HAWSONS IRON LTD — Investor Presentation 2018

Aug 20, 2018

SUPERGRADE IRON Right product, right place, right time. Quentin Hill, Managing Director

Key message

• Iron ore market has shifted to quality + Hawsons is the world’s leading high quality iron ore project + Negotiating off-take linked funding, Mitsui committed

• Best people are delivering a customer led development plan, it’s working

Cautionary Statement

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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.

Development Plan – Customer-led

• • Iron ore market has structurally shifted to high quality ore
• • Hawsons is the world’s leading undeveloped high quality iron ore project
• • Customers’ self interest will support development

• Mitsui first to commit, citing wish to service its customers

CARPENTARIA IS DELIVERING

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Delivered

1. Product offtake LOIs 2. Resource upgrade 3. PFS 4. Mitsui commit

2. Mitsui commit 4 3 2 Corporate 1 + Shares 200m + Cash (June 30) $1.0m + Hawsons nom. 68.7%

Top Shareholders + Silvergate Capital 10.7% + S.G. Hiscock 7.8% + Australia Conglin 7.1%

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MR QUENTIN HILL

ADAM WHEATLEY

RAY KOENIG

LOU JELENICH

MANAGING DIRECTOR (~5yrs)

PROJECT FINANCING DIRECTOR

PROJECT DIRECTOR

PRODUCT MARKETING DIRECTOR

Geologist, >20 years experience Integral part of Hawsons discovery team, driving development, formerly Delta Gold

One of Australia’s leading magnetite engineers; ex-Savage River magnetite and pellets.

• Technical feasibility

• Risk reduction

(Past projects, Gindalbie/Kararra, Hancock/Hope Downs, Aztec/Koolan Island)

• Project financing and bankability

Iron ore marketing and steel expert Ex-BHPB lead iron ore technical marketer

• Marketing saleable product

• • Offtake arrangements

Carpentaria Resources Board of Directors

Dr Neil Williams Chairman- Former - Chief Geologist Exploration MIM, CEO Geoscience Australia Mr Paul Cholakos NED - Mining Engineer, currently Executive General Manager, Technical Services Oil Search (ASX:OSH) Mr Jon Parker NED - Former General Manager Commercial Rio Tinto Iron ore, MD Felix Resources, MD Norton Goldfields – Mr Quentin Hill Managing Director

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HAWSONS IRON PROJECT

PFS COST ESTIMATES	PFS price assumption	Todays iron ore price assumption
Operating costs - C1 FOB	US$33.08
Operating costs - All in	US$39.74	US$39.74
Operating costs - CFR China	US$48.03
Supergrade price premium	US$25.00	US$38.00
Equivalent 62%Fe CFR cost	US$23.03
Capital cost inclusive of contingency	US$1.40Bn	US$1.40Bn
PFS FINANCIALS
Annual profit margin	US$401m
Equity IRR	29.9%	43.0%
Equity NPV	US$1,091m
tonne of supergrade (70%Fe)	201m	201m
Mine life / pay back period	20 / 3-4 years
62%Feprice assumption	US$63/t	US$67.95

• Outstanding prefeasibility study (PFS) results; • Cash flow positive at benchmark 62%Fe under US$30/t • excellent returns • high project value • 10mtpa production

Refer slide 20 and 21 for assumptions

HAWSONS IRON PROJECT

+ First quartile, quality adjusted; sustainable through the cycle; project of choice for off-takers.

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www.carpentariares.com

SLIDE | 8

Global iron ore supply curve (business costs is quality adjusted) (after CRU, July 2017)

Mitsui funding deal

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• Mitsui commits A$5.4 million to Hawsons JV bankable feasibility study, available once the balance of BFS funding is secured (20% of BFS funding)

• Mitsui gains option to secure 2.0mtpa of Hawsons Supergrade® product offtake for 20 years and exclusivity to sell the pellet feed in Japan

• Product price in line with market, which today is in line with CAP’s PFS assumptions

• • Option exercise condition is for Mitsui to commit a US$60m mezzanine debt facility for Hawsons’ construction

Benefits to CAP

• Non-dilutive to CAP interests, preserving value for shareholders

• Enhances bankability with potential for long term off take contract

• Reduces project funding requirements, addressing key project delivery risks

• Endorses CAP’s view of the market and the project potential

• Potential to lead to additional similar agreements

CUSTOMER DEMAND

COMPANY	VOLUME
Mitsui & Co	2.0 Mtpa*
Formosa Plastics	2.6 Mtpa
Bahrain Steel	3.0 Mtpa
Shagang	2.5 Mtpa
Mitsubishi Corp. RtM	1.0 Mtpa
Gunvor	1.0 Mtpa
Kuwait Steel	1.0 Mtpa
Emirates Steel	0.9 Mtpa
Total	14.0 Mtpa

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• ➢ Companies signed letters of intent (LOI) with ASX:CAP

• ➢ Combined annual revenue >US$170 billion

• ➢ 150% of remaining 8mtpa under LOI

• ➢ Competition for offtake to drive development

* Secured option

IRON ORE STRUCTURAL SHIFT

• • Structural shift in iron ore pricing
• • Hawsons Supergrade® at today’s prices ~US$105/t (see P21 for formula)

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• • Result of higher steel margins driven by increased capacity utilisation, strong demand and Chinese industrial reform

World Steel July 2018

RESULTS OF STRUCTURAL REFORMS OF CHINA’S INDUSTRY

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Drivers to pellets same as for high grade ore

• Higher productivity

• Lower pollution

• Bigger blast furnaces

• Lower domestic iron ore

• production

• Higher pellet usage

China now competing with Japan, Korea, MENA and Europe in seaborne pellet and pellet feed market

THE PELLET MARKET NEEDS NEW SUPPLY SOURCES

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Hawsons is the world’s leading undeveloped pellet feed project

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SLIDE | 13

www.carpentariares.com

HAWSONS SUPERGRADE® PRODUCT

+ World’s best pellet feed,

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Elements and Compounds	Elements and Compounds	Supergrade Pellet Feed (ALS, CISRI)	Supergrade Pellet Feed (ALS, CISRI)	Supergrade Pellet Feed (ALS, CISRI)	Supergrade Pellet Feed (ALS, CISRI)	Supergrade Pellet Feed (ALS, CISRI)	Supergrade pellets (CISRI) Fired at 12300C	Supergrade pellets (CISRI) Fired at 12300C	Supergrade pellets (CISRI) Fired at 12300C	Midrex DR Specifications*
chemical Analysis (%) (on dry basis)	Fe		70.3				67.80			67.00 min.
	SiO2		1.99				2.39
	Al2O3	0.29					0.44
	SiO2+ Al2O3	2.28					2.83			3.00 max.
	CaO	0.11					0.15
	MgO	0.2					0.22
	P	0.007					0.008			0.030 max.
	S	0.001					0.003			0.008 max.
	TiO2	0.11					0.10			0.15 max.
	Na2O	0.032					0.056
	K2O	0.05					0.054
				.
Physical Properties	Blaine Index (cm2/g)			1910
	Tumble(% +6.3mm)						96.53			NA
	Abrasion(% -0.5mm)						2.99			NA
	CCS(Kg/pellet)						324			>250
lurgical erties	Reducibility Index (%)						62.04
	Reduction swelling index (%)						13.92
Metal Prop	Softening/Melting (Kpa.0C)							551

• Highest iron content, + DR spec. - 70%Fe, <2% Silica + Ideal physical properties

• Excellent metallurgical properties

Hawsons’ indicative specifications based on bulk pellet feed test work (ASX Announcement, 14 October 2015) and China Iron and Steel Research Institute test work (CISRI) in Beijing February 2016). *P8 The Midrex Process by Midrex 2015

www.carpentariares.com

SLIDE | 14

PROJECT SUMMARY

• • Located 60km SW of Broken Hill
• • Power from reliable eastern states grid
• • Water from defined high yield saline aquifer 90km south
• • Mine and process on site for 10mtpa concentrate production
• • Hawsons’ unique soft ore makes the difference on cost and product quality
• • Workforce in Broken Hill

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• • See appendix for more detail

SLIDE | 15

www.carpentariares.com

HAWSONS IRON PROJECTLogistics and approvals

• • Slurry product 55km in pipeline to Broken Hill
• • Rail to Port Pirie or Whyalla on existing rail (12 mtpa spare capacity) we have engagement with all the infrastructure owners
• • Transhipment to Capesize vessels to customers in Asia and Middle East
• • Product quality 70% Fe, (tested by customers)
• • Federal Govt. Major Project Status March 2018
• • See appendix for more detail

SLIDE | 16

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www.carpentariares.com

CARPENTARIA IS DELIVERING

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Planned milestones

1. Funding

2. Resource upgrade 3. BFS delivered

3. Mining lease approval

4. Final investment decision

5. First production

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2018 2019 2020 2021
Task
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
A rovals 4
pp
BFS Test work 2
BFS En ineerin and Finance 3 5
g g
Construction
First Production 6
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Schedule conditional on funding

Key message

• Iron ore market has shifted to quality + Hawsons is the world’s leading high quality iron ore project + Negotiating off-take linked funding, Mitsui committed

• Best people are delivering a customer led development plan, it’s working

Quentin Hill Managing Director Email quentin.hill@capres.net.au Phone +61 7 3220 2022 Mobile +61 4 2396 8786

www.carpentariares.com

PROJECT PREFEASIBILITY STUDY RESULTS

Hawsons PFS preproduction costs (yr 1-2) USD (m)	Hawsons PFS preproduction costs (yr 1-2) USD (m)	Hawsons operating and sustaining costs (after prestrip, ~YR 3-22) USD/dmt product	Hawsons operating and sustaining costs (after prestrip, ~YR 3-22) USD/dmt product	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

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

The Company confirms that all assumptions and technical parameters underpinning the resource and reserve estimates continue to apply and have not materially changed since first reported on 28 July 2017.

SLIDE | 20

www.carpentariares.com

PROJECT PREFEASIBILITY STUDY RESULTS

		at August 20, 2018 prices 65%Fe fines
Hawsons PFS key economic results	Base case	US$94.55/t
		62%Fe price US$67.95
Equity IRR (post tax, geared)	29.90%	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	US$480m	US$490m
Life of mine annual margin(EBITDA)	US$401m	US$569m

	Key Hawsons PFS assumptions
total ore mined 1423mt	62% Fe fines benchmark* US$63/t	AUD:USD 0.75
total waste mine 717mt	65%Fe fines benchmark* US$75/t	debt:equity 65:35
total product 201mt	plus 5 x Fe 1% US$1.10 US$5.50/t	corporate tax 30%
product specification 70%Fe	plus magnetite premium US$7.50/t	loan term 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

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

The Company confirms that all assumptions and technical parameters underpinning the resource and reserve estimates continue to apply and have not materially changed since first reported on 28 July 2017.

SLIDE | 21

www.carpentariares.com

Resource increase, 30+ year mine life

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• Total resources >330mt concentrate

• Conversion rate from Inferred to Indicated Resources was outstanding at 96%, giving confidence in future upgrades

1km

• High value concentrate grade and recovery unchanged after ~40% more data point

3km

Category	Mt	DTR %	DTR Mt	Fe Head %			Concentrate Grades	Concentrate Grades	Concentrate Grades
					Fe %	Al2O3 %	P %	S %	SiO2 %	TiO2 %	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

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.

carpentariaex.com.au

22

Hawsons Iron Project – Mining

• Very large size and little internal dilution,

• low strip ratio (~ 0.5:1 waste:ore, near zero year 9

• “Bath tub” geometry ideal for simple bulk mining

• Truck and shovel switching to in-pit conveying when economics supports (~yr 5)

• Bulk material movement, non selective, same fleet for ore and waste

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Cross section

23

Mineral Processing – soft ore makes the difference

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• Plant average load to get to <40um and 70%Fe av. 63MW

• Savings also made on grinding media due to very low abrasion index (0.12 cf 0.50)

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Processing - Supergrade from unique siltstone ore, a technological step change

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50um

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Natural grain size <50um easily achieved

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Ball Milling 100% <40um 7kwh/t

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1000um

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Crushing stage generates high proportion of fines ~30% <150um

45% rejection at first magnetic separation

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Elutriation removes free silica upgrade > 69%Fe

After second magnetic separation 66%Fe

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Processing - Supergrade from unique siltstone ore, a technological step change

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Existing Infrastructure - Low development risk

• Workforce – close by in Broken Hill, birth place of BHP, and Australia’s most famous mining town, mostly town based workforce

• Power from eastern states grid

• Sufficient for project needs

• Main power draw - process plant and in pit conveyor

• Water

• high yield saline aquifer south of site, able to be allocated under existing regulations

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Existing Infrastructure - Low development risk

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25 t axle load rail, Port Pirie Spare Berths
12 Mtpa spare capacity
Whyalla
Closest to markets 25-
50% closer than
competitors
Cape Size capacity
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Approvals – Project pathway clear and achievable

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• No Native Title – it is extinguished on the mining and easement areas

• Mining Lease Application lodged

• Federal government major project status

• Environmental Impact Assessment guidelines received, a NSW State Significant Development

• Ecology and cultural heritage surveys largely complete, no showstoppers identified

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carpentariaex.com.au