South American Ferro Metals Limited

Alan Doyle – Executive DirectorOctober 2013

www.safml.com

Expanding, profitable iron ore producer

8Mtpa to 16Mtpa plan on track.

Production cost below $20 tonne at mine gate.

65.5% Fe content.

Increased resource.

Increasing profits.

ASX:SFZ

Investment Highlights

Only non-Brazilian listed pure play iron ore producer in South America

Located in prolific Iron Ore Quadrilateral (neighbouring Vale) Near to customers and infrastructure

JORC resource of 301.6Mt at 40.7% Fe of which 174.7 Mt is Measured and Indicated (5th richest Fe grade in Brazil, Phase III drilling program underway)

BFS for Stage I expansion from 1.5 to 8Mtpa ROM underway Stage II expansion to 16Mtpa ROM targeted for end 2016

Growing Profitability - Stage II Concentrator completed and being ramped-up

Highly experienced & successful Brazilian leadership team

Expanding to 8Mtpa then to 16Mtpa

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Feasibility Study Progress

8 million tpa ROM expansion feasibility study progressing with plant size and equipment

selections being addressed for: Primary crushing

Scalping, Secondary crushing with Primary

wet screening

Rod mill with Primary and Secondary wet screening

Three stage of WHIMS (4 roughers, 3 cleaners and 2 re-cleaners)

Concentrate thickening, filtration, stocking and loading

Tailings thickening, filtration, stockpile and disposal .

Current grind sizing is a concentrate below 1.4 mm.

Average composition of the Concentrate coming from the recent test works is:

Fe SIO2 Al2O3 P Mn LOI

65.5% 3.9% 1.1% 0.02% 0.50% 1.42%

LOW PHOSPOROUS

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Increasing Resource

November 2012: Updated resource from 230 million tonnes to 277.9 million tonnes.

April 2013: Increase of its resource estimate within the open pit envelope from

277.9 million tonnes to 301.1 million tonnes; including an increase

in indicated resources from 60 million tonnes to 101 million tonnes.

Mineralisation extends to a depth of over 400 metres. Drilling is underway to target the

core of the deposit at depth and extensions to the north of the current projected pit

envelope. This has the potential to further increase the size of the deposit.

Breakdown of the updated resource Ponto Verde Iron Ore Project

(Cut-off Grade Applied: 20% Fe) Resource Class Tonnes (Mt) Fe (%)

Measured 72.76 41.06 Indicated 101.96 40.68 Measured & Indicated 174.72 40.84 Inferred 126.34 40.45 Total Resource 301.06 40.65

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Increasing profitability

Commissioning of Second Concentrator commenced on schedule and within budget.

Targeted additional concentrate production, at a grade of approximately 65% Fe, is in

the range of 20,000 -24,000 tonnes per month, which represents an increase in

production of approximately 33%. This marked increase at low incremental cost will

result in a significant decrease in overall unit costs.

On-site laboratory completed providing quick assay results for production as well as

assisting in design of the enlarged pit.

Current production cost below $20 tonne (2013 financial year $20/t, 2012 $17/t)

Strong outlook for international iron ore demand – current CIF price exceeding $135

tonne

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Port access

Memorandum of Understanding with rail corporation, MRS Logistica SA, to develop rail

based port delivery for export of SAFM’s production.

Proposal to rail production to port terminals at Bahia de Sepitiba in the state of Rio de

Janeiro, approximately 400 km from the Ponte Verde mine.

The Ponto Verde mine is located 15 km west of the Andaime branch line of the MRS

system, which transports production from the Minas Itabaritos mines adjoining Ponto

Verde.

The rail transportation of the product will utilise existing MRS infrastructure for the

transport and unloading of iron ore products, as well as development of a new loading

terminal.

MRS is one of the largest railway companies in Brazil.

Advanced discussions with Port Authority re export of product

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Port access cont.

Strong Geology & Resource Base

Technical

5th Highest grade resource in Brazil.1

Lowest 10% on the Brazilian cost curve.1

Total cost of beneficiation production is projected to drop to around $18 per tonne, following full ramp up of the Stage II Concentrator.

Setting

Ore body runs NE to SW

Herculano & Vale’s Pico mines to the north of

SAFM’s site

Ore body open to the North, and West

Geology

Hematite-rich Itabirite ore

Resource 301.6Mt at 40.7% Fe

Located in the heart of Brazil’s prolific and historic Iron Ore Quadrilateral

1 RBC Prospector - 15 Jun 2012

SAFMVALE

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Product Range – Commercial Optimisation

15% or 225 ktpa Lump

Current 1.5 Mtpa ROM Feed

27% or 405 ktpa Sinter Feed

16% or 240 ktpa Stage I Concentrate

16% or 240 ktpa Stage II Concentrate(Being ramped-up)

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74% Mass Recovery or 1,110 ktpa

Growth: Stage I Operations Expansion

Stage I Bankable Feasibility Study (BFS) nearing completion

“Off-the-Shelf” approach - Reduced time and cost

Will include “Footprint” and “Tie-ins” for Stage II Expansion to 16Mtpa

Accessing export markets

…From 1.5 to 8Mtpa ROM by end 2015

To be commissioned late 2015

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Growth Plan: Stage II Operations Expansion

Stage II BFS to begin upon Stage I Study Completion

Mirror image of Stage I Plant

Foot print and tie in established during 8Mtpa expansion design

…From 8 to 16Mtpa ROM by end 2016

Expected commissioning late 2016

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The way forward

Unused $15 million facility from Deutsche Bank at June 2013

Profitable operations cover BFS costs

Current production cost below $20 tonne (2013 financial year $20/t, 2012 $17/t)

August achieved record monthly production

Second iron ore concentrator being ramped-up

Bankable feasibility study on track

Expansion from current 1.5 Mtpa to 8Mtpa ROM scheduled to be commissioned late

2015

Expansion from proposed 8Mtpa to 16Mtpa ROM scheduled to be commissioned late

2016

Strong outlook for iron ore market

Shares currently priced at low P:E ratio and well below asset replacement

Disclaimer

South American Ferro Metals Limited and each of its respective directors, officers and agents believe that the information contained in this presentation is correct and that any estimates, opinions or conclusions contained in this presentation are reasonably held or made as at the time of compilation. However, no warranty is made as to the accuracy or reliability of any estimates, opinions, conclusions or other information contained in this document.

South American Ferro Metals and its directors, officers and agents disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from this presentation.

This presentation is for the intended recipient. No part of this document may be reproduced without the permission of South American Ferro Metals Limited.

Forward Looking Statements

This presentation contains certain forward looking statements which by nature, contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.

Competent Person’s Statement

Information in this presentation that relates to the JORC resource at Ponto Verde is based on information compiled by Mr Bernardo Hurta de C Viana (Phase I) and Mr Porfirio Cabaleiro (Phase II) both of Coffey Mining (Brazil). Both are Members of the Australasian Institute of Mining and Metallurgy. Mr Viana and Mr Cabaleiro have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a “Competent Person” as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves (the JORC Code).

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Plant & Mine Layout

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Feasibility study Flowchart

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Plant Cross section

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Plant Layout

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Appendix A: Feasibility Study Progress

LogiCamms Pty Limited were engaged in March 2012 to design a plant capacity of 8

Mtpa (dry tons) to produce high grade iron ore concentrate (65.5% Fe) for the export

market. Work to date confirms the overall dry plant and WHIMS design utilisation will be

maintained at 74.2% and the plant is being designed to produce a final concentrate of

-1.4 mm at a grade of 65.5% Fe.

The ore body is friable Itabirite, to be mined using proven open pit mining methods with

the ore being crushed, screened and then magnetically separated to produce

concentrate. The study is based on proven non-blasting technology with no new

processes envisaged.

The success of the currently operating magnetic separation system has eliminated

within the expansion design the need for a flotation system, which has in turn eliminated

the need for use of potentially harmful chemicals on site and resulted in a smaller plant

footprint than initially anticipated.

Project infrastructure consisting of minerals processing facilities as well as support

infrastructure such as water and electricity supplies, access roads, workshops,

warehouses, laboratories and administration buildings are also being designed.

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Feasibility Study Progress cont.

The production process has a dump hopper feeding onto a vibrating grizzly feeding to a

chute with a primary rock breaker. This chute will be designed to discharge to a jaw

crusher which would discharge to a scalping screen via a conveyor.

The top deck from the scalping screen then feeds to a secondary cone crusher. The

secondary crusher product, the scalping screen middlings and undersize would then join

together and feed to primary wet screening via a conveyor. The plan is for three double

deck banana screens, the top and middling decks of the screens to be in a closed circuit

with a rod mill. The undersize of the double deck banana screens is to feed onto Derrick

tertiary screening using Stack Sizers or similar high frequency screens to cut at 0.6mm.

The top and middling screens from the Derrick screen are then to feed into a closed

circuit with the rod mill.

The study is proposing that the Derrick screen undersize is pumped to the rougher

magnetic separators feed tank and from there to a four way distributor, feeding the

rougher magnetic separators. The rougher magnetic separator tailings be pumped to a

high rate elevated thickener via dewatering screens, the tailings thickener underflow to

be sent to the tailings via a belt filter and conveyors.

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Feasibility Study Progress cont.

The concentrates from rougher the magnetic separators would be pumped to a three

way cleaner distributor and fed to magnetic separators. The tailings from these magnetic

separators would be returned to the rougher magnetic separator feed tank. The cleaner

magnetic separator concentrates become the final concentrates. The final concentrates

are then to be pumped to a high rate elevated thickener with the underflow dewatered

by belt filters.

The current study proposes the concentrates join an overland conveyor system which

transports them to an area adjacent to a railway stockpile prior to loading onto train by

front end loader.

Doubling production to a feed rate of 16 Mtpa throughput should be achieved by

duplication the proposed plant.

The feasibility study is progressing to the company’s satisfaction with the expectation

that capital expenditure for the expansion will be below that initially anticipated.