Roderda Smith B. Comm. C.A. F. Fin. Managing Director Precious Metals Australia Limited

Windimurra Vanadium Mine Mid West Resources Forum June 2006

• Windimurra project description $\mathcal{L}_{\mathbb{R}^+}$
• Windimurra history ang.
  Sinta
• Current status $\mathbb{Z}_2^{m}$
• Geology and resource hady.
• Redevelopment schedule em
  Sa
• Competitive advantages $\mathbb{Z}^m$
• Project threats $\int_{0}^{u}$
• Financial $\mathbb{Z}$

Ź

Midwest opportunities $\mathbb{Q}_+$

Location Map

PRECIOUS METALS AUSTRALIA EMITLED AND A

Wheimura Profect Description

• $\rightarrow$ Magnetite mine (vanadiferous titano magnetite)
• $\rightarrow$ 3.25 million tonnes ore pa
• $\rightarrow$ Magnetite beneficiation plant
• $\rightarrow$ 1.1 mtpa magnetite concentrate (Fe, Ti, V)
• $\rightarrow$ Pyrometallurgical plant
• $\rightarrow$ 1.1 mtpa roasted calcine (Fe, Ti, V)
• $\rightarrow$ Hydromettalurgical plant
• $\rightarrow$ 9,000 tpa vanadium trioxide powder
• $\rightarrow$ Ferro alloys plant

Á,

$\rightarrow$ 6,200 tpa ferrovanadium 80

Windinuna History

• 1985 Pegged by PMA
• 1988 PMA floated on ASX
• Drilling, testwork, research, process design 10 years ₩
• 1998 J/V 49% PMA, 51% Xstrata $\mathcal{R}$
• 1999 Construction

B

• PMA reduce to 40%
• 2000 Commissioning
• PMA reduce to 15% NPI
• 2003/4 Controversial closure
• 2005 PMA regain 100% ownership
• 2006/2007 Mine re-development/expansion

COTTESTERE

• Partly dismantled $\mathcal{Q}_\mathcal{U}$
• Insitu Plant replacement cost $\approx$ A\$100m ₩
• Rotary kiln, Civils, concrete, Borefield, pit
• Plus all infrastructure in place
• 365km natural gas pipeline M
• All weather roads
• s46 Environmental approval
• Aboriginal Clearances

6

• Detailed engineering BFS near completion 90g
• Cost to reopen, expand, value-add +A\$150m

Windhiurra Readevelopment Schedule

Re-engineering study (Mar '06)

• Identified efficiency gains
• Identified cost saving opportunities
• Re-optimised of plant design
• Bankable Feasibility Study (July '06)
• Finalise and cost optimised design
• Mine re-building $\approx$ 16 months 1.
  Ma
• Production late 2007
• Examining selling iron concentrate and Ti

Regional Geology

• Current resource length approx 5,900 m
• Strike length 27,000 m
• 149m tonne resource
• 1 billion tonne scope
• Average width 200 metres
• Mining weathered ore to 40m depth
• Unweathered magnetite $+40$ m depth

PRECIOUS METALS AUSTRALIA HIMITED 2000 2000

Windimurra Reserve

A

JORC compliant Reserve included within Resource 15% of Strike tested

Typical Gross Section

WINDIMURRA VANADIUM MINE TYPICAL CROSS SECTION AT 8700mN

PRECIOUS METALS AUSTRALIA LIMITED

Whelmurra Plant

13

Windinuma Compatiwe Advantages

• Largest proven reserve M
• Only oxidised deposit in world 110)
  1100
• Highly skilled labour 1977)
  Mar
• Stable government and society (vs. Russia, China M and South Africa)
• Natural gas for roasting H
• Co product feedstocks from alumina and nickel H industries
• Proven high quality production

Profect Threats

45

• Volatile vanadium prices
• need very high margin
• Domestic gas supply squeezed for export
• State royalty doesn't recognise down stream processing costs
• Extreme labour shortages Milli
• Spiraling construction costs
• Lack of iron ore infrastructure
• potential limited by lack of rail / port My

Firancial (2AS)

• Total Capex \$275m
• Existing plant \$100m
• Cash at bank \$40m
• Debt required $\sim $150$ m
• Sales revenue-
• At current prices \$275m pa
• At 10 year average price \$150m
• PMA Market Capitalisation \$150m

MIG WEST OPPORTUNITS - CONSULTATION SIROM

• Light steel fabrication for tanks, stairways, hand rails, $\begin{picture}(20,20) \put(0,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0$ hoppers
• Mechanical installation packages $\begin{picture}(20,20) \put(0,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0$
• Water pipeline and borefield installation $\begin{picture}(20,20) \put(0,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0,1){30}} \put(15,0){\vector(0$
• Crane hire (heavy lifting) 92.
• Equipment hire 92)
  Mili
• Supply camp for 140 persons $\frac{\partial p}{\partial x^2}$
• Other site buildings 99.
  Ma
• Labour hire opportunities 0.
  Ma
• Civil works and concrete
• Overhead power line construction

Mic West Opportunities - Ongoing S50mber vear

• Support services (survey, catering, training, IT, vehicle maintenance & light fabrication)
• Contract mining (earthmoving)
• Heavy lifting 1.
  Ma
• Bulk haulage of calcine/iron cons to Geraldton $\mathcal{H}$
• Geraldton, Mt Magnet and other locally based employment

PRECIOUS METALS AUSTRALIA DIMITED

Vanadium Uses 1

• Carbon steel Un
• Reinforcing bars $\frac{\partial \mathcal{D}}{\partial \mathcal{D}}$
• HSLA steel Un
• Construction, pipelines, ships, autos
• Tool steels Un
• High-speed tools, wear resistant parts 徽

INDE

Titanium alloys

• Jet engine parts, airframes, golf clubs, rockets, nuclear
• Chemicals

24

• Catalyst for sulphuric acid and plastics
• Dietary, glasses, pigments Gilli
• Batteries, new redox technology ₩

Use of Vanadium in Steel

• The steel industry accounts for 85% of total V demand
• Steel industry demand:
• HSLA Steels (oil & gas pipelines) 33%
• Carbon Steels (construction) 11%
• Full Alloy Steels (forging applications) 24%
• Tool Steels / Stainless Steel 17%

Vanadium / Hemum Alloys

• Best strength to weight ratio of common engineering materials
• Aircraft alloy was 5-7% of aircraft weight
• Now 20% of aircraft weight
• New alloy for A380 and B787 5-5-5 $(Al10\%$ Sn5% V5%

Vanadium Process Flow Diagram

WINDIMURRA VANADIUM MINE PROCESS FLOW