IRON ROAD LIMITED — AGM Information 2021

Nov 23, 2021

2021 Annual General Meeting

Chief Executive Officer’s presentation Larry Ingle 24 November 2021

Good morning Ladies and Gentlemen.

• It is with pleasure that I present to you today at the Iron Road 2021 AGM and thank you for your attendance.

• If you are having any challenges viewing this virtual presentation I would encourage you to access and view a copy available on the ASX or on the Iron Road website.

• My commentary today is annotated with the presentation made publicly available.

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Notice

Forward Looking Statements

This announcement contains certain statements with respect to future matters which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or outcomes to differ materially from those expressed, implied or projected. Investors are cautioned that such statements are not guarantees of future performance and accordingly not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

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Our standard notice relating to forward-looking statements.

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Corporate overview

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Capital Structure - November 2021 Board of Directors and Management
Share Price $0.20
Non-Executive Chairman Peter Cassidy Chief Executive Officer Larry Ingle
Shares on Issue 794.6M
Market Capitalisation $158.9M Executive Director Glen Chipman General Manager Projects Noel Second
Warrants and Rights Unlisted 62.3M
Cash (Sept-21 quarterly report) A$3.2M Non-Executive Director Jerry Ellis AO Stakeholder Relations Tim Scholz
Debt A$0M
Non-Executive Director Ian Hume Company Secretary Jarek Kopias
Enterprise Value $155.7M
Shareholder Distribution – November 2021 Share Price Performance - Past 12 Months
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A quick self-explanatory corporate overview.

• Our capital structure, shareholder distribution represented as a pie chart, our board of directors and key management and our share performance over the past 12 months i.e. effectively from last year’s AGM.

• Retracement of our share price since mid-year has correlated with the sharp fall in iron ore pricing. We have not been immune from share price falls experienced by producers and project developers alike.

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Strategy

• Attract investment in the Central Eyre Iron Project (CEIP)

• Build complementary Cape Hardy export & import opportunities – grain, minerals, fertilizer

• Validate Cape Hardy as the green hydrogen export hub of scale for South Australia

• Facilitate water security for regional industrial development

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Image- NASA
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The key focus for the Company is-

• Attract investment in the Central Eyre Iron Project (CEIP)

• Build complementary Cape Hardy export and import opportunities – grain, minerals, fertilizer

• Validate Cape Hardy as the green hydrogen export hub of scale for South Australia

• Facilitate water security for regional industrial development

I will cover all these points as we proceed through the presentation.

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Portalis update

Key points

• Consulted extensively with Eyre Peninsula (EP) grain growers and worked on various grain supply models

• Confirmed that growers, on balance, do not support the concept of long-term supply agreements

• Continuing work on scenarios that support the commercial needs of all, including investors & debt financiers

• Engaged with an international grain trading business on potential operating models & alternative development pathways that feature reduced capital expenditure

• Acknowledge any smaller alternate export facility needs to be scalable to support the future development of and timing of the larger-scale Capesize port

• Increased levels of engagement from potential industry partners for the CEIP is targeted to accelerate the larger-scale port

Image- Australian Farmer, Wudinna, ABC

Firstly yesterday (Tuesday 23 November 2021), Portalis provided a comprehensive update of the work undertaken to progress the early port development.

Portalis represents the three joint developers- Iron Road, Eyre Peninsula Co-operative Bulk Handling (EPCBH) and Macquarie Capital.

The key points have been extracted and are listed here, these are-

• There has been extensive consultation with EP grain growers and, through EPCBH, Portalis has worked with the growers on various models for the supply of grain to Cape Hardy.

• This work has resulted in valuable feedback, confirming strong support for a multi-commodity, multi-user port at Cape Hardy that will drive diverse regional growth opportunities for the Eyre Peninsula. Engagement has also confirmed that growers, on balance, do not support the concept of long-term supply agreements within the commercial model that was proposed at the various grower meetings.

• As a result, there is further work to be done on a grain supply model for the port that will support the commercial needs of all parties, including that of investors and debt financiers.

• EPCBH and Portalis have been approached by a grain trading business of international standing regarding grain handling and export opportunities at Cape Hardy. Portalis has confirmed it is working with that business on potential operating models that feature a reduced capital expenditure for an early stage port with consideration of strategic grower-owned upcountry grain storage.

• Importantly Portalis supports Iron Road’s requirement that any alternate export facility, smaller than that originally proposed, needs to be scalable to support the future development and timing of the CEIP.

• Increased levels of engagement from potential industry partners for the CEIP is targeted to accelerate the larger-scale port.

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Central Eyre Iron Project

Preferred Lower Capital, Lower Risk 12Mtpa CEIP Delivery Model – Key Metrics

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Operating Parameters Financial Metrics ($2018 terms)
Concentrate production (dry) 12Mtpa Capital Cost US$1.74 billion
Concentrate grade 66.7% Fe Capital intensity US$134/wmt
Life of Mine 22 years FOB operating cost US$44.50/wmt [1]
Life of Mine concentrate (dry) 250Mt 1 ex state royalty and sustaining capex
Strip ratio 0.97:1
Mean power demand 167MW
IRR and NPV10 Sensitivity at Financial Close [2]
High Grade 65% Iron Index Price
90 100 110 120
(US$/dmt)
0.717 25.0% / US$949M 33.5% / US$1.68B 40.8% / US$2.41B 47.5% / US$3.13B
0.750 22.1% / US$761M 30.8% / US$1.49B 38.2% / US$2.22B 44.8% / US$2.95B
0.800 17.7% / US$473M 26.8% / US$1.21B 34.3% / US$1.94B 41.0% / US$2.66B
2 geared, post-tax IRR and NPV10 at financial close, tax rate of 30%
Refer to ASX announcement “Revised CEIP Development Strategy Reduces Project Capex Requirements by 56%” on 25 February 2019
AUD/USD
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• The Central Eyre Iron Project (CEIP) remains an advanced, long-life greenfield iron ore development opportunity with premium iron concentrate bulk test work demonstrating it will assist steel mill customers lift productivity and better manage tightening environmental standards.

• The preferred 12Mtpa start-up option is characterised by significantly reduced capital requirements, less reliance on electrical power and a lower development risk profile, whilst maintaining product quality and project optionality.

• The 12Mtpa LOM plan utilises <50% of the Ore Reserve and will be an intergenerational asset producing consistent high quality iron concentrate for many decades to come.

• Sustained robust market demand for premium iron ore products, even in the current iron ore price environment, illustrates the potential for attractive CEIP margins with the 65% Fe Index averaging more than US$100/dmt CFR China over the last seven years (which includes the industry slump between mid-2014 to mid-2016). In addition pricing spreads ie. between high grade premiums and low grade discounts, have been widening. I will provide more commentary on the iron ore market in the following slide.

• The Company has progressed ongoing minority and majority partnership discussions for the CEIP and is constantly engaging with new parties as well as re-engaging with those already familiar with the project.

• COVID-19 has presented many challenges, particularly those restrictions on interstate and international travel, impacting the ability for technical due diligence teams to engage effectively. The Company looks forward to the progressive easing of these restrictions over time by the various States and Federal government.

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Iron ore market

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Some latest observations and commentary on the seaborne market, which despite the recent sharp downward price volatility, currently sees benchmark and higher grade iron ore prices supported at respectable levels. Observations relating to the supply-side have remained unremarkably consistent for several years now.

• Year to date Chinese iron ore imports of 934Mt, down 4.2% year-on-year and equivalent to around 40Mt less seaborne demand. China remains on track however to import around 1.1Bt of iron ore for the year.

• Sharp 2H 2021 price falls has occurred across all iron ore indices from unsustainable levels reached in the June quarter that included record high iron ore index pricing in both nominal and real terms

• Main driver has been corresponding severe cuts to Chinese crude steel output which fell approx. 14% year-on-year in the September quarter. October output represented a 5[th] consecutive month of declines.

• Chinese crude steel output year to date is 877Mt, down 0.7% year-on-year, but will comfortably still exceed 1Bt for the year.

• Ex-China crude steel output continues to recover, but is only partially offsetting looser supply/demand ore fundamentals due to the current rate of change in China’s steel output.

• Lack of visibility concerning higher cost Chinese domestic iron ore continues to provide support for seaborne prices at respectable levels despite the current weak Chinese steel demand sentiment

• For producers selling products below benchmark grade, erosion in realised pricing has been further exacerbated as price penalties have widened for low iron, high silica, high alumina, high phosphorus content. Extreme volatility in ocean shipping rates has had a compounding effect of causing some marginal producers to either halt operations or flag pending cuts in lower quality / lower margin products.

• Pricing spreads more generally (high-grade premiums and low-grade discounts) have been widening well above historical averages driven primarily by tightening environmental standards in the Chinese steel industry.

• Iron ore industry majors are maintaining ‘value over volume’ mantra / supply side discipline

• Sanctioned industry projects primarily offset orebody depletion issues.

• Modest, incremental growth and higher quality products remains the focus and, in the case of Vale, safely and gradually restoring previous levels of targeted output

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Strategic linkages
across the Eyre
Peninsula
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Iron Road, together with many of its shareholders and others, believe the proposed CEIP mine near Wudinna and industrial port precinct and green hydrogen export hub at Cape Hardy, are a key catalyst for transformational change on the Eyre Peninsula.

This is what we expect it to look like-

• The mine supplies a natural deep-water Capesize port with premium high-grade iron concentrate, suitable for pelletising using hydrogen, into green iron. Providing DRI feedstock from some or all of the iron concentrate production is a possibility too, together with the manufacture of specialist steels on site. Domestic and international exports are expected.

• A dedicated haulroad between the mine and port that also offers more efficient grain logistics opportunities across the Eyre Peninsula- effectively a superhighway to an efficient export port.

• Road trains, diesel-based mining and agricultural mobile plant benefiting from emerging hydrogen fuel cell technologies.

• The mine harnessing latent wind generation capacity (believed to be ~10GW across the EP, with hot spots at Cleve, Tumby Bay and Elliston), and with solar from the north, supplying the bulk of its energy needs.

• CEIP power infrastructure connecting excess renewable capacity to the ElectraNet grid at Yadnarrie North.

• Desalination plants at Cape Hardy and Kielpa (the latter allowing reinjection of brine back into an enormous hypersaline aquifer) having the potential to revolutionise water reticulation on the EP and remove all dependence on stressed aquifers or the river Murray. Essentially water will flow to Port Lincoln and not from groundwater aquifers around Port Lincoln. Similarly water will flow to Whyalla and not from Whyalla, sourced from Murray River. This complementary infrastructure is capable of delivering sustainable water required for industry, underpinning economic development of the EP. Distances are modest- Kielpa to Kimba 53km and to Lock 43km; Cape Hardy to Cummins 55km. Water is a strategic asset for any development and noting that this is ‘green’ water.

• Construction of a heavy haulage rail connection from the national railway network at Whyalla, opening up a substantial catchment of bulk mineral commodities in the hinterland and unlocking several other stranded resource opportunities.

• A hydrogen and ammonia plant at the port that will service both domestic and export markets whether this be ammonia for fertiliser and explosives for the mine or hydrogen for power generation, mining and agricultural mobile plant and export markets.

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Cape Hardy port industrial precinct & green hydrogen export hub

Iron Road has progressed early-stage works on the broader Cape Hardy port project such as-

• The acquisition of a further 24 hectares of gulf-front land, with Iron Road now owning approximately 1,200 hectares of land at Cape Hardy.

• Milestones associated with the extinguishment and relocation of various easements and rights of way across the various land parcels at Cape Hardy to allow for unencumbered port development. This process is expected to be complete early in 2022.

• Progress with a development deed and lease negotiations with the South Australian Department of Infrastructure and Transport, relating to the granting of a Certificate of Title over the seabed in favour of the State. This process is on track and targeted for completion by mid-2022.

• Advancement of a detailed marine geotechnical scope of works that has formally been reviewed by a preferred list of qualified EPC candidates, as well as the appointment of the preferred consultant. This is a key step in developing the final marine structural design for the port.

• The execution of a Deed of Novation and Variation of the CEIP Indigenous Land Use Agreement (ILUA) with Iron Road, Barngarla Determination Aboriginal Corporation (BDAC), Barngarla Aboriginal Corporation (BAC), South Australian Native Title Services Ltd (SANTS) and the South Australian Government being parties to the agreement. These amendments build on and broaden commercial arrangements to now include all bulk commodities and green hydrogen / ammonia. In addition, there is now flexibility embedded into the location of the CEIP infrastructure corridor to enable an optimised mine to port haulage route and more efficient grain logistics opportunities across the Eyre Peninsula.

• In addition to the ILUA the Company yesterday advised that with respect to the potential of Cape Hardy being a credible, long-term and large-scale green hydrogen / green ammonia export gateway for South Australia, it has recently received strong interest from multiple north Asian entities in associated opportunities, including “green iron” pellet manufacturing. This interest follows the State Government’s recent announcement it had selected seven short listed project proponents for converting the state-owned site at Port Bonython, in the Upper Spencer Gulf, into an export hub for green and blue hydrogen. Similar to the government-led Port Bonython engagement process initiated in May 2021, Iron Road intends launching a wide-ranging Expression of Interest (EOI) process during the first half of 2022, targeting Australian and international green hydrogen project proponents.

• Lastly EPCBH has recently acquired approx. 167 hectares of land adjacent to the Cape Hardy port precinct and plan to utilise it for opportunities arising from the proposed multi-user, multi-commodity deep-water port.

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In closing

• Today Iron Road has access to three world-class resource assets-

• A 4.5 billion tonne coarse-grained magnetite orebody near Wudinna

• Gulfside land with deep-water at Cape Hardy presenting minimal environmental impacts

• Untapped groundwater at Kielpa and substantial renewable energy resources across the Eyre Peninsula

• This combination puts the Company at the forefront of green industry development and investment

• Once realised, the amalgamation of mining, agriculture, renewable energy, water and green hydrogen will be transformative for the Eyre Peninsula and South Australia

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Image- Lot Fourteen, Government of South Australia
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In closing-

• Today Iron Road has access to three world-class assets-

• A 4.5 billion tonne coarse-grained magnetite orebody near Wudinna

• Gulfside land with deep-water at Cape Hardy presenting minimal environmental impacts (no cuttlefish, marine structures avoid seagrass, no dredging, no marine parks, no aquaculture leases and EPBC approval)

• Untapped groundwater (hypersaline) at Kielpa and substantial renewable energy resources across the Eyre Peninsula

• This combination puts the Company at the forefront of green industry development and investment

• Once realised, the amalgamation of mining, agriculture, renewable energy, water and green hydrogen will be transformative for the Eyre Peninsula and South Australia

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Authorised for release by the board of Iron Road Ltd

For further information, please contact: Larry Ingle, Chief Executive Officer Iron Road Ltd Level 3, 63 Pirie Street Adelaide SA 5000 Australia Tel: +61 8 8214 4400 Or visit ironroadlimited.com.au ASX: IRD admin@ironroadlimited.com.au

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Image- Cape Hardy, Survey of control points
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Thank-you.

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Appendix

Table 1 – CEIP Ore Reserve Summary

Resource Classification	Metric Tonnes (Mt)	Fe (%)	SiO2 (%)	Al2O3 (%)
Proved	2,131	15.55	53.78	12.85
Probable	1,550	14.40	53.58	12.64
Total	3,681	15.07	53.70	12.76

The Ore Reserves estimated for CEIP involving mine planning is based on and fairly represents information and supporting documentation compiled by Mr Bob McCarthy, a Member of the Association of Professional Engineers and Geoscientists of British Columbia (Canada) and a full-time employee of SRK Consulting (North America). Mr McCarthy has sufficient experience relevant to the style of mineralisation and the type of deposits 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”. Mr McCarthy consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Ore Reserves estimated for the CEIP involving aspects other than mine planning is based on and fairly represents information and supporting documentation compiled by Mr Larry Ingle, a Member of the Australian Institute of Mining and Metallurgy and a full-time employee of Iron Road Limited. Mr Ingle has sufficient experience relevant to the style of mineralisation and the type of deposits 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”. Mr Ingle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This report includes results that have previously been released under JORC 2012 by the Company on 2 May 2016. The Company is not aware of any new information or data that materially affects the information included in this announcement and all material assumptions and technical parameters underpinning the Ore Reserve continue to apply and have not materially changed.

This report contains forecast financial information announced as “Revised CEIP Development Strategy” on 25 February 2019. The Company is not aware of any new information or data that materially affects the information included in this announcement and all material assumptions underpinning the forecast financial information derived from this production target continue to apply and have not materially changed.

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Appendix

Table 2 – CEIP Global Mineral Resource

Location Murphy South/Rob Roy	Classification Tonnes (Mt) Fe (%) SiO2 (%) Al2O3 (%) P (%) LOI (%) Measured 2,222 15.69 53.70 12.84 0.08 4.5
	Indicated 474 15.6 53.7 12.8 0.08 4.5
	Inferred 667 16 53 12 0.08 4.3
Boo-Loo/Dolphin	Indicated 796 16.0 53.3 12.2 0.07 0.6
	Inferred 351 17 53 12 0.09 0.7
Total	4,510 16 53 13 0.08 3.5

The Murphy South/Rob Roy Mineral Resource estimate was carried out following the guidelines of the JORC Code (2004) by Iron Road Limited and peer reviewed by Xstract Mining Consultants. The Murphy South - Boo-Loo/Dolphin oxide and transition Resource estimate was carried out following the guidelines of the JORC Code (2004) by Coffey Mining Limited. The Boo-Loo/Dolphin fresh Mineral Resource estimate was carried out following the guidelines of the JORC Code (2012) by Iron Road Limited and peer reviewed by AMC Consultants. This report includes results that have previously been released under JORC 2004 and JORC 2012 by the Company on 30 June 2010, 28 May 2013 and 27 February 2015. The Company is not aware of any new information or data that materially affects the information included in this announcement and all material assumptions and technical parameters underpinning the Mineral Resource continue to apply and have not materially changed.

Table 3 – CEIP Indicative Concentrate Specification – 100 micron (p80)*
Iron (Fe) Silica (SiO2) Alumina (Al2O3)	Phosphorous (P)
66.7% 3.36% 1.90%	0.009%
* The concentrate specifications given here are based on current data from metallurgical test work, bulk samples and simulation modelling designed specifically to emulate the proposed beneficiation plant.

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