NOT FOR REDISTRIBUTION

Fortnightly Update : Iron Ore Report 16 June 2011

Corporate Market Snapshot Iron Ore Companies

Company Name Code Price % chg Forrest moves from CEO to Chairman of FMG – Andrew Forrest, the ASX LISTED Producers high profile Chief Executive of Australia’s third largest iron ore produc- Ltd AGO 3.45 -4.2% er, , will step down as CEO on 18 July to be- BC Iron Ltd BCI 2.83 -1.0% ♦ come FMG’s Chairman. He will be replaced by Nev Power, the current Fortescue Metals Group FMG 6.02 -5.9% Chief Operating Officer. Before joining FMG, Nev was the Chief Execu- Gindalbie Metals Ltd GBG 0.83 -11.6% tive Australian Operations for Thiess Pty Ltd, a wholly owned subsidiary Grange Resources Ltd GRR 0.49 -16.9% of Leighton Holdings Limited. IMX Resources Ltd IXR 0.43 -14.0% Mount Gibson Iron MGX 1.70 -8.4% Murchison Metals Ltd MMX 0.71 -27.8% Territory Resources Ltd TTY 0.52 14.3% Territory Resources backs higher Noble Group offer The board of AVERAGE PERFORMANCE -8.4% – junior iron ore producer Territory Resources Limited has recommended ASX LISTED Explorers/Developers the counter-takeover offer from commodities trader Noble Group Lim- African Iron Ltd AKI 0.20 -2.4% ♦ ited. Noble Group made an offer of A$0.50 cash per share, represent- Apollo Minerals Ltd AON 0.06 -6.3% ing a premium of A$0.04 to Exxaro Resources Limited’s bid for Territo- Aquila Resources Ltd AQA 7.12 -14.7% Athena Resources Ltd AHN 0.13 13.0% ry made in May. Noble Group’s cash offer values Territory at approxi- Australasian Resources Ltd ARH 0.25 -20.3% mately A$133m, 8% higher than Exxaro’s bid. Avonlea Minerals Ltd AVZ 0.15 - Infrastructure Brockman Resources Ltd BRM 3.50 -15.9% Cape Lambert Ltd CFE 0.40 -15.8% Centaurus Metals Ltd CTM 0.08 -1.3% set to accelerate ore expansion program Rio – Cullen Resources Ltd CUL 0.04 -7.9% Tinto Limited is set to fast-track its Pilbara iron ore expansion program Eastern Iron Ltd EFE 0.17 - to increase production capacity by 50% from 225mtpa to 333mtpa in Energio Ltd EIO 0.02 -24.0% 2015. A total of US$676m will be spent by the participants in the pro- Equatorial Resources Ltd EQX 2.20 0.9% FerrAus Ltd FRS 0.66 -18.5% ♦ ject, with Rio's share being US$350m and the rest to be shared by Rio’s Flinders Mines Ltd FMS 0.13 -10.3% Japanese partners, Mitsui & Co (Australia) Limited, Nippon Steel Corpo- Ferrowest Ltd FWL 0.13 -7.1% ration and Sumitomo Metals Industries to shorten the program timeline Gladiator Resources Ltd GLA 0.27 -12.9% by 6 months. The funds will be used to bring forward the engineering Golden West Resources GWR 0.63 1.6% work for the port and rail infrastructure. Rio began to implement its Haranga Resources Ltd HAR 0.25 -5.7% US$8b, five-year Pilbara expansion program in 2010. Ironclad Ltd IFE 0.68 -8.7% Iron Ore Holdings Ltd IOH 1.38 -6.5% Iron Road Ltd IRD 0.90 -17.4% Murchison Metals may sell Oakajee stake Murchison Metals Lim- * Jupiter Mines Ltd JMS 0.50 -1.9% ited is investigating several potential options on the potential divest- Latin Resources Ltd LRS 0.20 -33.3% ment of all or some of its 25% direct stake in the billion-dollar Oakajee Magnetic Resources NL MAU 0.16 -31.9% Port and Rail Project (OPR) in order to meet its 50% funding obligations Meteoric Resources NL MEI 0.07 -1.4% for the OPR and for Crosslands Resources Limited which owns the Jack Mindax Ltd MDX 0.29 -9.4% ♦ Hills Expansion Project and 50% of OPR. Mitsubishi Development Pty Nemex Resources Ltd NXR 0.20 8.1% Ltd, the joint owner of OPR, is also required to manage the arrange- Pepinnini Minerals Ltd PNN 0.11 -18.5% Red Hill Iron Ltd RHI 2.20 -10.6% ment of all debt funding for both the OPR and Jack Hills Expansion Pro- Scandinavian Resources Ltd SCR 0.49 -14.0% ject. The bankable feasibility study for the OPR is expected at the end Sherwin Iron Ltd SHD 0.14 -12.5% of the current quarter and the Jack Hills Expansion Project is expected Sphere Investments Ltd SPH 2.26 -27.1% to start exporting through Oakajee by 2015. Strike Resources Ltd SRK 0.26 -22.1% Sundance Resources Ltd SDL 0.35 -4.1% 1 Iron Ore Prices (US$ per tonne) Venus Metals Corp VMC 1.51 12.7%

Iron Ore Contract FOB (Western Australia to China) Wah Nam Int Holdings Ltd WNI 0.11 -29.0% 225 West Peak Iron Ltd WPI 0.20 -2.4% Iron Ore Spot FOB (Western Australia to China) 210 Western Desert Resources Ltd WDR 0.32 - Iron Ore Spot CFR (Landed in China) WPG Resources Ltd WPG 0.74 -7.5% 195 AVERAGE PERFORMANCE -9.6% 180 % Change based on previous report on 27/5/2011 165 Price Price 150

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120 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Source: Bloomberg

Alex Lee ) O 6 % 1 Prices based on Iron re Fines 2 Fe +61 8 9421 2111 [email protected] Capital Investment Partners AFSL 292416