LEGACY IRON ORE LIMITED — Proxy Solicitation & Information Statement 2011

Nov 10, 2011

ASX Announcement 11 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 Steve Shelton , Exploration Manager Marina Watts , Senior Geologist

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

The Company Announcements Office ASX Limited

Via E Lodgement

2011 Notice of Extraordinary General Meeting

Legacy Iron Ore Limited (“Legacy”) wishes to advise that an Extraordinary General Meeting (“Notice”) will be held on Friday 16 December 2011.

The Notice is attached and is in the process of being despatched to shareholders.

Legacy will be seeking, amongst other items, to obtain shareholder approval for the placement to be undertaken by National Mineral Development Corporation Ltd (“NMDC”), whereby NMDC intends to subscribe for 50% of the issued equity of Legacy for a placement of A$18.89m, subject to shareholder and Foreign Investment Review Board (“FIRB”) approval.

Legacy wishes to advise that all submissions have been made to FIRB on 27 October 2011 and it anticipates having a final decision by the time of the meeting.

Enquiries

Sharon Heng Managing Director Phone: +61 8 9421 2005

ASX Codes: LCY, LCYO, LCYOA, LCYOB

CONTACTS

Sharon Heng Managing Director T: +618 9421 2005

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

PO BOX 6878 EAST PERTH BC WA 6892

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

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ACN 125 010 353

NOTICE OF EXTRAORDINARY GENERAL MEETING AND EXPLANATORY STATEMENT

Extraordinary General Meeting to be held at the Exchange Plaza Conference Centre, Level 8, Exchange Plaza, 2 The Esplanade, Perth, WA 6000 on 16 December 2011 commencing at 9.30 am (WST)

This Notice of Extraordinary General Meeting and Explanatory Statement should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

An independent expert’s report is attached to this Notice, in Schedule 1, as required by ASIC Regulatory Guide 74. The report concludes that the transaction the subject of Resolution 1 in this Notice of Meeting, is not fair but is reasonable to the Company’s non-associated Shareholders, for the reasons set out in the report.

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is given that the Extraordinary General Meeting of Shareholders of Legacy Iron Ore Limited will be held at the Exchange Plaza Conference Centre, Level 8 Exchange Plaza, 2 The Esplanade, Perth WA 6000 on 16 December 2011 commencing at 9:30 am (WST).

ORDINARY BUSINESS

1. Approval for the Issue of Placement Shares and Placement Options to NMDC (Resolution 1)

To consider and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of, section 611 Corporations Act and for all other purposes, the Shareholders approve the issue of up to 306,791,800 Placement Shares and up to 190,334,619 Placement Options, and the exercise of up to 190,334,619 Placement Options, for the purpose and on the terms set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution 1 by a person who participated in the issue, and by any person proposing to acquire voting power in the Company over 20% by way of the proposed subscription, and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. Election of Mr Rana Som (Resolution 2)

To consider and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

“Conditional on Resolution 6 being passed, that for all purposes, Mr Rana Som be elected as a Director with effect from completion of the Placement the subject of Resolution 1.”

3. Election of Mr Naveen Kumar Nandar (Resolution 3)

To consider and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

“Conditional on Resolution 6 being passed, that for all purposes, Mr Naveen Kumer be elected as a Director with effect from completion of the Placement the subject of Resolution 1.”

4. Approval for the Issue of Shares and Adviser Options to Purkis Limited (Resolution 4)

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval be and is hereby given to the issue of 4,000,000 Shares and 20,000,000 Adviser Options, exercisable at $0.25 on or before 31 December 2015 for nil consideration and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : For the purposes of ASX Listing Rule 7.3, the Company will disregard any votes cast on Resolution 4 by a person who may participate in the proposed issue and any person who may obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities and any associate of those persons.

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However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. Approval for the Issue of Adviser Options to Precipio Capital Pty Ltd and Nominees (Resolution 5)

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval be and is hereby given to the issue of 18,000,000 Adviser Options, exercisable at $0.25 on or before 31 December 2015 for nil consideration and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : For the purposes of ASX Listing Rule 7.3, the Company will disregard any votes cast on Resolution 5 by a person who may participate in the proposed issue and any person who may obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities and any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

6. Approval for the Issue of Shares and Adviser Options to Burnbank Ltd (Resolution 6)

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution:

“That, conditional upon Resolution 1 being passed, and for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval be and is hereby given to the issue of 19,000,000 Shares and 20,000,000 Adviser Options, exercisable at $0.25 on or before 31 December 2015 for nil consideration and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : For the purposes of ASX Listing Rule 7.3, the Company will disregard any votes cast on Resolution 6 by a person who may participate in the proposed issue and any person who may obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities and any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

7. Approval for the Issue of Director Options to Sharon Heng (Resolution 7)

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, the Company be authorised to issue 10,000,000 Director Options to Sharon Heng at various exercise prices and expiry dates for nil consideration, on the terms and conditions as set out in the Explanatory Statement.”

Voting Exclusion : In accordance with sections 250R and 250BD of the Corporations Act 2001, the Company will disregard any votes cast on Resolution 7 by, or on behalf of:

• a. a member of the key management personnel (“KMP”) as disclosed in the Remuneration Report;

• b. a closely related party of those persons,

unless the vote is cast by a person as proxy for a person entitled to vote in accordance with a direction on the Proxy Form. The Company’s KMP’s are set out in the Remuneration Report. Generally speaking, they are

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people having the authority and responsibility for planning, controlling and directing the Company’s activities in a direct or indirect manner. KMP’s include the Directors, and senior executives of the Company.

A closely related party of key management personnel generally speaking means a spouse, child, or dependent of the KMP, or a child or dependant of the spouse of the KMP. It includes anyone else who is a member of the KMP’s family who would influence or may be expected to influence the KMP in relation to his or her dealings with the Company. It also includes any company which is controlled by the KMP, and includes any other people prescribed as closely related parties by ASIC, in the regulations to the Corporations Act (none are prescribed at this time).

For the purposes of ASX Listing Rule 10.13.6 the Company will disregard any votes cast on Resolution 7 by Ms Heng or any of her associates. However, the Company must not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

8. Approval for the Issue of Director Options to John Hebenton (Resolution 8)

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, the Company be authorised to issue 3,000,000 Director Options to John Hebenton at an exercise price of $0.25 each exercisable on or before 31 December 2013, for nil consideration on the terms and conditions as set out in the Explanatory Statement.”

Voting Exclusion : In accordance with sections 250R and 250BD of the Corporations Act 2001, the Company will disregard any votes cast on Resolution 8 by, or on behalf of:

• c. a member of the key management personnel (“KMP”) as disclosed in the Remuneration Report;

• d. a closely related party of those persons,

unless the vote is cast by a person as proxy for a person entitled to vote in accordance with a direction on the Proxy Form. The Company’s KMP’s are set out in the Remuneration Report. Generally speaking, they are people having the authority and responsibility for planning, controlling and directing the Company’s activities in a direct or indirect manner. KMP’s include the Directors, and senior executives of the Company.

A closely related party of key management personnel generally speaking, means a spouse, child, or dependent of the KMP, or a child or dependant of the spouse of the KMP. It includes anyone else who is a member of the KMP’s family who would influence or may be expected to influence the KMP in relation to his or her dealings with the Company. It also includes any company which is controlled by the KMP, and includes any other people prescribed as closely related parties by ASIC in the regulations to the Corporations Act (none are prescribed at this time).

For the purposes of ASX Listing Rule 10.13.6 the Company will disregard any votes cast on Resolution 8 by Mr Hebenton or any of their associates. However, the Company must not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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Explanatory Statement

The accompanying Explanatory Statement forms part of this Notice of Extraordinary General Meeting and should be read in conjunction with it.

Shareholders are specifically referred to the Glossary in the Explanatory Statement which contains definitions of capitalised terms used in this Notice of Extraordinary General Meeting and the Explanatory Statement.

Proxies

Please note that:

• (a) a Shareholder entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company;

• (c) a Shareholder may appoint a body corporate or an individual as its proxy;

• (d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and

• (e) Shareholders entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed proxy form provides further details on appointing proxies and lodging proxy forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company or its share registry in advance of the Extraordinary General Meeting or handed in at the Extraordinary General Meeting when registering as a corporate representative.

Voting Entitlements

In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001, the Board has determined that a person’s entitlement to vote at the Extraordinary General Meeting will be the entitlement of that person set out in the register of Shareholders as at 9:30am (WST) on 14 December 2011. Accordingly, transactions registered after that time will be disregarded in determining Shareholder’s entitlement to attend and vote at the Extraordinary General Meeting.

Enquiries

Shareholders may contact the Company Secretary, Ben Donovan, on (+61 8) 9421 2005 if they have any queries in respect of the matters set out in these documents.

By Order of the Board of Directors

Ben Donovan Company Secretary

Dated this 11[th] day of November 2011

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Explanatory Statement

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Company’s Extraordinary General Meeting.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company, which is material to a decision on how to vote on the resolutions in the accompanying Notice of Extraordinary General Meeting.

This Explanatory Statement should be read in conjunction with the Notice of Extraordinary General Meeting. Capitalised terms in this Explanatory Statement are defined in the Glossary.

Commercial background to the Resolutions

By way of background, the Resolutions proposed at the Meeting relate to capital raisings which have been announced on ASX to a new cornerstone investor, and issues to advisers involved in securing this source of funding to further the Company’s activities at Mt Bevan. Details of the terms of subscription, and the changes in the capital structure and control of the Company as provided below under the heading Resolution 1.

Findings of the Independent Expert’s Report on Resolution 1 – Not Fair but Reasonable

The independent expert’s report included at the end of this Notice of Meeting in Schedule 1 concerns the proposed issue of the Placement Shares and Placement Options, and the exercise of the Placement Options, under Resolution 1. It assesses whether the price paid for the change of control of the Company following the transaction with NMDC is fair and/or reasonable. ASIC policy set out in Regulatory Guide 74 requires Shareholders to be fully informed, by the Company:

• (a) providing Shareholders with certain information, which is set out below in the Explanatory Statement, and

• (b) an assessment of whether the premium being paid by NMDC for the change in control of the Company is considered by an independent expert to be fair and reasonable, or not.

The Company have engaged HLB Mann Judd to provide this report. Before voting, Shareholders are encouraged to read the report in its entirety.

The independent expert’s report concludes that the proposed acquisition of Placement Shares and Placement Options, and the exercise of the Placement Options by NMDC under Resolution 1, is not fair but is reasonable to the Company’s non-associated Shareholders.

The report finds that the transaction is not fair because it compares the subscription price proposed to be paid by NMDC if the transaction the subject of Resolution 1 is passed, which is $0.073 per Share and nil for the options to be issued, with the fair market value of a Share based on the value of the Company’s net assets, which is within the range of $0.269 and $0.43 per Share. The report finds that the net asset backing method to value the Shares is the most appropriate method to value a Share.

HLB Mann Judd considers it is more appropriate than valuing the fair market value of a Share based on share market valuation, which is within the range of $0.077 and $0.212 , because of the current uncertainty within world financial markets and the likelihood that the market does not reflect the full value of the Company’s shares.

The report has valued the Company’s net assets at between $80.77 million and $140.24 million. The report has assessed the value of the Company’s interest in the Mt Bevan joint venture based on the Company’s contractual interest in that project and on the basis that the Company will complete the expenditure requirement to earn its 60% interest.

As at 30 June 2011 the Company had sole funded expenditure at Mt Bevan of approximately $1.14 million. The Company has earned no joint venture interest in the Mt Bevan project at present. A 60% interest will be deemed to have been earned if and when the Company has sole funded $3.5m on the Mt Bevan tenements on expenditure during the two year earning period ending on 4 October 2012.

In their report HLB Mann Judd concludes that the transaction the subject of Resolution 1 is reasonable to non associated Shareholders for the reasons as identified on pages 18 to 20 of their report. Principally, that NMDC are bringing to the Company potential future financial backing and involvement in projects which otherwise would not be open to the Company to participate in. HLB Mann Judd considers that the disadvantages of the transaction (dilution of non associated Shareholders, subscription price being below the net asset backing valuation of a Share) do not outweigh the advantages of the transaction ($18.89 million cash injection into the Company for exploration and development at Mt Bevan, introducing a large cornerstone investor to the Company’s register, adding two new directors from NMDC with skill sets appropriate to the Company’s objectives at Mt Bevan, and the participation in the development of new projects).

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The Directors have provided their own rationale for recommending that Shareholders vote in favour of the transaction the subject of Resolution 1, where Resolution 1 is considered in detail below. Essentially the Directors consider that the proposed Placement is the best available alternative that the Company has in the current equity market to source investment funds. The access to the NMDC funds provides not only immediate funds like the placement would, but NMDC’s involvement potentially provides on-going funding security, with the ability to underwrite future capital raisings and provide project financing to further the Company’s Mt Bevan project and its other activities. NMDC has over US$4 billion in cash reserves, and has a global network with the ability to source debt and other sources of financing on attractive terms that are below normal commercial rates given its status as a Government of India controlled entity. NMDC also has a significant interest in various mining operations, and has the necessary technical skills needed to assist the Company in bringing its various projects into production, as well as assist in sourcing new resource projects which have the potential to grow shareholder value. Notwithstanding the findings of HLB Mann Judd for the purposes of ASIC Regulatory Guide 74, the Directors of the Company recommend that Shareholders vote in favour of the transaction the subject of Resolution 1 for the above reasons.

Item 1 - Approval for the Issue of Placement Shares and Placement Options to NMDC and the exercise of (Resolution 1)

Background

This Resolution relates to a capital raising the subject of ASX announcements on 22 September 2011 and 18 October 2011, comprising a Share placement of up to 306,791,800 Placement Shares and up to 190,334,619 Placement Options with various exercise prices as details below, to National Mineral Development Corporation Ltd (“ NMDC ”). The Resolution also relates to the exercise of up to 190,334,619 Placement Options, in accordance with their terms of grant which are detailed in Annexures A to G of this Explanatory Statement, and in the current annual report for the options already on issue.

The conditions of the Placement comprise:

•  due diligence enquiries being conducted to the satisfaction of NDMC (which has been satisfied),

•  regulatory approval for the subscription by NMDC within India, to the extent it is required under Indian legislation or regulation,

•  notification being made by NMDC in accordance with Foreign Investment Review Board Approval (“FIRB”) Policy, because NMDC is a related party of a foreign government and under FIRB Policy all investments in Australian company shares by such an entity must first be notified to the Treasurer, regardless of the dollar value of the investment or the value of the Company;

•  shareholder approval of the Company for the purposes of exception 7 in section 611 of the Corporations Act, and Listing Rule 7.2 exception 16, and

•  ASX granting a waiver from Listing Rule 6.18 to permit the “top up right” granted to NMDC for a period of 60 months from completion to maintain its shareholding level in the Company.

The above conditions are to be completed within 90 days of the signing of the Share Subscription Agreement which occurred on 15 October 2011. Completion of the transaction will occur within 7 days after the last condition has been satisfied or waived by the party entitled to do so.

Use of Funds

The issue of the Placement Shares will raise a total of $18,890,000 before the costs of the issue, payable at completion subject to ASX quotation of the Placement Shares. The funds raised will provide the Company with additional funding for exploration, the development of current and new projects and working capital.

There are no guarantees that the Placement Options will be exercised. If the Placement Options are exercised, the funds will be used for general working capital purposes. The Placement Options are subject to a voluntary escrow agreement between the Company and NMDC regulating the transfer and exercise of the Placement Options with the result that no Placement Options can be exercised by NMDC until such time as the corresponding number of Options on issue and held by optionholders who are not Associates of NMDC are exercised. The escrow period will remain in place until the expiry of the option. This has the effect of preserving the existing Voting Power of NMDC in the Company and preventing dilution of NMDC’s shareholding.

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Information about NMDC

Located in India, NMDC is a Government of India fully owned public enterprise, under the control of the Ministry of Steel, and is actively involved in the exploration of a wide range of minerals including iron ore, copper, phosphate, diamonds, tin and others metals. NMDC is currently debt free, has over US$4 billion in cash reserves, and during the financial year 2010/11 generated EBITDA of US$2.2 billion on revenues of US$2.8 billion.

NMDC currently produces approximately 30 million tonnes of iron ore (60+ Fe) per annum and is India’s single largest iron ore producer, with reported resources in excess of 800 million tonnes. (Reported in the NMDC annual report and on their website as public record, but not JORC compliant).

Employing over 5,000 people, NMDC is India’s largest iron ore producer, producing in excess of 30 million tonnes per annum (mtpa) of iron ore, and is currently developing a 3 mtpa steel plant and 2 pellet plants in excess of 1.2mtpa.

NMDC is also actively pursuing coal, copper, diamonds, gold and other metals through joint venture opportunities and will use Legacy as the main vehicle to exploit these opportunities.

Independent Expert’s Report

The independent expert’s report included at the end of this Notice of Meeting in Schedule 1 concerns the proposed issue of the Placement Shares and the Placement Options under Resolution 1, and the exercise of the Placement Options under Resolution 1, and whether the price paid for the potential change of control of the Company is fair and/or reasonable. ASIC policy set out in Regulatory Guide 74 requires Shareholders to be fully informed, by the Company:

• (a) providing Shareholders with certain information which is set out in the Explanatory Statement, and

• (b) an assessment of whether the premium being paid by NMDC for the potential change in control of the Company is considered by an independent expert to be fair and reasonable, or not. The Company has engaged HLB Mann Judd to provide this report.

Before voting Shareholders are encouraged to read the report in its entirety. The report concludes that the proposed acquisition of Placement Shares and Placement Options, and the exercise of the Placement Options by NMDC is not fair but the transaction is reasonable to the Company’s non-associated Shareholders.

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Current Capital Structure of Legacy (prior to implementation of any Resolutions at the Meeting)

Number	Class of Listed Security	Expiry Date	Exercise price ($)
258,891,800	Fully Paid Ordinary Share (ASX: LCY)	N/a	N/a
45,149,572	Options (LCYO)	7-Jan-12	0.2229
13,955,047	Options (LCYOA)	31-Dec-12	0.15
14,000,000	Options (LCYOB)	31-Dec-12	0.10
Number	Class of Unlisted Security
28,000,000	Piggyback options (LCYAG)	7-Jan-13	0.2229
1,000,000	Employee Options (LCYAS)	31-Dec-12	0.10
5,830,000	Employee Options (LCYAU)	1-Apr-15	0.25
7,000,000	Employee Options (LCYAI)	23-Dec-15	0.10
2,900,000	Options (LCYAK)	14-Feb-14	0.1173
2,000,000	Employee Options (LCYAO)	24-May-16	0.18
500,000	Employee Options	31-Dec-12	0.30

On Issue following the Placement assuming all resolutions are passed at this meeting, and assumes 24,900,000 options (being LCYOB, LCYAS, LCYAI and LCYAK above) are converted prior to Completion as they are “in the money”. Refer to section 6.3.1 of the Independent Experts Report.

Security	Currently on Issue	Securities to be issued subject to Resolution	Party Receiving Securities	Number of new securities to be issued under the Resolution	New Securities on issue if all Resolutions passed
SHARES
Fully Paid Ordinary Shares	283,791,800*	-	-	-
		4	Purkis Ltd	4,000,000	4,000,000
		6	Burnbank Ltd	19,000,000	19,000,000
		1	NMDC Ltd	306,791,800	306,791,800
				Total shares on Issue	613,583,600
OPTIONS
Options expiring 7 Jan 2012 at $0.2229 (LCYO)	45,149,572	1	NMDC Ltd	45,149,572	90,299,144
Options expiring 31 December 2012 at $0.15 (LCYOA)	13,955,047	1	NMDC Ltd	13,955,047	27,910,094
Options expiring 7 Jan 2013 at $0.2229 (LCYAG)	28,000,000	1	NMDC Ltd	28,000,000	56,000,000
Options Expiring 1 April 2015 at $0.25 (LCYAU)	5,830,000	-	-	-	5,830,000
New NMDC Option Expiring 1 April 2015 at $0.25^	-	1	NMDC Ltd	5,830,000	5,830,000
Options Expiring 24 May 2016 at $0.18 (LCYAO)	2,000,000	-	-	-	2,000,000

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New NMDC Options Expiring 24 May 2016 at $0.18^	-	1	NMDC Ltd	2,000,000	2,000,000
Options Expiring 31 December 2012 at $0.30 (Employee Options)	500,000	-	-	-	500,000
New NMDC Options Expiring 31 December 2012 at $0.30^	-	1	NMDC Ltd	500,000	500,000
Options Expiring 31 December 2013 at $0.25 (Adviser Options)	-	1,4,5,6	NMDC Ltd, Purkis Ltd, Burnbank Ltd and Precipio Capital Ltd	Purkis Ltd - 20,000,000 Burnbank Ltd - 19,000,000 Precipio Capital Ltd - 18,000,000 NMDC Ltd-57,000,000	114,000,000
Options Expiring 31 December 2014 at $0.25 (Ms Heng Options)	-	1,7	NMDC Ltd and Sharon Heng	Both parties 2,000,000 each	4,000,000
Options Expiring 31 December 2014 at $0.30 (Ms Heng Options)	-	1,7	NMDC Ltd and Sharon Heng	Both parties 2,000,000 each	4,000,000
Options Expiring 31 December 2014 at $0.35 (Ms Heng Options)	-	1,7	NMDC Ltd and Sharon Heng	Both parties 2,000,000 each	4,000,000
Options Expiring 31 December 2014 at $0.40 (Ms Heng Options)	-	1,7	NMDC Ltd and Sharon Heng	Both parties 2,000,000 each	4,000,000
Options Expiring 31 December 2014 at $0.45 (Ms Heng Options)	-	1,7	NMDC Ltd and Sharon Heng	Both parties 2,000,000 each	4,000,000
Options Expiring 31 December 2013 at $0.25 (Hebenton Options)	-	1,8	NMDC Ltd and John Hebenton	Both parties 3,000,000 each	6,000,000
					330,869,238

• Assumes that 24,900,000 options have been exercised. In case they are not exercised Resolution 1 is expressed to seek Shareholder approval for the issue and exercise of up to 190,334,619 Placement Options.

^ New NMDC Options indicate options issued to NMDC on the same strike price and exercise price as employee options but with the terms as set out in Annexure G.

Summary of capital structure assuming the passing of all resolutions under this Notice of Meeting

	Before Meeting Resolutions	After Meeting Resolutions
Total Shares on Issue*	258,891,800	613,583,600
Total Options on Issue*	120,334,619	330,869,238

• Assumes that 24,900,000 options have been exercised. In case they are not exercised Resolution 1 is expressed to seek Shareholder approval for the issue and exercise of up to 190,334,619 Placement Options.

Indicative Timetable for the Placement

NMDC confirm satisfactory due diligence enquiries

13 October 2011

Notice of Extraordinary General Meeting

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NMDC and Legacy sign Share Subscription Agreement 15 October 2011 General Meeting of the Company 16 December 2011 Cut off date for satisfaction of Conditions 12 January 2012 Latest date for completion and issue and allot Placement Securities 19 January 2012 Expected trading of Placement Securities on ASX 23 January 2012

Shareholders are being asked to approve Resolution 1 for the purposes of item 7 of section 611 of the Corporations Act. No approval is necessary for the issue of securities under Listing Rule 7.1 provided shareholders approve the issue for section 611 Corporations Act and Listing Rule 7.2 exception 16 purposes.

NMDC has agreed to subscribe for A$18.89m, on the basis that:

• (a) The Placement Shares to be issued to NMDC under the Agreement will comprise fully-paid ordinary shares in the capital of Legacy.

• (b) The number of Placement Shares to be issued to NMDC will comprise that number of shares as will, on Completion of the issue, result in NMDC holding 50% of the total number of issued shares in the capital of Legacy.

• (c) If further Shares in the capital of Legacy are issued between the date of this Agreement and the date of Completion, then there will be an adjustment in the number of Placement Shares to be issued to NMDC, in accordance with the principle stated in paragraph (b).

• (d) In addition, NMDC will be issued the same number of Placement Options as the Options on issue as at Completion.

• (e) Where any Options are exercised by optionholders who are not Associates of NMDC, NMDC becomes entitled to exercise the corresponding number of Placement Options but exercise of the NMDC Options in any other situation is not permitted. The Placement Options are subject to a voluntary escrow agreement between the Company and NMDC regulating the transfer and exercise of the Placement Options with the result that no Placement Options can be exercised by NMDC until such time as the corresponding number of Options on issue and held by optionholders who are not Associates of NMDC are exercised. The escrow period will remain in place until the expiry of the option. This has the effect of preserving the existing Voting Power of NMDC in the Company and preventing dilution of NMDC’s shareholding.

• (f) For a period of 60 months following Completion, NMDC is entitled to a “top up right” whereby any Shares or Options issued to parties other than NMDC will confer an entitlement on NMDC to subscribe for an equivalent number of securities, subject to the Company receiving a waiver of Listing Rule 6.18 to allow this top up right to subsist, which waiver application will be lodged and considered by ASX during the period between the date of this Notice of Meeting and the Meeting date, and any necessary shareholder approvals which may be required under the Listing Rules, subject at all times to the restrictions in section 606 of the Corporations Act.

The funds raised by the issue of the Placement Shares, and any exercise of the Placement Options, will be used to advance the development of the Company’s projects including drilling and exploration costs and general working capital as set out below.

as set out below.
Mt Bevan Development – Iron Ore (Drilling, Assays, Testwork, Resource Analysis, Development Studies, Site Infrastructure)	$10,000,000
Robertson Range Development – Manganese (Mapping, Sampling, Drilling, Assays, Resource Analysis)	$1,000,000
Laverton and Kimberley Development - Gold (Mapping, Sampling, Drilling, Assays, Resource Analysis)	$1,000,000
General Working Capital and Acquisition Opportunities	$6,890,000
TOTAL	$18,890,000

• Expenditure is subject to change based on exploration success and any additional projects identified

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Section 611 Corporations Act disclosures

The disclosures required to be made to Shareholders in relation to compliance with item 7 of section 611 of the Corporations Act are as follows, in relation to Resolution 1.

Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the issued voting shares of a company if, because of the acquisition, that person’s or another person’s Voting Power in the Company increases to more than 20%. Section 611 of the Corporations Act sets out certain exceptions to the general prohibition and permits an increase in Voting Power over 20%. Item 7 of section 611 of the Corporations Act provides a mechanism by which shareholders may approve an issue of shares in a company to a person which would otherwise result in that person’s, or another person’s, Voting Power in the Company increasing to more than 20%. Under the Corporations Act a person’s Voting Power in a company is the total of the votes attaching to the shares in that company in which that person has a relevant interest, and that person’s associates (within the meaning of the Corporations Act) have a relevant interest. The Voting Power of a person in the Company is determined by reference to section 610 Corporations Act. By section 608 Corporations Act, in addition to being the registered holder of shares, a relevant interest in shares is also achieved by having power to exercise or control the exercise of votes or disposal of the shares. In addition, a person will be deemed to have a relevant interest in securities held by a company, if the person has over 20% Voting Power in that company.

Associates are determined as a matter of fact, for example where a person controls or influences the board or the conduct of a company’s business affairs, or acts in concert with a person in relation to the entity’s business affairs.

In order for the Company to comply with the requirements of the Corporations Act, the Company has provided the information below which ASIC Regulatory Guide 74 requires the Company to provide to Shareholders when seeking approval in accordance with item 7 of section 611 of the Corporations Act, for Resolution 1.

In addition the Directors have appointed HLB Mann Judd to prepare the independent expert’s report annexed to this Explanatory Statement, in compliance with ASIC Regulatory Guide 74. The objective of commissioning an Independent Experts Report is to provide an opinion for the benefit of Shareholders considering Resolution 1 inclusive, as to whether or not the proposal in Resolution 1 is fair and reasonable to the Shareholders who are not Associates of NMDC.

The report is set out in Schedule 1 and it is recommended that Shareholders read that report in its entirety. The report concludes that the proposed acquisition of Placement Shares and Placement Options, and the exercise of the Placement Options, by NMDC is not fair but is reasonable to the Company’s non-associated Shareholders.

The Company provides the following information in accordance with ASIC Regulatory Guide 74:

Identity of the investors proposing to make the acquisitions, their Associates and Relevant Interests: National Mineral Development Corporation Limited, which is not a Related Party of the Company.

Shares in which NMDC has a Relevant Interest as at date of Meeting nil

Maximum Number of Placement Shares the subject of Resolution 1 assuming resolutions 4 and 6 are passed and 24,900,000 in the money options are exercised

306,791,800

Maximum Number of Placement Shares the subject of Resolution 1 assuming resolutions 4 and 6 are passed and 24,900,000 in the money options are not exercised 281,891,800 Maximum Number of Placement Options the subject of Resolution 1 assuming all resolutions passed and 24,900,000 in the money options are exercised. 165,434,619 Maximum Number of Placement Options the subject of Resolution 1 assuming all resolutions passed and 24,900,000 in the money options are not exercised. 190,334,619

Shares in which investor has a Voting Power following implementation of Resolution 1 (assumes no Placement Options are exercised but 24,900,000 in the money options are exercised prior to Completion, and Resolutions 4 and 6 are passed.) 306,791,800

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Shares in which investor has a Voting Power following implementation of Resolution 1 (assumes no Placement Options are exercised and 24,900,000 in the money options are not exercised prior to Completion, and Resolutions 4 and 6 are passed.) 281,891,800

Increase in Voting Power as a result of Resolutions 1 (assumes no exercise of Placement Options but 24,900,000 in the money options are exercised prior to Completion, and Resolutions 4 and 6 are passed ):

Name of Investor	Voting Power at date of Meeting	Voting Power after implementation of Resolution 1 if no other resolutions are passed	Voting Power after implementation of Resolution 1 if resolutions 4 and 6 are passed
National Mineral Development Corporation Ltd	Nil	50%* 283,791,800 shares	50%* (306,791,800 shares)

1. Assumes 24,900,000 “in the money” options are exercised prior to completion. In case they are not exercised Resolution 1 is expressed to seek Shareholder approval for the issue and exercise of up to 190,334,619 Placement Options.

2. Subject to the approvals required for the “top up rights” referred to above, for a period of 60 months following completion of the subscription NMDC will be issued Shares and Options in order to maintain 50% of Legacy at the time of completion.

It is noted that while NDMC will be issued Placement Options on the same terms as the Options currently on issue, they are restricted from exercising their Placement Options until a current Legacy option holder has exercised their option. As such, Placement Options can only be exercised at the same rate as other Legacy option holders convert. The Placement Options are subject to a voluntary escrow agreement between the Company and NMDC regulating the transfer and exercise of the Placement Options with the result that no Placement Options can be exercised by NMDC until such time as the corresponding number of Options on issue and held by optionholders who are not Associates of NMDC are exercised. The escrow period will remain in place until the expiry of the option. This has the effect of preserving the existing Voting Power of NMDC in the Company and preventing dilution of NMDC’s shareholding.

The Options on issue are detailed earlier in this Explanatory Statement, the detailed terms of which are either already in the public domain or described in Annexures A to G. If they are exercised and NMDC does not choose to exercise their Options, the effect will be to dilute the Relevant Interests of NMDC. It is not possible to predict the reduction in NMDC’s Voting Power if NMDC elected not to exercise any of the Placement Options, where any Options are exercised

The Directors of Legacy do not anticipate any Options currently on issue to be exercised between the date of this Notice of Meeting and the date of the Extraordinary General Meeting. However, the notice deals with the possibility that up to 24,900,000 “in the money” options may be exercised between the date of this Notice of Meeting and the date of the Extraordinary General Meeting.

Identity, associations with the associates and qualifications of any person who is intended to or will become a Director if the Shareholders agree to the allotment:

If the NMDC subscription under Resolution 1 proceeds in accordance with the Subscription Agreement, NMDC intend to appoint two Directors to the Company’s Board, namely Mr Rana Som and Mr Naveen Kumar Nandar, whose appointments are the subject of Resolutions 2 and 3.

Mr Som and Mr Nandar have each been nominated as a Director by NMDC, to be considered at the Meeting under Resolutions 2 and 3, and expressed to be conditional on the NMDC subscription in Resolution 1.

Detailed information is provided about the experience and qualifications of Mr Som and Mr Nandar under Resolutions 2 and 3 in this Explanatory Statement.

Statement of respective objectives and intentions of NMDC regarding the future of the Company in subscribing for Shares, if Shareholders pass Resolutions 1:

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The common objective of NMDC is to turn Legacy Iron Ore Ltd into a successful mineral explorer and mine developer, with an emphasis on iron ore, coal, base metals and other bulk commodities. This is consistent with the vision and objective of the current Board of the Company.

Terms of the proposed allotment and when it is proposed to be completed:

The Placement Shares will be issued to NMDC within three months of the Meeting date at a subscription price of $0.073 each under the terms of the Subscription Agreement. The final allotment of Placement Shares will occur on one date and be no later than 19 January 2012.

The interests of the Directors and their recommendation in relation to Resolutions 1:

The Directors have no personal interest in Resolution 1 and recommend that Shareholders vote in favour of all the Resolution 1 to allow the Company to proceed with its capital raising on terms which the Directors have negotiated on terms they believe are reasonable .

Despite the conclusion reached by the Independent Expert Report conducted by HLB Mann Judd, the Directors consider that the items outlined on page 6 above, including amongst other items, the improved ability to secure access to immediate development funding in a volatile global financial market, access to potential ongoing project development funding, access to development expertise and skills as well as potential acquisition opportunities offered through the NMDC network will all assist to underpin the future growth of the Company and development of its assets.

Item 2 - Election of Mr Rana Som (Resolution 2)

Shareholders are being asked to approve the appointment of Mr Rana Som as a Director of the Company which is conditional upon Resolution 1 being approved by Shareholders.

Mr. Rana Som has been the Chairman and Managing Director of National Mineral Development Corpation Ltd. (NMDC), since November 3, 2007 and serves as its Chief Executive Officer. Mr Som served as Director of Personnel of The State Trading Corporation of India Ltd., until July 30, 2008. He served as a Functional Director on the board of Hindustan Copper Limited since November 2000.

Mr Som has approximately 38 years of experience in various managerial positions. Mr. Som started his career in 1972 as a probationary officer with the Calcutta Port Trust and Chairman and Managing Director of Hindustan Copper Limited from 2000 to 2005. He has served as the Chairman of J&KMDC Limited. Mr. Som served as Wholetime Director of The State Trading Corporation of India Ltd., from March 31, 2005 to July 30, 2008.

Mr Som has a Post Graduate Degree in Economics from the University of Calcutta and a Post Graduate Diploma in Personnel Management from the National Institute of Personnel Management, Calcutta.

The Chairman intends to vote all available proxies in favour of Resolution 2.

Item 3 - Election of Mr Naveen Kumar Nandar (Resolution 3)

Shareholders are being asked to approve the appointment of Mr N.K. Nandar as a Director of the Company which is conditional upon Resolution 1 being approved by Shareholders.

Mr Nandar is the Director (Technical) for NMDC, and is a fellow member of the Institution of Engineers (India), a fellow member of the Mining Engineers Association of India and a Council Member of the Mining Engineers Association of India.

He has approximately 27 years of experience in the field of mining. Prior to being appointed to the Board of NMDC, Shri Nanda was also associated with Hindustan Copper Limited. Mr Nanda joined NDMC as Deputy Mining Engineer in the year 1999 and has served in various positions such as Statutory Mines Manager and General Manager-Head of the project until the Government of India appointed him as Director (Technical) on the Board with effect from December 1, 2008.

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The Chairman intends to vote all available proxies in favour of Resolution 3.

Item 4 – Approval for the Issue of Shares and Adviser Options to Purkis Limited (Resolution 4)

Background to Resolution 4

Purkis Limited has provided various corporate services to the Company as at the date of this General Meeting and have not been paid for these services, on the understanding that securities would be issued in lieu of cash fees subject to Shareholder approval.

Accordingly, the Company is seeking Shareholder approval for the issue of 4,000,000 Shares and 20,000,000 Adviser Options exercisable at $0.25 on or before 31 December 2015 as consideration for those services.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of these securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

Approval is being sought under ASX Listing Rule 7.1 for the issue of up to 4,000,000 Shares and 20,000,000 Adviser Options to Purkis Limited in consideration for various corporate services provided to the Company to date. Purkis Limited is not a Related Party of the Company and is an investor who is exempt from the securities disclosure requirements of the Corporations Act.

If Resolution 4 is passed, following the issue of 4,000,000 Shares and 20,000,000 Adviser Options referred to above, the Company will still have the capacity to issue 15% of its expanded Share capital over the next 12 months as those Shares and Adviser Options, once issued, will be excluded from the calculation under ASX Listing Rule 7.1 of the Company’s 15% capacity to issue equity securities. The issue of the Options referred to above must occur no later than 3 months, or such later date as permitted by ASX, from the date of the General Meeting.

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the proposed issue of Shares and Adviser Options:

• (a) the maximum number of Shares and Adviser Options to be issued is 4,000,000 and 20,000,000 respectively;

• (b) the Shares and Adviser Options will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by an ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (c) the Shares will be issued at a deemed issue price of $0.14 on the day of the Extraordinary General Meeting, and the Adviser Options will be issued for nil consideration and have an exercise price of $0.25 exercisable on or before 31 December 2015. The Adviser Options will otherwise be issued on the terms and conditions set out in Annexure A;

• (d) the Shares and Adviser Options are being issued to an investor exempt from securities disclosure requirements under the Corporations Act. Purkis Ltd is not a related party of the Company;

• (e) the Shares will rank equally with the other Shares currently on issue. The Shares issued upon any exercise of the Adviser Options will rank equally in all respects with the existing fully paid ordinary shares on issue quoted on ASX, the terms of which are in the public domain, and

• (f) no funds will be raised from the issue of the Shares and Adviser Options under Resolution 4. Funds of up to $5,000,000 may be raised upon exercise of the Adviser Options which will be used to partially fund the exploration programmes in respect to the Mt Bevan Project and general working administration costs. However, there is no guarantee that the Options will be exercised at any time in the future.

The Chairman intends to vote all available proxies in favour of Resolution 4.

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Item 5 – Approval for the Issue of Adviser Options to Precipio Capital Pty Ltd and Nominees (Resolution 5)

Background to Resolution 5

Precipio Capital Pty Ltd has provided various corporate services to the Company and as at the date of this General Meeting, have not been paid for these services, on the understanding that securities would be issued in lieu of cash fees subject to Shareholder approval. Accordingly, the Company is seeking Shareholder approval for the issue of 18,000,000 Adviser Options exercisable at $0.25 on or before 31 December 2015 as consideration for those services..

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of these securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

Approval is being sought under ASX Listing Rule 7.1 for the issue of up to 18,000,000 Adviser Options to Precipio Capital Pty Ltd and its nominees in consideration for various corporate services provided to the Company. Precipio Capital Pty Ltd and its nominees are not a related party of the Company and are investors who are exempt from securities disclosure requirements of the Corporations Act.

If Resolution 5 is passed, following the issue of 18,000,000 Adviser Options referred to above, the Company will still have the capacity to issue 15% of its expanded Share capital over the next 12 months as those Adviser Options, once issued, will be excluded from the calculation under ASX Listing Rule 7.1. The issue of the Adviser Options referred to above must occur no later than 3 months, or such later date as permitted by ASX, from the date of the General Meeting.

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the proposed issue of Adviser Options:

• (a) the maximum number of Adviser Options to be issued is 18,000,000, of which 6,000,000 Adviser Options will be issued to Precipio Capital Pty Ltd, 6,000,000 Adviser Options will be issued to its nominee Lawley Investments Pty Ltd and 6,000,000 Adviser Options will be issued to its nominee Elohim Nominees Pty Ltd, in consideration for the provision of general compliance services in relation to the NMDC transaction the subject of Resolution 1;

• (b) the Adviser Options will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by an ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (c) the Adviser Options will be issued for nil consideration and have an exercise price of $0.25 exercisable on or before 31 December 2015. The Adviser Options will otherwise be issued on the terms and conditions set out in Annexure A;

• (d) the Adviser Options are being issued to investors exempt from securities disclosure requirements under the Corporations Act. Precipio Capital Pty Ltd and its nominees Lawley Investments Pty Ltd and Elohim Nominees Pty Ltd are not Related Parties of the Company;

• (e) The Shares issued upon any exercise of the Adviser Options will rank equally in all respects with the existing fully paid ordinary shares on issue quoted on ASX, the terms of which are in the public domain; and

• (f) no funds will be raised from the issue of the Adviser Options under Resolution 5. Funds of up to $4,500,000 may be raised upon exercise of the Adviser Options which will be used to partially fund the exploration programmes in respect to the Mt Bevan Project and general working administration costs. However, there is no guarantee that the Adviser Options will be exercised at any time in the future.

The Chairman intends to vote all available proxies in favour of Resolution 5.

Item 6 - Approval for the Issue of Shares and Adviser Options to Burnbank Ltd (Resolution 6)

6.1 Background to Resolution 6

On 1 June 2011, the Company signed a mandate with Burnbank Limited for the introduction of a strategic cornerstone investor. The mandate included a success fee based upon shareholder approval being received for the cornerstone investment, the subject of Resolution 1. Accordingly, the Company is seeking Shareholder approval for the issue of

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19,000,000 Shares and 20,000,000 Adviser Options exercisable at $0.25 on or before 31 December 2015 as consideration for those services.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of these securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

Approval is being sought under ASX Listing Rule 7.1 for a success fee comprising the issue of up to 19,000,000 Shares and 20,000,000 Adviser Options to Burnbank Limited in consideration for various corporate services provided to the Company. Burnbank Limited is not a Related Party of the Company and is an investor who is exempt from disclosure under the requirements of the Corporations Act.

If Resolution 6 is passed, following the issue of 19,000,000 Shares and 20,000,000 Adviser Options referred to above, the Company will still have the capacity to issue 15% of its expanded Share capital over the next 12 months as those Shares and Adviser Options, once issued, will be excluded from the calculation under ASX Listing Rule 7.1. The issue of the Shares and Adviser Options referred to above must occur no later than 3 months, or such later date as permitted by ASX, from the date of the General Meeting.

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the proposed issue of Shares and Adviser Options:

• (a) the maximum number of Shares to be issued is 19,000,000;

• (b) the maximum number of Adviser Options to be issued is 20,000,000;

• (c) the Shares and Adviser Options will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by an ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

• (d) the Shares will be issued at a deemed issue price of $0.14 on the day of the Extraordinary General Meeting.

• (e) the Adviser Options will be issued for nil consideration and have an exercise price of $0.25 exercisable on or before 31 December 2015. The Adviser Options will otherwise be issued on the terms and conditions set out in Annexure A;

• (f) the Shares and Adviser Options are being issued to an investor exempt from securities disclosure requirements under the Corporations Act. Burnbank Ltd is not a Related Party of the Company;

• (g) the Shares will rank equally with the fully paid ordinary shares on issue.

• (h) If and when the Adviser Options are exercised, the allotted and issued Shares will rank equally in all respects with the existing class of quoted fully paid ordinary shares, the terms of which are in the public domain; and

• (i) no funds will be raised from the issue of the Shares and Adviser Options under Resolution 6. Funds of up to $5,500,000 may be raised upon exercise of the Adviser Options which will be used to partially fund the exploration programmes in respect to the Mt Bevan Project and general working administration costs. However, there is no guarantee that the Adviser Options will be exercised at any time in the future.

The Chairman intends to vote all available proxies in favour of Resolution 6.

Item 7 - Approval for Issue - Director Options to Ms Heng (Resolution 7)

Background to Resolution 7

The object of Resolution 7 is to provide Ms Heng with a mechanism to participate further in the enhanced value of the Company’s shares as a result of development of the Company’s projects, and an incentive for her future involvement with, and commitment to, the Company.

Shareholder approval of the issue of 10,000,000 Director Options to Ms Heng the subject of Resolution 7 is sought for the purposes of ASX Listing Rule 10.11.

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7.1 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires a listed ompany to obtain shareholder approval by ordinary resolution prior to the issue of securities (including an option) to a Director of the Company.

If Resolution 7 is passed, Options will be issued to Ms Heng (or her nominees), who is a Director of the Company. Accordingly, approval for the proposed issue of 10,000,000 Director Options to Ms Heng (or her nominee) on the achievement of the following terms is required under LR 10.11:

Number	Tranche	Expiry date	Exercise price
2,000,000	tranche 1	31 December 2014	$0.25
2,000,000	tranche 2	31 December 2014	$0.30
2,000,000	tranche 3	31 December 2014	$0.35
2,000,000	tranche 4	31 December 2014	$0.40
2,000,000	tranche 5	31 December 2014	$0.45

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the securities to Ms Heng (or her nominees) as approval is being obtained under ASX Listing Rule 10.11. ASX Listing Rule 7.1 provides that without the approval of holders of ordinary securities, a company must not issue during a 12 month period any equity securities, or other securities with rights of conversion to equity (such as an option), if the number of those securities exceeds 15% of the total ordinary shares on issue at the commencement of that 12 month period. Shareholders should note that if Resolution 7 is passed, the Options proposed to be issued to Ms Heng (or her nominees) pursuant to Resolution 7 will not be included in the Company’s 15% calculation for the purposes of ASX Listing Rule 7.1.

ASX Listing Rule 10.13 sets out a number of matters which must be included in a Notice of Meeting proposing an approval of an issue of securities under ASX Listing Rule 10.11. For the purposes of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 7:

• (a) the maximum number of securities to be issued by the Company to Ms Heng under Resolution 7 is 10,000,000 Options on the above terms;

• (b) the Options will be issued no later than one month after the date of the General Meeting;

• (c) the Options are exercisable at the above terms. The Options will otherwise be issued on the terms and conditions set out in Annexure B; and

• (d) no funds will be raised from the issue of the Options as they are being issued in recognition of her services provided or to be provided and her personal contribution to the Company. Funds of up to $3,500,000 may be raised upon exercise of the Options which will be used to partially fund the exploration programmes in respect to the Mt Bevan Project and general working administration costs. However, there is no guarantee that the Options will be exercised at any time in the future.

The Chairman intends to vote all available proxies in favour of Resolution 7.

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Item 8 - Approval for Issue - Director Options to Mr Hebenton (Resolution 8)

Background to Resolution 8

The object of Resolution 8 is to provide Mr Hebenton with a mechanism to participate further in the enhanced value of the Company’s shares as a result of development of the Company’s projects and an incentive for his future involvement with, and commitment to, the Company.

Shareholder approval of the issue of 3,000,000 Director Options to Mr Hebenton the subject of Resolution 8 is sought for the purposes of ASX Listing Rule 10.11.

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires a listed company to obtain shareholder approval by ordinary resolution prior to the issue of securities (including an option) to a Director of the Company.

If Resolution 8 is passed, Options will be issued to Mr Hebenton (or his nominees), who is a Director of the Company. Accordingly, approval for the proposed issue of 3,000,000 Options exercisable at $0.25 each on or before 31 December 2013 Mr Hebenton (or his nominees) is required pursuant to ASX Listing Rule 10.11.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the securities to Mr Hebenton (or his nominees) as approval is being obtained under ASX Listing Rule 10.11. ASX Listing Rule 7.1 provides that without the approval of holders of ordinary securities, a company must not issue during a 12 month period any equity securities, or other securities with rights of conversion to equity (such as an option), if the number of those securities exceeds 15% of the total ordinary shares on issue at the commencement of that 12 month period. Shareholders should note that if Resolution 8 is passed, the Options proposed to be issued to Mr Hebenton (or his nominees) pursuant to Resolution 8 will not be included in the Company’s 15% calculation for the purposes of ASX Listing Rule 7.1.

ASX Listing Rule 10.13 sets out a number of matters which must be included in a Notice of Meeting proposing an approval of an issue of securities under ASX Listing Rule 10.11. For the purposes of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 8:

• (a) the maximum number of securities to be issued by the Company to Mr Hebenton under Resolution 8 is 3,000,000 Options exercisable at $0.25 each;

• (b) the Options will be issued no later than one month after the date of the General Meeting;

• (c) the Options are exercisable at an exercise price of $0.25 on or before 31 December 2013. The Options will otherwise be issued on the terms and conditions set out in Annexure C; and

• (d) no funds will be raised from the issue of the Options as they are being issued in recognition of his services provided or to be provided and his personal contribution to the Company. Funds of up to $750,000 may be raised upon exercise of the Options which will be used to partially fund the exploration programmes in respect to the Mt Bevan Project and general working administration costs. However, there is no guarantee that the Options will be exercised at any time in the future.

The Chairman intends to vote all available proxies in favour of Resolution 8.

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Glossary

In this Explanatory Statement, the following terms have the following meaning unless the context otherwise requires:

Adviser Options	means an option issued to advisers of the Company exercisable at
	$0.25 on or before 31 December 2015
Extraordinary General Meeting	means the meeting convened by the Notice of Extraordinary General
	Meeting.
Associate	has the meaning given in the Corporations Act.
ASX	ASX Limited (ACN 008 624 691).
Board	Board of Directors.
Chairman	Timothy Turner
Constitution	Constitution of the Company.
Company or Legacy	Legacy Iron Ore Limited (ACN 125 010 353)
Corporations Act	Corporations Act 2001 (Cth).
Director	Director of the Company.
Explanatory Statement	the Explanatory Statement accompanying the Notice of Extraordinary
	General Meeting.
HLB Mann Judd	means HLB Mann Judd Corporate (WA) Pty Ltd
Listing Rules or ASX Listing Rules	the listing rules of ASX.
Meeting	means this Extraordinary General Meeting.
NMDC	means National Mineral Development Corporation Limited
Notice of Extraordinary General Meeting	the Notice of Extraordinary General Meeting accompanying the
	Explanatory Statement.
Placement Options	means the options to subscribe for Shares, the subject of Resolution 1.
Placement Shares	means the Shares to be issued to NMDC the subject of Resolution 1.
Related Party	has the meaning given in the Corporations Act.
Share(s)	ordinary fully paid shares in the capital of the Company.
Shareholder	a holder of a Share.
Voting Power	has the meaning given in the Corporations Act.
WST	Western Standard Time as observed in Perth, Western Australia.

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Annexure A: Adviser Options

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The Options are exercisable on or before 31 December 2015.

3. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of $0.25 per Option exercised.

4. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

5. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

6. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

7. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

8. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

9. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

10. Application will not be made for the Options to be quoted on the Official List of the ASX.

Notice of Extraordinary General Meeting

Page 20

Annexure B: 10,000,000 Options to Ms Sharon Heng

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The various tranches of Options are exercisable on the following terms:

Number	Tranche	Expiry date	Exercise price
2,000,000	tranche 1	31 December 2014	$0.25
2,000,000	tranche 2	31 December 2014	$0.30
2,000,000	tranche 3	31 December 2014	$0.35
2,000,000	tranche 4	31 December 2014	$0.40
2,000,000	tranche 5	31 December 2014	$0.45

1. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the exercise price per Option exercised.

2. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

3. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

4. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

5. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

6. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

Notice of Extraordinary General Meeting

Page 21

1. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

2. Application will not be made for the Options to be quoted on the Official List of the ASX.

Notice of Extraordinary General Meeting

Page 22

Annexure C: 3,000,000 Options to Mr Hebenton

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The Options are exercisable on or before 31 December 2013.

3. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of $0.25 per Option exercised.

4. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

5. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

6. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

7. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

8. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

9. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

10. Application will not be made for the Options to be quoted on the Official List of the ASX.

Notice of Extraordinary General Meeting

Page 23

Annexure D: Options currently on issue classes – LCYO, LCYOA, LCYOB

Provided below are the terms of the current listed options as set out on page 8 of the Notice.

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The Options are exercisable on the dates in the table shown on page 8 of the Notice.

3. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of the amount per Option exercised, as shown in the table on page 8 of the Notice.

4. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

5. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

6. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

7. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

8. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

9. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

Notice of Extraordinary General Meeting

Page 24

Annexure E: Options (LCYAG) – Piggyback Options

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The Options are exercisable on or before 14 February 2013.

3. Upon exercise of an Option in addition to receiving one ordinary full paid Share, the optionholder will receive a further Option exercisable at $0.2229 on or before 21 February 2014.

4. Each Option is only capable of being exercised following the exercise of an option with a corresponding exercise price by an option holder not associated with NMDC.

5. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of $0.2229 per Option exercised.

6. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

7. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

8. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

9. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

10. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

11. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

12. Application will not be made for the Options to be quoted on the Official List of the ASX.

Notice of Extraordinary General Meeting

Page 25

Appendix F: Employee Options

Set out below are the terms of each employee option as set out on page 8 of this Notice, with its exercise price and date set out in that table.

1. each Option will be issued nil of consideration;

2. each Option will entitle the holder to subscribe for one Share at the Exercise Price;

3. each Option expires on its Expiry Date;

4. subject to Rule 9 and Rule 17, the Options can be exercised in whole or part at any time up to and including the Expiry Date by lodging an Option Exercise Notice accompanied by the payment of the Exercise Price;

5. subject to the Listing Rules, the Options cannot be transferred or assigned by the holder except that the holder may at any time transfer all or any of his Options to his spouse or to a company the majority of the issued Shares in which are beneficially owned by him or to any trust that the holder is a beneficiary;

6. there are no participating rights or entitlements inherent in the Options and Option holders will not be entitled to participate in any new issue or bonus issue of Shares which may be offered to members of the Company from time to time prior to the Expiry Date;

7. in the event of any reorganisation (including consolidation, subdivision, reduction or cancellation) of the issued capital of the Company, the Options are to be reorganised in a manner required by the Listing Rules on a reorganisation of capital;

8. in the case of any pro rata entitlements issue (other than a bonus issue) the Exercise Price of the Option may be reduced according to the following formula:

NEP = O – E[P – (S + D)]

• N + 1

• NEP = the new exercise price of the Option.

• O = the old exercise price of the Option.

• E = the number of underlying securities into which one Option is exercisable.

• P = the average market price per share (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex rights date or ex entitlement date.

• S = the subscription price for a security under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue).

• N = the number of securities with rights or entitlements that must be held to receive a right to one new security.

In the case of a bonus issue the number of Shares over which the Option is exercisable may be increased by the number of Shares which the option holder would have received if the Option had been exercised before the record date for the bonus issue. If at the time of adjustment the Company is admitted to the official list of ASX, the Company will notify the ASX of the adjustments in accordance with the Listing Rules.

1. Shares allotted and issued pursuant to the exercise of Options will be allotted and issued not more than ten (10) business days after receipt of both a properly executed Option Exercise Notice and the relevant subscription monies;

2. application will not be made to the ASX for Official Quotation of the Options;

3. all Shares issued upon exercise of any Option will rank pari passu in all respects with the Company's then issued Shares. The Company will apply for Official Quotation with the ASX within 10 business days after the date of issue of all Shares issued upon exercise of any Option;

4. no Options will be issued under the Plan until an Application approved by the Directors has been received by the Company in accordance with Condition12; and

5. the Company will allot the Options and deliver a certificate or certificates for the Options to the Eligible Person within ten (10) business days of the Application Date.

Notice of Extraordinary General Meeting

Page 26

Appendix G: New options to NMDC on same strike and exercise price as employee options

The new options issue to NMDC will be to match the same exercise price and expiry period of the employee options in appendix F, and as outlined on page 8 of the Notice, with the exception that each option will have the following terms:

1. Each Option entitles the holder to acquire one fully paid ordinary share in the Company.

2. The Options are exercisable on or before the date in the table on page 8.

3. Each Option is only capable of being exercised following the exercise of an option with a corresponding exercise price by an option holder not associated with NMDC.

4. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum per Option exercised as set out in the table on page 8.

5. The Options may be transferred by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until expiry of the Options. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is listed on ASX.

6. Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.

7. Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.

8. In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

9. If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

10. In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

11. Application will not be made for the Options to be quoted on the Official List of the ASX.

Notice of Extraordinary General Meeting

Page 27

Schedule 1: Independent Experts Report

Notice of Extraordinary General Meeting

Page 28

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Independent Expert’s Report Legacy Iron Ore Limited

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HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au

HLB Mann Judd Corporate (WA) Pty Ltd is a member of

International, a worldwide organisation of accounting firms and business advisers.

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FINANCIAL SERVICES GUIDE Dated 1 July 2011

1.

HLB Mann Judd Corporate (WA) Pty Ltd

HLB Mann Judd Corporate (WA) Pty Ltd ABN 69 008 878 555 (“HLB Mann Judd Corporate” or “we” or "us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“ FSG ”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as a financial services licensee.

This FSG includes information about:

• who we are and how we can be contacted;

• the services we are authorised to provide under our Australian Financial Services Licence, Licence No. 250903 ;

• remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;

• any relevant associations or relationships we have; and

• our complaints handling procedures and how you may access them.

3.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

• securities;

• interests in managed investment schemes excluding investor directed portfolio services;

• � superannuation; and

• debentures, stocks or bonds issued or proposed to be issued by a government.

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4.

General financial product advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

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HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au

HLB Mann Judd Corporate (WA) Pty Ltd is a member of

International, a worldwide organisation of accounting firms and business advisers.

Financial Services Guide

-2-

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product and there is no statutory exemption relating to the matter, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither HLB Mann Judd Corporate, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by us

HLB Mann Judd Corporate has no employees. All personnel who complete reports for HLB Mann Judd Corporate are partners of HLB Mann Judd (WA Partnership). None of those partners are eligible for bonuses directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8.

Associations and relationships

HLB Mann Judd Corporate is wholly owned by HLB Mann Judd (WA Partnership). Also, our directors are partners in HLB Mann Judd (WA Partnership). Ultimately the partners of HLB Mann Judd (WA Partnership) own and control HLB Mann Judd Corporate.

From time to time HLB Mann Judd Corporate or HLB Mann Judd (WA Partnership) may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

9.

Complaints resolution

9.1. Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. Complaints must be in writing, addressed to The Complaints Officer, HLB Mann Judd Corporate (WA) Pty Ltd, Level 4, 130 Stirling Street, Perth WA 6000.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 7 days and investigate the issues raised. As soon as practical, and not more than one month after receiving the written complaint, we will advise the complainant in writing of the determination.

Financial Services Guide

-3-

9.2 Referral to external disputes resolution scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited ( “FOS ”). FOS independently and impartially resolves disputes between consumers, including some small business, and participating financial services providers.

Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. Contact details

You may contact us using the details at the foot of page 1 of this FSG.

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4 November 2011

The Directors Legacy Iron Ore Limited Hyatt Centre Suite 32 23 Plain Street EAST PERTH WA 6004

Dear Sirs and Madam

INDEPENDENT EXPERT’S REPORT

INTRODUCTION

On 24 May 2011 (“Announcement Date”), Legacy Iron Ore Limited (“Legacy” or the “Company”) announced that it had entered into a memorandum of understanding (“MOU”) with National Mineral Development Corporation Limited (“NMDC”), a government of India fully owned enterprise. The MOU allows NMDC the right to acquire a shareholding of up to 50% in Legacy by subscribing for shares in Legacy at a price to be agreed between the parties (“the Proposed Transaction”). On 15 October 2011 Legacy entered into a Subscription Agreement (“Agreement”) with NMDC. A summary of the terms of this Agreement are set out in Section 3 of this Report.

STRUCTURE OF REPORT

This report has been divided into the following sections:

1. Summary and opinion

2. Purpose of the Report

3. Outline of the Agreement

4. Adopted basis of evaluation

5. Profile of Legacy

6. Valuation of Legacy

7. Valuation of the consideration

8. Assessment of whether the Agreement is fair

9. Assessment of whether the Agreement is reasonable

10. Sources of information

11. Qualifications, Declarations and Consents

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HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au

HLB Mann Judd Corporate (WA) Pty Ltd is a member of

International, a worldwide organisation of accounting firms and business advisers.

Legacy Iron Ore Limited Independent Expert’s Report – November 2011 -2-

1. SUMMARY AND OPINION

1.1 Fairness

Set out in the table below is a comparison of the subscription amount under the Agreement with our assessment of the fair market value of the Legacy shares.

	Ref	Low	Preferred	High
		cents	cents	cents
Value of a Legacy Share	6	26.9	34.8	43.0
Subscription amount per share	7	7.3	7.3	7.3

The subscription amount under the Agreement is below our assessed fair market value of the Legacy shares.

Accordingly, it is our opinion that the Agreement is not fair.

1.2 Reasonableness

We have considered the analysis in Section 9 of this report, in terms of both the advantages and disadvantages of the Agreement and the position of the Non-associated shareholders if the Agreement was to proceed.

In our opinion, the position of Shareholders if the Agreement is to proceed is more advantageous than if the Agreement is not approved by the Non-associated shareholders.

1.3 Opinion

We are of the opinion that the Agreement is not fair but reasonable to Legacy’s Nonassociated shareholders.

2. PURPOSE OF THE REPORT

2.1 General

The Directors of Legacy have requested that HLB Mann Judd Corporate (WA) Pty Ltd (“HLB”) provide an independent expert’s report (“Report”) advising whether, in our opinion, the Agreement is fair and reasonable to the Non-associated shareholders of Legacy. “Non-associated shareholders” would be deemed to be all shareholders of Legacy other than those (if any) who might obtain a benefit as a result of the Agreement – for example, if any of the current NMDC shareholders are already shareholders of Legacy.

This Report has been prepared to assist shareholders in their decision whether to vote for or against the resolutions giving effect to the Agreement.

Legacy Iron Ore Limited Independent Expert’s Report – November 2011 -3-

2.2 Regulatory guidance

This Report is to be included in the Notice of Extraordinary General Meeting and Explanatory Memorandum (“Notice of Meeting”) for the meeting to be held on 16 December 2011 to consider the resolutions giving effect to the Agreement, for the purpose of assisting shareholders in their consideration of those resolutions. This Report should not be used for any other purpose.

We have prepared this Report having regard to the relevant Australian Securities and Investments Commission (“ASIC”) releases. ASIC Regulatory Guide 74 “ Acquisitions agreed to by shareholders ” suggests that the obligation to supply shareholders with all information that is material to the decision on how to vote on the resolutions giving effect to the Agreement can be satisfied by the non-associated directors of Legacy, by either:

• (a) undertaking a detailed examination of the Agreement themselves, if they consider that they have sufficient expertise; or

• (b) by commissioning an independent expert’s report.

• The directors of Legacy have commissioned this Report to satisfy this obligation.

In determining the fairness and reasonableness of the Agreement, we have had regard to ASIC Regulatory Guide 111 “Content of expert reports”, which states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price (in this case, the proposed subscription amount for the Legacy shares) and the value that may be attributed to the securities under offer (in this case, the value of the Legacy shares) (fairness ) and an examination to determine whether there are sufficient reasons for security holders to accept the offer despite an offer not being fair ( reasonableness ) .

The concept of fairness is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in this offer (in this case, the value of the Legacy shares). Furthermore, this comparison should be made assuming 100% ownership of the “target” (in this case, 100% of Legacy) and irrespective of whether the consideration is scrip or cash.

ASIC Regulatory Guide 111 states that an offer is reasonable if it is fair. An offer may also be reasonable, if despite it not being fair, there are significant factors which in the expert’s opinion shareholders should consider in accepting the offer.

RG 111 also suggests that where the Agreement is a control transaction the expert should focus on the substance of the control transaction, rather than the legal mechanism used to effect it. RG 111 suggests that where a transaction is a control transaction it should be analysed on a basis that is consistent with a takeover bid. Under the Agreement, NMDC will acquire a shareholding of 50% of the issued capital of the Company. NMDC will also be issued with the same number of options in the Company as already on issue, the terms of which are such that NMDC will be able to maintain a shareholding of at least 50% of the Company. Additionally, NMDC will have the right to nominate 3 of the required 5 directors of the Company and for a period of 60 months from completion will have the right to acquire shares in the Company to maintain its percentage shareholding in the Company. In our opinion the Agreement is therefore a control transaction as defined by RG 111 and we have therefore assessed the Agreement on that basis.

Legacy Iron Ore Limited Independent Expert’s Report – November 2011 -4-

We have also had regard to ASIC Regulatory Guide 112 “Independence of experts”.

3. OUTLINE OF THE AGREEMENT

On 15 October 2011, Legacy entered into an Agreement with NMDC for the subscription by NMDC for shares in Legacy. Details of this Agreement are set out in the Notice of Meeting.

The principal conditions of this Agreement are follows:

• i) the number of shares to be issued to NMDC will result in NMDC holding 50% of the total issued shares in the capital of Legacy;

• ii) the consideration to be paid by NMDC is $18,890,000;

• iii) if further shares in Legacy are issued between the date of the Agreement and the date of completion of the Agreement, the number of shares to be issued in i) above will be adjusted such that NMDC will hold 50% of the total issued shares in the capital of Legacy as at the date of completion of the Agreement, without any adjustment to the consideration payable in ii) above;

• iv) for a period of 60 months from completion, should the Company issue any further shares, NMDC will be entitled to subscribe for additional shares in the Company to maintain the percentage shareholding in the Company it held prior to the further issue;

• v) NMDC will have the right to nominate 3 of the required 5 directors of Legacy;

• vi) at completion, NMDC will receive the same number of options to acquire shares in the capital of Legacy as the options already on issue at the date of the Agreement, with those options being exercisable on the same or similar basis to the options already on issue. The options to be issued to NMDC will have the same exercise price as the options already on issue, but will expire 45 days later than those existing options. Additionally, NMDC can only exercise that number of options in a specific tranche as have been exercised by the holder or holders of the existing tranche of options.

4. ADOPTED BASIS OF EVALUATION

4.1 Fairness

We have assessed whether the Agreement is fair by comparing the value of the proposed subscription amount for each Legacy share with our assessed value of each Legacy share.

The Legacy shares have been valued at fair market value, which we have defined as the amount at which the shares would be expected to change hands between a knowledgeable willing buyer and a knowledgeable willing seller, neither of whom is under any compulsion to buy or sell. Special purchasers may be willing to pay higher prices to gain control, to reduce or eliminate competition, to secure a source of material supply or sales, or to achieve cost savings or other synergies arising on business

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combinations, which could only be enjoyed by the special purchaser. As in our opinion the Agreement is a control transaction, we have considered this factor in forming our opinion.

4.2 Reasonableness

We have assessed the reasonableness of the Agreement by considering other advantages and disadvantages of the Agreement to the Non-associated shareholders.

4.3 Individual circumstances

We have evaluated the Agreement for Legacy shareholders as a whole. We have not considered the effect of the Agreement on the particular circumstances of individual shareholders. Due to their particular circumstances, individual shareholders may place a different emphasis on various aspects of the Agreement from those adopted in this Report. Accordingly, individual shareholders may reach different conclusions to ours on whether the Agreement is fair and reasonable. If in doubt, shareholders should consult an independent adviser.

4.4 Limitations and Reliance on Information

HLB’s opinion is based on economic, share market, business trading and other conditions and expectations prevailing at the date of this Report. These conditions can change significantly over relatively short periods of time. If these conditions did change materially the valuations and opinions could be different in these changed circumstances.

This report is also based upon financial information and other information provided by Legacy. HLB has considered and relied upon this information. HLB has no reason to believe that any material facts have been withheld. The information provided to HLB has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to whether the Agreement is fair and reasonable. However, in preparing reports such as this, time is limited and HLB does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or “due diligence” investigation might disclose. In any event, an opinion as to fairness and reasonableness is more in the nature of an overall review rather than a detailed audit or investigation.

An important part of the information used in forming an opinion of the kind expressed in this Report is comprised of the opinions and judgment of management. This type of information was also evaluated through analysis, enquiry and review to the extent practical. However, such information is often not capable of external verification or valuation.

Preparation of this Report does not imply that HLB has audited in any way the records of Legacy. It is understood that the accounting information that was provided was prepared in accordance with generally accepted accounting principles and in a manner consistent with the method of accounting in previous years except as otherwise noted.

The information provided to HLB included historical financial information for Legacy. Legacy is responsible for this information. HLB has used and relied on this information for the purpose of analysis. HLB has assumed that this information was prepared

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appropriately and accurately based on the information available to management at the time and within the practical constraints and limitations of such information. HLB has assumed that this information does not reflect any material bias, either positive or negative. HLB has no reason to believe otherwise.

5. PROFILE OF LEGACY

5.1 Company History

Legacy was incorporated on 20 April 2007 and was admitted to the Official List of ASX on 8 July 2008 as Legacy Iron Ore Limited.

Legacy Iron Ore Ltd is an exploration company focussing on the discovery and commercialisation of iron ore and gold deposits. Its flagship project is the Mt Bevan project. The Company is currently earning its 60% interest in this project under an agreement with Hawthorn Investments Ltd. Under this Agreement the Company is required to expend $3.5 million by 4 October 2012. The Company’s directors intend to expend the required $3.5 million on this project and anticipate that this expenditure requirement will be met during the quarter ended 31 March 2012. This project has an inferred JORC resource of 617Mt at 32.1% Fe and an exploration target of 1.5-2 billion tonnes grading between 30-40% Fe. Phase 2 drilling commenced in mid August and is due for completion in November, with the aim to double the Inferred JORC compliant resource at Mt Bevan.

Legacy’s other iron ore interests are located in the Pilbara region of Western Australia at Hamersley and Robertson Range. In addition to iron ore, Legacy has several gold projects located at South Laverton and East Kimberley with a combined inferred JORC compliant resource comprising 121,454 oz gold.

5.2 Assets

The Company’s assets comprise predominantly cash, shares in an ASX listed entity (Hawthorn Resources Limited) and mineral exploration properties. An extract of the Company’s latest audited financial statements is shown at Section 5.8 of this report.

5.3 Legal Structure

Legacy is a company incorporated and domiciled in Australia. The company does not have any controlled entities.

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5.4 Management and Personnel

The Company’s current directors and management are:

Mr Timothy Turner Ms Sharon Heng Mr John Hebenton Mr Tao Han

Non- Executive Chairman Managing Director Executive Director and CEO Non-Executive Director

Mr Ben Donovan Company Secretary Mr Steve Shelton Exploration Manager Ms Marina Watts Senior Geologist

5.5 Capital Structure and Shareholders

At the date of this Report, Legacy had the following securities on issue:

Shares:

Number 258,891,800

==> picture [342 x 39] intentionally omitted <==

Fully paid ordinary shares

Options:

Expiry date Exercise price (cents)	Number
7 January 2012 22.29 31 December 2012 15.00 31 December 2012 10.00 7 January 2013 22.29 31 December 2012 10.00 1 April 2015 25.00 23 December 2015 10.00 14 February 2014 11.73 31 December 2012 30.00 24 May 2016 18.00	45,149,572 13,955,047 14,000,000 28,000,000 1,000,000 5,830,000 7,000,000 2,900,000 500,000 2,000,000
	120,334,619

Escrow provisions

No securities are held in escrow as at the date of this report.

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Top 20 shareholders

The top 20 shareholders at the date of preparation of this Report are set out below.

Shareholder	Number of Shares % of total shares on issue
Miss Sharon Kia Le Heng Wealth Forever Limited Zorich Limited Precipio Capital Pty Ltd Shkia Holdings Pty Ltd Burnbank Ltd Rock Resource Limited HSBC Custody Nominees Mr Rodney Laurence Bellotti UOB Kay Hian Private Limited Rock Resource Limited Ms Emerline Yihui Chen Mrs Niloufer Todd Elohim Nominees Pty Ltd Western Resources Aust Pty Ltd Lawley Investments Pty Ltd Mr Vincenzo Maio Ms Catherine Emma Bell CIMB Securities (Singapore) Company Support Services TOTAL	43,819,671 17.11% 23,000,000 8.98% 13,000,000 5.08% 8,000,000 3.12% 7,589,000 2.96% 6,000,000 2.34% 5,500,000 2.15% 5,053,180 1.97% 4,900,000 1.91% 4,388,746 1.71% 3,700,000 1.44% 2,200,000 0.86% 2,050,000 0.80% 2,000,002 0.78% 2,000,000 0.78% 2,000,000 0.78% 1,930,000 0.75% 1,890,000 0.74% 1,695,000 0.66% 1,200,000 0.47%
	141,915,599 55.39%

5.6 Share Price Performance

Legacy’s share price movements in the 12 months to the date of preparation of this Report, together with volumes traded are presented in the graph below:

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The following facts are worthy of note in relation to the above:

• (a) The Legacy closing share price has traded within the range of approximately 7 cents to 22 cents per share during the period; and

• (b) Immediately prior to the Announcement Date (24 May 2011) the Company’s share price had increased from a level of approximately 10 cents per share to approximately 13 cents per share. Following the announcement the Company’s shares have traded in the range of 9.4 cents per share to 22 cents per share. At the date of this report, the closing price of the company’s shares was 12.5 cents per share.

5.7 Financial Performance

Extracts of the Company’s audited financial results for the years ended 30 June 2009, 30 June 2010 and 30 June 2011 are set out below:

	Audited Year to 30 June 2011 $ Audited Year to 30 June 2010 $ Audited Year to 30 June 2009 $
Finance income Other income Compliance and regulatory expenses Depreciation and amortisation Key management personnel remuneration Employee benefit expense Exploration expenditure expenses Exploration tenements written off Administration expenses Finance expense Share-based payments Loss before income tax Income tax benefit Loss for the Year Other comprehensive income, net of tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR	93,010 101,836 125,515 19,720 - - (106,688) (79,953) (99,567) (53,989) (65,404) (47,269) (290,473) (187,144) (327,141) (273,323) (121,270) (215,069) (3,708) (14,510) (150,833) (2,813,146) (852,295) (1,453,452) (1,191,728) (912,618) (524,631) (549,778) (12,933) (16,120) (1,255,923) (2,349,824) (1,158,062)
	(6,426,026) (4,494,115) (3,866,629) - - -
	(6,426,026) (4,494,115) (3,866,629) 2,000,000 - -
	(4,426,026) (4,494,115) (3,866,629)

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5.8 Financial Position

Extracts of the audited statements of financial position as at 30 June 2010, and 30 June 2011 are set out below:

	Audited 30 June 2011 $ Audited 30 June 2010 $
Current Assets Cash and cash equivalents Other receivables Total Current Assets Non Current Assets Plant and equipment Exploration and evaluation expenditure Available for sale financial assets Total Non Current Assets Total Assets Liabilities Current Liabilities Trade and other payables Employee benefits Borrowings Total Current Liabilities Non Current Liabilities Borrowings Total Non Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity	1,285,161 2,624,732 123,965 77,996
	1,409,126 2,702,728
	117,410 119,852 9,995,587 10,649,870 3,500,000 -
	13,612,997 10,769,722
	15,022,123 13,472,450
	364,061 116,242 35,297 47,492 322,619 34,608
	721,977 198,342
	43,913 66,590
	43,913 66,590
	765,890 264,932
	14,256,233 13,207,518
	20,195,483 16,157,790 14,305,643 10,868,595 (20,244,893) (13,818,867)
	14,256,233 13,207,518

5.9 Tax Losses

At 30 June 2011, the Company had a net deferred tax asset of $2,968,446 relating primarily to the benefit of income tax losses. This asset is not included in the statement of financial position in Section 5.8 of this Report. This asset has been taken into account in determining the deferred tax liability arising on the recognition of the value of the Company’s exploration assets in Section 6.3.1 of this Report.

6. VALUATION OF LEGACY

6.1 Valuation Summary

HLB has assessed the fair market value of Legacy to be 34.8 cents per share.

For the purpose of our opinion, fair market value is defined as the amount at which the shares would change hands between a knowledgeable willing buyer and a

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knowledgeable willing seller, neither being under a compulsion to buy or sell. We have considered the aspect of a premium for control in forming our opinion.

In determining this amount, we assessed the fair market value of Legacy after considering the various valuation methods, which are discussed in further detail at Section 6.2 of this Report.

6.2 Valuation Methodology

Methodologies commonly used for valuing assets and businesses are as follows:

6.2.1 Capitalisation of future maintainable earnings (“FME”)

This method places a value on a business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (“ EBIT ”) or earnings before interest, tax, depreciation and amortisation (“ EBITDA ”). The capitalisation rate or "earnings multiple" is adjusted to reflect which base is being used for FME.

This method is not appropriate for use in mining or exploration companies.

6.2.2 Discounted future cash flows (“DCF”)

The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present values at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

The DCF methodology is not considered appropriate to use in the valuation of Legacy as the Company is in the exploration phase and does not have cash flow forecast information based on JORC reserves.

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6.2.3 Net asset value

Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

• Orderly realisation of assets method

• Liquidation of assets method

• Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Where wind up or liquidation of the entity is not being contemplated, these methods in their strictest form are generally not appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

The net assets on a going concern method is usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall net assets on a going concern basis.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when entities are not profitable, a significant proportion of the entity’s assets are liquid or for asset holding companies.

6.2.4 Quoted Market Price Basis

Another valuation approach that can be used in conjunction with (or as a replacement for) any of the above methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a “deep” market in that security.

6.2.5 Methodology Adopted

We consider that the most appropriate methods for the valuation of Legacy are the net assets on a going concern method and the quoted market price basis.

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6.3 Valuation

6.3.1 Net assets on a going concern method of valuation of Legacy

Our valuation of Legacy on a going concern method of valuation is set out in our valuation calculations below.

Statement of Financial Position Note	Audited 30 June 2011 $ Valuation Low $ Valuation Preferred $ Valuation High $
Current Assets Cash and cash equivalents 1 Other receivables Total Current Assets Non Current Assets Plant and equipment Exploration and evaluation expenditure 2 Available for sale financial asset Total Non Current Assets Total Assets Liabilities Current Liabilities Trade and other payables Employee benefits Borrowings Total Current Liabilities Non Current Liabilities Borrowings Deferred tax liability 3 Total Non Current Liabilities Total Liabilities Net Assets	1,285,161 3,825,331 3,825,331 3,825,331 123,965 123,965 123,965 123,965
	1,409,126 3,949,296 3,949,296 3,949,296
	117,410 117,410 117,410 117,410 9,995,587 80,770,000 110,220,000 140,240,000 3,500,000 3,500,000 3,500,000 3,500,000
	13,612,997 84,387,410 113,837,410 143,857,410
	15,022,123 88,336,706 117,786,706 147,806,706
	364,061 364,061 364,061 364,061 35,297 35,297 35,297 35,297 322,619 22,619 22,619 22,619
	721,977 421,977 421,977 421,977
	43,913 43,913 43,913 43,913 - 18,576,852 27,411,852 36,417,852
	43,913 18,620,765 27,455,765 36,461,765
	765,890 19,042,742 27,877,742 36,883,742
	14,256,233 69,293,964 89,908,964 110,922,964
	Number Number Number Number
Diluted shares on issue 4 Net tangible assets per share (cents)	229,839,454 258,039,784 258,039,784 258,039,784 6.20 26.9 34.8 43.0

We have made the following adjustments to the net assets and issued capital of Legacy as at 30 June 2011 in determining our valuation:

1. Cash and cash equivalents

The Company has a number of options on issue as disclosed in Section 5.5 of this Report. Of these options, a total of 24,900,000 are exercisable at less than the company’s current share price and are “in the money” from both a net assets and quoted market price perspective. As these options are “in the money” we have increased the Company’s cash balance by $2,540,170 and increased the Company’s issued capital to allow for the exercise of the options.

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2. Exploration and evaluation expenditure

We instructed SRK Consulting (Australasia) Pty Ltd (“SRK”) to provide an independent specialist market valuation of the exploration assets held by Legacy. SRK considered a number of different valuation methods when valuing the exploration assets of Legacy. A copy of the report prepared by SRK is attached to this Report as Appendix 2.

The range of values for Legacy’s exploration assets as assessed by SRK is set out below:

	Low Value $Million Preferred Value $Million High Value $Million
Mt Bevan inferred resource Mt Bevan exploration target Other exploration assets Total	42.78 56.47 70.17 35.21 46.67 58.13 5.14 9.44 14.30
	83.13 112.58 142.60

The Company is currently earning its 60% interest in the Mt Bevan assets. This interest will be earned by the Company expending $3.5 million. As at 30 June 2011 $1.14 million had been expended. The remaining $2.36 million has been deducted from the values assessed by SRK in determining the amounts included in our valuation calculation.

Our valuation calculations are therefore based on a range of values between $80.77 million and $140.24 million, with a preferred value of $110.2 million.

3. Convertible securities

At 30 June 2011, the Company had convertible securities on issue of $300,000. These securities were converted to 3,300,330 ordinary shares on 14 July 2011. We have therefore adjusted the Company’s number of issued shares as at 30 June 2011 to allow for the conversion of these securities and excluded the convertible securities from the liabilities of the Company.

4. Deferred tax assets and liabilities

The company had a net deferred tax asset of approximately $3.0 million as at 30 June 2011 arising primarily from the benefit of income tax losses. This net deferred tax asset has been taken into account in determining the deferred tax liability arising on the recognition of the value of the Company’s exploration assets and the Company’s available for sale financial asset.

5. Diluted issued shares

The diluted issued shares in this report comprise the 229,839,454 shares on issue as at 30 June 2011, the notional issue of 24,900,000 shares on exercise of the options in note 1 above and the issue of 3,300,330 ordinary shares on the conversion of the convertible securities in note 3 above.

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6.3.2 Quoted Market Price Basis - Shares

To provide a comparison to our assessed valuation of Legacy in Section 6.3.1, we have also assessed the value of Legacy on the quoted market price basis.

The quoted market value of a company’s shares is reflective of its value on a minority interest basis. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

RG 111.25 suggests that when considering the value of a company’s shares for the purposes of approval under Item 7 of section 611, the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain control of another company. These advantages include the following:

• control over policy, decision making and strategic direction;

• access to cash flows;

• control over dividend policies; and

• potentially, access to tax losses.

Whilst NMDC will not be acquiring 100% of the issued capital of Legacy, RG 111 states that the expert should calculate the value of the shares as if 100% control were being obtained. In our opinion the Agreement is a control transaction as defined by RG 111 and our calculation of the quoted market price of a Legacy share includes a premium for control.

Our valuation calculation has been prepared in two parts. First, we have calculated the quoted market price on a minority interest basis. Secondly, we have added a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

Minority interest value

A chart of the share price movement of Legacy over the 12 month period prior to the date of this Report is included in Section 5.6 of this Report.

The daily price of Legacy shares from 24 May 2010 to 23 May 2011 has ranged from a high of 17 cents on 1 July 2010 to a low of 6.7 cents on 16 March 2011. The closing price of the Company’s shares at the date of this report was 12.5 cents per share.

To provide further analysis of the market prices for a Legacy share, we have also calculated the volume weighted average market price for 10, 30, 60 and 90 day periods to 23 May 2011 as follows:

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	23 May	10 Days	30 Days	60 Days	90 Days
	2011	(cents)	(cents)	(cents)	(cents)
	(cents)
Closing price	13.5
Volume weighted average		11.7	11.7	11.2	11.0

For the quoted market price basis to be reliable there needs to be an adequately liquid and active market for the securities. We consider the following characteristics to be representative of a liquid and active or “deep” market:

• Regular trading in a company’s securities;

• At least 50% of a company’s securities are traded on an annual basis;

• The spread of a company’s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and

• There are no significant and unexplained movements in the company’s share price.

A company’s shares should meet all of the above criteria to be considered as trading in a “deep” market, however, failure of a company’s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares determined on this basis cannot be considered relevant.

An analysis of the volume of trading in Legacy shares for the twelve months to 23 May 2011 is set out below:

	Low	High	Cumulative	As a % of
	Cents	Cents	Volume Traded	issued Capital
				as at 30 June
				2011
10 days	9.3	14.5	25,290,904	11%
30 days	9.0	14.5	69,488,797	30%
60 days	6.7	14.5	81,404,540	35%
90 days	6.7	14.5	90,745,975	39%
180 days	6.7	17.0	128,532,357	56%
1 year	6.7	17.0	159,352,430	69%

We consider the level of trading in the Company’s shares to be sufficiently adequate and to otherwise meet the criteria in order for the trading in the Company’s shares to be considered as “deep”.

Our assessment is that a range of values for Legacy shares based on market pricing is between 6.7 cents and 17 per share cents with a preferred value of 11 cents per share.

Control Premium

Share prices from share market trading do not reflect the market value for control of a company as they are in respect of minority interest holdings. Traditionally, the

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premiums required to obtain control of companies range between 15% and 25% of the minority interest values.

Quoted market price including control premium

Applying these control premiums to Legacy’s quoted market share price results in the following quoted market price values including a premium for control:

	Low	Preferred	High
	Cents	Cents	Cents
Quoted market price value	6.7	11.0	17.0
Control premium	15%	20%	25%
Quoted market price value inclusive of a
control premium	7.7	13.2	21.2

Therefore, our valuation of a Legacy share based on the quoted market price method and including a premium for control is between 7.7 cents and 21.2 cents with a preferred value of 13.2 cents.

6.3.3 Quoted Market Price Basis – Options

At the date of this report the Company had 120,334,619 options on issue. Of these options, 73,104,619 were quoted on the ASX and the remainder of 47,230,000 were not quoted. We have assessed the value of the quoted options using the closing price at the date of preparation of this report and the value of the unquoted options using a Black and Scholes option pricing model as follows:

Number	Assessed value
Quoted options 73,104,619 Unquoted options 47,230,000	1,615,297 2,843,958
	$4,459,255

6.4 Assessment on the Fair Market Value of a Legacy Share

The results of the net asset and quoted market price valuations performed are summarised in the table below:

	Low	Preferred	High
	cents	cents	cents
Net assets (Section 6.3.1)	26.9	34.8	43.0
Quoted market price (Section 6.3.2)	7.7	13.2	21.2

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The above comparison ignores the value of the options on issue by the Company in 6.3.3 above. These options do not have a significant impact on the above comparison and have no impact on our conclusion.

We note the significant differences between the above valuation assessments.

Due to factors including the current uncertainties within world financial markets and the matter that is probable the market does not reflect the full value of the Company’s assets, we consider that the most appropriate valuation methodology to apply is the net asset method.

Based on the results above we consider the value of Legacy to be between 26.9 and 43.0 cents per share, with a preferred value of 34.8 cents per share.

7. VALUATION OF CONSIDERATION

NMDC is offering $18,890,000 as consideration for the issue of 258,039,784 shares in the Company and no consideration for the issue of 120,334,619 options. This equates to 7.32 cents per share and nil cents per option.

8. ASSESSMENT OF WHETHER THE AGREEMENT IS FAIR

ASIC Regulatory Guide 111 defines an offer as being fair if the value of the offer price is equal to or greater than the value of the securities being the subject of the offer. Set out in the table below is a comparison of our assessment of the fair market value of a Legacy share with the value of the consideration under the Agreement.

Cents Assessed fair market value of a Legacy share (Section 6) 34.8 Amount offered under the Agreement (Section 7) 7.3

As the amount offered is less than the assessed fair market value of a Legacy share, it is our opinion that the Agreement is not fair.

9. CONSIDERATION WHETHER THE PROPOSAL IS REASONABLE

In accordance with ASIC Regulatory Guide 111, an offer can be reasonable even though it is not fair. On this basis, we have identified the following factors in relation to the reasonableness of the Agreement:

Advantages

• The Agreement will raise $18,890,000 in cash for the Company. This will give the Company the ability to further develop its assets.

• The Agreement will secure the backing of a large and influential shareholder, and therefore bring to the Company the potential for future financial backing and involvement in projects in which the Company in its current form could not become involved.

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• The addition of the NMDC directors to the board of the Company and the access by the Company to NMDC employees should provide additional skills to enhance the growth of the Company.

• The Company currently has a “flagship” project with a number of smaller projects. Should the Company become involved in additional major projects, the diversification will reduce the risk to the Non-associated shareholders.

• The Directors have assessed that the likely cost of undertaking a bankable feasibility study for the Mt Bevan project is approximately $50 million and the likely capital cost of advancing the Mt Bevan project to production would be in excess of $1,300 million. The Company’s 60% share of these expenditures would be $30 million and $780 million, respectively. Without the financial support of a shareholder such as NMDC, the funding of these expenditures would either not be possible by the Company in its current form or be undertaken with significant dilution to Nonassociated shareholders. The directors anticipate that NMDC will provide financial support for these costs in a manner that will minimise any future dilution of the Nonassociated shareholders.

• The Directors advise that NMDC has indicated its intention to use the Company as the “Australian arm” of its operations to acquire other mining interests in Australia. This presents the opportunity for the Company to become involved in projects that are currently beyond the financial and operational capacity of the Company.

Disadvantages

• The price per share being offered under the Agreement of 7.3 cents per share and nil per option is significantly less than our preferred value of the Company of 34.8 cents per share and also the current quoted price of the Company’s shares.

• NMDC are not paying a premium for control of the Company.

• The Agreement will be significantly dilutive to the Non-associated shareholders.

• Under the terms of the Agreement, NMDC is under no compulsion to conduct any future projects in which it is involved through the Company.

We have considered the above factors.

We note that the advantages identified could be very attractive for the Non-associated shareholders. The funding provided under the Agreement and the potential for future financial backing presents a source of finance for the Company to develop its existing projects, in particular the Mt Bevan project. Additionally, the potential for involvement in future projects also presents a significant opportunity for the Company’s growth.

The likelihood of the above opportunities being realised must be weighed against the dilutive nature of the Agreement to the Non-associated shareholders and the price being offered by NMDC compared to our assessed value of the company. The offer by NMDC of 7.3 cents per share is significantly less than our range of values of the Company’s shares of 26.9 cents to 43.0 cents per share.

In view of this we have considered the likelihood of the above opportunities being realised.

Legacy Iron Ore Limited Independent Expert’s Report – November 2011 -20-

In respect of the development of the Company’s existing Mt Bevan project and the other existing assets of the Company, we consider that if the Agreement was approved, NMDC would have a vested interest in the success of those projects and therefore we consider it is reasonable to conclude there to be a strong likelihood of the realisation of the opportunities.

In respect of NMDC using the Company as the “Australian arm” of its operations to acquire other mining interests in Australia, we note that under the terms of the Agreement, NMDC is under no compulsion to conduct any future projects in which it is involved through the Company. NMDC’s Chairman, Mr Rana Som has, however been publically reported to advise NMDC’s intention to use the Company for future projects. The following article appeared in India’s Business Standard on 1 October 2011:

“Talking about Legacy, NMDC’s first-ever foreign acquisition, Rana Som said this would be used as a foothold in Australia not only to develop the mines under Legacy but also for acquiring other mines in the country. “Ultimately, Legacy will be our Australian arm,” he added.”

The Directors advise they are in discussions with NMDC regarding the introduction to the Company of two additional mining projects, one being an iron ore project and the other being a phosphate project.

We have considered the above factors and are of the view that the position of the Nonassociated shareholders if the Agreement was to proceed would be more advantageous than if the Agreement was not to proceed. Accordingly, we are of the opinion that the Agreement is reasonable to the Company’s Non-associated shareholders.

10. SOURCES OF INFORMATION

In preparing this report we have had access to the following principal sources of information:

• Draft notice of meeting and explanatory statement concerning the Agreement;

• Legacy’s Annual reports for the years ended 30 June 2010 and 30 June 2011;

• Discussions with directors and management of Legacy;

• Publicly available information;

• Share registry information;

• ASX Announcements concerning the Agreement; and

• Valuation report of Legacy’s exploration assets prepared by SRK.

11. QUALIFICATIONS, DECLARATIONS AND CONSENTS

HLB, which is a wholly owned entity of HLB Mann Judd Chartered Accountants, is a Licensed Investment Adviser and holder of an Australian Financial Services Licence under the Act and its authorised representatives are qualified to provide this Report. The authorised representatives of HLB responsible for this Report have not provided financial advice to Legacy.

Prior to accepting this engagement, HLB considered its independence with respect to Legacy with reference to ASIC Regulatory Guide 112. In HLB’s opinion, it is independent of Legacy and NMDC.

Legacy Iron Ore Limited Independent Expert’s Report – November 2011 -21-

This Report has been prepared specifically for the shareholders of Legacy. It is not intended that this Report be used for any other purpose other than to accompany the Notice of Meeting to be sent to the Legacy shareholders. In particular, it is not intended that this Report should be used for any purpose other than as an expression of the opinion as to whether or not the Agreement is fair and reasonable to the shareholders of Legacy. HLB disclaims any assumption of responsibility for any reliance on this Report to any person other than those for whom it was intended, or for any purpose other than that for which it was prepared.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. In the preparation of this Report, HLB has relied on and considered information believed, after due inquiry, to be reliable and accurate. HLB has no reason to believe that any information supplied to it was false or that any material information has been withheld.

HLB has evaluated the information provided to it by Legacy and other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially misstated or would not provide a reasonable basis for this Report. HLB has not, nor does it imply that it has, audited or in any way verified any of the information provided to it.

In accordance with the Act, HLB provides the following information and disclosures:

• HLB will be paid its usual professional fees based on time involvement at normal professional rates, for the preparation of this Report.

• Apart from the aforementioned fee, neither HLB, nor any of its associates will receive any other benefits, either directly or indirectly, for or in connection with the preparation of this Report.

• HLB, nor any of its directors or associates, have any interest in Legacy or NMDC.

• Neither HLB nor HLB Mann Judd has had any relationship with Legacy or any associate of Legacy or NMDC.

Yours faithfully

HLB MANN JUDD CORPORATE (WA) PTY LTD Licensed Investment Advisor (AFSL Licence number 250903)

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W M CLARK Authorised Representative

Legacy Iron Ore Limited Independent Expert’s Report – November 2011

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APPENDIX 1

Appendix 1 – Glossary of Terms

TERM	DEFINITION
Agreement	Subscription Agreement for the subscription by NMDC of
	$18,890,000 for shares in the Company.
Announcement Date	Date the Proposed Transaction was announced to	ASX
	being 24 May 2011
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange Limited
DCF	Discounted cash flows
Directors	Directors of Legacy
EBIT	Earnings before Interest and Tax
EBITDA	Earnings before Interest, Tax, Depreciation	and
	Amortisation
FME	Future maintainable earnings
HLB	HLB Mann Judd Corporate (WA) Pty Ltd
JORC	Code of the Joint Ore Reserves Committee of the AIMM,
	AIG and MCA.
Legacy or the Company	Legacy Iron Ore Limited
MOU	Memorandum of understanding
NMDC	National Mineral Development Corporation Limited
Notice of Meeting	The Notice of Extraordinary General Meeting	and
	Explanatory Memorandum for the meeting to be held on
	or about 16 December 2011
Proposed Transaction	The subscription by NMDC of $18,890,000 for	the
	allotment of 258,039,784 shares in the issued capital of
	Legacy and the issue of 120,334,619 options.
Report	Independent expert’s report prepared by HLB.
Shareholders or Non-associated	Existing shareholders in Legacy
shareholders
SRK	SRK Consulting (Australasia) Pty Ltd
VWAP	Volume weighted average price

Legacy Iron Ore Limited Independent Expert’s Report – November 2011

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APPENDIX 2

Appendix 2 – Independent specialist’s report prepared by SRK.

Tenement Valuations

Report Prepared for

Legacy Iron Ore Limited

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.

Report Prepared by

LEG003 August 2011

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Tenement Valuations

Legacy Iron Ore Limited Suite 32, 23 Plain Street, East Perth WA 6004

SRK Consulting (Australasia) Pty Ltd Level 1, 10 Richardson Street, West Perth WA 6005

e-mail: perth@srk.com.au website: www@srk.com.au

Tel: +61 8 9288 2000 Fax: +61 8 9288 2001

SRK Project Number LEG003

August 2011

Compiled by

Peer Reviewed by

Peter Williams Corporate Consultant (Geology)

Deborah Lord Principal Consultant (Geology)

Email: pwilliams@srk.com.au

Authors:

Peter Williams; Deborah Lord; Trivindren Naidoo

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Executive Summary

The purpose of this Report is to provide an independent technical assessment and valuation of Legacy Iron Ore Limited’s mineral assets in relation to the proposed investment in Legacy Iron Ore Limited by NMDC.

The projects comprising the mineral assets considered are:

• Mt Bevan Iron Ore Inferred Resource and exploration target

• Hamersley (Beasley Creek) and Robertson Range Iron Ore and manganese exploration

• East Kimberley gold, REE, manganese and polymetallic base metals prospects

• South Laverton gold exploration tenements, including Inferred Resources at Golden Rainbow, Blue Peter and Kangaroo prospects

The Mt Bevan project is the most significant component of the valuation.

Results

Where Mineral Resources have been stated and could be reviewed by SRK, comparable transactions were used to estimate a value for these assets, based on recent market activity in the particular commodity. Where Exploration Targets have been declared, SRK used the geological risk method, which discounts the comparable transaction approach value by determining the probability that this target will be reached, and the cost to achieve the stated target.

For projects with neither Mineral Resources nor Exploration Targets, a comparable transaction approach was also utilised by comparing the assets to similar exploration packages at early exploration stage using an area-based method.

Table ES - 1: Tenement Valuation Summary as at 30 August 2011 (Values quoted in A$million)

Project	Low	SRK Preferred	High
Mt Bevan Fe Inferred Resource	42.78	56.47	70.17
Mt Bevan W BIF Exploration Target	35.21	46.67	58.13
Remainder of Mt Bevan tenements	0.68	1.36	2.04
Hamersley Fe Exploration Ground	0.30	0.60	0.90
Robertson Range Fe Exploration Ground	0.54	1.08	1.63
Robertson Range Mn Exploration Ground	0.19	0.38	0.57
South Laverton Au Resources (Blue Peter, Golden Rainbow)	1.07	1.65	2.23
South Laverton Au - Non-JORC resources (Kangaroo Bore, Bull Terrier )	1.39	2.32	3.25
South Laverton Au Stophanis Well Patricia N Prospect	0.54	1.35	2.39
South Laverton Kingsley, Porphyry, Yindi Projects	0.10	0.22	0.55
East KimberleyAu Exploration Ground	0.05	0.10	0.25
East KimberleyMn Exploration Ground	0.03	0.06	0.10
East Kimberley Base Metal Exploration Ground	0.25	0.32	0.40
Total All Projects	83.13	112.58	142.60

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Table of Contents

	Executive Summary ..................................................................................................................................... ii	Executive Summary ..................................................................................................................................... ii
	Disclaimer ................................................................................................................................................... vii
	List	of Abbreviations ................................................................................................................................... viii
1	Introduction and Scope of Report ............................................................................... 1
2	Background and Brief .................................................................................................. 1
	2.1	Background of the project ................................................................................................................... 1
	2.2	Nature of the brief ............................................................................................................................... 1
3	Programme Objectives and Work Programme .......................................................... 1
	3.1	Purpose of the Report ......................................................................................................................... 1
	3.2	Reporting Standard ............................................................................................................................. 1
	3.3	Project team ........................................................................................................................................ 2
	3.4	Statement of SRK Independence ....................................................................................................... 3
	3.5	Representation .................................................................................................................................... 3
	3.6	Indemnities .......................................................................................................................................... 3
	3.7	Consents ............................................................................................................................................. 3
4	Description of tenements ............................................................................................ 4
	4.1	Mt Bevan ............................................................................................................................................. 4
		4.1.1 Location ................................................................................................................................... 4
		4.1.2 Tenement Ownership .............................................................................................................. 5
	4.2	Hamersley and Robertson Range ....................................................................................................... 6
		4.2.1 Location ................................................................................................................................... 7
		4.2.2 Tenement Ownership .............................................................................................................. 8
	4.3	East Kimberley .................................................................................................................................... 8
		4.3.1 Location ................................................................................................................................... 8
		4.3.2 Tenement Ownership .............................................................................................................. 8
	4.4	South Laverton .................................................................................................................................. 10
		4.4.1 Tenement Ownership ............................................................................................................ 12
5	Geology and Prospectivity ........................................................................................ 14
	5.1	Mt Bevan ........................................................................................................................................... 14
		5.1.1 Regional Geology .................................................................................................................. 14
		5.1.2 Local Geology ....................................................................................................................... 15
		5.1.3 Prospect Geology .................................................................................................................. 16
		5.1.4 Mineralisation ........................................................................................................................ 18
		5.1.5 Resources ............................................................................................................................. 19
		5.1.6 Prospectivity .......................................................................................................................... 20
	5.2	Hamersley and Robertson Range ..................................................................................................... 20
		5.2.1 Regional Geology .................................................................................................................. 20

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		5.2.2 Local Geology ....................................................................................................................... 22
		5.2.3 Prospects and mineralisation ................................................................................................ 23
		5.2.4 Prospectivity .......................................................................................................................... 25
		5.2.5 Target styles .......................................................................................................................... 26
	5.3	East Kimberley .................................................................................................................................. 27
		5.3.1 Regional Geology .................................................................................................................. 27
		5.3.2 Mineralisation and Target styles ........................................................................................... 29
		5.3.3 Resources ............................................................................................................................. 29
	5.4	South Laverton .................................................................................................................................. 30
		5.4.1 Regional Geology .................................................................................................................. 30
		5.4.2 Local Geology ....................................................................................................................... 32
		5.4.3 Prospect Geology .................................................................................................................. 34
		5.4.4 Resources ............................................................................................................................. 35
		5.4.5 Prospectivity .......................................................................................................................... 36
		5.4.6 Target styles .......................................................................................................................... 37
6	Valuation ..................................................................................................................... 38
	6.1	Valuation of 60% Interest in Mt Bevan Project ................................................................................. 38
		6.1.1 Mt Bevan Inferred Resource ................................................................................................. 38
		6.1.2 Mt Bevan Exploration Target ................................................................................................. 39
		6.1.3 Mt Bevan Exploration Ground ............................................................................................... 40
	6.2	Valuation of Hamersley and Robertson Range Projects .................................................................. 41
		6.2.1 Hamersley Fe Exploration Ground ........................................................................................ 41
		6.2.2 Robertson Range Fe Exploration Ground ............................................................................. 41
		6.2.3 Robertson Range Mn Exploration Ground ............................................................................ 42
	6.3	Valuation of East Kimberley Base Metal, Au and Mn Projects ......................................................... 42
		6.3.1 Valuation of copper – lead – zinc potential ........................................................................... 42
		6.3.2 Valuation of Gold potential .................................................................................................... 44
		6.3.3 Valuation of East Kimberley Manganese .............................................................................. 45
	6.4	Valuation of South Laverton Au Projects .......................................................................................... 45
		6.4.1 Blue Peter and Golden Rainbow Resource .......................................................................... 45
		6.4.2 Blue Peter, Kangaroo Bore, Bull Terrier, Patricia North Exploration Targets ....................... 45
		6.4.3 Gold Resource transactions .................................................................................................. 45
		6.4.4 South Laverton Au Exploration Ground ................................................................................ 46
7	Conclusions and Recommendations ........................................................................ 48
8	References .................................................................................................................. 50

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List of Tables

Table	3-1:	SRK project personnel and roles ................................................................................................. 2
Table	4-1:	Tenements comprising the Mt Bevan Project (Combined Reporting Group 183/2010) .............. 6
Table	4-2:	Hamersley and Robertson Range tenement details .................................................................... 8
Table	4-3:	Legacy Iron Kimberley East tenement holding as at 10 August 2011 ......................................... 9
Table	4-4:	Tenement ownership (Tengraph extract, 12 August 2011) ....................................................... 12
Table	5-1:	Mineral Resource Estimate Statement for the Mt Bevan Iron Ore Project as at 17 June 2011 19
Table	6-1:	Comparable transactions, magnetite projects, Western Australia ............................................. 39
Table	6-2:	Comparable transactions, iron exploration, Western Australia .................................................. 40
Table	6-3:	Comparable transactions, manganese exploration, Western Australia ..................................... 42
Table	6-3:	Transactional data on copper projects in Australia, July 2009 to August 2011 ......................... 43
Table	6-4:	Valuation by Exploration Risk method – Koongie Park Base metals copper prospect ............. 44
Table	6-5:	Summary of recent gold resource transactions ......................................................................... 46
Table	6-6:	Summary of gold exploration JV's and the values assigned per km2........................................ 46
Table	7-1:	Valuation Summary of Legacy Iron Ore Limited's exploration tenements as at 30 August 201148

List of Figures

Figure	4-1:	Location of Legacy's major projects ............................................................................................. 4
Figure	4-2:	Location of Mt Bevan Project (red X) ........................................................................................... 5
Figure	4-3:	Location of Legacy's Pilbara projects........................................................................................... 6
Figure	4-4:	Robertson Range tenements ....................................................................................................... 7
Figure	4-5:	Hamersley Project tenements ...................................................................................................... 7
Figure	4-6:	Location of East Kimberley tenements ........................................................................................ 8
Figure	4-7:	South Laverton projects areas in relation to major towns .......................................................... 10
Figure	4-8:	Location of the South Laverton tenements ................................................................................ 11
Figure	5-1:	Components of the Yilgarn Craton ............................................................................................. 14
Figure	5-2:	Geology of Mt Bevan area ......................................................................................................... 15
Figure	5-3:	Total Magnetic Intensity (TMI) aeromagnetic image of Mt Bevan prospect area, showing
		current phase of drilling .............................................................................................................. 17
Figure	5-4:	Drill Section Line 4 - 6 780 300N ............................................................................................... 18
Figure	5-5:	Cross section showing three types of iron mineralisation .......................................................... 19
Figure	5-6:	Location (A) and Tectonic Units (B) of the Pilbara Craton ......................................................... 20
Figure	5-7:	Geological setting of the Hamersley and Robertson Range Projects ........................................ 21
Figure	5-8:	Geology of Hamersley Project ................................................................................................... 22
Figure	5-9:	Geology of the Robertson Range project................................................................................... 23
Figure	5-10:	Beasley River East Prospect (black circle) in relation to Hamersley Iron’s Beasley River CID
		deposit and Legacy's "high iron" targets .................................................................................... 24
Figure	5-11:	Aeromagnetic targets in the northern portion of exploration licence E45/3395 ......................... 25

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Figure	5-12:	Satellite Image of tenement E45/3395, Iron Ore targets in magenta, Manganese targets in
		red/white, Fault-controlled alteration targets in blue/white ......................................................... 26
Figure	5-13:	Regional geology of the East Kimberley tenements .................................................................. 28
Figure	5-14:	South Laverton Project (bold) and Resources locations (blue) ................................................. 30
Figure	5-15:	Simplified geological map of the eastern Yilgarn Craton ........................................................... 31
Figure	5-16:	Local setting of Legacy's South Laverton Project ...................................................................... 33
Figure	5-17:	Mt Celia Project .......................................................................................................................... 34
Figure	5-18:	Patricia North RAB drilling.......................................................................................................... 36
Figure	5-19:	Orogenic gold mineralisation model for the Eastern Goldfields Province, Yilgarn Craton ....... 37
Figure	6-1:	@RISK analysis of the Koongie Park exploration risk valuation, to provide ranges at the 90%
		confidence level ......................................................................................................................... 44

Appendices

Appendix A: Base Metal Transactions Appendix B: Gold Exploration Transactions Appendix C: Gold Resource Transaction Appendix D: Geological Risk Methodology

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Disclaimer

The opinions expressed in this Report have been based on the information supplied to SRK Consulting (Australasia) Pty Ltd (SRK) by Legacy Iron Ore Limited (Legacy). The opinions in this Report are provided in response to a specific request from Legacy to do so. SRK has exercised all due care in reviewing the supplied information. Whilst SRK has compared key supplied data with expected values, the accuracy of the results and conclusions from the review are entirely reliant on the accuracy and completeness of the supplied data. SRK does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them. Opinions presented in this Report apply to the site conditions and features as they existed at the time of SRK’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate.

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List of Abbreviations

Abbreviation	Meaning
AIG	Australian Institute of Geoscientists
AAR	Anglo Australian Resources Limited
AuSIMM	Australasian Institute of Miningand Metallurgy
BIF	Banded Iron Formation
CID	Channel Iron Deposit
CP	Competent Person
JORC Code	Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC), December 2004.
Legacy	LegacyIron Ore Limited
M	million
Mt	million tonnes
Mtpa	million tonnesper annum
NPV	Netpresent value
SRK	SRK Consulting (Australasia)PtyLtd
t	tonne
tpa	tonnesper annum

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1 Introduction and Scope of Report

Legacy Iron Ore Limited (Legacy) is an ASX listed junior exploration company, and currently holds four mineral exploration projects in Western Australia. This report presents a valuation of Legacy’s tenement holdings.

2 Background and Brief

2.1

Background of the project

Legacy is in discussions with NMDC, an Indian parastatal company interested in investing in Legacy to assist in the development of projects in Australia. This investment would require an independent valuation of the Legacy assets to meet certain regulatory requirements in Australia. As part of Legacy’s internal process, Mr Steve Shelton met with Andre Wulfse and Peter Williams of SRK to discuss SRK’s ability to undertake these valuations of the range of projects currently being developed by Legacy.

2.2 Nature of the brief

SRK was tasked with conducting a valuation of Legacy’s tenement holdings, considering both the declared Resources and the exploration potential of projects without declared resources. The assessment and valuation is based on previously declared resources, where applicable.

The projects considered are:

• Mt Bevan Iron Ore Inferred Resource and exploration target

• Hamersley (Beasley Creek) and Robertson Range Iron Ore and manganese exploration

• East Kimberley gold, REE, manganese and polymetallic base metals prospects

• South Laverton geological review and valuation, including Inferred Resources at Golden Rainbow, Blue Peter and Kangaroo prospects

The Mt Bevan project is the most significant component of the valuation.

3 Programme Objectives and Work Programme

3.1

Purpose of the Report

The purpose of this Report is to provide an independent technical assessment and valuation of these mineral assets in relation to the proposed investment in Legacy Iron Ore Limited by NMDC. This Report is to comply with the technical property information required under various securities laws of Australia and may be included in the Legacy information circular to be prepared in connection with the investment.

3.2 Reporting Standard

This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment and Valuation Report under the guidelines of the VALMIN Code.

The VALMIN Code is the code adopted by the Australasian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG) and the standard is binding upon all AusIMM and AIG members. The VALMIN Code incorporates the JORC Code for the reporting of Mineral Resources and Ore Reserves.

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In this Report, identified Mineral Resources and Ore Reserves are quoted using categorisation in accordance with the JORC Code (2004). However, it should not be assumed that these Mineral Resource and Ore Reserve Estimates have necessarily been carried out in accordance with the guidelines and recommendations laid out in the JORC Code (2004), at least until further documentation can be obtained on the estimates and they have been formally endorsed by a ‘Competent Person’ in accordance with the JORC Code (2004).

3.3 Project team

The SRK project team members and their roles in the programme are presented in Table 3-1.

Table 3-1: SRK project personnel and roles

Peter Williams	Corporate Consultant (Geology)	Project Manager, resource valuation, exploration models
Trivindren Naidoo	Senior Consultant (Geology)	Data compilation and review
Deborah Lord	Principal Consultant (Geology)	Exploration valuation and Peer Review

Peter Williams : Peter has over 30 years' experience in the minerals industry, including 17 years as a consultant. He has been involved in several specialised major research projects, particularly regional structural controls on mineralisation in deformed terranes, notably Archean greenstone belts, Tertiary volcanic arcs of the southwest Pacific, and the Pan African fold Belts in Central Africa. Peter’s ore deposit experience extends to shear-hosted Au, stratiform base metals, nickel sulphides, intrusion-hosted nickel and PGE mineralisation, iron ore, manganese, epithermal Au, breccia-hosted Cu-Au skarn, porphyry Cu, VHMS deposits and alkali granite Sn-W environments. He has conducted major interpretation projects from aeromagnetic data for exploration targeting, and has worked in a range of geological terranes in Australia, West Africa, East Africa, Zimbabwe, Zambia, Democratic Republic of Congo, Indonesia, Papua New Guinea, Vanuatu, Solomon Islands and Europe. Peter consults on a range of projects from project reviews and audits and public reporting, to structural studies on both a regional and orebody scale. His primary research interest is controls on ore systems and the ability to recognise such controls in regional and detailed datasets, particularly geophysics. Peter is a Member of the Australian Institute of Geoscientists (AIG) and a Fellow of the Australian Institute of Company Directors.

Deborah Lord : Deborah has over 20 years’ experience in the mineral exploration industry and has consulted with SRK for more than a decade based in Australia and South America. Her expertise is in the development of valuation techniques for assessment of exploration assets and the application of these principles in valuation reports to VALMIN standard for release to the ASX and independent technical assessments / due diligence. Deborah has worked on projects across a range of geological environments and commodities particularly within Western Australia, but also across Australia as well as through South and North America. Deborah is a Member of the Australian Institute of Geoscientists (AIG) and is one of the AIG representatives on the VALMIN Review Committee.

Trivindren Naidoo : Trivindren has over 12 years' experience in the minerals industry, including 6 years as a consultant, and has extensive experience in exploration programs in Central and Southern Africa, as well as the Canadian Arctic. He has also consulted on projects in Australia, Brazil, North and West Africa, Europe and Mongolia. Trivindren’s ore deposit experience extends to kimberlite-hosted and alluvial diamonds, conglomerate-hosted and shear-hosted Au, stratiform base metals, intrusion-hosted nickel and PGE mineralisation, iron ore, coal and Iron Oxide Copper Goldtype mineralisation. Trivindren consults on a range of projects from project reviews and audits and

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public reporting, to developing and monitoring exploration strategies and plans. Trivindren is registered with SACNASP as a Professional Natural Scientist (Pr.Sci.Nat) in the field of Geology. He is also a Member of the Australasian Institute of Mining and Metallurgy, as well as a Member of the Geological Society of South Africa.

3.4 Statement of SRK Independence

Neither SRK nor any of the authors of this Report have any material present or contingent interest in the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of SRK.

SRK has no prior association with Legacy in regard to the mineral assets that are the subject of this Report. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence.

SRK’s fee for completing this Report is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report.

3.5 Representation

Legacy has represented in writing to SRK that full disclosure has been made of all material information and that, to the best of its knowledge and understanding, such information is complete, accurate and true.

3.6 Indemnities

As recommended by the VALMIN Code, Legacy has provided SRK with an indemnity under which SRK is to be compensated for any liability and/or any additional work or expenditure resulting from any additional work required:

• which results from SRK's reliance on information provided by Legacy or to Legacy not providing material information; or

• which relates to any consequential extension workload through queries, questions or public hearings arising from this Report.

3.7 Consents

SRK consents to this Report being included, in full, in the Legacy documents, in the form and context in which the technical assessment is provided, and not for any other purpose.

SRK provides this consent on the basis that the technical assessments expressed in the Summary and in the individual sections of this Report are considered with, and not independently of, the information set out in the complete Report and the Cover Letter.

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4 Description of tenements

Legacy has four major projects, with two projects focussed on iron ore and two projects focussed on gold (Figure 4-1). All four projects are located in Western Australia. The two iron ore projects are the Mt Bevan (Yilgarn) and the Hamersley and Robertson Range Projects (Pilbara), whereas the gold projects are the South Laverton and the East Kimberley projects.

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Figure 4-1: Location of Legacy's major projects

Source: Legacy

4.1 Mt Bevan

The Mt Bevan Iron Ore Project represents a joint venture between Legacy and Hawthorn Resources Ltd, whereby Legacy can earn a 60% interest in the project by expending A$3.5 million to develop the project to prefeasibility.

4.1.1 Location

The Mt Bevan Project is located 100 km west of the township of Leonora in the Yilgarn Iron Ore Province of Western Australia (Figure 4-2). The project lies immediately north and along strike of the iron ore resources defined by Jupiter Mining, specifically the Mt Mason DSO hematite and the Mt Ida Magnetite projects.

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Figure 4-2: Location of Mt Bevan Project (red X)

Source: YIPA

4.1.2 Tenement Ownership

The project consists of tenements E29/510 and E29/713, currently held by Hawthorn Resources (Table 4-1). The leases were granted in July 2005 and September 2009 respectively, and comprise the Combined Reporting Group 183/2010.

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Table 4-1: Tenements comprising the Mt Bevan Project (Combined Reporting Group 183/2010)

Tenement ID	Status	Area **(km2) **	Grant Date	Renewal Date	Tenement Holder	Expenditure*	Expenditure Status*
E29/510	Live	177	7/07/2005	6/07/2012	Hawthorn Resources	$118,000	Expended in Full
E29/713	Live	12	9/09/2009	8/09/2014	Hawthorn Resources	$15,000

• Expenditure data from Legacy

4.2 Hamersley and Robertson Range

Legacy has tenements in the Pilbara region that are prospective for iron ore and manganese, and these are divided into the Hamersley Project and the Robertson Range Project (Figure 4-3).

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Figure 4-3: Location of Legacy's Pilbara projects

Source: Legacy

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4.2.1 Location

Robertson Range Project

Legacy’s Robertson Range Project lies 100km – 120 km east-northeast of Newman in the East Pilbara of Western Australia (Figure 4-3). The project comprises three Exploration Licences (E45/3394, E45/3395 and E46/818) covering an area of 800 km[2] (Figure 4-4). The two major tenements E45/3395 and E46/818 were granted in December 2009. The tenements are prospective for iron ore and manganese.

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Figure 4-4: Robertson Range tenements

Source: Legacy

Hamersley Project

Legacy’s Hamersley Project lies 60km west of Tom Price in the West Pilbara of Western Australia (Figure 4-3). The project comprises two Exploration Licences (E47/1868 and E47/1869) covering an area of some 48 km[2 ] (Figure 4-5).

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Figure 4-5: Hamersley Project tenements

Source: Legacy

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4.2.2 Tenement Ownership

A summary of the tenements comprising the Hamersley and Robertson Range Projects is provided in Table 4-2. All tenements are held by Legacy Iron Ore Ltd.

The two Hamersley tenements (E47/1868 and E47/1869) constitute the Combined Reporting Group 11/2010, and the two granted Robertson Range tenements (E45/3395-I and E46/818-I) constitute the Combined Reporting Group 12/2010.

Table 4-2: Hamersley and Robertson Range tenement details

Tenement ID	Status	Area (BL)	Area **(km2) **	Grant Date	Renewal Date	Tenement Holder	Expenditure commitment
E47/1868	Live	6	18.95	13/01/2009	12/01/2014	Legacy Iron Ore Ltd	$20,000
E47/1869	Live	10	30.54	6/02/2009	5/02/2014		$20,000
E 45/3394	Pending	16	50.32
E 45/3395-I	Live	114	358.83	21/12/2009	20/12/2014		$114,000
E 46/818-I	Live	123	387.85	21/12/2009	20/12/2014		$123,000

• Expenditure data from Legacy

4.3 East Kimberley

4.3.1 Location

The East Kimberley Project tenements are located in the Halls Creek area. Halls Creek occurs 347 km south of Kununurra and is readily accessible via the sealed Great Northern Highway.

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Figure 4-6: Location of East Kimberley tenements

Source: SRK from DMP online data

4.3.2 Tenement Ownership

Details of the tenements are provided in Table 4-3.

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Table 4-3: Legacy Iron Kimberley East tenement holding as at 10 August 2011

Tene ID	Status	Project Name	Holder	Format	Legal Area	Unit	**Area (km2) **	Grant Date	Expires	Expenditure*	Expenditure Status*
E8003923	Live	Antrim Plateau	Legacy Iron Ore Ltd	E 80/3923	20	BL.	65.0226	3/12/2008	2/12/2013	$20,000	Expended in Full
E8004220	Live	Mt Bradley	Legacy Iron Ore Ltd	E 80/4220	2	BL.	5.2528	14/12/2009	13/12/2014	$15,000	N/A
E8004221	Live	Koongie Park	Legacy Iron Ore Ltd	E 80/4221	33	BL.	97.5709	14/12/2009	13/12/2014	$33,000	N/A
E8004222	Live	Bailey Range	Legacy Iron Ore Ltd	E 80/4222	11	BL.	35.7099	14/12/2009	13/12/2014	$20,000	N/A

• Expenditure data from Legacy

Source: Tengraph

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4.4 South Laverton

The South Laverton Gold Projects are located northeast of Kalgoorlie and south of Laverton, mostly in the Lake Raeside – Lake Rebecca areas of the Eastern Goldfields geological terrane (Figure 4-6). The tenement holdings have been grouped into separate projects, and these are indicated in Figure 4-8.

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Figure 4-7: South Laverton projects areas in relation to major towns

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The location of the majority of the Legacy tenements listed in Table 4-4 in the South Laverton area is shown in Figure 4-8.

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Figure 4-8: Location of the South Laverton tenements

(Overlapping labels of 5 small tenements omitted for clarity are P 39/5003, P 39/5006, P 39/5007, M 31/426 in the Blue Peter project and P 31/1972 in the Stophanis Well Project)

The tenements have been grouped in project areas by Legacy, and SRK has used these project groups as a basis for the valuation work.

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4.4.1 Tenement Ownership

Table 4-4: Tenement ownership (Tengraph extract, 12 August 2011)

Tenement ID	Status	Holder	Holder 2	Legal Area	% Held	Grant Date	Expires	Area km2
E 28/1319	Live	Legacy Iron Ore Ltd		4 BL		2/05/2008	1/05/2013	11.8363
E 28/1609	Live	Legacy Iron Ore Ltd		15 BL		7/11/2006	6/11/2011	43.2734
E 28/1648	Live	Legacy Iron Ore Ltd		4 BL		30/03/2007	29/03/2012	11.5917
E 28/1734	Live	Legacy Iron Ore Ltd		2BL		22/08/2008	21/08/2013	5.91899
E 31/641	Live	Legacy Iron Ore Ltd		1 BL		16/11/2007	15/11/2012	2.97425
E 31/658	Live	Legacy Iron Ore Ltd		3 BL		14/08/2006	13/08/2011	8.13082
E 31/711	Live	Legacy Iron Ore Ltd		1 BL		30/08/2006	29/08/2011	2.97043
E 31/716	Live	Legacy Iron Ore Ltd		27 BL		1/02/2008	31/01/2013	79.6439
E 31/717	Live	Legacy Iron Ore Ltd		30 BL		7/02/2008	6/02/2013	88.8745
E 31/759	Live	Glenmurrin Pty Ltd	Murrin Murrin Holdings Pty Ltd	12 BL	90	24/06/2008	23/06/2013	35.3545
E 31/861	Live	Legacy Iron Ore Ltd		11 BL		15/04/2010	14/04/2015	19.6646
E 31/862	Live	Legacy Iron Ore Ltd		5 BL		16/03/2010	15/03/2015	14.8549
E 31/912	Live	Legacy Iron Ore Ltd		14 BL		7/09/2010	6/09/2015	37.6388
E 31/928	Live	Legacy Iron Ore Ltd		19 BL		10/05/2011	9/05/2016	53.7061
E 31/952	Pending	Legacy Iron Ore Ltd		7 BL		31/12/2999	31/12/2999	35.7561
E 31/997	Pending	Cazaly Resources Ltd	Legacy Iron Ore Ltd	1 BL	90	31/12/2999	31/12/2999	2.97913
E 31/998	Pending	Cazaly Resources Ltd	Legacy Iron Ore Ltd	1 BL	90	31/12/2999	31/12/2999	2.97814
E 39/1435	Live	Legacy Iron Ore Ltd		2 BL		10/11/2009	9/11/2014	5.27140
E 39/1443	Live	Legacy Iron Ore Ltd		9 BL		10/11/2009	9/11/2014	17.1017
M 31/107	Live	Glenmurrin Pty Ltd	Murrin Murrin Holdings Pty Ltd	456.05 ha	90	22/08/1991	21/08/2012	4.55699
M 31/229	Live	Glenmurrin Pty Ltd	Murrin Murrin Holdings Pty Ltd	77.7386 ha	90	17/07/2009	31/12/2999	0.77739
M 31/230	Live	Glenmurrin Pty Ltd	Murrin Murrin Holdings Pty Ltd	628.9898 ha	90	17/07/2009	31/12/2999	6.2899
M 31/426	Live	Legacy Iron Ore Ltd		29 ha		12/01/2009	11/01/2030	0.28256
M 31/427	Live	Cazaly Resources Ltd	Legacy Iron Ore Ltd	91 ha	90	12/01/2009	11/01/2030	0.91257
P 31/1746	Live	Cazaly Resources Ltd	Legacy Iron Ore Ltd	200 ha	90	23/03/2007	22/03/2015	1.89925
P 31/1927	Live	Legacy Iron Ore Ltd		144 ha		17/09/2008	16/09/2012	1.43583

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Tenement ID	Status	Holder	Holder 2	Legal Area	% Held	Grant Date	Expires	Area km2
P 31/1928	Live	Legacy Iron Ore Ltd		142 ha		17/09/2008	16/09/2012	1.41099
P 31/1929	Live	Legacy Iron Ore Ltd		129 ha		17/09/2008	16/09/2012	1.2856
P 31/1930	Live	Legacy Iron Ore Ltd		186.0000		12/08/2008	11/08/2012	1.85535
P 31/1931	Live	Legacy Iron Ore Ltd		179.0000		12/08/2008	11/08/2012	1.78477
P 31/1972	Live	Legacy Iron Ore Ltd		171.0000		27/10/2009	26/10/2013	1.70059
P 39/5001	Live	Legacy Iron Ore Ltd		174.0000		30/11/2009	29/11/2013	1.75758
P 39/5002	Live	Legacy Iron Ore Ltd		190.0000		30/11/2009	29/11/2013	2.00448
P 39/5003	Live	Legacy Iron Ore Ltd		190.0000		30/11/2009	29/11/2013	1.90225
P 39/5004	Live	Legacy Iron Ore Ltd		56.0000		30/11/2009	29/11/2013	0.56049
P 39/5005	Live	Legacy Iron Ore Ltd		96.0000		30/11/2009	29/11/2013	0.96433
P 39/5006	Live	Legacy Iron Ore Ltd		6.0000		30/11/2009	29/11/2013	0.06290
P 39/5007	Live	Legacy Iron Ore Ltd		82.0000		30/11/2009	29/11/2013	0.81822

Area has been calculated by SRK on a square km basis to allow comparison across all tenements.

Legacy holds a 90% interest in the tenements listed as held by Glenmurrin Pty Ltd and those jointly owned by Cazaly Resources. Jackson Gold Pty Ltd acquired the 90% interest in the Glenmurrin held tenements, and subsequently, Legacy acquired the interest in these and other tenements held by Jackson under a sale and purchase agreement between the two companies dated 23 March 2009.

Although SRK has sighted the relevant agreements, SRK is not qualified to give a legal opinion on the validity of these agreements or the effect of changes in tenement status over the period the agreements have been in effect.

This valuation is based on the listing from the Department of Mines and Petroleum extracted on 12 August 2011, and the assumption that the legal agreements confer the rights as listed in Table 4-4.

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5 Geology and Prospectivity

5.1 Mt Bevan

The Mt Bevan Project is situated in the Yilgarn Craton of Western Australia (light pink area in Figure 4-2), a stable Archean craton consisting of belts of banded gneiss and layered sedimentary, volcanic and intrusive rocks, all of which were intruded by voluminous granitoids (Chin and Smith, 1983).

5.1.1 Regional Geology

Cassidy et al. (2006) divide the Yilgarn Craton into six terranes (three of which constitute a superterrane), with the western Narryer and South West Terranes dominated by granite gneiss, whereas the central Youanmi Terrane and the Eastern Goldfields Superterrane are composed of north-trending greenstone belts separated by extensive granite and granite gneiss (Figure 5-1).

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Figure 5-1: Components of the Yilgarn Craton

From Wyche, 2008

Wyche (2008) notes that the Ida Fault marks the boundary between the western Yilgarn Craton and the Eastern Goldfields Superterrane, and has been shown by seismic profiling to be a major, east-dipping structure that extends to the base of the crust, and is intruded in many places by late granite.

Differences in stratigraphic associations between the west Yilgarn and those of the Eastern Goldfields Superterrane include the relative abundance of komatiite and banded iron formation (BIF), as well as typically older greenstones in the Youanmi Terrane when compared to those in the Eastern Goldfields Superterrane (Wyche, 2008).

Riganti et al. (2006) note that the Youanmi Terrane combines the previously recognised Southern Cross and Murchison Granite-Greenstone Terranes, which are now recognised to have a broadly similar lithostratigraphy, geochronology, and tectonic history, as well as an isotopically distinct signature from the other terranes of the Yilgarn Craton.

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The Southern Cross Domain is separated from the Murchison Domain by major shear zones such as the Youanmi shear zone, and is bounded to the east by the Ida and Waroonga fault systems (Riganti et al. , 2006). Wyche (2008) notes that the Southern Cross Domain contains at least two greenstone successions, with the age of the older succession probably being in excess of 2.9 Ga. This older succession typically contains abundant banded iron formation and chert, interbedded with mafic and subordinate ultramafic rocks, overlain by a mafic-dominated succession (Wyche, 2008).

5.1.2 Local Geology

The project covers the northern parts of the Mt Ida greenstone belt (Figure 5-2). All the BIF in this greenstone belt lies west of the Ida Fault, which is taken to be the boundary between the Eastern Goldfields Superterrane and the Youanmi Terrane (Wyche, 2008).

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Figure 5-2: Geology of Mt Bevan area

Source: Legacy

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Mt Bevan forms part of a long series of ridges of BIF that are typically found low in the stratigraphic successions of the Southern Cross Domain of the Youanmi Terrane (Wyche, 2008). The BIF typically consists of fine laminae (0.5 – >5 mm) of recrystallised quartz and quartz–hematite– magnetite). G runerite (iron-rich amphibole) may be present in areas of higher (amphibolite facies) metamorphic grade. Beds within BIF commonly show evidence of tectonism and some ridges preserve refolded intrafolial folds that most likely developed during the earliest deformation of these rocks (Wyche, 2008).

5.1.3 Prospect Geology

Aeromagnetics and field mapping shows the presence of at least two extensive BIF horizons, which are interrupted in the middle of the tenement by a granitoid stock. The first stage of drilling has concentrated on the southern extent of the western BIF horizon (Figure 5-3).

Mt Bevan

The Mt Bevan deposit is located on a prominent north-south striking ridge line comprised of BIF outcropping at surface and dipping to the east.

This BIF horizon extends for at least 11 km within the southern part of the project area, and is the northern, more extensive part of the same horizon that hosts the Mt Ida magnetite resource of Jupiter (currently an inferred mineral resource of 530 Mt grading 31.9% Fe).

Drilling has intersected an 80 m – 120 m thick magnetite-bearing BIF unit (true thickness) dipping at approximately 30 degrees to the ENE (Figure 5-4). The conformity between the drilling sections is notable and reflects the excellent continuity of the BIF unit in outcrop over an 11 km length in the project area. As a consequence of the shallow dip, the magnetite bearing BIF unit has now been traced down dip for some 500 m to the base of the drilling on each section. As is common, weathering of the BIF unit has produced hematite and goethite mineralisation at the upper levels.

Mt Alexander

The Mt Alexander prospect is situated to the north of the Mt Bevan deposit, and comprises a strike ridge composed BIF, typically shallow dipping to the west (10 – 40 degrees), with some evidence of folding with locally sub horizontal and sub vertical dips. The total true thickness of the BIF is being reviewed at this stage but is thought to be circa 100 m. The BIF itself is very similar to that seen along strike to the south at Mt Bevan, with most outcrops showing high percentages of magnetite (now oxidised to martite/hematite at surface). There are some substantial areas of outcrop showing particularly high percentages of coarse magnetite that has been replaced by martite (hematite – formed at depth and pressure, not weathering).

This is likely a result of both structural deformation and metamorphism by proximal granites. Although requiring further evaluation, these zones are of particular interest given the potential to produce a commercial hematite product.

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Figure 5-3: Total Magnetic Intensity (TMI) aeromagnetic image of Mt Bevan prospect area, showing current phase of drilling

Source: Legacy

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Figure 5-4: Drill Section Line 4 - 6 780 300N

Source: Legacy

5.1.4 Mineralisation

Field mapping and drilling of the Mt Bevan deposit has indicated that three types of iron mineralisation are present (Figure 5-5):

• Magnetite

• Hematite

• Surficial hematite-goethite (detrital)

The magnetite is the major target, and is hosted in the BIF layer. Locally, pods of hematite mineralisation are present in small zones within the magnetite-bearing BIF layer, where the magnetite has been altered to hematite. Surficial detrital hematite-goethite iron mineralisation overlies the BIF hosted mineralisation in the form of a surficial blanket.

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Figure 5-5: Cross section showing three types of iron mineralisation

Source: Legacy

5.1.5 Resources

Geological modelling and resource estimation was carried out on the basis of the RC drilling campaign, and a maiden Inferred Resource was declared on 20 June 2011 (Table 5-1). The geological modelling and resource estimation was carried out by SRK.

Table 5-1: Mineral Resource Estimate Statement for the Mt Bevan Iron Ore Project as at 17 June 2011

Classification	Cut-off (% Fe)	Tonnes (Mt)	Fe (%)	SiO2 (%)	Al2O3 (%)	CaO (%)	P (%)	S (%)	LOI (%)
Inferred	15	616.8	32.1	47.4	3.4	3.1	0.05	0.13	-0.25
Inferred	25	522.2	34.4	46.8	2.5	2.7	0.06	0.13	-0.38

The information in this report that relates to the Mt Bevan Mineral Resources is based on work done by Andre Wulfse and Paul Hodkiewicz of SRK Consulting (Australasia) Pty Ltd. Andre Wulfse takes responsibility for the Resource Modelling, and Paul Hodkiewicz takes responsibility for the Geological Modelling. Steve Shelton of Legacy Iron Ore Limited is responsible for the integrity of the Exploration Results.

Andre Wulfse and Paul Hodkiewicz are Members of The Australasian Institute of Mining and Metallurgy and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity they are undertaking to qualify as a Competent Persons in terms of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2004 edition). The Competent Persons consent to the inclusion of such information in this Report in the form and context in which it appears. Peter Williams undertook Peer Review of the resource Report. Peter Williams is a Member of the Australian Institute of Geoscientists.

Note that the Inferred Resource is necessarily restricted to the area that was drilled, i.e. the southern portion of the western BIF horizon (Figure 5-3).

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5.1.6 Prospectivity

Recent focus has been on drilling the southern part of the Western BIF (Figure 5-3).

Based on the results of the recent drilling, as well as reconnaissance mapping of the BIF unit, Legacy announced an overall Exploration Target of 1.5 – 2.0 Bt at 30-40% Fe in their ASX Announcement of 20 June 2011, with Mr Steve Shelton (MAusIMM) listed as the Competent Person. Note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to define a mineral resource for the strike length of the BIF unit, and it is uncertain if further exploration will result in the determination of a Mineral Resource.

The northern part of the western BIF (Mt Alexander) and the 20 km strike Eastern BIF are prospective but have not been extensively explored to date.

5.2 Hamersley and Robertson Range

5.2.1 Regional Geology

Legacy’s Hamersley and Robertson’s Range Projects are located on the Pilbara Craton of Western Australia (Figure 5-6 and Figure 5-7).

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Figure 5-6: Location (A) and Tectonic Units (B) of the Pilbara Craton

Source: A: Hickman, 2011; B: Ruddock, 2002

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Hickman et al . (2010) describe the Pilbara Craton as a 250 000 km[2] ovoid segment of 3800-2830 Ma Archaean crust underlying the northwestern part of Western Australia, with the southern 70% of the craton concealed by the unconformably overlying 2775-2450 Ma rocks of the Fortescue and Hamersley Basins (Figure 5-6).

Stability of the terranes and basins of the Pilbara Craton was essentially attained at c. 2895 Ma, following the final stage of terrane accretion, with a major event of orogenic deformation and metamorphism (Hickman et al. , 2010).

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Figure 5-7: Geological setting of the Hamersley and Robertson Range Projects

Source: GSWA 1:500 000 digital data

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5.2.2 Local Geology

Hamersley

The Hamersley tenements are situated in the South Pilbara Sub-basin of the Hamersley Basin, an area which is associated with the Capricorn Orogen (Figure 5-7). The Hamersley Range was formed on the late Archaean-Palaeoproterozoic metamorphosed banded iron formations, shales, dolerite, carbonate, chert and rhyolite of the south Pilbara sub-basin. These rocks belong to the Hamersley group and make up part of the Ophthalmia fold belt.

To the south of the tenements, granite of the Rocklea Dome is exposed, with the intrusion resulting in the concentric outcrop pattern of the exposed sediments (Figure 5-8).

Younger valley-fill sediments associated with the Beasley River drainage crosscut the stratigraphy in a general north-south orientation (Figure 5-8).

The predominant structural trend appears to be northeasterly.

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Figure 5-8: Geology of Hamersley Project

Source: GSWA 1:500 000 digital data

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Robertson Range

The Robertson Range tenements are situated in the eastern portion of the Pilbara Craton, with tenement E46/818 underlain by sediments of the Manganese Group of the Collier Basin, and tenements E45/3395 and E45/3394 primarily underlain by Coondra Formation sediments of the Blake Sub-basin of the Officer Basin (Figure 5-7 and Figure 5-9).

Northwesterly structures appear to be dominant, with easterly structures apparently locally important in the southern portion of the tenements.

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Figure 5-9: Geology of the Robertson Range project

Source: GSWA 1:500 000 digital data

5.2.3 Prospects and mineralisation

Hamersley

Outcropping hematite and goethite iron mineralisation of the Channel Iron Deposit (CID) type has been discovered on a prominent hill lying within tenement E47/1869, immediately east of the tenement boundary, and along a subsidiary drainage of the Beasley River. This prospect has been named the Beasley River East Prospect (Figure 5-10).

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Figure 5-10: Beasley River East Prospect (black circle) in relation to Hamersley Iron’s Beasley River CID deposit and Legacy's "high iron" targets

Source: Legacy

A total of 15 rock chip samples were taken over a strike length of approximately 300 m. The assays show:

• High iron contents averaging 54.7% Fe, which would yield a calcined product CaFe – 61.1%

• Low silica and alumina, at the low end of typical CID values

• Very low phosphorus, typical of CIDs

The depth or thickness of the outcropping mineralisation is presently unknown. The width of the hill is some 150 m, and the height of the hill above the surrounding creeks is some 25 m on average.

Robertson Range

Known occurrences of iron ore (the Jim Jim occurrences) are present in the southern portion of tenement E45/3395 (Figure 5-9).

Aircore drilling of aeromagnetic targets (Figure 5-11) have encountered alluvial channels containing strongly ferruginous pisolitic and nodular material, currently covered by sand dunes. The thickness of the iron rich deposits, where intersected by fence drilling, were typically up to 200 m wide, with thicknesses of up to 5 m, but on average from 1-3 m. Assays of up to 42.2% Fe were obtained, with most samples being in the assay range of 25-35% Fe.

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Figure 5-11: Aeromagnetic targets in the northern portion of exploration licence E45/3395 Source: Legacy

5.2.4 Prospectivity

Hamersley

There is potential for further mineralisation along the tributary channel to the west (Figure 5-10). “High iron” target areas have also been identified on these tenements (Figure 5-10).

Robertson Range

Based on high resolution satellite imagery interpretation, Legacy have identified fourteen iron ore targets, four manganese targets and four fault-controlled alteration targets (Figure 5-12).

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Figure 5-12:

Satellite Image of tenement E45/3395, Iron Ore targets in magenta, Manganese targets in red/white, Fault-controlled alteration targets in blue/white

Source: Legacy

5.2.5 Target styles

Hamersley

The major target on these tenements is CID type iron ore. The CID type of deposit is one of the two major mineable iron ore types in the Hamersley Province and accounts for 40% of current production (Ramanaidou and Morris, 2010).

Ramanaidou and Morris (2010) describe CID deposits as iron-rich detrital accumulations comprising coarse sand to fine gravel size granules that include: pelletoids (ooids and pisoids); peloids, ferruginised wood (goethitic wood in the matrix and hematitic wood in the nucleus) and a porous matrix that envelops the granules.

Channel iron deposits occupy meandering palaeochannels on a mature surface that includes Precambrian rocks and ferruginous Palaeogene valley fill, with the CID deposits being generally less than one kilometre wide (up to 5 km) with a preserved thickness now ranging from one to rarely over 100 m (Ramanaidou and Morris, 2010).

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The Robe palaeochannel is the longest with CID partly preserved over a distance of 150 km (Ramanaidou and Morris, 2010). In the Robe Valley, CIDs are often preserved in an inverted topography as remnant mesas in the centre of the palaeochannels, whereas in other cases, CIDs abut the margin of the palaeochannels (Ramanaidou and Morris, 2010).

Robertson Range

Sedimentary manganese mineralisation of the type found in the Nicholson Downs manganese mine (previously known as the Balfour Downs deposit) is being targeted on exploration tenement E46/818. This tenement is underlain by manganiferous shales of the Balfour Formation, which hosts manganese mines, such as Nicholson Downs and Woodie Woodie, to the north.

CID mineralisation, as discussed for Hamersley, is also being targeted.

5.3 East Kimberley

5.3.1 Regional Geology

The regional geological setting for the East Kimberley tenements is shown in Figure 5-13. The geology of the Halls Creek mobile zone and surrounding areas comprises possible remnant basement sequences of the Ding Dong Downs Volcanics and Sophie Downs Supersuite overlain by the Halls Creek Group comprising the Saunders Creek, Biscay and Olympio Formations. These are intruded by the Woodward Dolerite, and in the central zone overlain by the Koongie Park Formation. These units were deformed during the Hall Creek Orogeny and intruded by the Sally Downs Supersuite comprising both granitic and gabbroic intrusions.

Renewed tectonic activity resulted in deposition of the Moola Mulla, Red Rock and Kimberley Basins, followed by the Mesoproterozoic Yampi Orogeny. Subsequent deposition of a variety of Neoproterozoic sedimentary sequences, including the Ruby Plains, Duerdin, and Albert Edward Groups and the Antrim Plateau Basalt in the early Cambrian culminated in cessation of sedimentation during the King Leopold Orogeny.

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Figure 5-13: Regional geology of the East Kimberley tenements (Source: GSWA 1:500 000 online maps)

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5.3.2 Mineralisation and Target styles

An overview of the mineralisation of the Kimberley area was provided by Tyler and others (2007). The major minerals in the Halls Creek orogeny are diamonds at Argyle, Copper, nickel and PGE mineralisation in layered sills (Sally Malay and Panton). Base metal VMS mineralisation has been identified at Koongie Park and the Brockman REE deposits are located close to the Legacy Mt Bradley tenement. Lode gold deposits are also present along the fault separating the eastern and central Halls Creek provinces.

The Koongie Park tenement is prospective for both gold (southeastern section) and base metals (northwestern section). The Koongie Park tenement is along strike from Anglo Australian Resources Limited (AAR) Koongie Park base metal deposits. AAR has reported two resources from its tenements. The Onedin deposit has a JORC compliant indicated resource estimate of 5 mt @ 1.1% Cu, 21 g/t Ag, 0.3 g/t Au from the Onedin copper zone; 1.3 Mt @ 5.4% Zn, 25 g/t Ag, 0.25 g/t Au from the Onedin zinc zone and 0.65 Mt @ 8% Zn, 1.1% Cu, 1.4% Pb, 47 g/t Ag, 0.37 g/t Au for the Copper Zinc zone.

The Sandiego deposit has a resource (indicated and inferred) of, for the copper lode 2 Mt @ 2.8% Cu, 1.8% Zn, 0.39 g/t Au and 18 g/t Ag (which includes a maiden high grade copper supergene resource of 0.37 Mt @ 4% Cu, 2.7% Zn, 0.29 g/t Au and 48 g/t Ag) and a zinc lode indicated and inferred resource of 1.57 Mt @ 6.8% Zn, 0.2% Cu, 0.16 g/t Au, 22 g/t Ag.

5.3.3 Resources

There are no identified resources in the Kimberley tenements.

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5.4 South Laverton

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Figure 5-14: South Laverton Project (bold) and Resources locations (blue)

5.4.1 Regional Geology

Legacy’s South Laverton Project is situated in the Eastern Goldfields Granite-Greenstone Terrane (Figure 5-1 and Figure 5-15), which makes up the eastern third of the Archaean Yilgarn Craton (Painter et al. , 2003).

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Figure 5-15: Simplified geological map of the eastern Yilgarn Craton Goscombe et al. , 2009

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Swager et al. (1995) note that the greenstones of the Eastern Goldfields Province host rich deposits of nickel and gold, and comprise metamorphosed mafic volcanic and intrusive rocks and felsic volcanic and sedimentary rocks which outcrop in highly deformed, linear belts intruded by, and separated by, variably deformed and metamorphosed granitoid rocks. They add that distinctive features of the Eastern Goldfields Province are the large volume of komatiite concentrated in the western half of the province and the virtual absence of BIF, which is common outside areas that are rich in komatiite.

Swager et al. (1995) add that the entire Eastern Goldfields Province is characterised by a strong north-northwest structural trend defined by major faults and shear zones, regional folds, and elongate granitoid batholiths (Figure 5-15). This has resulted in an anastomosing system of shear zones with elongate greenstone belts or domains with well-established stratigraphic sequences that are difficult to correlate across the major faults.

5.4.2 Local Geology

The South Laverton project area lies along the Keith Kilkenny Tectonic Zone and the southern part of the Laverton Tectonic Zone (Figure 5-16). These structures host numerous major gold mines, with the LTZ in particular hosting gold resources of some 20 million ounces.

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Figure 5-16: Local setting of Legacy's South Laverton Project Source: GSWA 1:500 000 digital data

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5.4.3 Prospect Geology

Mt Celia Project

The Mt Celia Project lies within the Laverton Tectonic Zone (Figure 5-17).

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Figure 5-17: Mt Celia Project

Source: Legacy

Blue Peter Prospect

Since grant of tenure in December 2009, Legacy has focussed attention on the Blue Peter shear system (Figure 5-16). The shear system extends over a distance of at least 2 km’s, and consists of single, parallel or en echelon quartz filled shears within mafic and lesser ultramafic lithologies, that flank an eastern granitoid.

Significant gold mineralisation (>1 g/t Au) has been encountered in five zones along the shear system, with the combined strike length of the mineralised zones being 790 m, although some zones are open along strike.

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Gold mineralisation appears to be associated mainly with the hanging wall and footwall contacts of a quartz lode – a zone of quartz veins and stringers that shows patchy visible gold and pyrite.

Kangaroo Bore Prospect

The Kangaroo Bore gold deposit is hosted by folded and faulted silicified quartz-pyrophyllite schists associated predominantly with the steeply dipping northwesterly trending Kangaroo Bore shear zone.

Stophanis Well Project

The Stophanis Well Project lies in and adjacent to a major deformation zone that hosts significant gold mineralisation (Figure 5-16). The project area flanks a small internal granitoid stock along strike of the now abandoned Patricia open cut gold mine.

Patricia North Prospect

Three sub parallel mineralised zones have been outlined by the drilling. Most drilling has, to date, been conducted on the far western zone where drill rig access was less constrained by small salt lakes and dunes. Drilling has defined a zone of mineralisation over some 700 m in this zone.

Drilling intersected a mixed sequence of sheared steeply dipping lithologies including mafic schists, sediments and possible porphyritic intrusives. Mineralisation appears associated with or without quartz veining, or with variably oxidised pyrite.

Yerilla Project

The Yerilla project, located 150 km’s northeast of Kalgoorlie, lies over the margins of a small syenite stock enveloped by a shear system, representing a splay from the major Keith Kilkenny Tectonic Zone (Figure 5-16) which hosts the major Leonora gold mining camp. Numerous small gold workings are present in the tenements, with the most significant being the Bull Terrier deposit.

Yilgangi Project

Gold mineralisation has been encountered at the Golden Rainbow prospect, with the mineralisation contained within a Fe-rich schist which is from 1-6 m thick and has a strike length in excess of 1.5 km.

A small number of historical shafts mark the location of the central section of the deposit, with records indicating that approximately 360 t of ore was mined from 1941 to 1960, with a reported average grade of 20.67 g/t Au (Baker and Smith, 2005).

Kingsley Project, Porphyry Project and Yindi Project

These are all early stage exploration projects in the South Laverton area, with no specific targets identified as yet.

5.4.4 Resources

Legacy estimated an Inferred Resource for the Blue Peter Prospect utilizing all RC drilling to date. The Inferred Resource is contained in five zones – Blue Peter, Blue Peter South, Blue Peter West, Blue Peter North and Coronation. The drill spacing within these zones is largely at 40 m x 20 m or better. Typically very good continuity is seen along strike and down dip. An Inferred Resource of 239,232 t at 3.97 g/t gold was estimated for a total of 30,554 oz gold, with Mr Steve Shelton (MAusIMM) signing off as competent person (Legacy ASX Announcement 15 December 2010).

In 2005, Jackson Gold estimated an Inferred Resource of 204,577 t @ 1.83 g/t Au for 12,064 oz, at a cut-off of 1 g/t Au for the Golden Rainbow deposit (Baker and Smith, 2005).

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The resource estimate was carried out by NJ Baker and approved by BS Smith, and was based on data derived from 95 RC holes, 26 of which were drilled by Jackson Gold Ltd.

5.4.5 Prospectivity

RAB drilling at the Patricia North prospect, along strike to the north of the abandoned Patricia opencast gold mine, has encountered gold mineralisation (Figure 5-18). Further drilling of this prospect is warranted.

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Figure 5-18: Patricia North RAB drilling

Source: Legacy

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5.4.6 Target styles

The target for this project is Orogenic gold mineralisation (Figure 5-19).

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Figure 5-19: Orogenic gold mineralisation model for the Eastern Goldfields Province, Yilgarn Craton

Hagemann et al. , 2001

Abbreviations: PP: prehnite-pumpellyite; GS: greenschist; AM: amphibolite; GF: granulite

Orogenic gold deposits are generally interpreted to have formed as a result of focused fluid flow late during active deformation and metamorphism of volcanoplutonic terranes (Hagemann et al. , 2001).

Hagemann et al. (2001) note that world-class gold camps and individual deposits in the Eastern Goldfields Province are characterised by a variety of mineralisation styles, including:

• 1 Brittle-ductile shear zones with quartz vein systems.

• 2 Disseminated lodes associated with shear zones or fault systems.

• 3 Sheeted quartz vein sets or stockworks.

• 4 Quartz ‘reefs’.

They add that many deposits contain more than one style of mineralisation, even in the same stage of mineralisation, and overprinting relationships are common. They conclude that the styles of mineralisation are influenced by (1) host-rock rheology, (2) heterogeneous-stress configuration at the oreshoot regional scale, (3) fluid-pressure variation, and (4) type of fluid flow (pervasive versus focused fluid flow).

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6 Valuation

The projects described above are prospective for a range of commodities and are at various stages of the exploration cycle. The VALMIN Code states that decisions as to which valuation methodology is used are the responsibility of the Expert or Specialist. Where possible, SRK considers a number of methods. The aim of this approach is to compare the results achieved using different methods to select a preferred value within valuation range. This reflects the uncertainty in the data and interaction of the various assumptions inherent in the valuation.

Lawrence (1994) provides an overview of a number of methods traditionally used to value exploration properties. For the valuation of the Legacy tenements, SRK has used the geological risk method to value early stage exploration assets. SRK has used comparable market transactions to link this method to current market conditions. The details of the method used are discussed in Appendix D.

Where Mineral Resources have been stated and could be reviewed and confirmed by SRK, comparable transactions have been used to estimate a value for these based on recent market activity in the particular commodity. Where Exploration Targets have been declared, SRK used this comparable transaction approach and discounted the value by determining the probability this target will be reached and the cost to achieve the stated target, being the geological risk method.

For project with neither Mineral Resources nor Exploration Targets, a comparable transaction approach was also utilised by comparing the assets to similar exploration packages at early exploration stage using an area-based method.

6.1 Valuation of 60% Interest in Mt Bevan Project

6.1.1 Mt Bevan Inferred Resource

Twenty one transactions involving pre-development iron ore resources in Western Australia were examined (hematite, magnetite and CID), and while there was a considerable range of values, the three comparable magnetite transactions were investigated. (Table 6-1) and showed a relationship between transaction value and grade of mineralisation. Mt Bevan is towards the high end of the range of grade of magnetite deposits in the transaction database.

For the Magnetite Range transaction, SRK removed the value of the gold assets and cash components from the company transaction. The median of these was $0.36 and the average was $0.59 per tonne. Because of the grade of the Mt Bevan deposit, these values were used to define the low and high value ranges respectively. The preferred value was the mid-point between these two being $0.48 per tonne.

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Table 6-1: Comparable transactions, magnetite projects, Western Australia

Project Name	Transaction date	Parties	Resources	Transaction Value (100%)	Implied Value contained Fe ($/t)
Lake Giles	Jun-09	MacArthur Minerals – Internickel Australia	449.6 Mt @ 26.3% = 118,244,800 t Fe (Inferred)	$9.26M	$0.26
Magnetite Range	Sep-10	Accent – Xingang Resources	228.2 Mt @ 30.4% Fe Indicated and 102.8 Mt @ 28.9% Fe Inferred for total 117,323, 460 t Fe	$4.50 M	$0.36
Mt Oscar	Aug-10	Breeton - Fox	72.4 Mt @ 34.0% = 24,630,480 t Fe (Inferred)	$17.00M	$1.15
				Median Average	$0.36 $0.59

(Input data © Copyright by Metals Economics Group 2011. All rights reserved)

This value range was applied to the Mt Bevan Resource to estimate a market value for the 198,057,000 t Fe (contained) of the Inferred Resource (at 15% Fe cut-off) stated previously.

The resulting valuation for Legacy’s 60% interest in the Mt Bevan Inferred Resource ranged from a low value of $42.78M to a high value of $70.17M with a preferred value of $56.47M.

6.1.2 Mt Bevan Exploration Target

In addition Legacy has stated an Exploration Target for the Mt Bevan western BIF area as follows: an overall Exploration Target 1.5 – 2.0 Bt at 30-40% Fe. This surrounds the resource area but has yet to be drilled. There is no certainty the future exploration will result in the definition of a Mineral Resource. While the aeromagnetic data suggests the BIF continues in this area there is uncertainty with respect to the continuity of thickness and grade that may be found with drilling.

To account for these risk factors, in using the Resource comparative transaction data to value Exploration Targets, the values obtained are modified by two factors:

• The probability that the tenement returns positive exploration result

• The cost associated with reaching a stage where a resource can be reported

SRK has estimated a 40% probability that the Exploration Target may convert to an Inferred Resource as we consider both the tonnage and grade targets are likely to be at the lower end of the Exploration Target range that Legacy has stated.

Legacy has communicated to SRK that the exploration program to test this area has a budget $1.0M. In order to calculate a value for the Exploration Target the preferred value of $0.48 per tonne of contained iron was used. To define the lower value range, the lower tonnage and grade of the Exploration Target was applied, and to estimate the upper value range, the higher tonnage and grade of the Exploration Target was used. Our Preferred Value was the mid-point of these two endmembers, using the 40% probability of conversion. The Inferred Resource contained Fe tonnes was subtracted from the overall Exploration Target in all cases.

The valuation for Legacy’s 60% interest in the Mt Bevan Exploration Target ranged from a low value of $35.21M to a high value of $58.13M with a preferred value of $46.67M.

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6.1.3 Mt Bevan Exploration Ground

In order to estimate the value of the exploration assets, SRK undertook an analysis of exploration transactions relating to iron ore in Western Australia completed over the past two years (Table 6-2). Most transactions relating to tenements at this stage of exploration are of “earn-in” nature, where a certain percentage of ownership is achieved through the exploration expenditure. In this type of transaction, there is a shared risk, in that if early expenditure does not generate useful information, the “optionee” can opt out of further expenditure, thus limiting risk. Typically, these agreements run over several (~3-6) years and expenditure commitments typically exceed the minimum statutory expenditure.

The determination of a value for the earn-ins involves an assessment of how likely the earn-in is to proceed to completion. In the case of reconnaissance precious or base metal exploration assets where exploration is at a very early stage involving the testing of geological concepts, the likelihood of the joint venture being completed is low, typically 5%.

However, in the case of the iron projects under consideration, the likelihood of the earn-in going to completion is much higher, as the presence of mineralisation has been demonstrated and the risk is related to certain grade and metallurgical factors being realised.

Based on a number of previous studies, SRK estimates that the likelihood of the earn-ins proceeding to completion is 70%. Cash considerations and binding expenditure commitments are added to the earn-in value and are not discounted for probability. The non-binding expenditure is discounted.

Other types of transactions include purchase of the tenements that do not require any discounting.

Table 6-2 summarises the iron earn-in transactions in Western Australia since October 2008.

Table 6-2: Comparable transactions, iron exploration, Western Australia

Project Name, Optionors	Transaction date	Optionees	100% Property value ($)	Area **(km2) **	Value **($/km2) **
Tom Price, AusQuest	Oct-10	Dragon Energy	$0.5M	31	16,129
Bullamine, Reedy Lagoon Corp	Oct-10	Cliffs Natural Resources	$5.7M	3484	1,646
Unaly South, Meteoric Resources	May-10	Black Ridge Mining	$1.5M	15	102,857
Yalgoo, Venus Metals	Feb-10	HD Mining and Investment	$11.2M	234	47,863
Evanston, Global Iron	Jan-10	Cliffs Natural Resources	$0.8M	306	2,582
Victory Bore, Mutual Holdings	Oct-09	Quest Minerals	$0.5M	82	6,610
Jigalong, Hannans Reward	Jun-09	Warwick Resources/Atlas Iron	$5.3 M	2235	2,349
Canegrass, Maxiums Resources	May-09	Flinders Mines	$1.4M	685	2,000
Mountain Creek, Tianda	Feb-10	Western Desert Resources	$1.2M	95	12,782
Roper Bar, ITOCHU	Nov-09	Western Desert Resources	$25.4M	2100	12,092
Miaree, Red River Resources	Feb-09	Iron Mountain Mining	$5.0M	307	16,403

(Input data © Copyright by Metals Economics Group 2010. All rights reserved)

This transactional data was applied to determine a value per square kilometre tenement area, where sufficient data were available. The eleven transactions provided a median value of $12,092 per square kilometre of tenement (excluding the lowest and highest values for Bullamine and Unaly South respectively because they are considered anomalous).

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The low and high range value were calculated based on a 50% variation above and below this median, as this is expected to have a higher variation than resource comparable transactions. Therefore a value of $6,046 per square kilometre of tenement was used for the lower end and $18,137 per square kilometre of tenement was applied to the higher end range.

The area of the Inferred Resource and Exploration Target was subtracted from the total tenement area to leave a calculated remaining area of 187.05 km[2] .

The valuation of Legacy’s 60% interest in the Mt Bevan exploration ground including E29/510 and E29/713 ranged from a low value of $0.68M to a high value of $2.04M with a preferred value of $1.36M.

6.2 Valuation of Hamersley and Robertson Range Projects

Using the same transactional data as presented in the previous section SRK used the comparable transaction data based on area to value the Hamersley and Robertson Range iron exploration assets.

SRK acknowledges that an area based approach is not ideal as it provides limited consideration of the detailed geology, however in the absence of discrete exploration targets and budget programs to assess it provides a viable method for very early stage exploration assets such as these.

6.2.1 Hamersley Fe Exploration Ground

The Fe transactional data was applied to determine a value per square kilometre tenement area. The median value of $12,092 per square kilometre of tenement was used to define our Preferred value and the low and high range value were calculated based on a 50% variation above and below this median ($6,046 and $18,137 per square kilometre of tenement respectively).

The total tenement area for E47/1868 and 1869 was calculated to be 49.49 km[2] .

The valuation of Legacy’s 100% interest in the Hamersley Fe exploration project including E47/1868 and 1869 ranged from a low value of $0.30M to a high value of $0.90M with a preferred value of $0.60M.

6.2.2 Robertson Range Fe Exploration Ground

Again, the Fe transactional data was applied to determine a value per square kilometre tenement area. The median value of $12,092 per square kilometre of tenement was used to define our Preferred value and the low and high range value were calculated based on a 50% variation above and below this median ($6,046 and $18,137 per square kilometre of tenement respectively).

Although SRK understands that the project is made up of E45/3395 and ELA45/3394, SRK assess that only approximately 25% of E45/3395 can be considered prospective for Fe. Our valuation used one quarter of this 89.71 km[2] tenement to estimate the value.

The valuation of Legacy’s 100% interest in the Robertson Range Fe exploration project including E45/3395 and ELA45/3394, ranges from a low value of $0.54M to a high value of $1.63M with a preferred value of $1.08M.

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6.2.3 Robertson Range Mn Exploration Ground

The Legacy manganese interests occur in the East Kimberly tenement E80/3923 and in the Robertson Range project. Both projects are at early green-fields stage of exploration, with no resources and no defined targets. SRK has noted three comparable transactions in Australia at this stage of exploration projects (Table 6-3).

Table 6-3: Comparable transactions, manganese exploration, Western Australia

Project Name, Optionors	Transaction date	Optionees	100% Property value ($)	Area **(km2) **	Value **($/km2) **
Skull Springs, Shaw River	Oct-09	Talisman Mining	$0.64M	220	2,922
Mt Minnie extension, Shaw River	Oct-08	Contact Uranium	$0.14M	370	385
Barramine, Shaw River	Aug-08	Pandell	$0.29M	293	974

The three transactions provided a median value of $974 per square kilometre of tenement. The low and high range value were calculated based on a 50% variation above and below this median, resulting in a lower end value of $487 per square kilometre of tenement and $1,461 per square kilometre of tenement for the higher end range.

In the absence of other data, SRK has used this figure to value both the East Kimberly and Robertson Range manganese projects.

The total tenement area for Robertson Range E46/818 was calculated to be 387.85 km[2] .

The valuation of Legacy’s 100% interest in the Robertson Range Mn exploration project, E46/818, ranges from a low value of $0.19M to a high value of $0.57M with a preferred value of $0.38M.

6.3 Valuation of East Kimberley Base Metal, Au and Mn Projects

6.3.1 Valuation of copper – lead – zinc potential

Over the last two years, there have been nine (9) copper or other base metal transactions in Australia, including one silver transaction. Five of these are transactions where resources have been reported. One of these was in feasibility study with a Reserve yet to be declared (Lady Loretta), and three of the transactions were at feasibility study with Reserves announced. The Musgrave Ni – PGE project was removed as not being comparable in terms of its commodities and geology. The transactions are shown in Appendix B, and summarised in Table 6-3.

Using the resource transactions only, the average of the four transactions suggests copper resources are traded at about US$0.054/lb. Using the median of the three copper-zinc transactions (i.e. removing the Bowdens silver transaction from the analysis) suggests a slightly lower median value of US$0.03/lb.

The exploration target for the Koongie Park style of mineralisation, based on copper as the primary commodity, is about 7 Mt for Onedin and 3.6 Mt for Sandiego. These are fairly typical of tonnages in VMS models, and can be used to determine a target size for potential deposits in the adjacent and along strike ground held by Legacy. The Koongie Park grades are equivalent to 3.57 Mt at 3.44% Cu equivalent and 6.95 Mt at 1.73% Cu equivalent at LME prices on 24 August 2011. This equates to a contained metal in copper equivalent terms of 123,000 t for Sandiego and 120,000 t for Onedin. Therefore a reasonable target size for the Legacy base metals deposits is about 120,000 t of Copper equivalent metal. Using the transaction value for copper of US$0.03 per pound, this is equivalent to a value of US$8,000,000 at the resource stage. As this is not a resource, SRK has applied an exploration risk model to assess the current value at the early exploration stage.

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Table 6-4: Transactional data on copper projects in Australia, July 2009 to August 2011

										Rsv & Rsc Price Paid for Cu Equ	Cu equ used
					Resources Certainty	Rsv & Rsc Cont Primary		Rsv & Rsc Cont Primary Equ
	Date	Seller 1	Buyer 1	Commodities			Unit		Unit
Bowdens	1/08/2011	Silver Standard Resources Inc	Kingsgate Consolidated Ltd	Ag, Pb, Zn	MIIF	97,054,000	oz	140,607,818	oz	$0.102	5.67
Carrapateena	8/03/2011	Teck Resources Ltd	OZ Minerals Ltd	Cu, Au, Ur	DRIF	2,700,000	Mt	4,211,741	Mt	$0.027	1.00
Einasleigh	5/07/2011	Copper Strike Ltd	Kagara Ltd	Cu, Ag, Au, Pb, Zn	MIIF	167,000	Mt	304,765	Mt	$0.030	1.00
Lady Loretta	4/02/2011	Cape Lambert Resources Ltd	Xstrata Plc	Zn, Ag, Pb	MIIF	2,322,000	Mt	3,450,590	Mt	$0.056	0.28
Cloncurry Copper	20/04/2011	Exco Resources Ltd	Xstrata Plc	Cu, Au, Ur	MIIF	401,000	Mt	462,281	Mt	$0.183	1.00
Lady Annie	12/03/2010	Cape Lambert Resources Ltd	China Sci-Tech Holdings Ltd	Cu	MIIF	336,000	Mt	336,000	Mt	$0.167	1.00
Panorama	21/01/2011	CBH Resources Ltd (Toho Zinc)	Venturex Resources Ltd	Zn, Ag, Au, Cu, Pb	MIIF	606,000	Mt	1,523,977	Mt	$0.027	0.28
Rasp	21/01/2010	CBH Resources Ltd	Toho Ltd	Zn, Ag, Pb	IDIF	1,091,000	Mt	2,091,692	Mt	$0.080	0.28

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Using an overall probability of success at generating a target for resource definition of 15%, (due to the fact that the mineralising system in adjacent rocks and in the tenement is already identified) and a future probability that such a target will yield a resource of 60%, then the valuation, allowing for reasonable costs in reaching the resource target value, is A$320,000 (Table 6-4). This results in the probability of success at Koongie Park of about 9%. SRK has used @Risk software to vary these probabilities and the target resource value to give a range of values, as shown in Figure 6-1.

Table 6-5: Valuation by Exploration Risk method – Koongie Park Base metals copper prospect

prospect
	Stage 1	Stage 2
	Identify economic intersections	Resource definition to inferred	Target resource value, VMS
Probability of success	0.15	0.6
Cost	$250,000	$1,000,000
Project value at Stage	$320,000	$3,800,000	$8,000,000

==> picture [304 x 214] intentionally omitted <==

Figure 6-1: @RISK analysis of the Koongie Park exploration risk valuation, to provide ranges at the 90% confidence level

At the 90% confidence that factors will lie within 15% of the values shown in Table 6-4, the range of values is to a low of $250,000 and a high of about $400,000.

6.3.2 Valuation of Gold potential

Valuation of the gold potential of the East Kimberley Projects was carried out using the same data and techniques as for the South Laverton exploration projects (see Section 6.4.4). The total tenement area for E80/3923, 4220, 4222 was calculated to be 105.98 km[2] . Half of the tenement E80/4221 was also considered to have gold potential.

The valuation of Legacy’s 100% interest in the East Kimberley Au exploration ground, including E80/3923, E80/4220, E80/4222 and half of E80/4221 ranges from a low value of $0.05M to a high value of $0.25M with a preferred value of $0.10M.

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6.3.3 Valuation of East Kimberley Manganese

Valuation of the manganese potential of the East Kimberley Projects was carried out using the same data and techniques as for the Robertson Range manganese exploration projects (see section 6.2.3). The tenement area for E80/3923 is 65.02 km[2] .

The valuation of Legacy’s 100% interest in the East Kimberley Mn exploration ground, E80/3923, ranges from a low value of $0.03M to a high value of $0.10M with a preferred value of $0.06M.

6.4 Valuation of South Laverton Au Projects

The South Laverton projects fall into two groups, those with resources (either historical or JORC) or known prospects, and those with no prospects, essentially green-fields exploration projects. The resources have been values comparable transactions, and the prospects have used the same market-based data as the transactions, discounted by risk and by the costs required to bring the prospects to the same stage as the resources. The status of the resources is discussed in the geological section above.

6.4.1 Blue Peter and Golden Rainbow Resource

Blue Peter and Golden Rainbow are valued as Inferred Resources as both these resources are quoted in the public domain and have been signed off by Competent Persons.

6.4.2 Blue Peter, Kangaroo Bore, Bull Terrier, Patricia North Exploration Targets

SRK has assumed that the remaining zones of defined mineralisation at Kangaroo Bore and Bull Terrier are valued on the basis that they are not JORC resources, but are exploration targets with high probability of conversion to resources.

SRK has assumed that the target size of the Patricia North prospect is 50,000 oz, and that there is a lower probability of conversion to a resource.

6.4.3 Gold Resource transactions

The gold resource transactions used as a basis for the geological risk method are shown in Appendix C.

Seven gold transactions involving pre-development resources in Australia were examined and while there was a considerable range of values, there was some uniformity when examined on a $/troy oz basis (Table 6-5). The Lorena and Paulsens transactions were not considered as comparable to the resources or targets at South Laverton, as the South Laverton resources tend to be of significantly lower grade than these deposits. For the remaining five deposit transactions a median value of $38.70 / oz of contained gold was calculated. The low and high range value were calculated based on a 35% variation above and below this median i.e. $25.16 / oz for the lower end range and $52.25 / oz for the higher end range.

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Table 6-6: Summary of recent gold resource transactions

Name	Tonnes	Grade (g/t)	Contained	Cost	$/oz
Bullant	894,000	5.16	148,000	$10,300,000	$69.59
Gidgee	1,844,000	5.268	312,000	$15,400,000	$49.36
Central Tanami Gold	5,860,000	2.7	509,000	$19,700,000	$38.70
Lorena	272,800	8.895	78,000	$20,400,000	$261.54
Meekatharra	44,680,000	1.7	2,442,000	$27,700,000	$11.34
Mt Magnet	30,400,000	3.21	3,137,000	$30,700,000	$9.79
Paulsens	314,000	12.754	129,000	$34,100,000	$264.34

The valuations used the transitional probabilities that projects would proceed to the next stage of exploration, based on the detailed study by Lord et al, which was carried out on gold projects in the Laverton area, and so is directly applicable to the Legacy tenement areas. The cost of drilling the relatively small resources was estimated to be $300,000 by SRK. Legacy has not prepared a detailed budget to drill the relevant prospects at his stage.

Values were then calculated by discounting from the target market-determined resources values by the transitional probabilities and the costs using the formula:

Market value = Probability x Target Market Value - Cost

6.4.4 South Laverton Au Exploration Ground

The gold exploration project areas in the South Laverton project comprises those tenement groups where no resources or specific exploration target have been identified. These are the Yindi, Kingsley and Porphyry tenement grouping (see Figure 5-14). These tenements have been valued using joint venture terms for similar projects over the past 2 years. The transactions used to determine parameters for the valuation are shown in Appendix B. Seven transactions have been identified that are on gold projects similar to the Legacy projects. Because no resources are present, these projects have been assigned a value on a $-per-square-kilometre basis. A summary of these transactions is shown in Table 6-6.

Table 6-7: Summary of gold exploration JV's and the values assigned per km[2]

Name	Date	Location	%	Cost ($)	100% Value ($)	Size **(km2) **	$/km2
Tennant Creek Mineral Field	Apr-09	Northern Territory	51%	900,000	1,764,706	2700	$654
Wilga	Dec-09	WA	24%	20,000	83,333	9.1	$9,158
Gnaweeda	Jun-09	WA	70%	200,000	285,714	173.6	$1,646
Mt Windsor Gold	Apr-10	Qld	60%	1,433,000537,500	2,388,333	4000	$597641
Malcolm Creek	Apr-09	Qld	70%	337,500	482,143	Uncertain
Griffins Find	Jul-09	WA	100%	112,500	112,500	Unknown
Muddawerrie and Livingstone	Jun-11	WA	80%	11363,000	141,250	260	$543303

Parameters used during the analysis of the joint venture implied values were:

1. The probability that an exploration joint venture goes to completion is 5%.

2. Year 1 expenditure on the joint ventures will be met.

3. Values assigned on a real basis.

4. Currency exchange rates at the transaction date.

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Excluding the Wilga transaction, as the value of this represented a strategic acquisition, the median value of the gold exploration projects is $647/km[2] . There is a very wide range, from $303 $/km[2] to $1,646/km[2] . These extremes have been used to determine the valuation range of the exploration properties for gold.

The total tenement area for the Kingsley, Yindi and Porphyry Projects was calculated to be 334.24 km[2] .

The valuation of Legacy’s 100% interest in the South Laverton Au exploration ground, including the Kingsley, Yindi and Porphyry Projects ranges from a low value of $0.10M to a high value of $0.55M with a preferred value of $0.22M.

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7 Conclusions and Recommendations

SRK has valued the Legacy mineral exploration tenements using the following market-based methodology.

Where Mineral Resources have been stated and could be reviewed by SRK, comparable transactions were used to estimate a value for these assets, based on recent market activity in the particular commodity. Where Exploration Targets have been declared, SRK used the geological risk method, which discounts the comparable transaction approach value by determining the probability that this target will be reached, and the cost to achieve the stated target.

For projects with neither Mineral Resources nor Exploration Targets, a comparable transaction approach was also utilised by comparing the assets to similar exploration packages at early exploration stage using an area-based method.

The valuation range and SRK’s preferred value for each of the projects is summarised in Table 7-1. SRK’s preferred value for all projects is $112.6 Million, with the valuation range being $83.1 million to $142.6 million.

Table 7-1: Valuation Summary of Legacy Iron Ore Limited's exploration tenements as at 30 August 2011

30 August 2011
Project	Low (A$M)	SRK Preferred (A$M)	High (A$M)
Mt Bevan Fe Inferred Resource	42.78	56.47	70.17
Mt Bevan W BIF Exploration Target	35.21	46.67	58.13
Remainder of Mt Bevan tenements	0.68	1.36	2.04
HamersleyFe Exploration Ground	0.30	0.60	0.90
Robertson Range Fe Exploration Ground	0.54	1.08	1.63
Robertson Range Mn Exploration Ground	0.19	0.38	0.57
South Laverton Au Resources (Blue Peter, Golden Rainbow)	1.07	1.65	2.23
South Laverton Au - Non-JORC resources(Kangaroo Bore, Bull Terrier)	1.39	2.32	3.25
South Laverton Au Stophanis Well Patricia N Prospect	0.54	1.35	2.39
South Laverton Kingsley, Porphyry, Yindi Projects	0.10	0.22	0.55
East KimberleyAu Exploration Ground	0.05	0.10	0.25
East KimberleyMn Exploration Ground	0.03	0.06	0.10
East Kimberley Base Metal Exploration Ground	0.25	0.32	0.40
Total All Projects	83.1	112.6	142.6

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Prepared by

Peter Williams Corporate Consultant

Reviewed by

Project Reviewer Deborah Lord

All data used as source material plus the text, tables, figures, and attachments of this document have been reviewed and prepared in accordance with generally accepted professional engineering and environmental practices.

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8 References

Baker, NJ and Smith, BS, 2005. P31/1598 - Golden Rainbow resource estimate, Internal report prepared for Jackson Gold Ltd, 32pp.

Cassidy, KF, Champion, DC, Krapež, B, Barley, ME, Brown, SJA, Blewett, RS, Groenewald, PB and Tyler, IM, 2006. A revised geological framework for the Yilgarn Craton, Geological Survey of Western Australia, Record 2006/8, 8pp.

• Chin, RJ and Smith, RA, 1983. Geology of the Jackson 1:250 000 sheet, Geological Survey of Western Australia, 1:250 000 Geological Series Explanatory Notes, 30pp.

• Goscombe, B, Blewett, RS, Czarnota, K, Groenewald, PB, Maas, R, 2009. Metamorphic evolution and integrated terrane analysis of the eastern Yilgarn Craton: rationale, methods, outcomes and interpretation, Geoscience Australia, Record 2009/23, 270pp.

• Hagemann, SG, Neumayr, P and Witt, MK, 2001. World-class gold camps and deposits in the eastern Yilgarn Craton, Western Australia, with special emphasis on the Eastern Goldfields Province, Geological Survey of Western Australia, Record 2001/17, 216pp.

• Hickman, AH, Smithies, RH and Tyler IM, 2010. Evolution of active plate margins: West Pilbara Superterrane, De Grey Superbasin, and the Fortescue and Hamersley Basins – a field guide, Geological Survey of Western Australia, Record 2010/3, 74pp.

• Hickman, AH. 2011, Pilbara Supergroup of the East Oilbara Terrane, Pilbara Craton: updated lithostratigraphy and comments on the influence of vertical tectonics, Geological Survey of Western Australia, Annual Review 2009-10, p.50-59.

• Lawrance M J, 1994. An overview of Valuation Methods for Exploration Properties in Mineral Valuation Methodologies 1994. Australian Institute of Mining and Metallurgy, Publication Series No5/95, pp 205-224. Melbourne, Australia.

• Lord, D, Etheridge, M, Wilson, M, Hall, G and Uttley, P, 2001. Measuring Exploration Success: An alternate to the discovery-cost-per-ounce method of quantifying exploration effectiveness. Society of Economic Geologists Newsletter Number 45, April 2001.

• Painter, MGM, Groenewald, PB, and McCabe, M, 2003. East Yilgarn Geoscience Database, 1:100 000 geology of the Leonora-Laverton region, Eastern Goldfields Granite-Greenstone Terrane – an explanatory note, Geological Survey of Western Australia, Report 84, 45pp.

• Ramanaidou, ER and Morris, RC, 2010. A synopsis of the channel iron deposits of the Hamersley Province, Westrn Australia, Applied Earth Science (Trans. Inst. Min. Metall. B), 119(1), p56-59.

• Riganti, A, Wyche, S and Chen, SF, 2006. A new lithostructural framework for the central Yilgarn Craton, Geological Survey of Western Australia, Annual Review 2005-06, 5pp.

• Ruddock, I, 2002. Mineralisation and geology of the Pilbara Craton, Geological Survey of Western Australia, 1:500 000 scale map.

• Swager, CP, Griffin, TJ, Witt, WK, Wyche, S, Ahmat, AL, Hunter, WM and McGoldrick, PJ, 1995. Geology of the Archaean Kalgoorlie Terrane – an explanatory note, Geological Survey of Western Australia, Report 48, 26pp.

• Tyler, I.M. Bagas, L. Sheppard, S and Pirajno, F. 2007. Kimberley-Tamnami-Arunta: geology and mineral systems. GSWA 2007 Abstracts.

• Wyche, S (compiler), 2008. Kalgoorlie, Youanmi, and Narryer Terranes of the Yilgarn Craton – a field guide, Geological Survey of Western Australia, Record 2008/12, 67pp.

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Appendices

Appendices

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Appendix A

Appendix A: Base Metal Transactions

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Appendix A-1

Target	Date	Synopsis	Metals	Transaction Type	Percent Acquired	Price ($ mil)	Reserves	Resources
Bowdens	1/08/2011	Continuing with its strategy of diversification, Kingsgate Consolidated is acquiring the Bowdens silver project in New South Wales from Silver Standard for $81 million in shares and staged cash payments.	Ag, Pb, Zn	Purchase	100.00%	$81.0		61 Mt @ 49.487 g/t Ag, 0.275% Pb, 0.389% Zn
Carrapateena	8/03/2011	OZ Minerals acquired a 100% interest in the early-stage Carrapateena copper-gold-uranium project in South Australia from its owners, including Rudy Gomez (RMG Services), (58%), Teck Resources (34%), and various minorities (8%) for a total consideration of $250 million in cash. OZ expects Carrapateena to produce copper at a similar rate as its nearby Prominent Hill mine, over a long mine life.	Cu, Au, U	Purchase	100.00%	$250.0		225 Mt @ 1.2% Cu, 0.5 g/t Au, 0.025% U
Cloncurry Copper	20/04/2011	Xstrata acquired Exco Resources' Cloncurry copper-gold project for $186 million in cash to provide additional feed for its nearby Ernest Henry concentrator. Exco used the cash for drilling at its Hazel Creek project and planned to distribute any surplus funds to shareholders.	Cu, Au, U	Purchase	100.00%	$186.0	28.1 Mt @ 0.828% Cu, 0.234 g/Mt Au	52.07 Mt @ 0.771% Cu, 0.23 g/t Au
Einasleigh	5/07/2011	Kagara proposes to offer Copper Strike $20.2 million in cash and returned Copper Strike shares in exchange for a 100% interest in the Einasleigh copper-polymetallic project in North Queensland.	Cu, Ag, Au, Pb, Zn	Purchase	100.00%	$20.2		21.565 Mt @ 0.776% Cu, 16.088 g/t Ag, 0.095 g/t Au
Lady Annie	12/03/2010	Cape Lambert sold its Lady Annie copper mine in Queensland to China Sci-Tech for $123.5 million in staged cash payments. China Sci-Tech will restart production at the mine as soon as possible.	Cu	Purchase	100.00%	$123.5	11.23 Mt @ 1.097% Cu	39.8 Mt @ 0.845% Cu
Lady Loretta	4/02/2011	Cape Lambert divested its 25% interest in the Lady Loretta zinc- lead-silver project in Queensland to JV partner Xstrata for $30 million in cash, giving Xstrata a 100% interest in the project.	Zn, Ag, Pb	Purchase	25.00%	$30.0		13.7 Mt @ 16.95% Zn, 5.787% Pb, 95.657 g/t Ag
Panorama	21/01/2011	Venturex acquired the Panorama copper-zinc project in Western Australia from CBH Resources for $25.9 million in cash and a zinc offtake agreement with CBH's 95.6% owner, Japanese smelter Toho Zinc. Venturex raised A$36.8 million for the acquisition and to accelerate feasibility studies at its projects in the Pilbara.	Zn, Ag, Au, Cu, Pb	Purchase	100.00%	$25.9	3.9 Mt @ 6.2% Zn, 2.2% Cu	19.3 Mt @ 3.142% Zn, 1.159% Cu, 16.109 g/t Ag
Rasp	21/01/2010	Rather than acquire a 50% interest in the Rasp mine, CBH's white knight Toho Resources is going to acquire all of the remaining interest in CBH Resources for about $231 million.	Zn, Ag, Pb	Purchase	50.00%	$52.0	3.17 Mt @ 6% Zn, 4.6% Pb	16.503 Mt @ 6.608% Zn, 5.115% Pb, 89.096 g/t Ag

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Appendix B

Appendix B: Gold Exploration Transactions

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Appendix B-1

Name	Date	Location	Synopsis	%	Cost	100% Value	Size **(km2) **	$/km2
Tennant Creek Mineral Field	Apr-09	Northern Territory	In April 2009, Emmerson Resources entered an agreement with Ivanhoe Australia whereby Ivanhoe could earn a 70% interest in Emmerson's Tennant Creek Project (relates to majority of 2700 km2ground holding). Under terms of the agreement, Ivanhoe would sole fund A$18M on exploration over three years to earn a 51% interest in the majority of Emmerson’s tenement package at Tennant Creek. Ivanhoe must spend a minimum of A$7.5M during the first three year, but would not earn any interest until spending the whole A$18M. Thereafter, Ivanhoe must sole fund an additional A$10M on exploration within five years to maintain its 51% interest in the tenements.	51	900,000	1,764,706	2700	$654
Wilga	Dec-09	WA	In December 2009, Chalice Gold Mines sold its 25% interest in the Wilga project to AngloGold Ashanti for A$20,000. Chalice retained a 1.5% NSR capped at A$1.5M. Tenements EL39/1003 and PL39/4890 (Chalice Gold PR 12/29/09).	24	20,000	83,333	9.1	$9,158
Gnaweeda	Jun-09	WA	In June 2009, Kent Exploration entered an agreement with Teck Resources to earn Teck's 70% interest in Gnaweeda. Kent paid Teck a non-refundable A$50,000 deposit for a three-month option period. To earn its interest, Kent must spend A$3M on exploration over four years. Once Kent had earned its interest, Teck could claw back 75% of Kent's interest by spending 2.5 times Kent's expenses. (Kent PR 6/1/09).	70	200,000	285,714	173.6	$1,646
Mt Windsor Gold	Apr-10	Qld	In April 2010, Liontown agreed to terms for a farm-in joint venture agreement with Ramelius Resources with regards to the gold rights portion of Mt Windsor. Ramelius can earn up to a 60% interest in the project by spending US$6.4 million (A$7M) in stages over four years, with a minimum commitment of US$1.14M (A$1.25M) in the first year. (Liontown PR 4/16/10) Over 4000 km2of ground.	60	1,433,000537,500	2,388,333	4000	$597641
Malcolm Creek	Apr-09	Qld	April 2009, Queensland Gold and Minerals (QGM) entered a farm-in and joint venture agreement with Newmont Mining for QGM's Malcolm Creek project. Newmont would conduct an initial A$250,000 exploration program within one year of signing the agreement, which would form part of the earn-in expenses of up to A$2M to earn a 70% interest in the project over four years (QGM PR 4/16/09).	70	337,500	482,143	Uncertain
Griffins Find	Jul-09	WA	Magma acquired option for 100% interest in Griffins Find from private individual. Initial payment of $50,000 and option may be exercised within 5 years for $1.25M in cash or equivalent value in Magma shares. Includes sliding gold royalty	100	112,500	112,500	Unknown
Muddawerrie and Livingstone	Jun-11	WA	Talisman acquired 80% interest in two projects for a combined consideration of 100,000 Talisman shares ($0.63 as at 27/6/11) from Murchison. Muddawerrie covers EL of 52 km2and Livingstone is 3 Els with area of 208 km2.	80	11363,000	141,250	260	$543303

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Appendix C

Appendix C: Gold Resource Transaction

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Appendix C-1

Date	Location	Synopsis	%	Tonnes	Grade (g/t)	Contained	Cost	$/oz	Comments / Mineralisation
9/12/2010	Kalgoorlie, Western Australia	US Nickel is offering $10.3M in shares to acquire the past-producing Bullant gold project in Western Australia from Argent Minerals. As part of the deal, US Nickel terminated its previous offer to acquire all of Argent.	100	894,000	5.16	148,000	$10,300,000	$69.59
31/01/2011	Montague Ridge, Western Australia	Panoramic Resources acquired most of the Gidgee gold project in Western Australia from Apex Minerals for $15.4M. Apex retained the Wilsons tenements at Gidgee.	100	1,844,000	5.268	312,000	$15,400,000	$49.36	Vein - mineralisation occurs in flat and steeply dipping quartz veins.
28/01/2010	Tanami, Northern Territory	Newmont sold the past-producing Groundrush tenements at its Tanami Operations in Australia to Tanami Gold for $19.7M in cash.	100	5,860,000	2.7	509,000	$19,700,000	$38.70
29/09/2010	Cloncurry, Queensland	Australian junior Malachite Resources acquired the Lorena gold project in Queensland from privately-owned Volga Elderberry for a consideration of $20.4M in shares.	100	272,800		78,000	$20,400,000	$261.54	Mineralisation in steeply- dipping shear zones, up to 12 m wide, of sedimentary units, breccias and fault gouge with sulfide-rich pods. Strong relationship between gold and arsenopyrite.
					8.895
11/01/2011	Meekatharra , Western Australia	Reed Resources acquired the Meekatharra gold mine complex in Western Australia from bankrupt Mercator Gold (Electrum Resources 100%) for $26.4M in cash and $1.3M in Reed shares, for a total consideration of $27.7 M.	100	44,680,000	1.7	2,442,000	$27,700,000	$11.34
8/07/2010	Mt Magnet, Western Australia	Ramelius Resources is acquiring the Mt Magnet gold project from Harmony Gold for $30.7M in cash.	100	30,400,000	3.21	3,137,000	$30,700,000	$9.79	Iron formation hosted and structurally controlled mineralisation, dependent largely by the mineralogy of iron formation bands.
5/05/2010	Pannawonic a, Western Australia	Northern Star acquired the Paulsens gold mine in Western Australia from Intrepid with an increased offer of $34.1M. Intrepid rejected a previous $24 million offer.	100	314,000		129,000	$34,100,000	$264.34	Mesothermal, vein, sulfides. Mineralisation associated with massive pyrite and adjacent to a large quartz dilation zone.
					12.754

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Appendix D

Appendix D: Geological Risk Methodology

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Appendix D-1

Exploration Valuation Methodology

Introduction to the Valuation Methodology

The valuation method developed by SRK and applied to the several projects is primarily designed to inform the reader of exploration value and of progress to discovery, based on the following criteria:

• Exploration Stage, i.e. position of the exploration project on the pathway to discovery

• Probability of the exploration project proceeding to the next Exploration Stage

• Cost of proceeding to the next Exploration Stage

• Minimum / threshold value of the Company corporate target

Each company has its own financial criteria for projects that, in its view, will provide a satisfactory return on shareholders’ funds. This threshold value is the expected Net Present Value (NPV) of the target resource that has to be delivered to the company, meeting its financial criteria, by the business of exploration. The target resource, in order to increase shareholders’ value, must satisfy those criteria of minimum profitability, to provide the acceptable return, and a minimum size threshold to provide an acceptable mine-life. If this is not the case, then shareholders’ value will be destroyed and the business of exploration becomes uneconomic.

In SRK’s approach, the Expected Value of an economic discovery is the probability of the exploration project advancing to the next Exploration Stage times the Target Value, less the cost of discovery, as shown in the following formula:

EV = (TV P) – C

(where EV = Expected Value; TV = Target Value; P = Probability of advancing exploration project; and C = Cost of advancing exploration project).

This valuation method generates an Expected Value for each project at each of the main exploration stages, or decision points, by working back from a project’s target value. This requires an assessment of the risk profile and the cost of each of the principal exploration stages. This process can be considered as a simplified ‘roll-back’ evaluation similar to one arm of a ‘successful’ decision tree analysis, as shown in a tabulated form in Table D1. Because the decision to proceed to the next stage is a forward-looking one, present dollar values are used for costs, based either on actual or budgeted costs that the exploring company can provide at the time. Where such cost information is lacking, the valuer must make an assumption based on experience and historical knowledge, and this is the case for this valuation.

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Appendix D-2

Definition and Discussion of Exploration Stages

Exploration Stages defined for the projects are defined in Table D1 as follows.

Table D1: Definition of Exploration Stages

	•	To build an expert team for the belt/region
	G •	To have knowledge, knowledge management and data /
Stage A. Ground Acquisition,	o	information availability for the belt
project generation	a •	To acquire ground in well-endowed belts, considering
	l	availability, political/environmental risks
Probabilities/risks associated with progressing from Stage A to Stage B, i.e. P(A-B)
Probability that the process of Ground Acquisition (A) will result in the acquisition of high quality, well-endowed and available
ground that is worthy of further work
	•	To define drillable targets
	G •	To build area knowledge, quality data management
	o	systems, suitable geological models
Stage B. Prospect Definition	a •	To use efficient exploration methods, geologic skills of
(Mapping & Geochemistry)	l	exploration team
	s •	To define prospect risks and target ranking tools, exploration audit process
	: •	To test presence of mineralising system
Probabilities/risks associated with progressing from Stage B to Stage C, ie. P(B-C)
Probability that this process will define drillable targets (features that meet criteria of the geological model and knowledge of
the area)
	•	To test geological models, accuracy of mapping and
	G	sampling
Stage C. Drill Testing	o •	To test geological information gathered during prospect
(Systematic RC, DD)	a	definition
	l •	To test presence of mineralising system
Probabilities/risks associated with progressing from Stage C to Stage D, i.e. P(C-D)
Probability that the drill testing phase will	result in one or more "economic drill intersections" that would be further drill tested
The decision to continue would be supported by other geological information that would give some initial confidence in the
continuity of mineralisation
	•	To have confidence in size and grade potential,
	G	continuity of grade and geological setting
Stage D. Resource Delineation	o •	To understand controls on grade distribution (low cost
	a	curve position)
Probabilities/risks associated with progressing from Stage D to Stage E, i.e. P(D-E)
Probability that a "drill-out" will result in the definition of a preliminary resource that is sufficiently robust at present prices to
warrant proceeding to feasibility
	•	To determine metallurgy, metal prices, mineability, cost,
Stage E. Feasibility	G o •	prices, mineral balance sheet To result in decision to mine, asset with defined NPV
	~~a~~
Probabilities/risks associated with progressing from Stage E to target NPV
Probability that the feasibility study will deliver an ore reserve

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Appendix D-3

Determining Early Stage Exploration Probabilities

The early Exploration Stages A to B to C lead up to the discovery of a ‘mineral occurrence’ by a potentially ‘economic’ drill intersection. The probability of a project proceeding from one stage to the next is firmly based on the geological model, its critical success factors and the application of Bayesian probabilistic analysis. This method requires:

• building the underlying geological process model;

• identifying the critical success factors; and

• assignment of probability to each factor.

The probability of the occurrence of a mineral deposit can be derived from the product of the relative probabilities of each of the critical success factors, assuming that probabilities of occurrence of each of the critical factors are independent:

P = P1 x P2 x P3 x P4

(Where P = probability of advancing exploration project and P1-4 = probability of occurrence of each of the critical success factors of the geological process model).

Usually, no more than three or four critical success factors will apply, and the processes of any geological model for the formation of Archean gold deposits generally include the following essentials:

• source of mineralizing fluids ( Source , P1 );

• active geological structures to provide a pathway ( Pathway , P2 );

• evidence for movement of those fluids ( Fluid , P3 ); and

• a structural or reactive trap to cause deposition of metals from mineralizing fluids ( Trap , P4 ).

For each relative probability of the critical success factors described above, a value between 1.0 and 0.0 is assigned, where a value of 1.0 indicates that the factor is definitely present, and 0.0 indicates that the factor is definitely not present. A value of 0.5 is assigned where information about the factor is not known or data are not available. Therefore a relative probability > 0.5 indicates that there is a degree of evidence that the factor is present, whereas a relative probability < 0.5 indicates that there is a degree of evidence that the factor is not present.

Each exploration project is carefully reviewed in relation to the geological process model for the target or region. Relative probabilities are assigned to each factor for each project, and multiplied to obtain an overall probability, P, that all of the essential components of the mineralizing system are present in the target or region. This probability is then assigned to the relevant Exploration Stage in the valuation spreadsheet, representing the probability that the exploration project or prospect could advance to the next phase of exploration.

The benefits of the Bayesian probabilistic approach include:

• Semi quantitative, geologically based, simple to apply and mathematically sound

• Consistent disciplined approach to evaluating targets within and between regions

• Transparent, explicit, challengeable and changeable with new results

• Assesses exploration risk profile and cost in a consistent and quantitative method

• Value of company minimum target is embedded

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Appendix D-4

Determining Late Stage Exploration Probabilities

To establish the risk profile for the exploration process requires estimation of regional or belt-wide probabilities for the style of target sought by the company. As most exploration projects will tend to fall into the early Stages B & C, for valuation purposes it is also necessary to assign probabilities to the later Stages D & E in order to complete the valuation spreadsheet. A range of probabilities can be estimated at each Exploration Stage based on the high knowledge and experience in each belt, e.g. the number of prospects generated, the number that advanced to drilling and to resource definition and finally to feasibility studies. Accumulation of knowledge in the early Exploration Stages and strong focus in ‘well-endowed’ belts is a major value-creating step in the exploration business.

For example, where a company has a long history of exploration on large tenement blocks in belts, a range of probabilities can be readily established. Where this knowledge is less known, these beltwide probabilities have to be assumed by the valuer based on their knowledge of the belt, available historical data and collective experience. Assigning belt wide probabilities may seem difficult at first, but in reality it is what SGW does every time it makes a decision to acquire a property, or to spend company funds on a prospect to progress it to the next Stage.

This valuation utilises a robust set of probabilities and costs for later stage exploration properties generated from a detailed historic exploration review of a mature exploration district, Laverton (see Lord et al., 2001). These data were compiled in 2000 by Deb Lord and Peter Williams (SRK) and were used to determine project probabilities and exploration expenditure for the district. A list of exploration projects in the Laverton District was generated and the principal sources of information used for the review were Department of Minerals and Energy Annual Technical Reports for exploration projects and Form 5 expenditure reports for individual tenements.

In all cases the probability of advancing to the next exploration stage is related to how that stage is defined. For example if a large exploration target is the company’s aim, then this will be harder to achieve and therefore a lower probability than if a smaller target has been stated. Therefore the assignment of probabilities in such cases relies on an assessment of the geological understanding at that point in time

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PROXY FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

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LEGACY IRON ORE LIMITED

REGISTERED OFFICE:

ABN: 31 125 010 353

SUITE 32 23 PLAIN STREET EAST PERTH WA 6004

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SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

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Code: LCY Holder Number:

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

OR

The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting). or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the Extraordinary General Meeting of the Company to be held at 9.30 am (WST) on Friday 16 December 2011 at Exchange Plaza Conference Centre, Level 8, Exchange Plaza, 2 The Esplanade Perth WA 6000 and at any adjournment of that meeting.

SECTION B: Voting Directions to your Proxy

Please mark "X" in the box to indicate your voting directions to your Proxy.

Resolution

1. Approval for the Issue of Placement Shares and Placement Options to NMDC

2. Election of Mr Rana Som

3. Election of Mr Naveen Kumar Nandar

4. Approval for the Issue of Shares and Adviser Options to Purkis Limited

5. Approval for the Issue of Adviser Options to Precipio Capital Pty Ltd and Nominees

6. 6.Approval for the Issue of Shares and Adviser Options to Burnbank Ltd

7. Approval for the Issue of Director Options to Sharon Heng

8. Approval for the Issue of Director Options to John Hebenton

For Against Abstain*

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If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

• If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SECTION C: Please Sign Below

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Security Holder Sole Director and Sole Company Secretary

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Security Holder 2 Security Holder 3 Director Director / Company Secretary

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7862095377

Reference Number:

LCY

2

1

My/Our contact details in case of enquiries are:

NAME

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TELEPHONE NUMBER ( )

NOTES

1. Name and Address

This is the name and address on the Share Register of Legacy Iron Ore Limited. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. Appointment of a Proxy

If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of Legacy Iron Ore Limited.

3. Directing your Proxy how to vote

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. Appointment of a Second Proxy

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by telephoning the Company's share registry +61 8 9315 2333 or you may photocopy this form.

To appoint a second Proxy you must:

• (a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and

• (b) Return both forms in the same envelope.

5. Signing Instructions Individual: where the holding is in one name, the Shareholder must sign.

Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. Lodgement of Proxy

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than 9.30 am (WST) on Wednesday 14 December 2011, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.

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