SYDNEY MINING CLUBPRESENTATION

“The voice of the Customer”

MARK CUTIFANI, Managing Director

SONS OF GWALIA LTD

6 September 2001

SONS OF GWALIA LTD

AGENDA

• Introduction

• Business context

• Tantalum - A case study

• Sons of Gwalia - Strategic directions

• Summary - Portfolio position

SONS OF GWALIA LTD

ADVANCED MINERALSCore business

Profitable, Significant Growth

GOLDCore business

Profitable, Significant

MINERAL SANDSLow risk

opportunity

SONS OF GWALIA LTD - AN AUSTRALIAN MINER

SONS OF GWALIA LTD

SONS OF GWALIA OPERATIONS

WA

Wodgina

Greenbushes

Leonora Region

Laverton Region

Southern Cross Region

Murray Basin JV

GoldAdvanced Minerals

Perth

Port Hedland

Kalgoorlie

SONS OF GWALIA LTD

FOCUS ON RESULTS EPS(cents)

Pro

fit

A$

mill

ion

Profit after tax & before abnormals

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1993 1994 1995 1996 1997 1998 1999 2000 2001

0

10

20

30

40

50

60

SONS OF GWALIA LTD

MAJOR GOLD COMPANIES - 2000 ROIC

-5%

0%

5%

10%

15%

20%

25%

30% Sons of Gwalia - 24%

Sons of Gwalia - 24%

Source: Merrill Lynch, May 2001Source: Merrill Lynch, May 2001

SONS OF GWALIA LTD

RELATIVE PERFORMANCE

0.9

1.1

1.3

1.5

1.7

1.9

SGW AllRes Top100

Sons of GwaliaSons of Gwalia

SONS OF GWALIA LTD

BUSINESS CONTEXT

• Changing the rules

• Implications of change

• Tantalum - A case study

SONS OF GWALIA LTD

BUSINESS CONTEXT - A CHANGING WORLD

• Information and Communication

• Faster / Higher - Focus on performance

• Life cycle costs

• Technology obsolescence

• Environment - Energy efficiency

THE CUSTOMER IS LOOKING FOR NEW SOLUTIONS TO OLD PROBLEMS

THE CUSTOMER IS LOOKING FOR NEW SOLUTIONS TO OLD PROBLEMS

SONS OF GWALIA LTD

BUSINESS CONTEXT - IMPLICATIONS

• A new world - Looking for new solutions

• Material Sciences - Identifying possibilities

• Light Metals - The new wave

• Base Metals - Future position?

HOW DOES THE MINERALS INDUSTRY MEET THESECHALLENGES?

HOW DOES THE MINERALS INDUSTRY MEET THESECHALLENGES?

SONS OF GWALIA LTD

TANTALUM - A CASE STUDY

• Properties - A competitive edge

• Applications - An emerging position

• Market Growth - What can we see

• Gwalia’s response to the customer

SONS OF GWALIA LTD

WHAT IS TANTALUM?

• Grey-blue metal

• Soft, ductile

• High melting (2,997ºC) and boiling points (5,425 ºC)

• Low co-efficient of thermal expansion

• Excellent capacity to store and release electrical charge

• Exceptional resistance to corrosion

SONS OF GWALIA LTD

TANTALUM APPLICATIONS

• Electronics– PCs, Palm Pilots– Video Cameras, Sony Playstations– Automotive electronics

• Telecommunications– Mobile Phones– Base Stations

• Alloys– Turbine blades in powerstations– Aerospace

SONS OF GWALIA LTD

ELECTRONICS

61%

ELECTRONICS

61%

MILL PRODUCTS

15%

MILL PRODUCTS

15%

METAL CUTTING

8%

METAL CUTTING

8%

CHEMICALS

6%

CHEMICALS

6% SUPER ALLOYS

10%

SUPER ALLOYS

10%

TANTALUM USAGE - 2000

TANTALUM DEMAND - 2000TANTALUM DEMAND - 20005 million lbs Tantalum5 million lbs Tantalum6.3 million lbs Ta6.3 million lbs Ta22OO55

SONS OF GWALIA LTD

TANTALUM DEMAND GROWTH

0.01.02.03.04.05.06.07.08.09.0

'000

lbs

Ta2

O5

Forecast @ 8%paForecast @ 8%pa

Historical tantalum demand Historical tantalum demand

SONS OF GWALIA LTD

CANADA - 8% CANADA - 8%

BRAZIL - 5%BRAZIL - 5%OTHER- 12%OTHER- 12%

GLOBAL TANTALUM RESERVE BASE - 2001

Sons of Gwalia - 75%Sons of Gwalia - 75%

Source: US Geological Survey - January 2001Source: US Geological Survey - January 2001

SONS OF GWALIA LTD

SOURCES OF RAW MATERIAL - 2000

Brazil

Africa

Other

Synthetics

US DLA

Russia

Asia

China

CanadaSons of Gwalia

26%

SONS OF GWALIA LTD

MAJOR TANTALUM MINES POST EXPANSIONS

0

200

400

600

800

1000

1200

1400

'000

lbs

per

an

nu

m

Brazil

Brazil

Brazil

Brazil

Canada

Canada

Ethiopia

Ethiopia

China

China

China

China

SONS OF GWALIA LTD

TANTALUM - ORGANIC GROWTH

FOCUS ON STABILISING THE MARKET AND DELIVERING VALUE TO OUR

CUSTOMERS

• Dominant Resource position

• Regional positions / Established infrastructure

• Low cost production

• Take or Pay Contracts– Growth profile– Revenues protected

• Multiple options for growth

SONS OF GWALIA LTD

MANAGING THE MARKET

• Customer needs

• Value Chain

• Supply Chain Integration

• Product Research

• Promotion

SONS OF GWALIA LTD

STRATEGIC DEVELOPMENT

• Business model

• Core skills

• Core values

• Objectives

• Portfolio assessment

SONS OF GWALIA LTD

STRATEGIC DIRECTIONS - BUSINESS MODEL

• Commodity - Growth potential- Resource positions

• Capital Intensity - Establishment- Risk profile

• Margin Potential - Cost structures- Revenue risks

DOES THE INDUSTRY STRUCTURE GIVE AN OPPORTUNITY TO MANAGE RETURNS?

SONS OF GWALIA LTD

SONS OF GWALIA - CORE SKILLS

• Geology - Regional exploration- Working-over ground

• Mining - Low Capital intensity- No frills

• Process - “Breakers” and “Shakers”- Infrastructure hubs

UNDERSTANDING OUR SKILLS BASE KEEPS US FOCUSSED ON WHERE WE CAN ADD VALUE

SONS OF GWALIA LTD

STRATEGIC DEVELOPMENT OBJECTIVES

GOLD - Secure production base- Improve quality of returns- Establish industry relevant position

TANTALUM - Secure resource position- Establish critical mass and low cost growth platform- Increase market penetration

MINERAL - Establish Resource base

SANDS - Establish product quality and market potential- Promote Murray Basin brand

POSITION FOR EXCEPTIONAL RETURNS

AND PROFITABLE GROWTH

SONS OF GWALIA LTD

GOLD - A CORE BUSINESS

• Profitable, high cash flow business

• Underwrite revenue through hedging

• Focus on capital efficiency & total returns– Infrastructure hub– Flexible ore sources– Rationalise to reduce costs

• 3 strategic regions– Leonora– Southern Cross– Laverton

SONS OF GWALIA LTD

PACMIN BID - RATIONALE

EARNINGS ACCRETIVE WHILE STRENGTHEN BASE TO MANAGE PROFITABLE GROWTH

• Strengthen Regional Positions

• Secures Production / Cost Base

• Enables more Effective Capital allocation

• Improves Industry Gold Position

• Strengthens Balance Sheet / Cash Flows

SONS OF GWALIA LTD

TANTALUM PRODUCTION & SALES

0

500

1000

1500

2000

2500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

‘00

0L

BS

‘00

0L

BS

ForecastForecast

GROWTH SECURED BY CONTRACTED

TAKE OR PAY SALES

SONS OF GWALIA LTD

MURRAY BASIN TITANIUM

• First mineral sands producer• Commissioned March 01• Sales contracts in place• First shipments June 01• Production:

– 30,000tpa rutile– 10,000tpa zircon– 30,000tpa ilmenite

• Total Resources: 15.4Mt HMC• 156% increase in Resources

in 12 months• Excellent exploration potential

SONS OF GWALIA LTD

MURRAY BASIN 2002 BUSINESS OBJECTIVES

• Ramp production to full capacity

• Establish Murray Basin Titanium Brand– Rutile– Zircon

• Consolidate Resource base to underwrite Stage II potential

• Confirm ilmenite processing & market quality

POSITION FOR NEXT DEVELOPMENT PHASE

SONS OF GWALIA LTD

SONS OF GWALIA - OPPORTUNITIES

FOCUS ON CUSTOMER NEEDS WILL PLAY A SIGNIFICANT PART IN DIRECTING OUR

FUTURE DEVELOPMENT

• TITANIUM - The third wave?

• LITHIUM - The fourth wave?

• OTHER - New technologies

- New applications

SONS OF GWALIA LTD

SONS OF GWALIA - ASSET PORTFOLIO

PORTFOLIO STRUCTURED TO DELIVER

RETURNS AND PROFITABLE GROWTH

• GOLD - Long-term sustainable profits

• TANTALUM - Growth profile

• MINERAL SANDS - Seeding an Opportunity

• OPPORTUNITIES - Identifying strategic fit

SONS OF GWALIA LTD

SONS OF GWALIA - FOCUS ON RESULTS EPS(cents)

Pro

fit

A$

mill

ion

Profit after tax & before abnormals

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1993 1994 1995 1996 1997 1998 1999 2000 2001

0

10

20

30

40

50

60

SONS OF GWALIA LTD

SSONS OF ONS OF GGWALIAWALIASSONS OF ONS OF GGWALIAWALIAwww.sog.com.auwww.sog.com.au

SONS OF GWALIA LTD