LEGACY IRON ORE LIMITED — Capital/Financing Update 2011

Nov 13, 2011

ASX Announcement 14 November 2011

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I R O N O R E L I M I T E D
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About Legacy Iron Ore

Legacy Iron Ore Limited (“Legacy” or the “Company”) is a Western Australian based Exploration Company, focused on iron ore and gold exploration and discovery.

Legacy’s mission is to increase shareholder wealth through capital growth, created via the discovery, development and operation of profitable mining assets.

The Company was listed on the Australian Securities Exchange on 8 July 2008. Since then, Legacy has had a number of iron ore, manganese and gold discoveries which are now undergoing drilling and resource definition.

Board and Management

Timothy Turner , Non-Executive Chairman Sharon Heng , Managing Director John Hebenton Executive Director & Chief Executive Officer Tao Han , Non-Executive Director Ben Donovan , Company Secretary

Key Projects

Mt Bevan Iron Ore Project Hamersley Iron Ore Project Robertson Range Iron Ore and Manganese Project South Laverton Gold Project East Kimberley Gold, Base Metals and REE Project

Enquiries

Sharon Heng Managing Director Phone: +61 8 9421 2005

ASX Codes: LCY, LCYO, LCYOA, LCYOB

FORTESCUE CENTRE SUITE 32, 23 PLAIN STREET EAST PERTH WA 6004

PO BOX 6878 EAST PERTH BC WA 6892

The Company Announcements Office ASX Limited

Via E Lodgement

SIGNIFICANT RESOURCE INCREASE LIKELY FOLLOWING COMPLETION OF PHASE 2 DRILLING AT MT BEVAN

Highlights

 Mt Bevan Iron Ore Project

• 5,000m Phase 2 drilling now complete.

• Drilling designed to significantly increase current inferred resource.

• Virtually no change in dip, thickness or grade along the entire 11km strike.

• SRK Consulting engaged to calculate significantly increased inferred JORC resource by mid-January 2012.

• Completed bulk-scale LIMS metallurgical testwork confirms excellent commercial-scale processing capabilities.

• Additional 7,000m Phase 3 drilling to commence mid-Feb 2012.

• Completion of Phase 3 likely by mid-April 2012.

• On track to earn 60% JV interest by mid-April 2012.

• NMDC indicate willingness to fund Legacy’s share of JV expenditure.

 Robertson Range Manganese Project

• IP geophysical survey commencing next week to consolidate the recent discovery of significant manganese mineralisation on the Black Hill Prospect.

• Detailed drilling programme to follow.

• Extensive Helimag geophysical survey to commence 21[st] November covering both Robertson Range Manganese and Iron Ore Projects – to aid in drill target definition.

Phone: +61 8 9421 2005 Fax: +61 8 9421 2001 Email: info@legacyiron.com.au Web: www.legacyiron.com.au

 Mt Celia Gold Project

• 1,200m drilling programme to begin early February 2012.

• To be completed by end of February 2012.

• Drilling to increase JORC resource and drill test high-grade gold mineralisation at depth.

Legacy Iron Ore Limited

ASX Announcement 14 November 2011

MT BEVAN IRON ORE PROJECT

Legacy Iron Ore Limited (“Legacy” or the “Company”) is pleased to announce the completion of its 5,000m Phase 2 Mt Bevan resource definition drilling programme.

The completed Phase 2 drilling is located along strike to the north and south of the current inferred resource, and now provides complete coverage of the Western BIF target across the whole 11 km strike and to a depth of 250 – 300m (see Figure 1).

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LINE
4
LINE
0
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Figure 1: Western BIF Target – Drill hole positions (Blue – Phase 1, Yellow - Phase 2 drilling)

Legacy commenced Phase 2 drilling with the intention that the 5,000m programme would extend the current known 617Mt inferred resource at 32.1% Fe, and would allow Legacy to report a substantial increase in the current JORC resource.

Results from Phase 2 continue to show the excellent continuity and thickness of the magnetite mineralisation at Mt Bevan which was identified in the Phase 1 drilling. As drilling has continued along the full length of the 11km strike, the results have indicated there is virtually no change in dip, thickness or grade.

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Legacy Iron Ore Limited

ASX Announcement 14 November 2011

In essence, the drilling has intersected a 100m+ thick main magnetite BIF unit (‘Central BIF”), and a thinner (average 15m) magnetite BIF at depth (‘Lower BIF”), both shallowly dipping east at a consistent dip of 30 degrees (true dip).

To assist with geological, QA/QC and metallurgical information, two diamond drill holes were undertaken. One hole (381m deep) was drilled on Line 0 (see Figures 1 and 2). The second hole (240m) was drilled alongside previously drilled RC hole MBC 1007 (Line 4) to ‘twin’ the hole, enabling assay comparisons between RC and diamond drilling and to provide samples for metallurgical testing.

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Figure 2 : Drilling on Line 0 (most southern)

The diamond holes showed visible BIF formations as shown in Figures 3 and 4.

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Legacy Iron Ore Limited

ASX Announcement 14 November 2011

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Figure 3: Diamond drill core– Central BIF unit: high grade disseminated and laminated magnetite (black)

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Legacy Iron Ore Limited

ASX Announcement 14 November 2011

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Figure 4: Diamond Drill Core – Central BIF unit: medium and coarse grained magnetite (black)

Outstanding Bulk-scale Metallurgical Testwork Results

A key driver for Legacy is the ability to develop an economic deposit. To this extent, a 200kg sample was used to undertake bulk-scale Low Intensity Magnetic Separation (“LIMS”) testwork, with the results proving the excellent commercial-scale processing capabilities of the Mt Bevan ore. This testwork provided further validation that the resource at Mt Bevan is amongst the highest quality level of any Western Australian magnetite project.

“ The liberation curves from the LIMS testwork show a final product of less than 5% silica can be achieved at a final grind size of P80 75 micron. The LIMS testwork for the Mt Bevan sample confirmed the results from the original DTW testwork and in fact gave better results which more accurately emulate a magnetic plant. The possibility of further upgrading the samples exists at 50 micron, where all samples have a silica grade of below 3% ”. (Figure 5 – Source: Calibre Projects Pty Ltd).

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Legacy Iron Ore Limited

ASX Announcement 14 November 2011

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Figure 5 – Liberation curve

Increased JORC Resource

The Phase 2 drill data and assay results will be utilised by resource consultants SRK Consulting to calculate a significantly increased inferred JORC resource, and provide ongoing support for the conversion of the Exploration Target* of 1.5 – 2.0 Bt grading between 30 – 40 % Fe to a conservative 300m depth.

It is anticipated that the increased resource estimate will be available by mid January 2012.

Future Drill Programme

A 7,000m Phase 3 drilling programme utilising two rigs has been contracted to commence mid February 2012 with completion expected by mid April 2012. The results of this programme will be used to upgrade approximately half (2.2km strike) of the “Inferred” JORC resource to “Indicated” status, as a precursor to the Pre-Feasibility Study.

ROBERTSON RANGE MANGANESE PROJECT

An IP geophysical survey will commence 14[th] November to consolidate the recent discovery of significant manganese mineralisation on the Black Hill Prospect. A drilling programme will follow.

An extensive Helimag geophysical survey will also commence 21[st] November covering both Robertson Range Manganese and Iron Ore Projects – to aid in drill target definition.

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Legacy Iron Ore Limited

ASX Announcement 14 November 2011

MT CELIA GOLD PROJECT

A 1,200m drilling programme (2 weeks) will begin in early February 2012. The drilling programme is to increase the JORC resource and drill test high grade gold mineralisation at depth.

Legacy Managing Director, Sharon Heng’s Comments

“ The ongoing drilling and exploration success at Mt Bevan continues to indicate that this project has the potential to host an economic deposit, and is likely to result in a significant upgrade in the current resource due for release in mid to late January 2012.

Shareholders can be assured that these exciting results achieved to date will be followed up with continued aggressive exploration and project development programmes, and potential new project acquisitions all aimed at increasing the value of the Company.

This ongoing aggressive exploration and the ramping up of activity at Mt Bevan will require additional funding, which will be available to Legacy should shareholders approve the $18.9m placement to National Mineral Development Corporation Ltd (“NMDC”) at the coming EGM.

Not only will the placement to NMDC provide immediate funding, but more importantly as NMDC have indicated, it will ensure access to additional debt financing facilities which they will make available to fund Legacy’s share of expenditure and development costs under the Joint Venture with Hawthorn once it earns its 60% interest. ”

Background

Mt Bevan is a joint venture between Legacy and Hawthorn Resources Limited (“Hawthorn”) whereby Legacy is earning a 60% interest in the project by expending a minimum of $3.5 on exploration.

Legacy and Hawthorn continue to work towards the ongoing development of Mt Bevan and are exploring the best possibilities to achieve increased value for its shareholders.

(Full details of these projects are available on the company website www.legacyiron.com.au)

Yours faithfully, LEGACY IRON ORE LIMITED

Sharon Heng Managing Director

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Competent Person’s Statement:

The information in this report that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves (excluding the SRK Consulting study) is based on information compiled by Steve Shelton who is a member of The Australasian Institute of Geoscientists and a full time employee of Legacy Iron Ore Limited. Mr. Shelton 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 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves“. Mr. Shelton consents to the inclusion in this report of the matters based on his information in the form and the context in which it appears.

* The exploration target for the Mt Bevan project of between 1.5 – 2.0Bt grading 30%–40% Fe should be considered in line with clause 18 of the JORC code. The potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.

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