21 June 2011 - MEP SA Transport Infrastructure Presentation

Transport Infrastructure challenges for bulk iron from the Braemar Iron Formation.

The viewpoint of the Braemar Iron Alliance

SA Transport Infrastructure Conference, Adelaide21 June 2011

Andrew Woskett, Spokesman for the Braemar Iron Alliance

Managing Director, Minotaur Exploration Ltd (ASX: MEP)

This presentation has been prepared by the management of Minotaur Exploration Limited (MEP) on behalf of the Braemar Iron

Alliance, an unincorporated body, for the general benefit of analysts and industry and does not constitute specific advice to any

particular party or persons. Information herein is based on publicly available information, internally developed data and other sources.

Where an opinion, projection or forward looking statement is expressed in this presentation, it is based on the assumptions and

limitations mentioned herein and is an expression of present opinion only. No warranties or representations are made or implied as to

origin, validity, accuracy, completeness, currency or reliability of the information. MEP and Alliance members specifically disclaim and

exclude all liability (to the extent permitted by law) for losses, claims, damages, demands, costs and expenses of whatever nature

arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on

any of it. Where MEP or the Alliance expresses or implies an expectation or belief as to the success of future exploration and the

economic viability of future project evaluations, such expectation or belief is expressed in good faith and is believed to have a

reasonable basis. However, such projected outcomes are subject to risks, uncertainties and other factors which could cause actual

results to differ materially from projected future results. Such risks include, but are not limited to, exploration success, metal price

volatility, changes to current mineral resource estimates or targets, changes to assumptions for capital and operating costs as well as

political and operational risks and government regulatory outcomes. MEP and the Alliance disclaim any obligation to advise any

person if it or they become aware of any inaccuracy in or omission from any forecast or to update such forecast.

The following presentation is a visualisation of possible infrastructure solutions to

support potential future iron ore mine developments. Locations nominated for the

provision of infrastructure facilities are for illustration purposes only and should not be

considered viable technical, economic, environmental, social or State solutions for any

future requirements

Cautionary Statements

1. The Braemar Iron Alliance: members and objectives

2. The Braemar Iron Formation: where, what and why it is Australia’s next big Iron province

3. Mining development scenarios

4. Transport Infrastructure challenges:

Rail haulage of concentrates and lump ore

Concentrate Slurry transfer

Port capacity

Freight cost penalty

Braemar Ironstones: The infrastructure challenge

The Braemar Iron Alliance comprises:

Bonython Metals Group (private)

Carpentaria Exploration (ASX: CAP)

Havilah Resources (ASX: HAV)

Minotaur Exploration (ASX: MEP)

Royal Resources (ASX: RRL)

Sinosteel PepinNini JV (SPCM)

The Braemar Iron Alliance

The Braemar Iron Alliance intends to:

Define and articulate the demand case to

federal, state & local governments and

infrastructure investors for coordinated transport

and common user infrastructure to suit the

needs of the iron ore mining industry along the

Braemar Iron Formation

Braemar Ironstones: Australia’s next big Fe province

This presentation is based on a range of views held and assumptions made by members of the Braemar Iron Alliance, none of which

are yet supported by definitive feasibility studies into potential development of mineral resources.

The integrated, multi-user infrastructure facilities envisaged herein are hypothetical in nature and scope and there can be no level of

certainty that this or any concept may eventuate

The term "Exploration Target” used herein should not be misconstrued as an estimate of Mineral Resources and Reserves as defined by the JORC Code (2004), and the term has not been used in that context. It is uncertain if further exploration will result in the determination of a Mineral Resource.

Refer Cl 18 of the JORC Code (2004).

Braemar Ironstones: who is involved?

Iron mineralisation stretches for over 200km from SW of Broken Hill to Peterborough in SA

The formation straddles the heavy duty E-W rail link to Port Pirie on Upper Spencer Gulf

Braemar Ironstones: the potential mining scale

Alliance members foresee potential for up to 50

billion tonnes of mineable magnetite ore to be

defined through exploration over the next decade(‘Exploration Target’)

with scope for say 5 pits each mining 50 million

tonnes of ore p.a. and beneficiating around 10Mtpa

of concentrate each

for total annualised output of ~50Mtpa of blast

furnace quality magnetite concentrates grading 65%

- 70% Fe

and a foreseeable 100 year life of mining across the

Braemar ironstones

๏Rail:

• Main continental E-W standard gauge rail line runs right

through the Braemar Iron Formation

• Deposits are a 150km - 300km rail trip from Port Pirie

where a Pellet Plant could be established

• ARTC to upgrade E-W corridor in 2012

• Existing unused line capacity of 10Mtpa

• Rail access to each mine requires a 35km ‘spur’ into

train loading bins

• ‘balloon loop’ required at each mine for train turn

around and 24 hour loading/unloading

• Need 2,000m long trains, 25 tonne/axle, 100 tonne

wagons and 20,000 tonne train set capacity minimum

• Future line duplication needed to provide sufficient train

paths beyond 10Mtpa

• Need significant stockpile hardstand and negative

pressure storage sheds at Port or Pellet plant

Braemar Ironstones: Transporting Concentrates & lump iron

product to Port

Braemar Ironstones: Transferring Concentrates to Port

๏Slurry Pipeline:

• Slurry transfer is a cost effective alternative to rail

haulage for a long-term mining project

• Slurry transfer applies to concentrate movements

• We envisage a 300km long buried pipeline to Port Pirie

or 380km to a deep water port location

• It requires a 600mm diameter Concentrate delivery

pipe + Return Water Line

• Examples:

✴Century Zinc’s 300mm diameter concentrate pipeline is

304km long, moving concentrate in slurry

✴Minas Rio iron project, Brazil, 600mm diameter pipeline

is 522km long, to transport 24.5Mtpa of concentrate

• 2-3 intermediate Pump Stations

• Port Dewatering station & Concentrate storage

• both rail and slurry line solutions could be used to

transport >25Mtpa of concentrate

Braemar Ironstones: Port for bulk loading of Concentrates

up to 100Mtpa port capacity, all bulks

up to 250 ships loaded per year

6,000tph loading rate

320m long, double sided berth

Need 20m draft in Spencer Gulf

Port Pirie not suitable

Alternative deep water sites in Spencer

Gulf

jetty length ~3km?

Capital cost maybe +$750 million

Biggest challenge to development of new mines is lack of bulk handling port infrastructure:

• Port Adelaide: capacity is only 1.7Mtpa and too far away for the transport volumes given

• Port Pirie: capacity expanding to 8Mtpa, but has very shallow draft capability of ~4m

• Port Bonython: extra rail distance incurs additional haulage charges via Port Augusta

Braemar Iron Alliance sees an emerging requirement to berth 200,000 DWT ‘Cape

Size’ vessels for sea freight of iron concentrates, Pellets & direct shipping ore:

Braemar Ironstones: Sea Freight differentials, SA vs WA

Ex Spencer Gulf5,300Nm

Ex Port Hedland3,200Nm

Note: Nm means nautical miles

Braemar Ironstones: Sea Freight differentials, SA vs WA

Sea Freight ex Port Hedland, WA

Destination Distance Nm Cost US$/tonne

China 3,200 $9.7

Japan 3,400 $10.4

Sea Freight ex Spencer Gulf, SA

Destination Distance Nm Cost US$/tonne Penalty US$/t

China 5,300 $13.8 $4.1

Japan 5,300 $13.8 $3.4

Source: Citigroup, AME

Note: Nm means nautical miles

~US$100M per year

penalty for 25Mtpa

trade. Ports need to be

competitive

Extra sea voyage distance of 2,100 km & time from SA imposes a cost penalty to be overcome:

Transport Infrastructure challenges for bulk iron from the Braemar Iron Formation.