Company Presentation:

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1 Company Presentation: The Selenge Iron Ore Project Robert Wrixon Managing Director Platts Steel Markets Asia Conference 20 November 2012

2 COMPETENT PERSON S STATEMENTS AND DISCLAIMERS Competent Persons Statements The information in this presentation that relates to Exploration Results and Exploration Targets is based on information compiled and reviewed by Mr Kerry Griffin, who is a Member of the Australian Institute of Geoscientists. Mr Griffin has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Griffin is the Technical Director of Haranga Resources Limited and consents to the inclusion in this report of the matters based on his information, and information presented to him, in the form and context in which it appears. The technical information contained in this announcement in relation to the JORC Compliant Resource for the Bayantsogt Deposit has been reviewed by Mr Peter Ball of DataGeo Ltd, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Ball has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Ball consents to the inclusion in this report of the matters based on his information, and information presented to him, in the form and context in which it appears. Exploration Targets Exploration Targets are conceptual in nature and should not be construed as indicating the existence of a JORC Code compliant mineral resource. There is insufficient information to establish whether further exploration will result in the determination of a mineral resource within the meaning of the JORC Code. Forward Looking Statements This presentation includes certain forward looking statements. All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management s best judgment as of the date hereof based on information currently available. The company does not assume the obligation to update any forward-looking statement. 2

3 OVERVIEW Flagship Selenge Iron Ore Project Four Primary Targets Drilled Initial JORC Resource at only one target (Bayantsogt: 33Mt) based on 2011 drilling Mt total Exploration Target at Selenge Close to rail and road infrastructure, easy access to market Next to Mongolia s largest iron ore export mine (Eruu Gol: approx 300Mt) 2012 drilling is now complete, major JORC resource upgrade by April 2013 Excellent metallurgical properties yield a premium magnetite concentrate MOU for 5Mtpa of rail capacity signed with Mongolian Government and Railway Authority Supportive Major Investor: Lippo Group Lippo Group increased holding from 7.4% to 13.9% via $6m placement in March 2012 Subsequently increased their interest on market to 15.3% Mongolian iron ore exports growing rapidly due to healthy margins and the market outlook for inland China remains strong 3

4 COMPANY SNAPSHOT (26 October 2012) Share price / volume history (A$; millions) 52 week low 52 week high 30 day VWAP Date 17-Oct Mar-12 Share price $0.19 $0.54 $0.22 Key statistics (A$) Ordinary shares on issue 26-Oct m Unlisted options 1 26-Oct-12 - Share price 26-Oct-12 $0.20 Share Price (A$) $0.60 $0.50 $ Volume (m) Market capitalisation 26-Oct-12 $42.35m Fully diluted market capitalisation 26-Oct-12 $42.35m Cash 30-Sep-12 $8.92m Undiluted enterprise value Diluted enterprise value 2 $33.43m $33.43m $ Substantial shareholders $0.20 $ Name No. Shares Held % of Shares on Issue Golden Rain (Lippo Group) 32.47m 15.33% Geotrass LLC 10.00m 4.72% $0.00 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug In the money options only. 36.0m options on issue in total 2. Adjusted for cash received from exercise of options Source: Bloomberg as at 26 October Directors interests Directors collectively hold 12.1% of the shares on issue 4

5 BOARD Matthew Wood Chairman Robert Wrixon Managing Director Erdene Tsengelbayar Exec Director & COO Kerry Griffin Techincal Director Timothy Flavel Director and Coy Sec Batochir Sukhbaatar Non Exec Director Daniel Crennan Non Exec Director Marshall Cooper Non Exec Director 19 years experience in the resources sector with both major and junior resource companies Currently a Director of Voyager Resources, Avanco Resources, Lindian Resources and Copper Range, previously Chairman of Mongolia focused Hunnu Coal Limited 16 years commercial experience in engineering, strategy consulting, mineral asset acquisition and corporate strategy (with Xstrata plc) and exploration management Ph.D in Mineral Engineering from the University of California, Berkeley and B.Eng degree in Chemical Engineering from Princeton University (USA) Previously Managing Director of Uranio Limited / Manhattan Corporation Limited Investment Banking and resource valuation expertise, qualified mineral economist Over 25 years operational and management expertise natural resources in Mongolia Geologist with 18 years experience in exploration, resource development, mining geology and asset acquisition in Australia, Africa and Mongolia Previous senior roles in Mongolia with Ivanhoe Mines and Aspire Mining Chartered Accountant with 20+ years experience in mining and accounting Currently Director and Company Secretary of Voyager Resources and Copper Range Successful Mongolian businessman and Joint Venture partner in the Selenge Project Melbourne-based barrister with Aickin Chambers, expertise in Corporations and Commercial Law Currently a director of Castillo Copper Limited, previously on the board of Hunnu Coal Head of Mining Investments for Lippo Energy Representative of the Lippo Group, the Company s largest shareholder 5

6 AN ASX LISTED MONGOLIAN COMPANY Operating in Mongolia for almost three years Listed on the ASX in December 2010 IPO heavily marketed in Mongolia through CPS International and MICC Over 200 Mongolian shareholders (almost 20% of investor base) All key projects are joint ventures with Mongolian partners Two Mongolian board members 23 of 25 employees are Mongolian nationals, all based in Mongolia Over $20m invested in Mongolia to date Currently running Mongolia s largest drill program 35,000m of diamond drilling in

7 CSR AND ENVIRONMENTAL STEWARDSHIP Selenge is Mongolia s largest drill program A social licence to operate is a must HAR, VOR and Hunnu Coal jointly run one of Mongolia s largest private student scholarship program 15 students currently in the program, 6 are HAR students 4 of the students are from the local community near Selenge All students get summer work experience with HAR New water bore to be donated to the local community Haranga sponsored this year s local summer festival 30,000 spruce, pine and birdcherry trees planted and protected in 10 different areas in the local soum Exploration camp quality and drilling rehab as per western/australian standard 7

8 Iron ore consumption/production forecast in China s northern provinces (Million Tonnes at 20% Fe grade equivalent) In 2012 China will mine 1Bt of raw iron ore at an average grade of 17% Fe Providing only 1/3 of requirement China is fundamentally short iron ore Source: CRU Strategies; Noble Group 8

9 STEEL MILLS IN NORTHERN CHINA Inland steel mills of northern China are fed by domestic low grade magnetite mines Mongolian magnetite concentrate is the perfect replacement for declining domestic supply Source: CRU Strategies 9

10 MONGOLIAN IRON ORE EXPORT GROWTH Quarterly Mongolian Iron Ore Exports to China Source: National Statistics Office of Mongolia From practically zero in 2008, Mongolian iron ore exports are expected to reach around 7Mt in

11 HARANGA HAS FOUR MONGOLIAN IRON ORE PROJECTS Proximity to transport & infrastructure is vital to access the northern Chinese market Selenge and Shavdal projects are close to existing iron ore export mines All projects are targeting large magnetite deposits Selenge is the Company s most advanced project; currently undertaking the country s largest drill program 11

12 THE SELENGE PROJECT LOCATION (Haranga: 80%) Largest ground holding in Mongolia s premier iron ore belt 200km north of UB Nearby to Eruu Gol mine (300Mt) and the Tumurtei (230Mt), Tumur Tolgoi (25Mt) iron ore deposits* Eruu Gol iron ore mine: Mongolia s largest Currently exporting 5 Mtpa Building wet mag sep plant to expand to 8 Mtpa** CIC invested $700m to obtain ~35% of Eruu Gol in 2009*** Populous industrial and agricultural region, well served by infrastructure Availability of power and water Sources: * Mineral Resources Authority of Mongolia Register of Mineral Deposits; Golomt Bank Mongolia Economic Review Dec 2010 ** National Statistics Office of Mongolia; Company Presentation Metals Mongolia Conference 2011 *** Wall Street Journal 29 Oct 2009 (CIC = China Investment Corp) 12

13 ERUU GOL MINE GOOD ANALOGUE FOR SELENGE Eruu Gol resource approx 300Mt Located within a magnetite hill hence low strip ratio, low mining cost Banded magnetite skarn deposit hence straightforward, low cost beneficiation Upgraded using dry magnetic concentrators 58-62% Fe magnetite concentrate from a feed grade of approx 35% Fe Exporting 5Mt of this product in 2012 Wet magnetic separation plant under construction Will produce 66% Fe premium concentrate Expansion to 8 Mtpa end 2014 Recently signed offtake agreement with Winsway for 30Mtpa by 2017 New rail spur to the Eruu Gol Mine ERUU GOL VALUATION: Approx US$2.0B based on 2009 CIC purchase (minimal production and no rail spur at the time) US$3Bn Hong Kong IPO under discussion Overburden Removal at Eruu Gol Sources: Mineral Resources Authority of Mongolia Register of Mineral Deposits; Golomt Bank Mongolia Economic Review Dec National Statistics Office of Mongolia; Company Presentation Metals Mongolia Conference Wall Street Journal 29 Oct 2009 (CIC = China Investment Corp). 13

14 ERUU GOL A 5MTPA INTEGRATED EXPORT OPERATION 14

15 THE IRON MINERALISATION CORRIDOR AT SELENGE Almost all the best magnetite skarn deposits known to exist in Mongolia are located in this Iron Mineralisation Corridor in Selenge Province 15

16 TARGETS IDENTIFIED AT SELENGE PROJECT All four primary targets drilled and contain significant intervals of iron ore Two new targets recently identified 16

17 DRILL PLAN MAP AT BAYANTSOGT (OVER MAGNETICS) 46 of 53 holes have hit iron mineralisation Selected intersections: 103m at 44% Fe from 225m (BTDH 20) includes 28m at 58% Fe 97m at 44% Fe from 223m (BTDH 32) includes 29m at 54% Fe 71m at 37% Fe from 266m (BTDH 15) includes 12m at 50% Fe 20m at 47% Fe from 35m (BTDH 18) 12m at 42% Fe from 113m (BTDH 17) 10m at 42% Fe from 113m (BTDH 8) Consistent iron lodes from surface, increasing in size and grade at depth Mineralisation remains open to the SW and at depth 17

18 INITIAL RESOURCE AND CROSS SECTION AT BAYANTSOGT JORC Code (2004) Inferred Resource Table Cutoff Grade (% Fe) Tonnes (million) Average Grade (% Fe) 15% Cutoff % Fe 25% Cutoff % Fe 30% Cutoff % Fe Drilling this year will expand the resource High grade zone has been extended New Exploration Target is 40-60Mt 18

19 DRILL PLAN MAP AT DUND BULAG (OVER MAGNETICS) Dund Bulag is the largest target, again coincident with a large magnetite skarn hill Very wide iron lodes from surface: 85m at 22% Fe from 121m (DBDH 1) 20m at 24% Fe from 0m (DBDH 3) 54m at 22% Fe from 98m (DBDH 5) - includes 6m at 31% Fe 132m at 20% Fe from 103m (DBDH 8) 126m at 20% Fe from 242m (DBDH 9) 19

20 INTERPRETED CROSS SECTION AT DUND BULAG Very low strip ratio Exploration Target: Mt of ore 20

21 EXCELLENT METALLURGICAL PROPERTIES Banded Magnetite Skarn mineralisation at Selenge: Coarse grained with SiO2 primarily in separate bands Far more easily beneficiated than typical Australian massive magnetites Deposit/ Prospect Average Raw Fe Grade Average Mass Yield Summary of All DTR Tests from Every Metre of 2011 Mineralised Core Average Concentrate Quality (75µm Grind, 10% Yield Cutoff) Fe (%) SiO2 (%) Al2O3 (%) Bayantsogt 30.1% 29.1% Dund Bulag 18.5% 18.0% Huiten Gol 27.7% 29.8% S (%) P (%) Even the lower grade ore produces a 65-66% Fe concentrate at 75µm grind High Fe and low impurities should allow premium pricing 21

22 INLAND CHINESE IRON ORE PRICES REMAIN STRONG Monthly Average Spot Prices for Seaborne Imports vs Inland Domestic Iron Ore US$130/t US$102/t Source: AME Group Monthly Iron Ore Outlook October

23 LOW END OF THE COST CURVE This is a sustainable long term advantage into the inland northern Chinese steel mills reliant on domestic magnetite and poorly served by seaborne imports. Source: CRU Strategies, Macquarie Bank, ProMet Engineers Techno-Economic Assessment on the Selenge Iron Ore Project 23

24 SUMMARY AND SELENGE PROJECT PLAN China mines ~1Bt per year of iron ore, 17% Fe average Primarily magnetite mines - forecast decline in grade and tonnes Growing demand and high prices for magnetite concentrate in inland northern China Bayantsogt and Dund Bulag are well advanced High grade Huiten Gol and new discovery at Undur Ukhaa give further upside Total Exploration target of Mt for the four drilled targets only Excellent Met Results: 65-66% Fe concentrate achieved Highly positive preliminary Scoping Study Six month newsflow for Selenge Project 35,000m drill program almost complete, substantial resource uplift expected by April 2013 Mining Licence application underway final submission by end 2012 More Met Testing: Coarser grind sizes and dry magnetic separation Full feasibility study to commence in