/19

99

21

23/0

5/20

20

Mon

arch

C

232/

2007

M

onar

ch

918

Ha

$13,

733.

28

$91,

800.

00

Min

jar G

old

918

MG

14

063.

76

M59

/421

M

inja

rn

Gra

nted

2/

07/1

996

24/0

5/19

99

21

23/0

5/20

20

Mon

arch

C

232/

2007

M

onar

ch

986.

05

Ha

$14,

765.

52

$98,

700.

00

Min

jar G

old

986.

05

MG

15

106.

29

M59

/431

M

inja

rs

Gra

nted

1/

10/1

996

17/1

0/20

03

21

16/1

0/20

24

Mon

arch

C

232/

2007

M

onar

ch

128

Ha

$1,9

14.8

8 $1

2,80

0.00

M

inja

r Gol

d 12

8 M

G

1960

.96

M59

/457

M

inja

rn

Gra

nted

29

/04/

1997

24

/05/

1999

21

23

/05/

2020

M

onar

ch

C23

2/20

07

Mon

arch

30

2.9

Ha

$4,5

32.8

8 $3

0,30

0.00

M

inja

r Gol

d 30

2.9

MG

46

40.4

3 M

59/4

58

Min

jarn

G

rant

ed

29/0

4/19

97

24/0

5/19

99

21

23/0

5/20

20

Mon

arch

C

232/

2007

M

onar

ch

888.

2 H

a $1

3,29

9.44

$8

8,90

0.00

M

inja

r Gol

d 88

8.2

MG

13

607.

22

P59

/155

5 M

inja

rn

Gra

nted

29

/12/

2000

27

/01/

2006

4

26/0

1/20

10

Mon

arch

C

233/

2007

M

onar

ch

166

Ha

$365

.20

$6,6

40.0

0 M

inja

r Gol

d 16

6 M

G

365.

86

P59

/155

6 M

inja

rn

Gra

nted

29

/12/

2000

27

/01/

2006

4

26/0

1/20

10

Mon

arch

C

233/

2007

M

onar

ch

193

Ha

$424

.60

$7,7

20.0

0 M

inja

r Gol

d 19

3 M

G

425.

37

P59

/155

7 M

inja

rn

Gra

nted

29

/12/

2000

27

/01/

2006

4

26/0

1/20

10

Mon

arch

C

233/

2007

M

onar

ch

133

Ha

$292

.60

$5,3

20.0

0 M

inja

r Gol

d 13

3 M

G

293.

13

P59

/155

8 M

inja

rn

Gra

nted

29

/12/

2000

27

/01/

2006

4

26/0

1/20

10

Mon

arch

C

233/

2007

M

onar

ch

167

Ha

$367

.40

$6,6

80.0

0 M

inja

r Gol

d 16

7 M

G

368.

07

P59

/159

9 M

inja

rs

Gra

nted

25

/06/

2001

15

/11/

2002

4

14/1

1/20

06

Mon

arch

C

232/

2007

M

onar

ch

47

Ha

$103

.40

$2,0

00.0

0 M

inja

r Gol

d 47

M

G

263.

75

P59

/161

1 M

inja

rs

Gra

nted

24

/12/

2001

18

/07/

2003

4

17/0

7/20

07

Mon

arch

C

232/

2007

M

onar

ch

26.1

2 H

a $5

7.20

$2

,000

.00

Min

jar G

old

26.1

2 M

G

263.

75

P59

/161

2 M

inja

rs

Gra

nted

24

/12/

2001

18

/07/

2003

4

17/0

7/20

07

Mon

arch

C

232/

2007

M

onar

ch

9.27

H

a $2

2.00

$2

,000

.00

Min

jar G

old

9.27

M

G

263.

75

P59

/175

8 M

inja

rn

Gra

nted

26

/07/

2006

1/

08/2

007

4 31

/07/

2011

M

onar

ch

C23

3/20

07

Mon

arch

19

7 H

a $4

33.4

0 $7

,880

M

inja

r Gol

d 19

7 M

G

434.

19

P59

/175

9 M

inja

rn

Gra

nted

26

/07/

2006

1/

08/2

007

4 31

/07/

2011

M

onar

ch

C23

3/20

07

Mon

arch

11

2 H

a $2

46.4

0 $4

,480

M

inja

r Gol

d 11

2 M

G

263.

75

P59

/176

0 M

inja

rn

Gra

nted

26

/07/

2006

1/

08/2

007

4 31

/07/

2011

M

onar

ch

C23

3/20

07

Mon

arch

93

H

a $2

04.6

0 $3

,720

M

inja

r Gol

d 93

M

G

263.

75

P59

/176

1 M

inja

rn

Gra

nted

26

/07/

2006

1/

08/2

007

4 31

/07/

2011

M

onar

ch

C23

3/20

07

Mon

arch

12

0 H

a $2

64.0

0 $4

,800

M

inja

r Gol

d 12

0 M

G

264.

48

P59

/176

2 M

inja

rn

Gra

nted

7/

08/2

006

25/0

7/20

07

4 24

/07/

2011

M

onar

ch

C23

3/20

07

Mon

arch

12

1 H

a $2

66.2

0 $4

,840

M

inja

r Gol

d 12

1 M

G

266.

68

P59

/176

8 M

inja

rn

Gra

nted

23

/11/

2006

17

/08/

2007

4

16/0

8/20

11

Mon

arch

Mon

arch

47

H

a $1

03.4

0 $2

,000

M

inja

r Gol

d 47

M

G

263.

75

P59

/180

0 M

inja

rn

Gra

nted

30

/01/

2007

3/

06/2

008

4 4/

06/2

012

Mon

arch

Mon

arch

28

H

a $6

1.60

$2

,000

G

inda

lbie

28

M

G

263.

75

P59

/180

3 M

inja

rn

Gra

nted

30

/01/

2007

5/

06/2

008

4 4/

06/2

012

Mon

arch

Mon

arch

17

5 H

a $3

85.0

0 $7

,000

M

inja

r Gol

d 17

5 M

G

385.

70

E59

/485

M

inja

rn

Ren

w. P

end.

7/

10/1

992

3/02

/200

2 1

2/02

/200

3 M

onar

ch

C23

3/20

07

Mon

arch

26

B

LOC

$1

1,83

4.00

$7

8,00

0.00

M

inja

r Gol

d 77

87.0

M

G

930.

54

For

per

sona

l use

onl

y

Appendix 2 Permit Details : Minjar JV

For

per

sona

l use

onl

y

App

endi

x 2

– P

erm

it D

etai

ls :

Min

jar J

V P

age:

1

Tene

men

t Pr

ojec

t St

atus

A

pplic

atio

n D

ate

Gra

nted

D

ate

Term

(Y

ears

) Ex

piry

D

ate

Man

ager

Co

Com

b R

ep ID

Ta

g A

rea

Are

a U

nits

R

ent

Com

mitm

ent

Hol

ders

A

rea

(Ha)

Pr

ojec

t Sh

ire R

ates

E59

/118

0 N

ing

App

licat

ion

24/0

9/20

04

5

G

inda

lbie

Met

als

Ltd

M

onar

ch

7 B

LOC

$7

96.9

5 $2

0,00

0.00

G

inda

lbie

Met

als

Ltd

2096

.5

GM

100

263.

75

E59

/152

1 K

arar

a A

pplic

atio

n 17

/06/

2008

5

Gin

dalb

ie

2 B

LOC

$2

27.7

0 $1

5,00

0.00

G

inda

lbie

Met

als

599.

0 G

M10

0 26

3.75

E

59/1

442

Talle

ring

Pea

k A

pplic

atio

n 17

/10/

2007

5

Gin

dalb

ie

18

BLO

C

$2,0

49.3

0 $2

0,00

0.00

K

arar

a M

inin

g Li

mite

d 53

91.0

G

M10

0 64

4.22

E

59/1

533

Kar

ara

App

licat

ion

4/08

/200

8

5

Gin

dalb

ie

2 B

LOC

$2

27.7

0 $1

5,00

0.00

G

inda

lbie

Met

als

599.

0 G

M10

0 26

3.75

E

59/1

534

Kar

ara

App

licat

ion

4/08

/200

8

5

Gin

dalb

ie

1 B

LOC

$1

13.8

5 $1

5,00

0.00

G

inda

lbie

Met

als

299.

5 G

M10

0 26

3.75

E

59/1

535

Kar

ara

App

licat

ion

4/08

/200

8

5

Gin

dalb

ie

22

BLO

C

$2,5

04.7

0 $2

2,00

0.00

G

inda

lbie

Met

als

6589

.0

GM

100

787.

38

E70

/269

8 K

alb

App

licat

ion

6/07

/200

4

5

Gin

dalb

ie

49

BLO

C

$5,5

78.6

5 $4

9,00

0.00

D

so V

entu

res

Pty

Ltd

1467

5.4

KM

L 17

53.7

1 P

59/1

877

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

45

.62

Ha

$100

.36

$2,0

00.0

0 G

inda

lbie

Met

als

Ltd

45.6

2 G

M10

0 26

3.75

P

59/1

878

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

20

.25

Ha

$44.

55

$2,0

00.0

0 G

inda

lbie

Met

als

Ltd

20.2

5 G

M10

0 26

3.75

P

59/1

879

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

45

.42

Ha

$99.

92

$2,0

00.0

0 G

inda

lbie

Met

als

Ltd

45.4

2 G

M10

0 26

3.75

P

59/1

880

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

46

.14

Ha

$101

.51

$2,0

00.0

0 G

inda

lbie

Met

als

Ltd

46.1

4 G

M10

0 26

3.75

P

59/1

881

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

71

.57

Ha

$157

.45

$2,8

80.0

0 G

inda

lbie

Met

als

Ltd

71.5

7 G

M10

0 26

3.75

P

59/1

882

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

94

.48

Ha

$207

.86

$3,8

00.0

0 G

inda

lbie

Met

als

Ltd

94.4

8 G

M10

0 26

3.75

P

59/1

883

Lode

ston

e A

pplic

atio

n 25

/10/

2007

4

Gin

dalb

ie M

etal

s Lt

d

46

.1

Ha

$101

.42

$2,0

00.0

0 G

inda

lbie

Met

als

Ltd

46.1

G

M10

0 26

3.75

P

59/1

884

Lode

ston

e A

pplic

atio

n 19

/11/

2007

4

Gin

dalb

ie M

etal

s Lt

d

71

.9

Ha

$158

.18

$2,8

80.0

0 G

inda

lbie

Met

als

Ltd

71.9

G

M10

0 26

3.75

P

59/1

902

Min

jar

App

licat

ion

19/1

1/20

07

4

G

inda

lbie

Met

als

Ltd

75

Ha

$165

.00

$2,8

80.0

0 G

inda

lbie

Met

als

Ltd

75

GM

100

263.

75

E59

/428

M

ul

Gra

nted

17

/05/

1981

11

/06/

1992

5

10/0

6/19

97

Gin

dalb

ie M

etal

s Lt

d C

196/

1994

V

ital M

etal

s 8.

62

SQ

KM

$1

,324

.62

$100

,000

.00

Gin

dalb

ie M

etal

s Lt

d 86

2 G

M10

0 26

3.75

E

59/1

070

Min

jars

G

rant

ed

1/08

/200

1 12

/09/

2003

5

11/0

9/20

08

Gin

dalb

ie M

etal

s Lt

d C

232/

2007

M

onar

ch

2 B

LOC

$4

80.7

0 $2

0,00

0.00

M

inja

r Gol

d 59

9.0

GM

100

263.

75

E59

/100

2 N

ing

Gra

nted

30

/03/

2000

13

/08/

2003

5

12/0

8/20

08

Gin

dalb

ie M

etal

s Lt

d

Mon

arch

33

B

LOC

$7

,931

.55

$49,

500.

00

Gin

dalb

ie M

etal

s Lt

d 98

83.4

G

M10

0 11

81.0

7 E

59/1

136

Min

jars

G

rant

ed

14/0

7/20

03

31/1

0/20

05

5 30

/10/

2010

G

inda

lbie

Met

als

Ltd

C23

2/20

07

Mon

arch

13

B

LOC

$2

,302

.30

$20,

000.

00

Min

jar G

old

3893

.5

GM

100

465.

27

E59

/113

9 M

inja

rs

Gra

nted

28

/07/

2003

13

/10/

2005

5

12/1

0/20

10

Gin

dalb

ie M

etal

s Lt

d C

232/

2007

M

onar

ch

11

BLO

C

$1,9

48.1

0 $2

0,00

0.00

M

inja

r Gol

d 32

94.5

M

G

393.

69

E59

/114

0 M

inja

rs

Gra

nted

28

/07/

2003

13

/10/

2005

5

12/1

0/20

10

Gin

dalb

ie M

etal

s Lt

d

Mon

arch

2

BLO

C

$354

.20

$15,

000.

00

Min

jar G

old

(Dig

ital M

appi

ng)

599.

0 G

M10

0 26

3.75

E

59/1

203

Min

jars

G

rant

ed

26/0

5/20

05

28/1

1/20

06

5 27

/11/

2011

G

inda

lbie

Met

als

Ltd

C23

2/20

07

Mon

arch

7

BLO

C

$796

.95

$20,

000.

00

Min

jar G

old

(Dig

ital M

appi

ng)

2096

.5

GM

100

263.

75

E59

/121

0 M

inja

rs

Gra

nted

15

/06/

2005

26

/10/

2006

5

25/1

0/20

11

Gin

dalb

ie M

etal

s Lt

d C

232/

2007

M

onar

ch

21

BLO

C

$2,3

90.8

5 $2

1,00

0.00

M

inja

r Gol

d (D

igita

l Map

ping

) 62

89.5

G

M10

0 75

1.59

M

59/4

60

Mul

G

rant

ed

5/06

/199

7 17

/10/

2003

21

16

/10/

2024

G

inda

lbie

Met

als

Ltd

C19

6/19

94

Vita

l Met

als

701

Ha

$9,7

15.8

6 $7

0,10

0.00

G

inda

lbie

Met

als

Ltd

701

GM

100

1073

9.32

P

59/1

085

Mul

G

rant

ed

5/02

/199

2 25

/08/

1994

2

24/0

8/19

96

Gin

dalb

ie M

etal

s Lt

d C

196/

1994

V

ital M

etal

s 14

5.99

H

a $2

89.0

8 $5

,840

.00

Gin

dalb

ie M

etal

s Lt

d 14

5.99

G

M10

0 32

1.76

P

59/1

088

Mul

G

rant

ed

5/02

/199

2 25

/08/

1994

2

24/0

8/19

96

Gin

dalb

ie M

etal

s Lt

d C

196/

1994

V

ital M

etal

s 19

0 H

a $3

76.2

0 $7

,600

.00

Gin

dalb

ie M

etal

s Lt

d 19

0 G

M10

0 41

8.76

For

per

sona

l use

onl

y

Appendix 3 Permit Details : Warriedar JV

For

per

sona

l use

onl

y

App

endi

x 3

– P

erm

it D

etai

ls :

War

rieda

r JV

Pag

e: 1

Tene

men

t Pr

ojec

t St

atus

A

pplic

atio

n D

ate

Gra

nted

D

ate

Term

(Y

ears

) Ex

piry

D

ate

Man

ager

Co

Com

b R

ep ID

Ta

g A

rea

Are

a U

nits

R

ent

Com

mitm

ent

Hol

ders

A

rea

(Ha)

Pr

ojec

t Sh

ire R

ates

E59

/888

W

AR

A

pplic

atio

n 28

/07/

1998

5

Mon

arch

Mon

arch

5

BLO

C

$569

.25

$15,

000

Maw

son

Wes

t Ltd

14

97.5

W

arrie

dar

263.

75

E59

/133

3 W

AR

A

pplic

atio

n 30

/01/

2007

5

Mon

arch

Mon

arch

1

BLO

C

$230

.00

$10,

000

Min

jar G

old,

Roy

al R

esou

rces

29

9.5

War

rieda

r 26

3.75

M

59/5

81

WA

R

App

licat

ion

12/0

3/20

03

21

Mon

arch

Mon

arch

29

5 H

a $4

,413

.20

$29,

500

Min

jar G

old,

Roy

al R

esou

rces

29

5 W

arrie

dar

4519

.4

M59

/583

W

AR

A

pplic

atio

n 22

/05/

2003

21

M

onar

ch

M

onar

ch

897

Ha

$13,

419.

12

$89,

700

Min

jar G

old,

Roy

al R

esou

rces

89

7 W

arrie

dar

1374

2.04

M

59/6

65

WA

R

App

licat

ion

19/1

2/20

05

21

Mon

arch

Mon

arch

77

2 H

a $1

1,54

9.12

$7

7,20

0 G

inda

lbie

, Roy

al R

esou

rces

77

2 W

arrie

dar

1182

7.04

M

59/6

66

WA

R

App

licat

ion

19/1

2/20

05

21

Mon

arch

Mon

arch

20

2 H

a $3

,021

.92

$20,

200

Gin

dalb

ie, R

oyal

Res

ourc

es

202

War

rieda

r 30

94.6

4 P

59/1

794

WA

R

App

licat

ion

30/0

1/20

07

4

M

onar

ch

M

onar

ch

107

Ha

$235

.40

$4,2

80

Gin

dalb

ie M

etal

s Lt

d &

Roy

al R

esou

rces

Ltd

10

7 W

arrie

dar

263.

75

P59

/179

9 W

AR

A

pplic

atio

n 30

/01/

2007

4

Mon

arch

Mon

arch

43

H

a $9

4.60

$2

,000

M

inja

r Gol

d, R

oyal

Res

ourc

es

43

War

rieda

r 26

3.75

E

59/7

23

WA

R

Gra

nted

24

/06/

1996

16

/01/

2002

2

15/0

1/20

04

Mon

arch

C

232/

2007

M

onar

ch

1 B

LOC

$4

55.1

8 $2

0,00

0 M

inja

r Gol

d, R

oyal

Res

ourc

es

299.

5 W

arrie

dar

263.

75

E59

/887

W

arbu

rton

Gra

nted

28

/07/

1998

9/

10/2

002

5 8/

10/2

009

Mon

arch

C

232/

2007

M

onar

ch

17

BLO

C

$1,7

85.8

5 $3

0,00

0 G

inda

lbie

, Roy

al R

esou

rces

50

91.5

W

arrie

dar

608.

43

E59

/935

W

AR

G

rant

ed

28/0

1/19

99

20/0

1/20

03

5 19

/01/

2009

M

onar

ch

C23

2/20

07

Mon

arch

24

B

LOC

$2

,521

.20

$21,

600

Gin

dalb

ie, R

oyal

Res

ourc

es

7188

.0

War

rieda

r 85

8.96

E

59/1

330

WA

R

Gra

nted

30

/01/

2007

16

/05/

2008

5

15/0

5/20

13

Mon

arch

Mon

arch

10

B

LOC

$1

,138

.50

$20,

000

Gin

dalb

ie M

etal

s Lt

d &

Roy

al R

esou

rces

Ltd

29

95.0

W

arrie

dar

357.

9 E

59/1

331

WA

R

Gra

nted

30

/01/

2007

9/

04/2

008

5 8/

04/2

013

Mon

arch

Mon

arch

4

BLO

C

$455

.40

$15,

000

Min

jar G

old,

Roy

al R

esou

rces

11

98.0

W

arrie

dar

263.

75

E59

/133

2 W

AR

G

rant

ed

30/0

1/20

07

9/04

/200

8 5

8/04

/201

3 M

onar

ch

M

onar

ch

3 B

LOC

$3

41.5

5 $1

5,00

0 M

inja

r Gol

d, R

oyal

Res

ourc

es

898.

5 W

arrie

dar

263.

75

P59

/179

5 W

AR

G

rant

ed

30/0

1/20

07

24/0

6/20

08

4 23

/06/

2012

M

onar

ch

M

onar

ch

26

Ha

$57.

20

$2,0

00

Gin

dalb

ie M

etal

s Lt

d &

Roy

al R

esou

rces

Ltd

26

W

arrie

dar

263.

75

P59

/179

6 W

AR

G

rant

ed

30/0

1/20

07

24/0

6/20

08

4 23

/06/

2012

M

onar

ch

M

onar

ch

95

Ha

$209

.00

$3,8

00

Min

jar G

old,

Roy

al R

esou

rces

95

W

arrie

dar

263.

75

P59

/179

7 W

AR

G

rant

ed

30/0

1/20

07

24/0

6/20

08

4 23

/06/

2012

M

onar

ch

M

onar

ch

21

Ha

$46.

20

$2,0

00

Min

jar G

old,

Roy

al R

esou

rces

21

W

arrie

dar

263.

75

P59

/179

8 W

AR

G

rant

ed

30/0

1/20

07

24/0

6/20

08

4 23

/06/

2012

M

onar

ch

M

onar

ch

73

Ha

$160

.60

$2,9

20

Min

jar G

old,

Roy

al R

esou

rces

73

W

arrie

dar

263.

75

For

per

sona

l use

onl

y

Appendix 4 Mt Mulgine JV

For

per

sona

l use

onl

y

App

endi

x 4

– P

erm

it D

etai

ls :

Mt M

ulgi

ne J

V P

age:

1

Tene

men

t Pr

ojec

t St

atus

A

pplic

atio

n D

ate

Gra

nted

D

ate

Term

(Y

ears

) Ex

piry

D

ate

Man

ager

Co

Com

b R

ep ID

Ta

g A

rea

Are

a U

nits

R

ent

Com

mitm

ent

Hol

ders

A

rea

(Ha)

Pr

ojec

t Sh

ire R

ates

E59

/105

7 M

UL

Gra

nted

19

/04/

2001

6/

01/2

006

5 5/

01/2

011

Vita

l Met

als

C19

6/19

94

Vita

l Met

als

6 B

LOC

$6

30.3

0 $2

0,00

0.00

G

inda

lbie

Met

als

Ltd

1797

.0

MM

26

3.75

E

59/1

324

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 3

BLO

C

$341

.55

$10,

000.

00

Gin

dalb

ie M

etal

s Lt

d 89

8.5

MM

26

3.75

E

59/5

66

MU

L R

enw

. Pen

d.

17/0

3/19

94

19/0

7/19

99

2 18

/07/

2001

V

ital M

etal

s C

196/

1994

V

ital M

etal

s 2

BLO

C

$210

.10

$50,

000.

00

Gin

dalb

ie M

etal

s Lt

d 59

9.0

MM

26

3.75

M

59/3

86

MU

L G

rant

ed

7/06

/199

5 20

/12/

1995

21

19

/12/

2016

V

ital M

etal

s C

196/

1994

V

ital M

etal

s 84

5 H

A

$11,

711.

70

$84,

500.

00

Gin

dalb

ie M

etal

s Lt

d 84

5 M

M

1294

5.40

M

59/3

87

MU

L G

rant

ed

7/06

/199

5 20

/12/

1995

21

19

/12/

2016

V

ital M

etal

s C

196/

1994

V

ital M

etal

s 88

7 H

A

$12,

293.

82

$88,

700.

00

Gin

dalb

ie M

etal

s Lt

d 88

7 M

M

1358

8.84

M

59/4

25

MU

L G

rant

ed

14/0

8/19

96

17/1

0/20

03

21

16/1

0/20

24

Vita

l Met

als

C19

6/19

94

Vita

l Met

als

940

HA

$1

3,02

8.40

$9

4,00

0.00

G

inda

lbie

Met

als

Ltd

940

MM

14

400.

80

M59

/426

M

UL

App

licat

ion

14/0

8/19

96

21

Vita

l Met

als

V

ital M

etal

s 92

3 H

A

$13,

808.

08

$92,

300.

00

Gin

dalb

ie M

etal

s Lt

d 92

3 M

M

1414

0.36

M

59/4

61

MU

L A

pplic

atio

n 5/

06/1

997

21

Vita

l Met

als

V

ital M

etal

s 86

2 H

A

$12,

895.

52

$86,

200.

00

Gin

dalb

ie M

etal

s Lt

d 86

2 M

M

1320

5.84

M

59/5

63

MU

L A

pplic

atio

n 21

/03/

2002

21

V

ital M

etal

s

Vita

l Met

als

120

HA

$1

,795

.20

$12,

000.

00

Gin

dalb

ie M

etal

s Lt

d 12

0 M

M

1838

.40

P59

/108

3 M

UL

Gra

nted

5/

02/1

992

25/0

8/19

94

2 24

/08/

1996

V

ital M

etal

s C

196/

1994

V

ital M

etal

s 16

9.47

5 H

A

$336

.60

$6,8

00.0

0 G

inda

lbie

Met

als

Ltd

169.

475

MM

37

3.52

P

59/1

084

MU

L G

rant

ed

5/02

/199

2 25

/08/

1994

2

24/0

8/19

96

Vita

l Met

als

C19

6/19

94

Vita

l Met

als

167.

72

HA

$3

32.6

4 $6

7,20

0.00

G

inda

lbie

Met

als

Ltd

167.

72

MM

36

9.65

P

59/1

086

MU

L G

rant

ed

5/02

/199

2 25

/08/

1994

2

24/0

8/19

96

Vita

l Met

als

C19

6/19

94

Vita

l Met

als

105.

1 H

A

$209

.88

$4,2

40.0

0 G

inda

lbie

Met

als

Ltd

105.

1 M

M

263.

75

P59

/108

7 M

UL

Gra

nted

5/

02/1

992

25/0

8/19

94

2 24

/08/

1996

V

ital M

etal

s C

196/

1994

V

ital M

etal

s 15

0 H

A

$297

.00

$6,0

00.0

0 G

inda

lbie

Met

als

Ltd

150

MM

33

0.60

P

59/1

781

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 17

3.94

H

A

$383

$6

,957

.60

Gin

dalb

ie M

etal

s Lt

d 17

3.94

M

M

383.

36

P59

/178

2 M

UL

App

licat

ion

24/0

1/20

07

V

ital M

etal

s

Vita

l Met

als

128.

56

HA

$2

83

$5,1

42.4

0 G

inda

lbie

Met

als

Ltd

128.

56

MM

28

3.35

P

59/1

783

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 16

3.76

H

A

$360

$6

,550

.40

Gin

dalb

ie M

etal

s Lt

d 16

3.76

M

M

360.

93

P59

/178

4 M

UL

App

licat

ion

24/0

1/20

07

V

ital M

etal

s

Vita

l Met

als

154.

01

HA

$3

39

$6,1

60.4

0 G

inda

lbie

Met

als

Ltd

154.

01

MM

33

9.44

P

59/1

785

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 16

7.89

H

A

$369

$6

,715

.60

Gin

dalb

ie M

etal

s Lt

d 16

7.89

M

M

370.

03

P59

/178

6 M

UL

App

licat

ion

24/0

1/20

07

V

ital M

etal

s

Vita

l Met

als

164.

04

HA

$3

61

$6,5

61.6

0 G

inda

lbie

Met

als

Ltd

164.

04

MM

36

1.54

P

59/1

787

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 14

2.17

H

A

$313

$5

,686

.80

Gin

dalb

ie M

etal

s Lt

d 14

2.17

M

M

313.

34

P59

/178

8 M

UL

App

licat

ion

24/0

1/20

07

V

ital M

etal

s

Vita

l Met

als

105.

04

HA

$2

31

$4,2

01.6

0 G

inda

lbie

Met

als

Ltd

105.

04

MM

26

3.75

P

59/1

789

MU

L A

pplic

atio

n 24

/01/

2007

Vita

l Met

als

V

ital M

etal

s 15

0.53

H

A

$331

$6

,021

.20

Gin

dalb

ie M

etal

s Lt

d 15

0.53

M

M

331.

77

P59

/179

0 M

UL

App

licat

ion

24/0

1/20

07

V

ital M

etal

s

Vita

l Met

als

191.

64

HA

$4

22

$7,6

65.6

0 G

inda

lbie

Met

als

Ltd

191.

64

MM

42

2.37

For

per

sona

l use

onl

y


About Deloitte

‘Deloitte’ refers to the Australian partnership of Deloitte Touche Tohmatsu and its subsidiaries. Deloitte, one of Australia’s leading professional services firms, provides audit, tax, consulting, and financial advisory services through around 3000 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we are dedicated to helping our clients and our people excel. For more information, please visit Deloitte’s web site at www.deloitte.com.au.

Deloitte is a member of Deloitte Touche Tohmatsu (a Swiss Verein). As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names “Deloitte”, “Deloitte & Touche”, “Deloitte Touche Tohmatsu”, or other, related names. Services are provided by the member firms or their subsidiaries and affiliates and not by the Deloitte Touche Tohmatsu Verein.

Liability limited by a scheme approved under Professional Standards Legislation.

Confidential - this document and the information contained in it are confidential and should not be used or disclosed in any way without our prior consent.

© Deloitte Touche Tohmatsu. December 2008. All rights reserved.

For

per

sona

l use

onl

y

24 december 2008 ms elizabeth harris for personal use only ... · 24/12/2008 · 24 december 2008...

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