HAWSONS IRON LTD — AGM Information 2019

Nov 20, 2019

‘The Right Product at the Right Time’

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Annual General Meeting, Review of Operations
Quentin Hill, Managing Director
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Cautionary Statement

This presentation has been prepared by the management of Carpentaria Resources Limited (CAP) for the benefit of customers, 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. The Company confirms that all assumptions and technical parameters underpinning the Resource and Reserve estimates and all material assumptions underpinning the production target or the forecast financial information derived therefrom continue to apply and have not materially changed since first reported on 28 July 2017.

Taking the right steps

• • Important development steps taken this year
• • Established key support post-bankable feasibility study
• • Project work increased definition and confirmed assumptions
• • Continue to take the necessary steps
• • Market conditions support the case for value and development

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Markets Insider, 16 April 2019
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SLIDE | 3 www.carpentariares.com
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Contents

1.Expenditure summary 2.Achievements

3.Strategy 4.Iron and steel market outlook 5.Company outlook

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Expenditure summary shows focussed lean operations

• Administration and staff costs are lean and stable

• Increased costs reflect BFS funding efforts

• market research

• site visits

• negotiations

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SLIDE | 5 www.carpentariares.com
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Important development steps taken this year

• Key strategics intend to negotiate a role at the end of the BFS

• critical to gain project finance

• Project is well scoped and ready for the next phase

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•
10Mtpa maximises existing infrastructure
•
Fixed components of capital cost require
scale for attractive financial returns
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Important development steps taken this year

Project work increased definition, confirming

• operational advantages of low variability ore

• PFS assumptions are appropriate

• Highlights opportunities for cost reduction in BFS

Work completed

• Ore body variability test work

• Detailed pit slope geotechnical assessments

• Tails storage design options

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1Uniaxial Compression Strength mPa – AS 4133.4.3.2 – 2013 Rock Testing methods 2Bond Ball Mill Work Index kWh/t – Standard Bond test with closing screen of 53um 3Abrasion Index – Standard Allis Chalmers test

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SLIDE | 7 www.carpentariares.com
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Offtake-led development strategy continues….other improvements to offering underway

Offtake-led development strategy continues

• focus on the Middle East and Asia

• negotiations with a number parties continue

At the same time we are:

• Addressing items raised in due diligence

• Improving the offering to investors and offtakers, seeking to strengthen the Company skills base

• Exploring other development pathways

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SLIDE | 8 www.carpentariares.com
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High grade iron ores which improve efficiency are increasingly favoured and harder to find

“In the context of the new environmental policy introduced by China, even if the consumption of steel was to fall, the need for high-quality iron ore will increase in order to improve environmental footprint, and that’s what we have experienced already in the last few years.”

• Rio CEO, Jean-Sebastien Jacques.

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SLIDE | 9 www.carpentariares.com
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Technology shift and environmental costs support increased demand for higher quality ore and pellets in China

Quality price spread set to widen over time

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Source: Wood Mackenzie SLIDE | 10

Source: Wood Mackenzie

DRI producers are supply constrained…….several proposals for new pellet plants, options for feed are limited

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• DRI expansions are supply constrained

• 24Mtpa increase in demand out to 2025

• Supply options are very limited

• Hawsons is leading new project

• CAP taking the steps you would expect After IIMA, July 2019, updated for company data on Samarco

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Hawsons is a standout as a higher quality and DR grade mine, where opportunities are very limited

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35
30
Corunna Downs
25
20
Zogoto Hawsons
15 Marillana
El Aouj Blotberget
Buckland Iron Bridge
10 Simandou
Mary River Central Eyre
Pilbara Iron Ore Phase 2
5 Iron Project
Project Mbalam
Pedra
Southdown
Kami de Ferro
Kalia
0
55 60 65 70 75
Pampa de Pongo
-5
Fe grade (%)
Source: Wood Mackenzie Q3 FY2019
Post tax IRR (%)
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IRR and product grades for unfinanced projects PFS stage or later

*All projects except Hawsons at BFS stage . Hawsons at PFS stage

*Assumes that Hawsons is in production and the outcomes are as set out in the prefeasibility study announced on 28 July 2017. The Company confirms that all assumptions and technical parameters underpinning the Resource and Reserve estimates and all material assumptions underpinning the production target or the forecast financial information derived therefrom continue to apply and have not materially changed since first reported on 28 July 2017.

*Bubble size represents annual production capacity

*Excludes replacement or expansion projects owned by established miners RIO, BHP, CSN, FMG

*Based on Wood Mackenzie long term price forecasts

Source: Wood Mackenzie (developed from company 's stock exchange compliant releases, modified uniformly by Wood Mackenzie by internal long term price and cost forecasts, Wood Mackenzie is not aware of any material omissions in the data)

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SLIDE | 12 www.carpentariares.com
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Hawsons and DRI production, offers ~5Mtpa of CO2 abatement each year, that’s one million cars off the road

Direct-reduction (DR) steel production route produces half the emissions of typical blast furnace route

Replacing blast furnace steel with DRI steel from Hawsons will be equivalent to removing one million cars off the road*

Zero carbon steel

• Leading technology is direct reduction

• hydrogen from renewable electricity

• DR grade iron ore

Hawsons Supergrade® product is meeting current and future trends

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Blast furnace
2.3t
DRI 1.1t
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*After ore processing is accounted for, Hawsons Supergrade through DRI steel making, displacing steel from blast furnaces, is set to reduce CO2 emissions by ~5Mtpa, equivalent to taking one million cars off the road.

Taking the right steps

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• • we have taken some very important steps this year
• • the offtake strategy is sound and prospective
• • at the same time we are improving the offering to investors

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to investors
+ Progress will unlock project value
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www.carpentariares.com

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APPENDIX

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www.carpentariares.com

Project Prefeasibility Study Results

Hawsons PFS preproduction costs (yr 1-2) USD (m)	Hawsons operating and sustaining costs (after prestrip, ~YR 3-22) USD/dmt product
Preproduction mining costs including pre-strip 194	Mining 12.14
Mining 242	Processing 8.23
Processing 398	Infrastructure and admin. 1.48
Infrastructure and administration 359	rail and port 11.23
Rail and port 208	Total C1 FOB 33.08
Total 1,2,3 1401	sustaining capital 4,5 3.48
1incl EPCM 12.5% / contract management 3% of US$127m	royalties 3.18
2incl. contingency and design growth (av. 16.5%)	Total all in FOB 39.74
3excludes finance costs	sea freight 8.29
	Total CFR China 48.03
4excludes new in-pit conveyor in yr 5 of US$120m	less Supergrade premium 25.00
5net of salvage	62%Fe equivalent total CFR 23.03

Base case 10 Mtpa Hawsons Supergrade® production exported through Port Pirie

The Company confirms that all assumptions and technical parameters underpinning the Resource and Reserve estimates and all material assumptions underpinning the production target or the forecast financial information derived therefrom continue to apply and have not materially changed since first reported on 28 July 2017

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Project Prefeasibility Study Results

			at August 20, 2018 prices 65%Fe fines
	Hawsons PFS key economic results	Base case	US$94.55/t
	Equity IRR (post tax, geared)	29.90%	62%Fe price US$67.95 43.04%
	Equity NPV (10%) (post tax, geared)	US$1,091m	US$1,973m
	Project IRR (post tax, ungeared)	17.80%	25.63%
	Project NPV (10%) (post tax, ungeared)	US$867m	US$1,793m
	Life of mine ave. annual revenue	US$881m	US$1059m
	Life of mine ave. annual all in costs Life of mine annual margin(EBITDA)	US$480m US$401m	US$490m US$569m

			Key Hawsons PFS assumptions	Key Hawsons PFS assumptions
	total ore mined	1423mt	62% Fe fines benchmark*	US$63/t	AUD:USD	0.75
	total waste mine total product product specification	717mt 201mt 70%Fe	65%Fe fines benchmark* plus 5 x Fe 1% US$1.10 plus magnetite premium	US$75/t US$5.50/t US$7.50/t	debt:equity corporate tax loan term	65:35 30% 10.5 yrs
	annual production	10mt	product revenue (dmt)	US$88.00/t	delivered rebated diesel price	A$0.89/L
	moisture	8%	*ave. (mean) price forecast for 2020-2030 (real	2016)	deliveredpowerprice	A$95/MWhr

Base case 10 Mtpa Hawsons Supergrade® production exported through Port Pirie

The Company confirms that all assumptions and technical parameters underpinning the Resource and Reserve estimates and all material assumptions underpinning the production target or the forecast financial information derived therefrom continue to apply and have not materially changed since first reported on 28 July 2017

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Project Resource and Reserve

• • Resource increase, 30+ year mine life
• • Total resources >330mt concentrate
• • Conversion rate from Inferred to Indicated Resources at 96%
• • High value concentrate grade and recovery unchanged after ~40% more data point

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Concentrate Grades
DTR Fe
Fe Al2O3 SiO2 TiO2
Category Mt DTR % Mt Head % % % P % S % % % LOI %
Probable Reserves 755 14.7 111 17.5 69.9 0.19 0.003 0.002 2.60 0.03 -3.03
Indicated (incl. Reserves) 840 14.5 121 17.4 69.9 0.19 0.004 0.002 2.61 0.03 -3.04
Inferred 1,660 13.6 227 16.8 69.7 0.20 0.004 0.003 2.91 0.03 -3.04
Total 2,500 13.9 348 17.0 69.7 0.20 0.004 0.002 2.81 0.03 -3.04
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The Company confirms that all assumptions and technical parameters underpinning the resource estimates continue to apply and have not materially changed since first reported on 28 July 2017. Reported at a 9.5%DTR cut off grade, and 38micron grind.

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SLIDE | 19 www.carpentariares.com
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Hawsons Supergrade[®] and DRI production, offers 5mtpa[*] of CO2 abatement each year, that’s more than one million cars of the road

• Direct reduction (DR) steel production route produces half the emissions of typical blast furnace

• After ore processing is accounted for Hawsons Supergrade[®] through DRI, displacing steel from blast furnaces is set to reduce CO2 emissions by ~5mtpa[*] , equivalent to more than one million cars

Assumptions

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10Mtt Hawsons Supergrade [®] = 6.6Mt DRI steel = 7.3Mt CO2 (-2.4Mt CO2 Supergrade [®] processing) = 4.9Mt CO2 = >1 million cars
Standards (United States EPA) [1]
Activity kg C02
1 litre of diesel fuel 2.68
Rail/t/km 0.02
Road/t/km 0.06
MwH coal 1150 [2]
Shipping/t/km 0.01
blast furnace/t steel 2250 [3]
DRI / t steel 1100 [3]
Car 4600pa
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• 1 https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references

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• 2 50% renewable energy

• 3Material Economics,2018, The Circular Economy