GWR GROUP LIMITED — Capital/Financing Update 2020

Dec 20, 2020

21 December 2020

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ASX Announcement

Road Transport Contract Executed – C4 Iron Deposit

HIGHLIGHTS

• Following the commencement of mining at Stage 1 of the 100% owned C4 Iron Deposit[1] , Alliance Partner Pilbara Resource Group (PRG) has acheived a significant production milestone having finalised the Haulage Contract with QEM Group Australia Pty Ltd (QEM) to transport the ore from the C4 mine site to Port of Geraldton.

• With road transport of the product a crucial link in the production chain, GWR is pleased to have this secured at contract rates that are in line with the company’s internal estimates.

• High-Grade ore is currently being stockpiled on the ROM (Figure 1), with crushing and screening activites on-going, the transport of this high grade material to the Port of Geraldton is imminent.

• Site 88 at the Port of Geraldton is now prepared and fully operational which includes a truck unloading facility, a storage shed with approximately 100,000 tonnes of capacity, and associated conveyor networks (Figure 2).

• PRG is engaged for Stage 1 of the C4 mining operations which covers the first 1 million tonnes of C4’s Mineral Resource estimate of 21.6 million tonnes at 60.7% Fe[2] with assessment and modelling currently underway to increase production tonnage on Stage 1 (Figure 3).

• GWR is currently undertaking a review of C4 to assess what portion of the ~

• remaining 20 million tonnes[2] will be optimised in Stage 2 mining of the C4 deposit and begin to engage with interested parties.

• Following the execution of the sales contract ore vessel charters will commence in January through the Port of Geraldton.

1 Refer ASX Announcement 4th December 2020 (Production Works Commence at C4 Iron Deposit)

2 2004 JORC Code compliant Resource is 131.1 Mt at 60.0% Fe, comprising of 10.1 Mt at 62.5% Fe Measured, 72.0 Mt at 59.9% Fe Indicated and 48.8 Mt @ 59.4% Fe Inferred. (refer ASX announcement dated 12th November 2019 and 8th July 2011 and 11th April 2013).

GWR Group Limited ( ASX : GWR ) (“ GWR Grou p” or “the Company ”) is very pleased to announce the final and crucial link in the production process has been satisfied with Alliance Partner Pilbara Resource Group (PRG) having finalised and executed the Haulage Contract with experienced contractor QEM Group Australia Pty Ltd (QEM) to road transport the ore from GWR’s 100% owned flagship C4 Iron Ore deposit in Wiluna, WA to Port of Geraldton.

With road transport a crucial link in the production chain, GWR is pleased to have this secured at contract rates that are in line with the company’s internal estimates.

On Thursday 3[rd] December 2020 the Company and its contract partners Pilbara Resource Group Pty Ltd (PRG) commenced mining operations at its 100% owned flagship C4 Iron Ore deposit in Wiluna, WA, described as an exceptional, DSO project, which will produce a high grade, low impurity iron ore.

From here, the High-Grade ore that is currently being stockpiled on the ROM (Figure 1), with crushing and screening activites on-going, the company believes the transport of this highgrade material to the Port of Geraldton is imminent.

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Figure 1: High-grade ore crushed and stockpiled on ROM pad awaiting transport.

Alliance Partner Pilbara resource Group (PRG) is engaged for Stage 1 of the C4 mining operations which covers the first 1 million tonnes of C4’s Mineral Resource estimate of 21.6 million tonnes at 60.7% Fe with assessment and modelling currently underway to increase production tonnage on Stage 1.

Under the Joint Venture with PRG, GWR is required to provide minimal capex and opex, will retain 70% share in the project profit as well as retaining the rights for ore sales, strategy and timing.

~ GWR is currently undertaking a review of C4 to assess what portion of the remaining 20 million tonnes will be optimised in Stage 2 mining of the C4 deposit and begin to engage with interested parties.

Site 88 at the Port of Geraldton is now prepared and fully operational which includes a truck unloading facility, a storage shed with approximately 100,000 tonnes of capacity, and associated conveyor networks (Figure 2).

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Figure 2: Site 88 at the Port of Geraldton is now prepared and fully operational.

Table 1: Key project Milestones to be achieved for the development of the C4 Iron Deposit

MILESTONE The Company will keep shareholders informed of operational milestones as they progress		PROGRESS
Haulage contracts		Completed
Completion of service agreement with nearby mine for access to site services such as village, workshops and water.		Completed
Finalisation of contract rates for major services; mining, crushing and screening		Completed
Northern Haul Road construction and site setup (workshops, lay down area’s, internal access roads and services such as water, power and communication)		On schedule
Works Approval (required for crushing and screening operations)		Completed
Road user agreement for the gravel sections and low standard tar sealed sections of the C4 turn to Meekatharra portion of the Gold Fields highway		Progressing
Completion of agreements with Port of Geraldton for services and third party for shed access		Completed
Commencement of Production Mining Operations		Commenced
Commencement of first Iron Ore Haulage	Expected Shortly
Offtake Agreements of High-grade DSO Iron Ore	Completed
First Ore at Geraldton Port of Iron Ore Mined and Transported	Jan 2021

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GWR Chairman Mr Gary Lyons commented:

“I am very pleased to advise shareholders of a crucial and significant production milestone the PRG team have achieved, with the finalaisation and execution of the road transport agreement with experienced operator QEM.

With Site 88 located at Port of Geraldton now ready to accept ore, GWR remains on track to meet our target of first ore shipment in early January 2021 and exploit this strong commodity cycle.”

For further information please contact:

Adrian Costello David Utting Mark Pitts General Manager David Utting Corporate Company Secretary Ph: +61 8 9322 6666 Ph: +61 416187462 E: adrianc@gwrgroup.com.au E: david@davidutting.com E: markp@endeavourcorp.com.au

Competent Person’s Statement

The information in this report which relates to Exploration Targets, Exploration Results and Mineral Resources or Ore Reserves is based on information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”) a Corporate Member of the AusIMM and independent consultant to the Company. Mr Maynard is the Director and principal geologist of Al Maynard & Associates Pty Ltd and has over 40 continuous years of exploration and mining experience in a variety of mineral deposit styles. Mr Maynard 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 2012 Edition of the “Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves” (JORC Code). Mr Maynard consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

The Mineral Resource Estimate was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Table 2. Wiluna West Iron Ore Project Mineral Resources by Deposit

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Note: Differences may occur due to rounding. Refer ASX Announcements 12[th] November 2019, 8[th] July 2011 and 11 April 2013.