SPG Mineração S. A. Tartarugal Grande Iron Ore Project

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2 THE PROJECT Introduction 3 Amapa State 5 DNPM Process / Procedures 6 Capacity 7 LOGISTICS Cost Position / Expected Sales Destination 9 Actual Scenery 10 Existing Railroad 12 Railroad Project 14 CURRENT STATUS Trenches 15 Geophysics 16 Drilling Job 18 Final Report Approved 20 allan@spgmineracao.com.br 2

3 Introduction is a holding company of Mineral Rights in Amapa State, northern of Brazil. His main area of activity is a development of new business related to the exploitation of deposits of iron ore. Founded in 2006 by three partners / shareholders, SPG Mineração S. A. has been preparing since them, the consolidation of the Greenfield Project, Tartarugal Grande Iron Ore, located in Tartarugalzinho County, Amapa State. Currently the structure of SPG Mineração S.A is made up of 88% of own Shares and 12% of company shares Acquired by a Russian company, SEVERSTAL in This document is a brief presentation of all aspects related to the design, quality of the ore, the DNPM processes, logistics and drilling studies already performed. allan@spgmineracao.com.br 3

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5 Amapa State Northern Brazilian state with population of 734 th. people. The state s GDP (2010: c. $4.2bn) is dominated by services (69%), followed by agriculture and forestry (19%) and industrial production (12%). Mining products (iron ore, manganese) account for more than 90% of the state s exports, followed by timber (5%) and agriculture products (1-2%). The state has a great amount of high quality highways with extremely low load rate, the capital Macapa has an international airport. The first railroad from the port Macapa was built in 1940s when a huge manganese deposit was discovered. The state has c. 237 Mwatt /h. power generation supply and c. 200 Mwatt/h. power generation demand. Currently 4 new dams are being built with total generation capacity of Mwatt/h. The Brazilian government wants the Amapa state to become a net exporter of electricity. Brazil Map and Amapá State in red. allan@spgmineracao.com.br 5

6 DNPM DNPM Processes with Final Report approved by DNPM / Hectars / Hectars / Hectars / Hectars DNPM Processes with Partial Report approved by DNPM / Hectars / Hectars / Hectars Areas: Hectars (473 km² / 294 mi²) All of these processes can be checked on the following address: and their respectives DNPM processes. allan@spgmineracao.com.br 6

7 Capacity The deposit contains both hematite and magnetite ores with the latter being located very close to the surface and may be sold as direct shipping ore. Resource base is estimated at bn tonnes. Magnetite grade accounts for ~40% Fe, while hematite grade. Is estimated at much higher level of 60-65% Fe. In case hematite part of the deposit contains enough reserves the project may be started with mining high-grade low-cost hematite first and turning to magnetite afterward. areas inside the Amapá State, painted in RED. 7

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9 Cost Position The State of Amapa is in a very favorable region in relation to maritime logistics, the navigation distance to the Panama canal is 2,200 nautical miles, a good point for Asian and a west coast countries of North America. Expected Sales Destinations. allan@spgmineracao.com.br 9

10 Actual Scenery Currently the logistics can be made through trucks from the areas of to the port of Santana. This path can be done by trucks with a capacity of 50 tons. The distance between areas of To the port of Santana is approximately 216 Kilometers (134 Miles). This highway has a low rate of traffic and a high quality asphalt with no incidence of tolls. Actually two companies do this kind of logistics. (ZAMAPA and UN- AMGEN). BR-156 Road between SPG Minerção S. A. to Santana Port. allan@spgmineracao.com.br 10

11 BR-156 Road, near the acces to 11

12 Existing Railroad We can consider a combined transport, which would be done by truck to the city of Porto Grande at 100 Kilometres (60 Miles), and in Porto Grande, would be created the access to the current railroad linking the Serra do Navio to the port of Santana, in this case. We would use the railroad during 120 Kilometers (75 miles) until Porto Grande to Porto de Santana. This facility was created by the American company ICOMI, in order to transport Manganese from Serra do Navio to Porto de Santana. Existing Amapá Railway. allan@spgmineracao.com.br 12

13 Existing Railroad In this Map we can check some SPG Mineraçao S. A. areas and the existing Railroad near the BR-156. The areas appears in PINK color. Existing Amapá Railway. 13

14 Railroad Project To build this access, we will consider a cost of approximately US$ 1,500, per 1 Kilometer (0.6 Mile) For the extension of 99.6 Kilometers (62 Miles) will have a cost of approximately US$ 149,400, TRANSNORTE Railway Projection. allan@spgmineracao.com.br 14

15 Trenches During the year of 2011 and 2012 were 116 open trenches in strategic areas. Below are some images and data related to work performed. Open-pit method will be used to develop both hematite and magnetite parts. 15

16 Geophysics The geophysic map presented on this page was generated from a preliminary study of aerial geophysical interpretation, produced by RECONSULT Geofísica and supervised by technical staff of Figure 7: Magnetic Analytic Signal Block 1 Map. Flight parameters - 1 (TFTGN) and 2 (TFTG): Line Direction: N/S Tie Line Direction: E-W Line spacing: 100m Tie line Spacing (Global): 1000m (infill 200m) Crystal Volume (down): 2048 pol3 Nominal clearance: 100m Sampling Interval: 0.1s (mag), 1s (gamma). Aircraft: Cessna 208 Caravan Contractor: FUGRO Airborne Some Geophysical Data made by RECONSULT. allan@spgmineracao.com.br 16

17 Geophysics Magnetic method uses the Earth magnetic field to help mapping the subsurface. This is possible because some rocks are more magnetic than others. Magnetic Field can be measured through magnetometers. The obtained magnetic anomalies depend on the position of the rock. A fixed certain body will cause different anomalies if it is located in Australia, Africa, Canada, Brazil. In study area, the magnetic inclination is around 0 making the anomalies like a low magnetic, with the negative pole much higher than the positive. Figure 2 shows a typical magnetic anomaly in this latitude, in profile and in map: Figure 4: Total Magnetic Intensity Block 1 Map. Radiometrics is a measure of the natural radiation in the earth s surface, which can tell us about the distribution of certain soils and rocks. Geologists and geophysicists routinely use it as a geological mapping tool to tell them where certain rock types change. Some Geophysical Data made by RECONSULT. allan@spgmineracao.com.br 17

18 Drilling Job The works were made by drilling company BOART LONGYEAR, totaling 24 holes around the areas /2006, /2006, / /2006. The 24 holes has on average 118 meters each, totaling meters linear samples. 18

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20 Final Report Approved To access the Final Report Approved by DNPM, you must visit the follwing link: Some instructions is available to Download the file. The Official Report about this Approval is presented in Diário Oficial da União (The Brazilian Government Newspaper). These Newspaper is available in the following link:

21 Allan Pedrosa Vieira Nascimento - President / Director Ver Released December 2013 allan@spgmineracao.com.br Av. Sergipe, Macapá - Amapá - Brazil - ZIP