DOTZ NANO LIMITED — Annual Report 2011

Mar 5, 2012

OPERATIONS UPDATE & ANNUAL FINANCIAL RESULT 6 MARCH 2012*

DISCLAIMER

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 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 forward-looking 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. This presentation includes capital cost estimates from a Scoping Study. Typically the accuracy of Scoping Study capital costs will be in a range of +50% / -35%, with a contingency of 25% applied.

COMPETENT PERSON’S STATEMENT

The information in this report that relates to mineral resources is based on information compiled by Mr Mark Owen, who is a Chartered Geologist with the Geological Society of London. Mr Owen is employed full time by Wardell Armstrong International (WAI). Mr Owen 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 a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Owen consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Ore Reserves is based on information compiled by Mr Bruce Pilcher, who is a Member of the Australasian Institute of Mining and Metallurgy and is a Chartered Engineer under the Institute of Materials, Minerals and Mining. Mr Pilcher is employed full time by Wardell Armstrong International (WAI). Mr Pilcher 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 a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Pilcher consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

NORTHERN IRON OVERVIEW

Overview :

• 100% owner of Sydvaranger Iron Ore Project, Norway

• Operated from 1910 to 1997 (200Mt of ore mined)

• Listed on the ASX in Dec 2007, mining commenced in May 2009 and the first shipment was in Nov 2009

• High quality magnetite concentrate

• Portion of production subject to long term offtake contract with key European customer in place

• Long mine life expected

Corporate:

• ASX Code - NFE

• Ordinary Shares: 370m

• Market capitalisation @ A$0.90 A$333m

• Cash @ 29 February: US$28.1m

• Net Debt @ 29 February (unaudited) US$91.9m

Significant Shareholders :

• Tschudi Mining:

~24%

• OM Holdings Ltd:

~14 %

• Eley Griffiths:

• ~8 %

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OUR ASSET RESOURCES, INFRASTRUCTURE AND QUALITY

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Open Cut Mine- 25+ Year Mine Life

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Concentrator- High Quality Magnetite Concentrate

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8km Railway- Owner and Sole User

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Port- Efficient and Uncongested

RESOURCE / RESERVES

Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)	Mineral Resource Summary as at 01 February 2012 (at 15% Fe total cut-off grade)
Deposit	Indicated (Mt)	Fe (Total%)	Inferred (Mt)	Fe (Total %)	Total Tonnes (Mt)	Fe (Total %)
Bjørnevatn	152.0	32	138.1	30	290.1	31
Kjellmannsåsen	13.2	33	4.2	30	17.4	32
Fisketind Øst	11.1	31	19.2	31	30.3	31
Tverrdalen	20.4	32	26.4	31	46.8	31
Hyttemalmen	0.4	34	1.0	32	1.4	32
Bjornfell			13.6	32	13.6	32
Söstervann			4.7	37	4.7	37
Grundtjern			2.9	34	2.9	34
Fisketind SW			17.5	33	17.5	33
Jerntoppen			17.0	31	17.0	31
Total	197.1	32	244.6	31	441.7	31

• A drilling program commenced in May 2011 aimed at:

• Providing infill drilling data

• Testing a number of greenfield targets within the existing concession area

• Additional resource and reserve upgrades are expected during 2012 as infill drilling converts Inferred to Indicated Resources

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Reserve Summary as at 01 February 2012
(at 15% Fe total cut-off grade)
Probable Fe
Deposit Reserve (Mt) (Total%)
Kjellmannsåsen 11.8 33
Hyttemalmen 0 0
Bjørnevatn 142.6 32
Tverdalen 11.2 31
Fisketind Øst 6.7 30
Total 172.3 32
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RECENT PERFORMANCE- PHYSICALS

	Sep ‘11 Qtr* Actual	Dec’11 Qtr^ Actual	Mar’12 Qtr Projected	CY2012 Projected
Tonnes Mined	3,706	1,883	3,900	18,800
Crushed (kt)	780	1,045	1,149	5,955
Milled (kt)	796	1,034	1,175	5,500
Concentrate Produced (kt)	305	427	500-525	2,450
Concentrate Shipped (kt)	339	426	500	2,500
Iron Grade % Fe	66.8	66.9	67.0	67.5
Direct Operating Cost USD / dmt	132	86	70-80	60-65

• Sept’11 Qtr impacted by a 4 week unplanned maintenance stoppage on the primary mill.

• ^ Dec’11 mining impacted by a decision to reduce mining and consume stockpiles.

• Actual January and February concentrate production 327kt (2.0 Mtpa rate)

• February Production, 170kt, represents record monthly production rate of 2.1 Mtpa (annualised)

• Improvement due to:

• Higher throughput rates caused by debottlenecking improvements and Bjørnevatn ore

• Improving plant reliability

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• Operating costs expected to decline as volumes increase.

SALES AND MARKETING UPDATE

Tata Steel Europe

• Tata Steel Europe has declared a base volume of 1.0 Mtpa till March 2016 – the maximum allowable under the contract

• Tata has exercised its 0.5 Mt buyers option for 2012

Other

• NFE continues to ship to Asian customers via its exclusive agency agreement with OM Holdings (through its subsidiary OM Materials Pte Ltd)

• In Dec 2011 the company dispatched its first vessel to China on a CIF basis, which is expected to result in modest improvements to achieved sales price

• The non-met market continues to be explored, with a second cargo dispatched in January

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SVG Concentrate discharging in China mid February, completing NFE’s first CIF sale to the Chinese market. Selling CIF is expected to result in modest improvements to achieved sales price

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NORTHERN IRON VALUE CREATION STRATEGY

NORTHERN IRON VISION

EXPAND OPTIMISE PRODUCTION Long life, cost NAMEPLATE  Double the competitive ACHIEVE concentrate  Achieve sub 4% silica provider of high NAMEPLATE for blast furnace production quality iron ore capacity to 5.6 pellet feed pellet feed to Achieve a 2.8 Mtpa  Achieve sub 2% silica Mtpa customers in production rate during CY12 during CY12 for direct reduced  Change out the mining fleet with Europe, the Middle Achieve sub 5% silica  iron (DRI) pellet feed Upgrade the port to larger equipment East and Asia. from April 2012 handle cape size vessels

NORTHERN IRON

 Achieve a 2.8 Mtpa TODAY production rate during CY12 during CY12 Currently running  Achieve sub 5% silica at ~2.1 Mtpa from April 2012 5.8% silica content

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Q2 ‘12 Q3’12 2013-2014 2016
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Capital required USD m (expected to be satisfied from operating cash flows and debt)	16.0 (already committed)	50 – 60	280– 360	Note: capital costs in 2013-2016 are at scoping study level of accuracy. Expansion capital costs vary based on tailings disposal option selected.
Expected LOM operating costs (real) USD / dmt	< 50	< 55	< 40
Expected life of mine sales price FOB (% from base case)	100%	120%	120%

LIFE OF MINE OPERATING COSTS (Base case - excludes growth options)

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The Company has completed a reassessment of life of mine operating costs based on actual performance in 2010-2011 and expected performance over the life of the project.

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USD / dmt Operating
Operating Cost Guidance
Cost (Real basis)
2012 guidance: 60 –65
2013 – 2015 estimate: < 55
2016 – End of mine life estimate: < 50
Estimate of expected LOM average: < 50
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PORT UPGRADE OPTION

• [][Three main activities required to enable cape ] sized vessels to be loaded at Kirkenes:

• Upgrade the shiploader to allow correct positioning of the cargo in the wider vessels

• Dredging the berth to required depth

• Commission an additional concentrate silo to take total storage capacity to approximately 240,000 dry metric tonnes

• Current Status

• Funds approved to prepare engineering estimates and environmental approvals for dredging

• Expected Capital Cost USD 30m

• Expected Commissioning: January 2014

• Benefits

• Lower shipping costs results in higher FOB sales realised, especially for Asian sales

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HIGHER CONCENTRATE QUALITY

NFE’s consultant chief metallurgist and Noramco Engineering have identified and costed conceptual pathways to higher quality products. Estimates are at a scoping study level of accuracy

Sub 4% Silica Concentrate

• Additional magnetic separation capacity required

• Larger tailings thickener required

• Additional water sources required

• No additional environmental approvals required, though local government building approval for the thickener required, and approval for additional water usage required from the National authority

• Capital Cost: USD 7m

• Expected commissing: January 2014

• Improved pricing expected, and possible increased European sales.

Sub 2% Silica Concentrate

• All 4% equipment listed above required

• Flotation plant required

• Environmental approval required for disposal of tailings from the flotation plant – either marine or dry tailings options, options are being examined

• Capital Cost: USD 20m

• Earliest commissioning: January 2014

• Improved pricing expected, plus increased sales to Europe and the Middle East

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EXPANSION SCOPING STUDY COMPLETE

• An engineering scoping study examining doubling concentrate production has been completed by Noramco Engineering Corporation, with second opinions on cost and concept provided by major Norwegian engineering consultancy Multiconsult and SRK Consulting (UK).

• The study has examined three possible plant concepts to lift total Sydvaranger production to 5.6 Mtpa

• Duplication of the existing plant within the existing buildings

• Construction of a new 2.8 Mtpa standalone plant next to the existing facility at Kirkenes

• Construction of a new 2.8 Mtpa plant at the minesite at Bjørnevatn

• The study also examined three different tailings disposal options:

• Continued use of the existing marine disposal system approved for the existing plant

• Construction of a tailings dam adjacent to the mine site for disposal of wet tailings

• Construction of a dry tailings plant for disposal of tailings into the planned mine waste dumps

EXPANSION OPTION 1

Expand existing plant using existing infrastructure and plant space

• Expansion equipment to be housed in the existing concentrator building using space formerly used for flotation, magnetic separation and old grinding mills

• Utilizes a flowsheet similar to the current concentrator flowsheet

 Capital Cost estimate: USD 310m – USD 360m (depending on tailings solution selected)

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EXPANSION OPTION 2

Expansion plant constructed at Kirkenes

• Plant to be located at the site of the former pellet plant on the west side of the train unloading facility

• Ore to be conveyed to a new stockpile and fed directly to the new plant which will utilize a Semi Autogenous Grinding (SAG) mill and ball mill circuit with the appropriate magnetic separators, fine screens, and filters

• A new tailings thickener and associated pumping and utility systems would also be constructed

• Capital Cost estimate: USD 280m – USD 330m (depending on tailings solution selected)

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EXPANSION OPTION 3

Expansion plant constructed at mine site

• Involves construction of the same expansion plant considered under Option 2

• Plant to be located near the mine site

• Concentrate would be pumped via pipeline from the new concentrator at the mine site to the existing plant in Kirkenes where filtering would take place

• Capital Cost estimate: USD 325m – USD 335m (depending on tailings solution selected)

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EXPANSION- PERMITTING AND APPROVALS

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The approvals process is currently the critical path for the project.

The Company requires 2 significant government approvals to proceed with the expansion:

• Local Government land use approval

• Environmental permits for the increase in mineral and other waste emissions

To obtain these approvals the following activities and timeline is expected:

• Approval of the Scope of Work for the Environmental and Social Consequences Investigation – Q2 2012

• Completion of the Consequences Investigation and submission of the applications and reports – Q2 2013

• Decision from local government and national environment agency on land use and emission applications – Q4 2013

STRATEGIC REVIEW

• In Nov-2011, Northern Iron announced it was initiating a strategic review with a view to maximising value for all shareholders

• Northern Iron continues to work with its advisors to consider a range of corporate and operational strategies including a review of ownership options available to the company

• The Strategic Review may or may not result in a specific transaction

• Northern Iron has a strong basis to continue to develop as a standalone company and deliver value to shareholders

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