DOTZ NANO LIMITED — AGM Information 2014

May 28, 2014

Northern Iron Limited Annual General Meeting 29 May 2014

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DISCLAIMER

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Forward-looking statements

This presentation includes forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions, many of which are outside the control of Northern Iron Ltd (NFE). Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Any forward-looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, NFE does not undertake any obligation to update or revise any information or any of the forward-looking statements in this presentation or any changes in events, conditions or circumstances on which any such forwardlooking statement is based. No representation or warranty (express or implied) is made by NFE or any of its directors, officers, employees, advisers or agents that any forecasts, projections, intentions, expectations or plans set out in this document will be achieved, either totally or partially, or that any particular rate of return will be achieved.

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NORTHERN IRON OVERVIEW

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Overview :

• 100% owner of Sydvaranger Iron Ore Mining Operation, Norway

• Operated from 1910 to 1997 (200Mt of ore mined); restarted by Northern Iron 2009

• Listed on the ASX in Dec 2007; mining commenced May 2009; first shipment Nov 2009

• High quality magnetite concentrate ~68% Fe with strong demand from customers

• Portion of production placed in a long term offtake contract with Tata Steel

• Long mine life

• Advantageous location with adjacent uncongested infrastructure (rail, port, with excess capacity)

Corporate:

 ASX Code : NFE  Ordinary Shares: 484.4m

• Market capitalisation @ A$0.18: A$87.2m

• Cash & available facilities @ 30 April: US$21.5m

Significant Shareholders (as of 28 May) :

• Dalnor Assets Ltd: ~19 %

• Tschudi Mining: ~14 %  OM Holdings Ltd: ~11 %  Prominvest AG: ~ 5%

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2013 HIGHLIGHTS

 .

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#1

Improvement in safety performance with a 63% reduction in the total reportable injury frequency rate

#2

15% increase year-on-year in total tonnes mined

#3

Consistent production of ~2 Mt p.a. of iron ore concentrate over 2012 and 2013

#4

Premium product quality of ~68% Fe maintained

#5

EBITDA of US$21.9 million in 2013 (2012: US$21.9 million)

#6

17% reduction in borrowings and interest bearing liabilities year-on-year

#7

Successive monthly concentrate production records in January, February, July and December 2013, showing a consistent trend

#8

A record quarterly production result of 545kt in December 2013 surpassed by a new record of 553kt in the March 2014 quarter

#9

Development of sales to a diversified customer base including a focus on direct sales into the European steel market as sinter feed

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2013 PERFORMANCE Safety, Environment, Community

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Safety:

Environment:

Safety:
	2013	2012
Lost Time Injury (LTI)	9	16
Total Reportable Injury	15	41
Frequency Rate (TRIFR)

  - Awareness – Monitoring – Control

     - Awareness:  community liaison group meets quarterly.

     - Monitoring: participation in a national research program to improve rehabilitation of subsea areas impacted by tailings deposition.

• Significant improvement year-on-year;

• 7 less LTI’s and a 63% reduction in the Total Reportable Injury Frequency Rate

• Introduction of proactive tools and measurements:

• Control: strengthening internal controls through the introduction of online management systems to report, follow-up and close out non-conformities and identify opportunities for improvement.

Community:

• Walk Observe Communicate (WOC) – helpful to improve safety culture

• TRIFR measuring – align with European standards

• May 2013 – Sør-Varanger municipality approved the scope of work for the Environmental & Social Impact Study (ESIA), necessary for future applications required for expanding production.

• Improvements are encouraging though efforts are continuing to achieve best practice

• More than 70% of employees reside in the Sør-Varanger municipality; supporting the objective of building a long term sustainable business with an adequate proportion of locally based skilled employees.

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2013 PERFORMANCE Mining

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• 15% increase in total tonnes mined year-on-year, an annual record for the Sydvaranger Gruve operations.

• Steady improvements in productivity and utilisation achieved in 2012 were maintained during 2013, delivering a stable and predictable operation.

Total material mined	2013	2012
Ore Mined (kt)	5,288	4,239
Waste Mined (kt)	13,138	11,833
Total Mined (kt)	18,426	16,071

• Mine production matched to concentrator requirements with a demonstrated ability to deliver ore feed necessary.

• Flexibility demonstrated in managing the wedge type failure which occurred in September 2013 at the Bjørnevatn West wall.

• West wall - failed material is stable; monitoring continues; no risk to intermediate term mine plan; remediation options are under review.

	Ore Blend	2013 %
	Bjørnevatn	82
	Kjellmannsåsen	14
	Fisketind	4

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Mine Production (Quarterly)
4,961
4,689
4,427 4,410 4,366 4,484
4,190
3,942
Tonnes Mined (kt) 3,515
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2013 PERFORMANCE Concentrate Production

• Consistent production of ~2 Mt p.a. of iron ore concentrate over 2012 and 2013 despite unplanned production interuptions during the June quarter

June quarter
	2013	2012
Ore Milled (kt)	4,791	4,725
Concentrate Produced (Dry kt)	1,992	1,980
Total Shipped (Dry kt)	1,917	1,928

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Concentrate Quality - Iron and Silica Content %

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Average SiO2 in concentrate (%)
Average Fe in concentrate (%)
8.0 70.0
69.0
7.0
68.0
6.0
67.0
5.0 66.0
65.0
4.0
64.0
3.0
63.0
2.0 62.0
Fe content (%)
Silica content (%)
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 Production achievements:

• Record monthly production > 200kt achieved in July and December 2013

• Sep-13 quarter production of 515kt, highest production quarter including a planned primary mill reline

• Dec-13 quarter record production of 545kt

• 2H 2013 production of ~ 1.1 million tonnes,

  • 14% increase over 1H

• Premium grade product quality maintained throughout 2013.

Concentrate Production (Quarterly)

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600
500
400
300
200
100
0
Concentrate Produced (kt)
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2013 PERFORMANCE Financial Results

• Net loss after tax of US$ 1.7 million, significantly improved from a loss of US$ 11.3 million in 2012

• EBITDA of US$21.9 million achieved in 2013 underpinned by improving production performance

• Operating margin maintained with improving C1 unit cash operating costs since 2H’13. Operating costs remain stable and predictable

• Capital expenditure remains disciplined and modest

		6 months	6 months
		ended	ended	Year	Year
		30-Jun-13	31-Dec-13	ended	ended 31-
				31-Dec-13	Dec- 12
Average FOB Sales Price	(US$/dmt)	104	102	103	97
C1 Cash
Operating Unit	(US$/dmt)	95	84	90	83
Cost
EBITDA	US$m	5.4	16.5	21.9	21.9
Operating loss
before interest &	US$m	(0.6)	(2.9)	(3.5)	(3.7)
tax
Net (loss)/profit after tax	US$m	2.5	(4.2)	(1.7)	(11.3)

FOB Sales Price &

Cash Capital Expenditure (Quarterly)

C1 Unit Cash Operating Cost (Quarterly)

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C1 Unit Cost (US$/dmt) 10
FOB Sales Price (US$/dmt) 9 8.2 8.8
7.8
120 108 107 110 8
110 99 100 7
96 95
100 6
89
90 86 99 5 4.7
80 90 4
83 85 85 83 3.0
70 78 78 79 3
1.9
60 2 1.2
0.9
50 1 0.6
40 0
Capital Expenditure (US$m)
FOB Sales Price & C1 Unit Cost (US$/dmt)
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2013 PERFORMANCE Financial Results

• Progress continues on improving the balance sheet

• finance leases reduced 35% year-on-year

• term loans with DNB and Innovasjon Norge reduced to US$ 23.3 million (2012: US$34.4 million).

• Overall reduction in debt & interest bearing liabilities of 17% year-on-year

• During April 2014, DNB renewed the working capital facility for the period until May 2015, maintaining the available funding at a limit of US$35 million.

Total Borrowings	2013	2012
Finance leases (US$m)	26.2	40.5
Working capital facility (US$m)	33.6	29.9
Innovasjon Norge loan (US$m)	10.0	12.1
DNB Loan (US$m)	17.3	22.3
Total Interest Bearing Liabilities	87.2	104.7
& Borrowings

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Current Assets, Interest Bearing Liabilities & Borrowings, Net Debt (as at 31st December each year)

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100
75
Current assets
50
25
Cash & Cash
equiv
0
Borrowings excl.
leases & working
capital
-25
Finance leases
-50
Working capital
-75
Net debt facility
-100
-125
2009 2010 2011 2012 2013
US$m
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2014 PERFORMANCE Year-to-date

OPERATIONS

• Mar’14 quarter realised the third consecutive quarter of increased production records

• The last 6 months of production equates to an annualised production rate of ~ 2.3 Mt.

• May ‘14 production to date approx. 200kt

• Rock-on-ground service contract signed with Orica Norway for the delivery of explosive and drilling services; expected to further improve productivity.

SALES & MARKETING

• Tata Steel have exercised their option to extend the long term offtake contract until 31 March 2018

• Spot sales continue to ArcelorMittal, Bahrain Steel and Tata Steel

• Iron ore price hedging in place for Q2’14 (135kt @ US$123/wmt) and Q3’14 (60kt @ US$120/wmt) with an approx. mark-to-market value of ~ US$3-4 million.

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Key Performance Indicators		Year-to-
		date as at
		30-Apr-14
Ore Mined	Kt	1,796
Waste Mined	Kt	3,944
Total Material Mined	Kt	5,740
Ore Milled	Kt	1,681
Concentrate Produced	Dry Kt	740
Concentrate Shipped	Dry Kt	778
No. of Shipments	#	12
Average FOB Sales Price	US$/dmt	100
C1 unit operating cost	US$/dmt	78
Group cash balance & available	US$m	21.5
facilities

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2014 & BEYOND

Delivering Value

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GOALS

 A sustainable and profitable long term business delivering returns to all stakeholders

• Goals deliverable with stable operations, premium quality, predictable costs, opportunities for growth

• Zero harm

• 2.0 Mt concentrate production in 2012 and 2013

• Maximise value and optimise throughput

• Lower unit cost per tonne

• Optimise quality

• Preferred Supplier

• 3 quarters of successive production records

• 2014 production stable at a rate of ~ 2.3 Mt p.a.

• Higher volumes / lower costs attainable with fine crushing improvements

• Trusted employer with strong community relationships

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2014 & BEYOND

Delivering Value

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KEY FOCUS AREAS

• Safety/Environment : High priority as this is our licence to operate. Safety performance underpins reliable and stable operations which in turn yields higher productivity and output.

• Reliability: Reliability improvement offers the quickest potential to improve production. Focussed on reducing unplanned downtime and increasing planned preventative maintenance. Continue to embed planning processes linking mine, rail, plant and port.

• Productivity: Continue delivering sustainable incremental improvements to operations; compliance to plans with unrelenting follow up of deviations.

• Competence & Culture: People get things done. Productivity improvement enabled through clear goals, aligning team behaviours, developing skills and competence, engaging and communicating effectively across the organisation.

 Sustainability :

• Price : deliver maximum volume into the highest yielding market

• Cost: focus on operating cost reductions and long term major contracts up for renewal which offer the opportunity to significantly improve the cost structure

• Quality: maintain premium quality, review opportunities to improve margin with further quality enhancement

• Growth: focus on process flow enhancements and evaluate projects to deliver step-change volume uplift to a level of approximately 2.8Mtpa. Continue with the expansion project and obtaining associated approvals.

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KEY POINTS SUMMARY

• Mine Production – flexible plans, ready to deliver higher ore feed to match concentrator demand.

• Plant Production – momentum, continuing to achieve new production records. Reliability is the key to quick improvement!

• Improvement to Current Operations – targets developed with bottom-up actions providing clear tasks, timeframes and accountabilities.

• Marketing – supplying to the European sinter market, competitive environment for Sydvaranger Gruve’s premium product enables best return to be achieved.

• Debt – modest, reducing steadily.

• Growth – Identifying and evaluating projects to deliver stepchange volume uplift at levels of approximately 2.8 Mt p.a. Continuing with the expansion project and obtaining associated approvals.

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Resources – Infrastructure – Quality