2013 Mining South Australia

Whyalla, November 26-27, 2013

Operational Update – Frome Basin

Uranium Production

Dr Andrea Marsland-Smith Geology Manager

Heathgate Resources Pty Ltd, Adelaide, Australia

General Atomics

General Atomics Torrey Pines, CA

• Headquartered in San Diego, California, ~ 5000+ employees

• Founded 1955 (privately held corporation) • Is one of the world's leading institutions for:

high-technology systems ranging from the nuclear fuel cycle to electromagnetic systems,

remotely operated surveillance aircraft,

airborne sensors, and advanced electronic,

wireless and laser technologies.

3

WORLD-WIDE LOCATIONS

M-411(4) 10-2008

INTERNATIONAL

• Dresden

• Mittenwalde

• Lauchhammer

• Lübben

• Tokyo

• Adelaide

• Bangkok

• Rabat

USA

• San Diego

• Washington, DC

• Denver

• Los Alamos

• Ogden, U

• Oklahoma City

• Ft. Madison, I

• Panna Maria

• Grants, NM

• Tupelo, MI

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General Atomics Uranium Resources

GENERAL ATOMICS URANIUM RESOURCES

Rio Grande Resources

ConverDyn

Colorado Mill & Mines Wyoming Property

Cotter Corp GA Energy Services

Australian Companies

Baywood Nuclear Fuels Corp

Heathgate Quasar

Mt. Taylor Mine, New Mexico Texas Properties

Honeywell Energy Services

Uranium Marketing

US Corporations

Four Mile Deposit SA (JV with Alliance Resources Ltd) Exploration, S.A, WA, NT

Beverly Mine, Beverley North Mine SA, Exploration SA

Metropolis, Illinois Conversion Services

LEGEND

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PROPRIETARY & CONFIDENTIAL 6

Australian Tenements

WA

SA

NT

AMADEUS BASIN, NT

Exploration

AVON BASIN, WA

Exploration

Qld

FROME BASIN, SA

Beverley & Beverley Nth Deposits

Four Mile Deposit

Exploration

NSW

GAWLER CRATON, SA

Exploration

PROPRIETARY & CONFIDENTIAL

Heathgate Tenement and Mining Assets – Frome Basin

Gammon

Ranges

National Park

EL 5177 Wooltana 1396 km2

Heathgate 100 %

EL 5119 North Mulga 691 km2

Heathgate 100 %

EL 4387–Paralana 178 km2

Heathgate 100 %

ML6387 Bev Nth 61 km2

ML6321 Beverley 117 km2

EL 5311 Mt Frome 399 km2

Heathgate 100 %

EL 5328 Mt Frome Nth 268 km2

Heathgate 100 %

EL 5329 Mt Frome Sth 357 km2

Heathgate 100 %

EL 5349 Lake Frome 819 km2

Heathgate 100 %

RL’s 18-20 7.5 km2

Heathgate 100 %

BEVERLEY

PEPEGOONA PANNIKAN

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TOTAL AREA 4294.5 km2

PROPRIETARY & CONFIDENTIAL

Quasar Tenement and Mining Assets – Frome Basin

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EL 5261 Petermorra 429 km2

QSR 80%; Paladin 20%

EL 5118 Mt Yerila 622 km2

QSR 80%; Paladin 15%; Risenger 5%

Four Mile East

Four Mile West EL 5017 Arkaroola 780 km2

QSR 75%; Alliance Resources 25%

ML 6402 Four Mile 122.06 km2

QSR 75%; Alliance Resources 25%

TOTAL AREA 1953.06 km2

APA

PROPRIETARY & CONFIDENTIAL 9

Beverley and Beverley North – Frome Basin, SA

BEVERLEY

Port Augusta

ADELAIDE

5km

Beverley Mine Lease

EL3934

Pepegoona

Pepegoona West

Pannikan

Beverley

Deep South

Beverley East

Four Mile

West

Four Mile

East

Discoveries

2009-2010

Production from Q3 2010

Approximately 550km north of Adelaide

Discoveries

2005-2008

Approvals in place to

commence construction

Beverley North Mine Lease

Four Mile Mine Lease

Heathgate Exploration Lease

Discovered 1969

Production from 2000

Quasar/Alliance JV

Exploration Lease

PROPRIETARY & CONFIDENTIAL 10

Pepegoona East & West

Pannikan

Four Mile East

Beverley

Four Mile West

Northern Flinders Ranges

Frome Basin

Rated one of earth’s 5 most naturally radioactive places

Natural Uranium in the Northern Flinders Ranges

PROPRIETARY & CONFIDENTIAL

Uranium in the Frome Basin

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• Top 2 cm (surface) 1,570,000 lbs has

eroded into the basin

(Av. 2 years production from

Pepegoona, Pannikan)

• In the last 4 million years (time of last

uplift of the ranges) 2.3 billion

pounds of uranium into the basin

near Beverley

• That’s approx. 1600 years of

production at an average of 1Mlbs

per year (assuming 70% recovery)

• HGR have produced 1.3% of this

inventory

Airborne Radiometrics (U channel)

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PROPRIETARY & CONFIDENTIAL

Rangefront & Palaeochannel Hosted Mineralisation

Rangefront (Fluvial)

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Flinders Ranges

Palaeochannel

Frome Sedimentary Basin WEST EAST

PROPRIETARY & CONFIDENTIAL

Roll Fronts

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Groundwater Flow Redox Front

PROPRIETARY & CONFIDENTIAL

Heathgate Resources Pty Ltd

• World’s most advanced In Situ

Recovery (ISR) mine

• Infrastructure includes 1 x processing

plant, 2 x satellite plants, power plant,

airstrip, camp accommodation (180)

• Fly-in/fly-out (2 x Encore Jets) o Sharp Airlines

• Approximately 150 permanent and up

to 50 labour hire employees

• 26% of mine workforce from local

Aboriginal communities

• More than 600+ people in indirect jobs o Thompson Drilling, Cater Care, Kalari,

KJM etc…

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Beverley – History

Beverley was Australia’s first In-Situ Recovery (ISR) mine

• 1969 Beverley deposits discovered

• 1982 First draft Beverley EIS (not progressed due to 3-mines policy)

• 2001 Production commenced at Beverley

• 2009 Beverley North deposits discovered

• 2011 Beverley North Mine approved February 2011

PROPRIETARY & CONFIDENTIAL

ISR Mining Method

• Used since 2000 at Beverley, Pepegoona and Pannikan

• Mining method for 45% of global U3O8 production (1)

• Lower costs compared to conventional

mining • Typical Recovery ~70% in 12 months

For successful ISR mining, ore body must have following properties:

• Ore body must be in an aquifer

• Aquifer sediments must be permeable

• Aquifer ideally is vertically confined

(above and below) by impermeable

layers

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PROPRIETARY & CONFIDENTIAL 16

Heathgate Production

Source: World Nuclear Association, annual production Statistics

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000Beverley

Pepegoona

Pannikan

lbs

U3O

8

Year

18+ Mlbs (~8000+ tonnes) produced since 2000

PROPRIETARY & CONFIDENTIAL 17

Wellfield

Looking South-West

In-house hydrological flow modelling software:

- Wellfield design

- Flow rates

- Wellfield control

Use of reactive–transport

models to tailor lixiviant

chemistry to each wellfield

30m

Wellfield flow pattern (modelled)

Wellfield design

PROPRIETARY & CONFIDENTIAL 18

Wellfield

>$170M invested in

exploration/delineation

drilling to date

Well costs $40K-$100K

PROPRIETARY & CONFIDENTIAL 19

Ion Exchange – Capture &

Elution

• Resin is used to capture uranium leached in the wellfields

• Loaded resin is stripped using acidified sodium chloride solution (this is the eluate)

• Precipitation, drying and packing at Beverley

Mining solution (100-300ppm U)

from the wellfields is passed

through ion exchange columns

Mine Operation – Uranium Recovery and Processing

PROPRIETARY & CONFIDENTIAL 20

Satellite Plants

PROPRIETARY & CONFIDENTIAL 21

Precipitation, Thickening and Drying - Beverley

Final product is uranyl peroxide (UO4.2H2O)

from low temperature drying (<250oC)

– Precipitation of ‘yellowcake’ by addition of hydrogen peroxide and caustic soda to the eluate

PROPRIETARY & CONFIDENTIAL

Control Room

Central Control - Total control of all

Wellfield and Plant operations (flows,

pressures, leak detection, water

balance, etc)

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PROPRIETARY & CONFIDENTIAL 23

Four Mile Project

A decision to recommence development of the Four Mile Project was

made in October 2012

Commonwealth regulatory approvals received 2 September 2013

The Start-Up Plan comprises:

• A staged commencement of mining operations, to permit actual

production rates to be considered before full-scale production

facilities are constructed.

• Uranium capture at Heathgate’s Pannikan satellite plant

• Elution, precipitation, drying and packing at Heathgate’s Beverley

processing plant

• Production of 2.128 M lb of uranium oxide over 10 months

Source: Adapted from Alliance Resources Ltd, Company Presentation 23 Oct 2013.

PROPRIETARY & CONFIDENTIAL 24

Four Mile Project

Image source: Four Mile Uranium Mine PEPR, June 2013.

PROPRIETARY & CONFIDENTIAL 25

Four Mile Project

Image source: Four Mile Uranium Mine PEPR, June 2013.

PROPRIETARY & CONFIDENTIAL

Four Mile

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FME Wellfield FM Laydown

FME Wellfield

FME Wellhouse

PROPRIETARY & CONFIDENTIAL 27

Four Mile Project - Resources

Source: Alliance Resources Ltd, Company Presentation 23 Oct 2013.

Inferred 29 M lbs

Indicated &Inferred 42 M lbs

PROPRIETARY & CONFIDENTIAL 28

Four Mile Project - Resources

Source: Alliance Resources Ltd, Company Presentation 23 Oct 2013.

PROPRIETARY & CONFIDENTIAL 29

Four Mile Project - Resources

Source: Alliance Resources Ltd, Company Presentation 23 Oct 2013.

Thankyou