1. 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

2. Australia-China Mineral Exploration Investment Seminar 2011 logo Copyright & disclaimer Copyright © State Government of Victoria 1996 - 2011 Copyright in this presentation is owned by the State of Victoria or used under licence. Disclaimer The content of this presentation is provided for information purposes only. No claim is made as to the accuracy of authenticity of the content of the presentation. In no event will the State of Victoria, its agents, instrumentalities and employees be liable for the accuracy of the information contained on this presentation nor its use of reliance placed on it. The information in the presentation is provided on the basis that all persons accessing it undertake responsibility for assessing the relevance and accuracy of its content. Information published by the Victorian Government is considered to be true and correct at the time of publication. Changes in circumstances after the time of publication may impact on the accuracy of this information and the Victorian Government gives no assurance of any information or advice contained.

3. 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

4. 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

5. 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)

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

7. 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

8. 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

9. 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 50710 Mt3.5%Inferred WIM 100210 Mt5.7%Measured WIM 150452 Mt4.5%Measured WIM 200430 Mt7.2%Indicated WIM 2501270 Mt5.4%Indicated Total3072 Mt5.1% ave Data source: open file exploration reports

10. 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

11. 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%

12. 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

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

14. Australia-China Mineral Exploration Investment Seminar 2011 logo Base metals – Investment opportunities Undeveloped resources and prospects 1 3 2 Melbourne 1.BCD Resources NL. Inferred resource 66,000 t Cu 2.Jabiru Metals Ltd. 12.5 Mt 2.1% Cu, 4.4% Zn, 0.7% Pb 3.Dart Mining NL. Extensive area of mineralisation including 436m @ 0.05% Molybdenum (Mo) including multiple higher grade zones of up to 0.63% Mo and Cu - 106m @ 0.15% Cu VERY limited exploration to date

15. 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 3 1 1 2 & 3 1 4 Abundant new exploration targets

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

17. 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.

18. Australia-China Mineral Exploration Investment Seminar 2011 logo Gold - Investment opportunities Undeveloped resources 1 2 4 3 5 6 7 8 9 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

19. 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

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

21. 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. 1 1 1 Discovery opportunities 1.Conventional gas 2.Unconventional gas 2 2

22. 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

23. 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

24. 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 www.dpi.vic.gov.au/earth-resources  Online store  Web mapping

25. 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