BMAGBandalup Magnesite Project

Terry Butler-Blaxell June 2015

Western Australia

BMAG

Putting Bandalup Back on the Map

2

Well, it never actually left the Map

BMAG

BMAG Deposit 2W looking south towards First Quantum’s Nickel Operation

3

BMAGWestern Australia’s Significant Cryptocrystalline Magnesite Deposit

Developing a new local source of Magnesite and CCM for Western Australia

Logistical advantages-access to eastern goldfields and agricultural districts

Decrease the reliance on external monopolistic suppliers

Small scale niche development; batch production proposed

Pilot trials and product development in progress

Scope to increase resource significantly – geophysical channel targets

We are private with low overheads and can adjust output depending on demand

4

BMAG

Introduction

BMAG was a historical production centre for beneficiated Magnesite product. Magnesite is the precursor to CCM.

Project owners have an association with the project dating back to 1961.

Located immediately adjacent FQM Ravensthorpe Nickel Operations (RNO) near Ravensthorpe.

Metallurgical evaluation has shown the ability to produce CCM that is compatible with nickel hydrometallurgical applications and agricultural applications.

Historical tonnage and grade estimates based on bulk sampling and drilling suggest sufficient material to support >10 years @ 30,000tpa CCM production.

Paleochannel targets provide upside for delineation of additional Magnesite tonnages. Several square kilometres of untested Magnesite channels.

Existing 200,000 tonne fines stockpile and bulk sample stockpiles available for re-processing to generate kiln feed for CCM – trials are in progress

Granted Mining Leases, ability to leverage off historical feasibility studies and fast track development.

5

BMAG

Magnesia pricingCalcined, 90-92% MgO, lump FOB China $275-320

European calcined, agricultural grade CIF Europe €240-350

Dead-burned, Lump, FOB China 90% MgO $270-29092% MgO $300-38094-95% MgO $350-40097.5% MgO $450-485

Fused, Lump, FOB China 96% MgO $600-63097% MgO $850-95098% MgO $980-1050

Magnesite Greek, raw, max 3.5% SiO2 FOB East Mediterranean €65-75

Source: Industrial Minerals, January 2015

6

BMAG

Mine 100- 200ktpaMagnesite Ore

Beneficiation Screen +/- DMS

Calcination 700C

30ktpa CCM forWA Market

Trial reclamation from stockpiles of crude Magnesite fines at BMAG

Resource confirmation

Update historical engineering & feasibility studies

Recommence open pit mining zero stripping

Mobile plant and equipment, campaign operation

Install small calciner

Batch operation

Reagent supply security

Process overview

7

BMAG

Ownership

Bandalup Magnesite ProjectBMAG

Ashbridge HoldingsPty Ltd Butler

MacDonald Butler

50% 50%

65% 35%

8

BMAG

Tenure

9

BMAG

10

BMAGMagnesite deposits & location – Southern W.A.

11

BMAG

Exposure of high grade nodular Magnesite at Deposit 2W

12

Magnesite occurs from surface with near-zero pre-strip

BMAG

Deposit 4E and Magnesite fines

13

BMAG

Magnesite economic evaluation factors

One tonne of mined Magnesite ore can generate 150kg of CCM.

Typical in-ground crude Magnesite values ~30% MgO

Screening at -6mm removes most of the contaminants

The oversize fraction grades >45% MgO and is highly pure cryptocrystalline Magnesite

Typically, approx. 30% of the ROM feed (crude ore) is sized >6mm which is of a suitable grade as kiln feed for calcination and production of CCM

The -6mm fines can be further upgraded by HMS to improve overall MgO yield.

Resources can be stated at various screen size cut-offs to show how much kiln feed (“Recoverable Magnesite”) can be recovered, and the assays of that screened material.

Calcination at 700C reduces the mass by approximately 50% to generate reactive CCM

Beneficiation can be a water intensive process due to sticky, swelling clays

Calcination rule of thumb: 3.1GJ/tonne of kiln feed – THE LARGEST COST ELEMENT

14

BMAG

Deposit Tonnes in situ +6.35mm +6.35mm

-50mm +50mm -6.35mm(reject)

1 313,420 90,946 24,995 65,952 222,474

2W 294,887 123,454 49,211 74,243 171,433

2E 219,690 50,904 21,388 29,516 168,786

3 839,864 174,557 63,757 110,800 665,308

4W 310,992 78,998 29,262 49,736 231,994

4E 1,421,287 483,410 167,734 315,676 937,877

Totals 3,400,140 1,002,269 356,347 645,922 2,397,871

plus 6.35mm -50mm

10%

plus 50mm19%minus

6.35mm71%

In-situ Magnesite tonnage estimate

Original estimate by Thomas 1972, adjusted for tonnes mined after 1972. Originally reported as “Inferred and Indicated Reserve”. The deposit was tested by percussion drilling, bulk sampling and screening

15

BMAG

“Recoverable” Magnesite tonnage & grade +6.35mm (CCM kiln feed estimate)

Original estimate by Thomas, 1972 classified as “indicated reserves”. A reported 245,000 tonnes crude ore was mined from Deposit 2W and 4E after 1972, which has been subtracted from the estimate. The deposits were extensively tested by bulk sampling and screening which is an appropriate assessment method for the style of mineralisation. Grade and contaminants are highly dependent on size fraction. In the table above, the finer -6.35mm fraction is discarded. The fines can be further beneficiated by dense media separation.

Deposit Tonnes MgO% SiO2% CaO%

1 85,714 45.5 0.98 0.60

2W 98,104 46.5 0.62 1.15

2E 47,297 45.2 1.31 0.53

3 129,495 46.4 0.81 0.88

4W 67,516 45.1 1.87 0.59

4E 474,062 46.1 0.77 0.64

Totals 902,188 46.0 0.89 0.68

16

A large area of paleochannels represent excellent targets for additional tonnages

BMAG

EM model paleochannel depth – exploration target

Average 28m depth to base of paleochannels

Good geophysical targets for additional magnesite tonnages

17

BMAG

1 tonne crude Magnesite ore

0.3 tonnes beneficiated Magnesite “kiln feed”

45% MgO

0.15 tonnes CCM

95-97% MgO18

BMAG

Proposed processing route – Minproc 1980Reprocess existing 200,000t stockpile of fines

Recommence mining, beneficiate to provide new kiln feed for CCM

19

BMAG

Proposed beneficiation flowsheet – fines stockpile

Kiln feed

Mass recovery from fines ~15%

20

BMAG

Stockpile of -50mm fines at BMAG Deposit 2W available for re-processing

Based on historical studies, approximately 15% of the mass of this stockpile could be recoverable as suitable kiln feed for CCM

Pilot trials are in progress

21

BMAG

Calcination – major cost of CCM production

Dead Burned Magnesite (DBM): fire at 1600C = refractory applications

Caustic Calcined Magnesite (CCM): fire at 700C = hydrometallurgical applications

Rule of thumb: 3.1GJ/tonne of kiln feed for calcination (6.2GJ/tonne CCM)

With low overheads and no public shareholders, BMAG can campaign-mine and batch process according to market conditions

22

BMAG

BMAG CCM produced by calcination testwork

MgO% SiO2% CaO% Al2O3% Fe2O3% Reactivity

BBMS1 92.00 1.84 1.31 0.04 0.04 149s

BBMS2 94.50 0.21 0.81 0.02 0.02 109s

BBMS3 96.70 0.56 0.75 0.02 0.02 118s

BBMS4 94.50 1.20 1.01 0.06 0.06 200s

BBMS5 94.50 0.73 1.44 0.02 0.02 138s

Average 94.4 0.91 1.06 0.03 0.03 143s

Oretest, 2001 testwork. Samples calcined in rotary calciner @ 700C for 90min

23

BMAG

BMAG compared to QMAG’s EMAG Product

sizing MgO% SiO2% CaO% Al2O3%Fe2O3%

NV Reactivity

BMAG -10mm 94.4 0.91 1.06 0.03 0.03 232 143s

EMAG45 P95 =45um 95.4 1.36 2.78 0.15 0.18 240 35s

EMAG500 P100=500um 94.8 1.94 2.71 0.18 0.23 N/A 60s

EMAG1000 P100=1mm 94.0 2.4 3.0 0.20 0.26 240 300

NV: neutralising value where CaCO3 = 100

24

reduce grind size to increase reactivity

Low silica, low calcium product derived from BMAG’s high purity cryptocrystalline magnesite

BMAG

25

Contact UsTerry Butler-Blaxell BSc GDipApFin MBA MAUSIMM MAICD FFin

Project Manager, Owner’s Team

Phone +61 41 893 7740

Fax +61 8 9291 5760

Email terrybb@iprimus.com.au

“We do weird minerals and stuff like that.”