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Investor Presentation - Proactive Investors

Investor Presentation – January 2013 - Iron Ore and Manganese

Development in Africa


Iron ore and manganese development in Africa

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2


Iron ore and manganese development in Africa

Corporate Overview

PROFILE

AIM quoted iron ore („Fe‟) and manganese („Mn‟‟) development company focussed

in Africa

PROJECTS

Iron Ore: Mebaga, Gabon & Malelane, South Africa Manganese: Nayega, Togo &

Leinster, South Africa

STRATEGY

To advance low capex deposits which offer significant value uplift potential through

resource delineation, into production

VALUE

Milestone driven development programmes targeting near term production and

cashflow

Reviewing synergistic acquisition opportunities

3


Iron ore and manganese development in Africa

Key Data

MARKET

TICKER

AIM

FRX

12 MONTH HIGH/LOW 4.25p / 1.505p

SHARES IN ISSUE 634,311, 908*

SHARE PRICE 2.175p (11.01.13)

MARKET CAP £13.8m (11.01.13)

NOMAD

BROKER

finnCap

finnCap

* 40m shares conditional on the sale of 17% in Ressources Equatoriales

Shareholder Analysis

16.45%

Shareholders >15%

Share Price

35.67%

12.93%

Shareholders 10%15%

Shareholders 5%10%

15.97%

Directors‟ Shareholdings

18.98%

Shareholders 2.5%5%

Shareholders 0%2.5%

Dave Reeves 15.91%

Roy Pitchford 12.31%

Russell Lamming 6.61%

Brian Moritz 2.10%

James Carter 0.44%

Total 37.36%

4


Iron ore and manganese development in Africa

Proven Track Record in Africa

“The Board has a proven record of building value for shareholders through developing assets into

production and successfully completing trade sales”

Feasibility Studies Completed and Mines Developed

• Eureka Gold Mine, Zimbabwe – 1.8mtpa (Delta Gold)

• Ngezi Platinum Mine, Zimbabwe – 2.2mtpa (Zimplats)

• Leeuwkop Platinum Mine, South Africa – commenced development before takeover (Afplats)

• Stellite Chrome Mine – South Africa - 480,000 tpa (Chromex)

Company Trade Sales

• Zimplats (ASX) – c.US$400m (D Reeves, R Pitchford)

• Afplats (AIM) – c.US$600m (D Reeves, R Lamming, B Moritz, R Pitchford,)

• Chromex (AIM) – c.US$50m (R Lamming, B Moritz)

● MD - Dave Reeves ● Chairman - Brian Moritz ● Finance Director James Carter

● Non Exec Director - Russell Lamming ● Non Exec Director - Roy Pitchford ●

5


Iron ore and manganese development in Africa

Market & Demand

• Iron ore and manganese are the two main

ingredients in steel making

• BHP Billiton, Rio Tinto and Vale currently

control 75% of the seaborne iron ore

trade

• Long term iron ore demand and price is

supported by:

• Demand growth driven from China

• Rising capital intensity

• Replacement of higher cost Chinese

production

• Manganese price currently

US$5.40/dmtu (46% Mn CIF China)*

• Iron Ore spot price currently US$158/t

(62% Fe CIF China)**

* Source Ferroalloy.net

** Source Thomson Reuters

6


Iron ore and manganese development in Africa

Corporate Structure

*

*Subject to completion of purchase of 17%

7


Iron ore and manganese development in Africa

Mebaga DSO Iron Ore Project - Gabon

Land Position

309 sq km

82 per cent. Holding*

High Grade Zone

1.8km strike

Identified by historical work by

BRGM

DSO Grade

20Mt @ 60% Fe

„Exploration Target‟

bBSO Grade

50Mt @ 47% Fe

„Exploration Target‟

Proximity to Infrastructure

30km to sealed highway

200km to working rail

Rail delivers to deep water port

*Subject to completion of purchase of 17%

8


Iron ore and manganese development in Africa

Mebaga Iron Ore – Development Programme

• Fast tracked exploration plan to drill out

high grade iron ore resources

• Geophysical data (aeromagnetic and

radiometric) to be bought and processed

• Reconnaissance and detailed geological

mapping of the BIF trend is underway

• Drilling programme planned to delineate

JORC resources in H2 2013

• Two infrastructure solutions:

• Rail 182km to Port of Owendo on trans

Gabon, currently exporting 3.5Mtpa of

manganese

• Barge 300km to Port Gentil along the

Oougue River

9


Iron ore and manganese development in Africa

Mebaga Iron Ore Peer Comparison

Company Exchange Location Comments Resource/

Exploration Target

Market Cap

(GBP)*

EV/t

Contained Fe

(GBP)

BC Iron ASX Australia In Production

@ 4 mtpa

81mt @ 54% 286 million 6.55

African iron Republic of Congo Takeover 2012, PFS 55mt @ 55% 220 million 7.26

Western Desert

Resources

ASX Australia (NT) Planning 3mtpa, late

2013

32mt @57% 157 million 8.63

Territory Iron Australia (NT) Takeover 2011,

2mtpa

9mt @ 58% 112 million 20.77

Mebaga AIM Gabon Commencing

Resource Work

20mt @ 60% 12million 1.00**

* As of 8 January 2013

** Assuming the exploration target is converted to a resource

10


Iron ore and manganese development in Africa

Nayega Manganese Project - Togo

Land Position

92,390 ha

5 exploration licences in

northern Togo

Low Capex

US$15m

Initial estimate for 250,000

tpa production

Indicated Resource

7.3Mt @ 14.7%

Mn

Low Opex

US$2/dmtu FOB

Initial estimate for 250,000

tpa production

Bankable Study

H1 2013

Development

H2 2013

Towards Production

11


Iron ore and manganese development in Africa

Nayega Manganese Project - Togo

Fast-tracking to Development

• Focussed on developing an open pit, zero

strip mining operation

• Simple beneficiation route using washing,

screening and gravity

• Good road access to Lome Port (600km

away and undergoing USD50m expansion

for third container port). Backloading of

350,000 tpa available (US AID)

• Undertaking a Definitive Feasibility Study

with a view to completing in H1 2013

• Exploitation permit application submitted

• Regional evaluation has delineated

additional targets for Mn mineralisation to

increase resource

12


Iron ore and manganese development in Africa

Malelane Iron Ore Project – South Africa

Inferred Resource

139Mt @ 37% Fe

Modelled on 1.1km of 14km

Exploration Target

775 - 930Mt

34 – 36% Fe

NPV US$523m (10%)

IRR of 72%

(pre tax)

CAPEX US$139m

&

OPEX US$53.5/t FOB

Proximity to Infrastructure

6km and 170km

From rail and deep water port of Maputo respectively

13


Iron ore and manganese development in Africa

Malelane Scoping Study Results & Development

Project Upside

• Starter DSO operation

Scoping Study Economics

Physicals

Pre-Feasibility Study

• NPV @10% - 523USD m (pre-tax)

• IRR 72% (pre-tax)

• Capital Cost USD139m

• Capital Intensity USD77/t

• Operating Cost USD53.5/t FOB

• Revenue USD 95/t FOB

• Payback 1.9 years

• 1.8mtpa output of iron ore fines, LOM16.6 years

• Conventional open pit mining, strip ratio 1.55:1

• Process plant crush and HPGR to 6mm, gravity separation

• Concentrate conveyed to rail siding 6km away

• Build a rapid load out station for rail loading at existing siding

• Rail to Port of Maputo approx 170km. Requires port expansion

to 20mtpa to free up capacity in the existing loading area.

• Drill programme and preliminary metallurgical

testwork confirmed potential for low capex iron-ore

development at Malelane

• Further detailed geological mapping of the Spago

ridge by structural geological consultant completed to

aid drill targeting to update the resource

• Environmental Studies and Social and Labour Plan

drafting has commenced in preparation for a mining

licence application

• Positive preliminary metallurgical testwork - very

coarse grind size is optimal for pre-concentration to

57% Fe

• Pre-feasibility drilling to commence at end of wet

season for upgraded resource and confirmatory met

testwork

• Pre-feasibility study to be complete 2013

15


Iron ore and manganese development in Africa

Malelane Capital Intensity

Adriana Lac Otelnuk

Grange Resources Southdown

Gindalbie Karara

BHP Billiton Outer harbour expansion

Macarthur Minerals Lake Giles

Aquila West Pilbara

Black Iron Shymanivske

ArcelorMittal Mont Wright

Oceanic Hopes Advance

New Millenium KeMag and LabMag

Northland Resources Hannukainen

BHP Billiton Inner harbour expansion

Rio Tinto Pilbara expansion

Northland Resources Kaunisvaara

Rio Tinto Simandou

Champion Fire Lake North

Alderon Kami

Sundance Mbalam

ArcelorMittal Liberia project phase I&II

Northern Iron Sydvarangar Expansion

IOC Carol Lake

London Mining Marampa

Fortescue Pilbara expansion

Atlas Iron McPhee Ck/SE Pilbara

Cliffs Bloom Lake phaseII

Malelane

African Minerals Tonkolili Phase I

Atlas Iron North Pilbara

Macarthur Minerals Ularring

Mt. Gibson Extension Hill

*Source Macquarie March 2012

$0 $50 $100 $150 $200 $250 $300

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Iron ore and manganese development in Africa

Additional Projects

Leinster Manganese – South Africa

Applications

• One further Gabon DSO iron

application, similar size to Mebaga and

well positioned to shipping. Previously

explored.

Land position of 47,004 ha over 10 farms

20km from Aquila's Avontuur Project (147.8Mt @ 38.2% Mn)

• Two South African potential DSO iron

projects located near to existing

Malelane Project

Anglo American drilled 51 holes (1977-1988)

Exploration target 5.5 -8.7Mt @28.6 – 31.3% Mn (Coffey Mining)

Known deposit open in all directions & historical data secured

Aeromag survey completed – drilling planned

17


Iron ore and manganese development in Africa

Portfolio - Key Milestones

Completed Milestones 2012

2013 Value Drivers

• Nayega Manganese Project – Togo

Resource defined 7.3Mt at 14.7%

Positive economics calculated – low capex and

opex

Met test work undertaken

• Malelane Iron ore Project – South Africa

Resource defined – 139Mt at 36.9%

Scoping study completed with excellent

economics

Further resource programmes underway

• Secured new DSO project - Gabon



Secured project with an exploration target of

20Mt at 60%

Proximity to infrastructure with access to

regional ports

• Nayega Manganese Project – Togo

• Secure exploitation permit

• Complete Definitive Feasibility study H1 2013

• Fast-track to mine development H2 2013

• Malelane Iron ore Project – South Africa

• Increase and upgrade resource

• Complete environmental study

• Pre-feasibility H2 2013

• Mebaga DSO project – Gabon

• Define a maiden DSO resource

• Fast track to Scoping Study status by Q4 2013

• Continued evaluation of synergistic

opportunities in Africa

• Complement low-capex/ near to

infrastructure/early production investment

criteria

18


Iron ore and manganese development in Africa

Development Summary

Establishing its position as a leading low-capex iron ore and manganese exploration

and development company with near-term production potential in Africa

Nayega

Togo

Early cashflow to fund and develop iron ore portfolio in

Africa

Mebaga

Gabon

Proximity to infrastructure potentially enabling rapid

development to exploit DSO resource potential

Malelane

South

Africa

Strong economics - robust NPV, IRR and low capital

intensity (first quartile of iron ore projects globally)

19


Iron ore and manganese development in Africa

Contacts

Dave Reeves

Ferrex PLC

Felicity Edwards/

Elisabeth Cowell

St Brides

Email: dave@ferrexplc.com

Email: felicity@sbmf.co.uk

elisabeth@sbmf.co.uk

T: +44 (0)207 236 1177

Elizabeth Johnson/ Joanna Weaving

FinnCap Limited

T: +44 (0)20 7220 0500

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Iron ore and manganese development in Africa

Appendix - Board

Brian Moritz

Non-Executive Chairman

Dave Reeves

Managing Director

James Carter

Finance Director

Roy Pitchford

Non-Executive Director

Russell Lamming

Non-Executive Director

Brian is a Chartered Accountant and former Senior Partner of Grant Thornton, London. He formed Grant

Thornton’s Capital Markets Team which floated over 100 companies on AIM under his chairmanship. In 1995 he

retired from Grant Thornton to concentrate on bringing new companies to the market as a director. He

concentrates on mining companies, primarily in Africa, and was formerly chairman of African Platinum PLC

(Afplats) and Metal Bulletin PLC as well as currently being chairman of several junior mining companies.

Dave holds a first class honours degree in mining engineering from the University of New South Wales, a graduate

diploma in applied finance and investment from the Securities Institute of Australia, and a Western Australian first

class mine managers certificate of competency. He has spent the last 14 years operating in Africa including

Zimbabwe Platinum Mines Ltd (Zimplats) and Afplats. He is a non-executive director of ASX company Minbos

Resources.

James is a CPA with 17 years experience in the mining industry. James was most recently CFO of Straits

Resources, a diversified metals group listed on the ASX. Prior to this James was CFO and Company Secretary of

SGX listed Straits Asia Resources and was integral to its development as a 10 million tonne per annum coal

producer in Indonesia. His work at Straits included debt and equity capital markets, tax strategy, M&A and

corporate governance. James was involved with equity and debt capital markets raisings of $2 billion in the last 5

years. James is a board member of Worldwide Energy, an aspiring Indonesian coal company and PTT Asia Pacific

Mining.

Roy, a Charted Accountant, has more than 25 years senior management and executive experience. Previously

CEO of Cluff Resources Zimbabwe Ltd, Delta Gold Zimbabwe (Pvt) Ltd, Zimplats, Afplats and African Minerals Ltd.

Roy currently sits on numerous public and private mining companies‟ boards.

Russell Lamming is a qualified geologist with an honours degree in geology from the University of the

Witwatersrand and a Bachelor of Commerce in Economics from the University of Natal. Russell has a broad range

of experience including directorship of a South African mining consultancy and precious metals analyst for a

leading international broker. Russell led the commercial process at Afplats and was most recently CEO of AIM

listed Chromex Mining, which was bought in 2010 at a significant premium to its listing price. He is currently MD

of GoldPlat.

21


Iron ore and manganese development in Africa

Appendix - Management Team

Mark Styles

Exploration Manager

Justin Longley

General Manager, West

Africa

Gus Simbanegavi

General Manager, South

Africa

Mark is a geologist with a first class honours degree obtained from the University of Western

Australia and 20 years experience in exploration and project management worldwide. His

experience covers a range of precious metals, base metals and industrial minerals in

Australia, Saudi Arabia, Tanzania, South Africa, Canada and Mexico, where he was country

manager for ASX-listed explorer Azure Minerals Limited. In 2008, Mark established a

geological consulting company specialising in property evaluation, target identification and

exploration management with Cliffs Asia Pacific Iron Ore as a major client.

Justin holds a an honours degree in geology from University College London, and an MBA from

Imperial College London. For over 20 years he has worked throughout Africa to identify and

develop mineral resources, bring mines into production, and generally realise commercial

opportunities. Justin has served as senior management for Diamondworks in Angola, Oryx

Natural Resources in the DRC, and Mukuba Resources in Zambia. He has also led the

turnaround of poorly performing businesses on behalf of Barclays Bank in Kenya.

Gus is a mining engineer who has worked his whole career in Southern Africa. He has

developed gold mines in Zimbabwe and was a Mine Manager for Zimplats at their platinum

operation in Zimbabwe. Most recently Gus was General Manager Operations for Aquarius

Platinum and has a wealth of open pit and underground experience.

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