HAWSONS IRON LTD — AGM Information 2014

Nov 9, 2014

Carpentaria Exploration Ltd We find it. We prove it. We make it possible. Annual General Meeting Presentation November 10[th] 2014

Disclaimer

This presentation has been prepared by the management of Carpentaria Exploration Limited (CAP) for the benefit of analysts, brokers and investors and not as specific advice to any particular party or persons. The information is based on publicly available information, internally developed data and other sources. Where an opinion is expressed in this presentation, it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to origin, validity, accuracy, completeness, currency or reliability of the information. CAP disclaims and excludes all liability (to the extent permitted by law) for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it. Where CAP expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future project evaluations, such expectation or belief is expressed in good faith and is believed to have a reasonable basis. However, such expected outcomes are subject to risks, uncertainties and other factors which could cause actual results to differ materially from expected future results. Such risks include, but are not limited to, exploration success, metal price volatility, changes to current mineral resource estimates or targets, changes to assumptions for capital and operating costs as well as political and operational risks and governmental regulation outcomes. CAP does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forecast or to update such forecast.

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CARPENTARIA

Company Snapshot

ASX Code : CAP

FLOATED : Nov 2007 CASH: AUD 4.0 million (Nov. 10 2014) QUOTED SECURITIES: 124 m shares

SHARE PRICE : $0.062

Top Shareholders: Silvergate Capital: 18.2% Conglin Group: 11.4% Directors & Management: 5.3%

• Strong cash position

• History of good capital management

• Major asset Hawsons Iron Project 60%

• Focussed on development of Hawsons

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Hawsons Iron Project Concept

• Deliver 10 million tonnes per year of “best quality” pellet feed magnetite concentrate to end users needing high purity feed - at premium prices over the long term

• Exploit very large resource with favourable mining and processing attributes and achieve very low cost production

• Use the existing, high capacity, power, water, rail, workforce and existing port to achieve very competitive low capital and operating costs

• Gain approvals on a timely and favourable basis

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Project Concept –Transport logistics

Location is everything

• Mine to rail head via new slurry – 50km

• Existing open access rail to new stockpile at Port Pirie – 360km

• New stockpile to existing port berths via new conveyor

• Barge transport to 180,000t vessels – 15-30km

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Key achievements last 12 months Pilot plant achieves high grade

	Fe%	**SiO2% **	Al2O3%	P%	S%
Hawsons flow sheet pilot plant test concentrate	68.3	3.56	0.39	0.007	<0.001
Hawsons floatation bench test concentrate	69.1	1.19	0.54	0.025	NA

• Tested new flow sheet at Iron Ore Technical Centre (ALS Ammtec, Perth)

Impact crushing to 100% passing 1mm

Magnetic separation 45% tailings rejection

• Increases confidence in flow sheet assumptions and cost estimates

• Confirms low energy, single stage ball milling can meet grain size and grade targets

• Upgrading with Hydroseparator

Ball Milling to 100% passing 38 micron

• Increases certainty of pricing premium

• Separate floatation test work results from South Africa open new opportunity for direct reduction iron (DR) feed

Magnetic separation ~66%Fe ~6% SiO2

• Results being finalised

• Over 1 tonne of concentrate to be produced for future test work

• Allows planning of larger pilot plant run

Hydroseparation >68%Fe, 3.6%SiO2

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Key achievements last 12 month (cont.)

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Technical Director Ray Koenig and the cleaner magnetic separator top, Hydroseparator column right

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Key achievements last 12 month (cont.)

• Secured port access at Port Pirie - 12mtpa first right of refusal

• Commenced the rail –port – marine prefeasibility study jointly with Flinders Ports

• Defined a high yield water source with allocation limits suitable for project requirements 90km from site (4,136m of drilling)

• Set the development case at 10Mtpa for our studies, utilising existing infrastructure

• Maiden indicated resource

• Lodged Mining lease application

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Targeted CFR China Costs

• Carpentaria is targeting the second quartile of the all in CFR China cost curve indexed to 62% Fe

• Approx. US$56

• Approx. US$64 (69% basis)

• Withstand price fluctuations

• Premium price expected

• Industry productivity drive will require similar

optimisation at Hawsons in future work

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Source - After Credit Suisse 21 August 2013

1 Reported cash costs are C1 costs

2 all-in cash costs include royalties, sustaining capital, corporates costs but not finance costs

3 includes a freight adjustment to CFR China and indexed to a 62% product

4 exchange rate 0.85USD = 1.00AUD

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New Opportunities Pricing premium approx. $20/t

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Current $3.50
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$95/t
$81/t
$67/t
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Oct -14
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Source Vale

Source Custeel.com

Premium currently $3.50/%Fe (14/4%)

Premiums driven by

• Efficiencies using higher grade

At 69% Fe reasonable to expect $2.50-$3.50/%Fe Or $17-$25/t above 62% price

Discounts for lower grade are similar so conceivably a $38 difference in 69%Fe price and 58%Fe

• Environmental pressures becoming stronger (long term trend)

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Price forecasts

	2015	2016	Long term
Consensus	103	100	101
Maximum	117	116	121
Minimum	76	76	85

Source Metal Expert Consulting Global Iron ore forecast July 2014 compiled from widely used independent forecasts published in June and July 2014

• Market characterised by over supply – not weak demand, supply will be absorbed over time, and mine closures will restore balance

• We plan for trading in the lower part of the band,

• Hawsons still has potential for very attractive returns using long term price forecasts

• Bulls – Westpac Economist Bill Evans in September 2014, predicted rise above $100/t next year and beyond $120/t in 2016.

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Steel making trends new opportunity Increase in DRI demand to feed electric arc furnaces

Electric Arc Furnace (EAF) steel making predicted to increase because

• more efficient

• lower energy requirements

• lower emissions

• esp. India, Middle East

EAF feed

• EAF relies on high quality feed (SiO2<2%)

• Feed balance currently approx.

• ~80% scrap metal

• ~20% direct reduction iron (DRI)

• Demand for DRI feed set to increase

• DRI feed attracts added premium

• Few projects with a DR feed option

• New opportunity to explore for Hawsons

Global crude steel production by type

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1600
1400
1200
Blast Furnace
1000
800 Electric Arc Furnace
600 Projected DRI
Requirements
400
CAP DRI projection
past 2010
200
0
2000 2005 2010 2015 2020 2025 2030
Source Metal Bulletin
12
Millions of tonnes
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Current and future work

Current program designed to bring all project elements ready for detailed feasibility study and

Build a platform for further investment Complete December 2014

• Finalise process test work

• Rail – port -marine prefeasibility study

• Power network capability study

• Detailed plan of BFS work schedule

• Optimise business case based on new test work opportunities and traditional markets

Use this platform to attract additional funding partners

Targeted production and approval time frames subject to additional funding;

• Approvals and bankable feasibility study completion less than two years

• Production targeted in 3.5-4yrs

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Summary

Project pathway is clear and achievable

Potentially attractive returns at forecast long term Fe prices from high grade concentrate Clear strategy to attract funding partners and grow value

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Carpentaria Exploration

We find it. We prove it. We make it possible.

Phone: +61 7 3220 2022 To find out more visit www.capex.net.au

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The information in this presentation that relates to Exploration Results, Exploration targets and Resources is based on information compiled by Q.S. Hill, who is a member of the Australian Institute of Geoscientists and has had sufficient experience which is relevant to the style of mineralization 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, Mineral Resources and Ore Reserves'. Q.S.Hill is an employee of Carpentaria and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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CARPENTARIA

APPENDIX 1 – Resources

							Concentrate Grades	Concentrate Grades	Concentrate Grades
		Category	Billion Tonnes		Magnetite DTR%	Fe%	Al2O3%	P%1	SiO2%	LOI%		Contained Concentrate Million Tonnes
		Inferred	1.554		14.7	69.6	0.20	0.004	2.9	-3.0		228
		Indicated	0.215		16.2	69.8	0.20	0.005	2.8	-3.0		35
		Total	1.769		14.9	69.7	0.20	0.004	2.9	-3.0		263
		Indicated and									Exploration
		Inferred										potential
		Resource area

Reported under JORC 2012 – no material change since first published 26 March 2014

The Company is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

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