Alkane Resources — Investor Presentation 2010

Nov 2, 2010

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R ESOURCES L TD AB N 3 5 0 0 0 6 8 9 2 1 6

3 November 2010

Manager Announcements Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000

Dear Sir,

PRESENTATION

Attached is a copy of Dubbo Zirconia Project Marketing Presentation to be delivered in Hong Kong over the next two weeks.

A copy of this presentation will also be available on the Company’s website www.alkane.com.au.

Yours faithfully,

for ALKANE RESOURCES LTD

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D I Chalmers Managing Director

Registered Office: 129 Edward Street Perth WA 6000 Telephone: 61 8 9227 5677 Facsimile: 61 8 9227 8178 PO Box 8178 Perth Business Centre Western Australia 6849 www.alkane.com.au mail@alkane.com.au

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Dubbo Zirconia Project NSW Australia Marketing Presentation Hong Kong November 2010

Corporate snapshot

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Shareholder profile
Exchanges ASX: ALK
ADR: ANLKY
Share Price (29 October 2010) A$0.78
Shares 249m
Fully Diluted Market Cap ~A$195m
Cash ( a t 30 ep S t em b er 2010) ~A$6 . 8 m
Retail
Top 20 ~60%
Institutions
No debt
Directors & Management 3%
12 Month High / Low A$1.19/ $0.23 at 30 june 2010 Abbotsleigh (Gandel Metals) 29%
Directors & Management
J. S. F. Dunlop Chairman
D. I. Chalmers Managing Director
A . . D Lethlean Non ‐ Executive Director
I. J. Gandel Non‐Executive Director
L.A. Colless CFO Joint Secretary
K.E. Brown Joint Secretary
T W Ransted Chief Geologist
M D Sutherland General Manager NSW
Source: FT
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DZP Location

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Central West
New South Wales
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Business Strategy

Multi commodity explorer and miner, focussed in the Central West of New South Wales, Australia

Dubbo Zirconia Project – world class resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earths

Gold production from Peak Hill mine 1996 – 2005. New gold development planned at Tomingley based upon 800,000 oz resource

Major gold discovery at McPhillamys (~3 million oz) Jo nt enture w ti V i h Newmont

Develop multiple operations within tight geographic area over next five years

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Au Au Cu
Zr Nb Cu
Y REE
Au
150km area
Au
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Rare Metals ‐ Rare Earths

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Rare Metals – Rare Earths

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• China produces 90% of world downstream zirconium chemicals

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• China is limiting the export of raw rare earths materials

• China currently produces 95% of world REE output

Rare metals Light rare earths Mids Heavy rare earths

• Brazil produces 90% of world niobium

� Green technology is dependent on � Increased demand also driven by changes in legislation � China has dominant position

� Green technology is dependent on rare metals and rare earths

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…not so rare, but increasingly valuable

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Dubbo Zirconia Project Location Dubbo reg on pop i 80 000, State power grid State gas grid Major mixed agriculture Transport hub Substantial light industry

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DZP Geolo
gy
0 200
metres
Jurass c agei d trachyte ni trus vei
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	DZP Resources
	Measured Resource : 35.7 million tonnes grading
	0 - 55 metres 1.96% Zr02, 0.04%HfO2, 0.46% Nb2O5 , 0.03% Ta2O5 , 0.14% Y2O3,0.75% REO and 0.014% U3O8
	Inferred Resource : 37.5 million tonnes at similar grades 55 - 100 metres
	TOTAL : 73.2 million tonnes
	The ore is not classified as a radioactive deposit. Major world resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements
	Production of uranium is currently prohibited in NSW

DZP Program

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Resource drilling completed 2001. Flow sheet developed 1999 to 2002, with trials to m n pi i ilot p ant sca e. etal l D iled feasibility study comp etel d in 2002.

AusIndustry Commercial Ready Grant of A$3.29M in April 2006 on dollar for dollar basis to complete process optimisations, and construct and operate the Demonstration Pilot Plant (DPP).

Laboratory program commenced at ANSTO Lucas Heights (Australian Nuclear Science and Technology Organisation) July 2006, with Demonstration Pilot Plant commissioned March 2008

Substantial Zr and Nb product samples from DPP distributed to potential customers 2009-2010. Y and REE product samples scheduled for early 2011.

Continual market update – strong growth predicted in most products

Revise and update the 2002 feasibility study by Q2 2011. DFS managed by Perth based consultants TZ Minerals International Pty Ltd (TZMI).

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DZP Flow Sheet

DZP Demonstration Pilot Plant

Zirconium A lications pp

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Zirconium Chemicals Industr
y
ZIRCON / BADDELEYITE ELECTRIC ARC FURNACE
2008 ~ 160,000t zircon
converted to 96,000t of CHEMICAL PROCESSING
zirconia (equivalent) products
and 10,000t Zr metal
FUSED
“INTERMEDIATES” ZBS ZOC ZIRCONIA
ZOC = zirconium oxychloride
ZBS = zirconium basic sulphate UPGRADING/CONVERSION UPGRADING/CONVERSION
ZOH = zirconium hydroxide
ZBC = zirconium basic carbonate “END USE”
ZrO2 = zirconia ZBC ZOH ZBS ZOC ZBC Zr Doped
Acetate Zirconia
Fused zirconia prices
have escalated by ��� CatalystsPaint driersAnti-perspirants ��� CatalystsMixed zirconias [Pigment ] �� [Pigment ] coatingLeathertanning �� [Pigment ] coatingsDrillingmuds ��� CatalystsPaint driersAnti-perspirants �� CatalystsFireproofing textiles ��� CatalystsStructural ceramicsBio-
20% in recent �� Printing inks (as AZC)Ceramics coating �� Fireproofing textilesRubber �� Printing inks (as AZC)Ceramics � ceramicsElectronics
months and ZOC will � Electronics � Electronics
follow and flow on to � Zirconium soaps
zirconium chemicals
Source: TZMI
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Zirconium Chemicals Current Zirconia , Zirconium Chemical Uses 2015 Estimated 150,000 tonnes with industry growth rate of 4.5%pa . High growth areas: Advanced ceramics and catalysts 13 0%pa Ceramic pigments 8.0%pa Zirconium metal for nuclear applications ? Products range rom f US$4/kg o t US$20/kg Metal US$200/kg Source: TZMI

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Zircon Usage Zircon provides the feedstock for the zirconium industry 2012 Global consumption estimate 1,400,000tpa 18% = 250,000t zircon for zirconia and zirconium chemicals Source: TZMI

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Zircon Su l Demand Price
pp y
20% shortfall by 2020
Zircon prices have
escalated by 30%
during 2010 to
US$1,100/t
Zircon price and supply will have a major impact on the cost and availability
of zirconium chemicals, zirconia and zirconium metal
Source: TZMI
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Niobium A lications pp

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Structure of Niobium Industr
y
Metallurgical
� Structural steels
� Stainless and heat
resistant steels
Pyrochlore FeNb � Superalloys
� Super conducting
magnets
Columbite
Tantalite Nb 2O 5
Oxides
� Class
� Ceramics
AZL Nb
Concentrate
Nb Raw Materials Intermediate Products Applications
DZP process removes radioactive elements such as uranium and thorium, producing clean concentrate
Source: TZMI
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Niobium Demand
Niobium 2008
(Ferroniobium units)
consumption
~85,000t – 90% Brazil
Estimate for 2012
~100,000t
Ferro-niobium price spiralled to US$60/kg in March 07 and is currently around US$35 - 40/kg
Sources: IAMGOLD / TZMI
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REE A lications pp

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Source: Molycorp
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Rare Earth Su l ‐ Demand pp y

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Source: IMCOA

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Rare Earth Consum tion
p
Light Rare Earth
DZP Average as
REOs
US$10/kg Q1 2010
US$12/kg Q2 2010
US$16/kg July 2010
US$28/kg 9 August 2010
US$31/kg Q3 2010
Yttr um eavy i H REs
DZP Average as
REOs
US$33/kg Q1 2010
US$42/kg Q2 2010
US$55/kg July 2010
US$64/kg 9 August 2010
US$65/kg Q3 2010
Total YREE demand 2015 estimated to be 200,000 tonnes
Source: IMCOA
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	DZP Product Output
	Base case model of 400,000 tonnes pa and expanded 1 million tonnes pa of ore processed
		Production Outputs Product 400,000tpa 1,000,000tpa
		Production Outputs
		Product	400,000tpa	1,000,000tpa
		ZBS, ZOH, ZBC, ZrO2	15,000tpa (6ktpa ZrO2)	37,000tpa (15ktpa ZrO2)
		Nb -Ta concentrate	2,000tpa (1.4ktpa Nb2O5)	5,000tpa (3.5ktpa Nb2O5)
		LREE concentrate	1,980tpa (REOs)	4,950tpa (REOs)
		YHREE concentrate	600tpa (REOs)	1,500tpa (REOs)
		�ZBS = zirconium basic sulphate; ZOH = zirconium hydroxide; ZBC = zirconium carbonate Equivalent ~99% ZrO2 + HfO2 Base case revenues ~US$120m + 1 Mt pa ~US$250m ++ Open pit life 200 years Open pit life 80 years
		�Nb-Ta concentrate = ~70% Nb2O5 + Ta2O5 calcined basis �LREE = La, Ce, Nd �YHREE = Y, Gd, Dy, Tb

DZP YREE Out ut p

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Yttrium - Rare Earth Individual Production (assumed 70% recovery)

	DZP YREE Output Yttrium - Rare Earth Individual Production (assumed 70% recovery)	DZP YREE Output Yttrium - Rare Earth Individual Production (assumed 70% recovery)	DZP YREE Output Yttrium - Rare Earth Individual Production (assumed 70% recovery)
		Ore 400 000tpa(Base Case) 1 000 000tpa
		, , , La2O3 504 1,260 CeO3 950 2,376 Pr6O11 104 262 Nd2O3 364 912 Sm~~2~~O~~3~~ 56 142 __
		Total LREE 1,980tpa 4,950tpa Eu2O3 2 4 Gd2O3 56 138 Tb4O7 8 22
		Dy2O3 52 132 Ho2O3 10 28 Er2O3 30 74 Tm2O3 4 10 Yb2O3 26 64
		L O 4 10 u2 3 Y ~~2~~ O ~~3~~ 408 1,022__ Total YHREE 600tpa 1,500tpa Total YREE 2,580tpa 6,450tpa
	YHREE output will be very significant outside of China

			DZP Product		Development
		Product	Precipitate	Dried	Further development
		ZBS ZOH ZBC	27% ZrO2 35% ZrO2 35% ZrO2	98.6% ZrO2 99% ZrO2 99% ZrO2	Impurity minimisation Impurity minimisation Impurity minimisation
	ZrO2 Nb concentrate Ferro-niobium		56% Nb2O5	99.8% ZrO2 70% Nb2O5 58% Nb	Particle sizing Additional refining
	LREE concentrate YHREE concentrate		~99% REO ~62% REO	At lab scale Target +90%	DPP scale Further DPP and devel.
	�ZBS = zirconium basic sulphate; ZOH = zirconium hydroxide; ZBC �Nb concentrate = Niobium-tantalum pentoxide			**= zirconium carbonate ; ZrO2 **	= zirconia (all with Hf)
	�LREE l th i d i d i i = an anum, cer um, neo ym um, praseo ym um, samar um �DPP = demonstration pilot plant			�YHREE tt i d li i t bi d i = y r um, ga o n um, er um, yspros um

Develo ment athwa p p y

	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway	Developmentpathway
																2013
				‐> 2009		2010				2011				2012			2013
		DUBBO ZIRCONIA	Resource definition 2001 ‐2002	�
		PROJECT	Flow sheet development 2002	�
			Laboratory Zr – Nb 1999 ‐ 2002	�
			Pilot plant Zr – Nb 2002	�
			Mine Plan & Scheduling 2002	~~�~~
			Plant Design & Engineering 2002	�
			Laboratory Y & REE 2009 ‐			~~�~~
			Demonstration Pilot Plant 2008 ‐
			Z–NbPdtDitibti	~~�~~		~~�~~
			r rouc sruon
			Y ‐ REE Product Distribution
			Secure Offtake Agreements
			Definitive Feasibility Study	2002
			( ) **Environmental Impact EA **	2000 ‐>
			Detailed Design
			Project Financing / Consent
			Construction
		Production CAPEX base case estimated at approximately A$150m + A$30m for acid plant	Production

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DZP Site 3D Image
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DZP Process Plant La out y

DZP Strate ic Si nificance g g

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Majority of “downstream” zirconium products are derived from zircon, whose output is governed by ilmenite/rutile from mineral sands mining operations.

China dominates downstream zirconium business at ~90% but feed is zircon.

Niobium production dominated by one company, CBMM in Brazil with 90% of market. Rare earth and yttrium production dominated by China (95%). DZP offers new source particularly for important Y and HREE.

Production costs are spread across the four metal outputs – zirconium (hafnium), niobium (tantalum), light rare earths and yttrium-heavy rare earths.

Project located in region with very favourable infrastructure and legislative framework, both at a State and Federal level.

Increased demand for many of the metals is driven by environmental legislation to ensure emissions minimisation and energy consumption efficiency

The DZP provides an alternative and strategic source for a number of important metals, and is capable of producing for hundreds of years from one ore body.

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Conclusion

Dubbo Zirconia Project

A strategic and alternate supply for the zirconium, niobium and rare earths industries www.alkane.com.au

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Disclaimer

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Disclaimer

This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other trend projections. Such statements are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors which are beyond the control of Alkane Resources Ltd. Actual results and developments may differ materially from those expressed of implied by these forward looking statements depending on a variety of factors. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities.

Competent Person

The information in this presentation that relates to mineral exploration, mineral resources and ore reserves is based on information compiled by Mr D I Chalmers, FAusIMM, FAIG, (director of the Company) has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting o f xp ora E l ti on esu R lt s, Mi nera esources an l R d re eserves. an O R I Ch a mers consen l t s o t th e nc us on n i l i i th e presentation of the matters based on his information in the form and context in which it appears.

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