Australia-China Mineral Exploration Investment Seminar 2011 logo Australia - China Mineral Exploration Investment 2011 Earth resource investment opportunities in Victoria, Australia Paul McDonald Director, Prospectivity & Exploration Department of Primary Industries Victoria - AUSTRALIA

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Australia-China Mineral Exploration Investment Seminar 2011 logo Victorian earth resources – diverse and rich  Mineral sands – world-class province  Base metals – emerging province  Brown coal – principal province  Gold – world-class province  Oil & conventional gas – world-class province  Unconventional gas – potential  Geological Carbon Storage – emerging  Geothermal – emerging

Australia-China Mineral Exploration Investment Seminar 2011 logo Victoria – commodity overview Gas Gold Copper Mineral sands Oil Gas C storage Brown Coal Copper Lead Zinc Molybdenum Geothermal

Australia-China Mineral Exploration Investment Seminar 2011 logo Mineral Sands - overview Heavy mineral sands deposits Located in the Murray Basin, NW Victoria  Two main types; 1.Fine grained laterally extensive 2.Coarse grained linear strandlines  Three operating mines (coarse grained deposits)  Many undeveloped resources (fine & coarse grained deposits)

Australia-China Mineral Exploration Investment Seminar 2011 logo Mineral Sands - Developed & undeveloped resources

Australia-China Mineral Exploration Investment Seminar 2011 logo Mineral Sands market  Forecasts indicate TiO 2 supply shortages from 2012  Record rutile prices  Forecasts indicate Zircon supply shortages from 2011  Record zircon prices

Australia-China Mineral Exploration Investment Seminar 2011 logo Mineral Sands – factors for success  Economies of scale (large project, large resource)  Mineral assemblage (higher zircon and rutile proportion)  Resource grade (higher valuable heavy mineral content)  Ilmenite upgrading  Proximity to infrastructure  Sustainable competitive advantage rests on: size, grade, assemblage and upgrading

Australia-China Mineral Exploration Investment Seminar 2011 logo Victoria’s Mineral Sands – size and grade Large deposits, competitive grade in ground with favourable assemblage DepositAmountGrade (VHM) Status WIM Mt3.5%Inferred WIM Mt5.7%Measured WIM Mt4.5%Measured WIM Mt7.2%Indicated WIM Mt5.4%Indicated Total3072 Mt5.1% ave Data source: open file exploration reports

Australia-China Mineral Exploration Investment Seminar 2011 logo Victorian mineral sands – competitive advantage Deposit size Grade (ave) 3.2Bt1.8% Deposit size Grade (ave) 346Mt5.1% Deposit size Grade (ave) 146 Mt1% Base Iron – Kwale - Africa Gunson Resources – Coburn – W Aust Mineral Commodities – Xolobeni - Africa Deposit size Grade (ave) 979 Mt1.3% - Africa Data source: open file reports

Australia-China Mineral Exploration Investment Seminar 2011 logo Victorian Mineral Sands – Size and grade advantage Deposit size Grade (ave) ~ 3 Bt5.1% Similar deposit size but Victorian deposits have higher Zircon and higher titania minerals Deposit size Grade (ave) ~ 3 Bt1.8%

Australia-China Mineral Exploration Investment Seminar 2011 logo Victorian Mineral Sands – Investment opportunity  Industry currently highly attractive – excellent margins, sustained supply gap  Large undeveloped resources (~ 3 Bt)  High resource grades (3.5 – 7.2 %)  Mineral assemblage (higher zircon and rutile)  3% average demand growth predicted for mineral sands products (TiO 2 & Zircon)  Proximity to established port facilities  Access to competitive energy prices

Australia-China Mineral Exploration Investment Seminar 2011 logo Base metals - overview Base metal deposits  Several undeveloped resources  Exploration & discovery potential for;  Porphyry  SedEx  VHMS

Australia-China Mineral Exploration Investment Seminar 2011 logo Base metals – Investment opportunities Undeveloped resources and prospects Melbourne 1.BCD Resources NL. Inferred resource 66,000 t Cu 2.Jabiru Metals Ltd Mt 2.1% Cu, 4.4% Zn, 0.7% Pb 3.Dart Mining NL. Extensive area of mineralisation including 0.05% Molybdenum (Mo) including multiple higher grade zones of up to 0.63% Mo and Cu % Cu VERY limited exploration to date

Australia-China Mineral Exploration Investment Seminar 2011 logo Base metals – Investment opportunities Discovery potential Melbourne 1.Porphyry deposits - Arc related 2.Porphyry deposits - Back arc 3.SedEx: Sedimentary exhalative deposits 4.Avebury style Ni & Abundant new exploration targets

Australia-China Mineral Exploration Investment Seminar 2011 logo Gold - overview Gold deposits  Two operating mines  Numerous undeveloped resources  Abundant prospects  New disseminated gold potential

Australia-China Mineral Exploration Investment Seminar 2011 logo Gold - developed resources 1 2 Northgate Minerals Corporation 1.Stawell Gold Mine – 90,000 oz pa. 2.Fosterville Gold Mine – 100,000 oz pa.

Australia-China Mineral Exploration Investment Seminar 2011 logo Gold - Investment opportunities Undeveloped resources Undeveloped resources 1 - 9: Resource range 52,000 oz to 1.8 Moz Grade range 1.5 to 12.4 g/t Gold field New gold exploration targets

Australia-China Mineral Exploration Investment Seminar 2011 logo Low Sovereign Risk New Minerals Act (MRSDA) – the benefits Stage 1 benefits –Most modern earth resources legislation in the world –Aligns government licensing processes with industry development processes –Increases tenure security for those actively exploring/developing –Tenements not being explored/developed will become available for new applicants –More efficient works approval process –Bipartisan support Stage 2 improve interactions with other Government agencies

Australia-China Mineral Exploration Investment Seminar 2011 logo Victoria’s Outstanding Infrastructure Electricity Oil & Gas Rail lines

Australia-China Mineral Exploration Investment Seminar 2011 logo Victoria’s Gas – Investment opportunities Victoria is undeveloped for unconventional gas. Opportunities exists due to anticipated demand growth Discovery opportunities 1.Conventional gas 2.Unconventional gas 2 2

Australia-China Mineral Exploration Investment Seminar 2011 logo Victoria’s Geological Carbon Storage – Investment opportunities Affordable GCS opportunities for high carbon projects Victoria’s Gippsland Basin is one of the world’s best potential CO 2 storage sites

Australia-China Mineral Exploration Investment Seminar 2011 logo State-wide datasets & databases  Geology  Magnetics  Radiometrics (K, Th, U, TC)  Gravity  Electromagnetics  Digital Terrain  Databases – tenements, drill holes, geochemistry, geological sites, etc

Australia-China Mineral Exploration Investment Seminar 2011 logo Free reports & data – easy internet access  World-class 2D & 3D geoscience data  24/7 free access via  Online store  Web mapping

Australia-China Mineral Exploration Investment Seminar 2011 logo Key reasons to invest in Victoria  Potential to develop globally competitive mineral sands deposits  Potential to discover globally significant base metal deposits  Low sovereign risk  A pro-investment Government  Transparent, industry aligned approvals processes  Low cost and reliable electricity supply  Access to reticulated natural gas and transport infrastructure