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MACARTHUR MINERALS LIMITED Capital/Financing Update 2022

Mar 20, 2022

65338_rns_2022-03-20_546c7560-6b43-4347-bae0-724aa7a17dda.pdf

Capital/Financing Update

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News release

For Immediate Dissemination

21 March 2022

MAIDEN ORE RESERVE FOR LAKE GILES MAGNETITE PROJECT TOTALS 237 MILLION TONNES - SUPPORTING A 25 YEAR MINE LIFE

Macarthur Minerals Limited (ASX: MIO) (TSX-V: MMS) (OTCQB: MMSDF) (the Company or Macarthur ) is pleased to announce a maiden Ore Reserve Statement for the Lake Giles Iron Project as at 21 March 2022.

The Ore Reserve defined for the Lake Giles Iron Project, incorporates the Moonshine and Moonshine North magnetite deposits. The Lake Giles Iron Project is 100% owned by Macarthur Iron Ore Pty Ltd, (a wholly owned subsidiary of Macarthur Minerals Limited). The Ore Reserve has been incorporated into a Feasibility Study which demonstrates a technically and economically viable project. This Ore Reserve Statement sets out the key Feasibility Study outputs which support the Ore Reserve, however a separate and more detailed summary of the key Feasibility Study outputs has also been released to the market today.[1]

Ore Reserves are reported in accordance with the JORC Code 2012 and the Canadian Institute of Mining, Metallurgy and Petroleum “CIM Definition Standards for Mineral Resources and Ore Reserves” (CIM, 2014)

HIGHLIGHTS

  1. Maiden Ore Reserve totals 237 million tonnes of iron ore at Probable/Proven classification.

  2. Ore Reserve contains 74 million dry tonnes of iron ore concentrate for a 25-year mine life, based on 87% of the Indicated and Measured Mineral Resources.

  3. Ore Reserves support a positive Feasibility Study.

Project Location

The Lake Giles Iron Project is located 250 km northwest of Kalgoorlie in the Yilgarn region of Western Australia.

Regional Geology and Geological Interpretation

The Ore Reserve forms part Indicated and Measured Mineral Resources of the Lake Giles Iron Project encompassing the Moonshine and Moonshine North magnetite deposits. The Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA Global) and previously reported to the market on 12 August 2020[2] . The Company confirms that all assumptions and technical parameters underpinning the Mineral Resource estimates continue to apply and have not materially changed. Detailed discussion of the project geology and Mineral Resource estimation methodology are detailed in release available here.

1 ASX Press Release filed 21 March 2022, titled “Positive Feasibility Study Results for Lake Giles Iron Project”.

2 ASX Press Release filed 12 August 2020, titled “Moonshine Magnetite Resource Upgrade”

the green iron ore company Macarthur Minerals Limited | ABN 93 103 011 436 ASX: MIO | TSX-V: MMS | OTCQB: MMSDF

www.macarthurminerals.com [email protected]

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Figure 1. Plan view of Moonshine magnetite deposits of the Lake Giles Iron Project

Mineral Resource and Ore Reserve Statement

The Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA Global) and previously reported to the market on 12 August 2020. Mineral Resources for the Moonshine and Moonshine North deposits are presented in Table 1.

Table 1. Mineral Resources – Lake Giles Iron Project, Moonshine and Moonshine North, DTR >15%

Category Tonnes
(Mt)		 Head Grades(%) Head Grades(%) Head Grades(%) Head Grades(%) Head Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%)
Fe P SiO2 AI2O3 LOI DTR Fe P SiO2 AI2O3 LOI
Measured 53.9 30.8 0.05 45.4 1.6 2.7 32.2 66.0 0.031 6.2 0.2 -0.7
Indicated 218.7 27.5 0.046 51.1 1.4 1.6 31.0 66.1 0.017 6.7 0.1 -0.1
Subtotal 272.5 28.1 0.047 50.0 1.4 1.8 31.2 66.1 0.02 6.6 0.2 -0.2
Inferred 449.1 27.1 0.047 52.6 1.0 1.4 29.2 65.0 0.026 8.4 0.1 0

Notes

  • (a) Figures contained within the Tables have been rounded.

  • (b) Resource estimates are based on block models constructed using three dimensional geological wireframes. (c) Mineral Resources are reported from the block models above a DTR cut-off grade of 15%.

  • (d) Mineral Resources are not Ore Reserves and do not have demonstrated economic viability.

  • (e) All Mineral Resources are reported on a dry-tonnage basis.

  • (f) Mineral Resources are reported inclusive of the Ore Reserve.

  • (g) The Mineral Resource estimates underpinning the production target of the Feasibility Study have been prepared by a competent person in accordance with the requirements in Appendix 5A (JORC Code).

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The Ore Reserve estimate was prepared by Orelogy Consulting Pty Ltd (Orelogy) based on the diluted resource block model. The Ore Reserve for the Lake Giles Iron ore Project is estimated at 237 Mt at an average grade of 28.2% Fe and DTR of 31.3%, as presented in Table 2.

Table 2. Ore Reserves – Lake Giles Iron Project, Moonshine and Moonshine North, DTR >15%

Category Tonnes
(Mt)		 Head Grades(%) Head Grades(%) Head Grades(%) Head Grades(%) Head Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%) Concentrate Grades(%)
Fe SiO2 AI2O3 P LOI DTR Fe SiO2 AI2O3 P LOI
Moonshine
Proven 34.2 28.1 51.6 1.2 0.04 1.7 30.5 65.9 6.8 0.2 0.02 -0.6
Probable 166.4 27.2 51.9 1.4 0.05 1.4 30.7 66.6 6.2 0.1 0.02 0.0
Sub-total 200.6 27.4 51.9 1.4 0.04 1.4 30.6 66.5 6.3 0.1 0.02 -0.1
Moonshine Nth
Proven 17.8 35.4 35.4 2.2 0.06 4.2 34.3 66.5 5.0 0.3 0.03 -0.9
Probable 18.2 30.4 44.7 1.3 0.05 2.9 35.9 63.2 9.4 0.2 0.04 -0.3
Sub-total 36.0 32.9 40.1 1.7 0.05 3.5 35.1 64.8 7.3 0.3 0.05 -0.6
Combined
Proven 51.9 30.6 46.0 1.5 0.05 2.6 31.8 66.1 6.1 0.2 0.03 -0.7
Probable 184.7 27.6 51.2 1.4 0.05 1.5 31.2 66.2 6.6 0.1 0.02 -0.1
TOTAL 236.6 28.2 50.1 1.4 0.05 1.8 31.3 66.2 6.5 0.1 0.02 -0.2

Notes

(a) The Ore Reserve is reported in accordance with JORC Code 2012 and Canadian Institute of Mining, Metallurgy and Petroleum “CIM Definition Standards for Mineral Resources and Ore Reserves” (CIM, 2014).

(b) The Ore Reserve was evaluated using a 62% Fe benchmark price of USD100/dmt with a 20% premium for 65% Fe and concomitant Fe concentrate grade bonus.

(c) Ore Reserves are based on a Feasibility Study utilising Mineral Resources from Moonshine and Moonshine North deposits.

  • (d) Ore Reserves account for mining dilution and mining ore loss.

(e) A Davis Tube Mass Recovery (DTR MR) cut-off grade of 15% was applied prior to scheduling for 2022 reserves estimate.

(f) Proven Ore Reserves are based on Measured Mineral Resources only and Probable Ore Reserves are based on Indicated Mineral Resources only.

  • (g) Ore Reserves are reported on a Dry Tonnage Basis.

  • (h) Ore Reserves are a part of Mineral Resources.

  • (i) The sum of individual amounts may not equal due to rounding.

(j) The Ore Reserve estimates underpinning the production target of the Feasibility Study have been prepared by a competent person in accordance with the requirements in Appendix 5A (JORC Code).

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Ore Reserves Estimation Methodology

The mine design and Ore Reserve estimate have been completed to a level appropriate for a feasibility study and are consistent with the CIM definitions for public reporting. The Ore Reserve estimate is based on Measured and Indicated (MI) mineral resources only. Inferred material has been classified as waste.

The mining strategy is based on Contractor mining with Macarthur providing management and technical oversight. Conventional open pit mining using 400 t excavators and 180 t rigid dump trucks was selected as the most appropriate mining method for the contract mining operation. Drill and blast will be undertaken on 10 m bench and mined in 5 m flitches.

Waste will be hauled to external waste rock dumps. Ore will be hauled to the ROM pad and either tipped directly into the primary crusher feed bin or placed onto a ROM finger stockpile for later rehandling using a front-end loader.

The two pits will be mined in a total of seven stages – two for Moonshine North and five for Moonshine. Each stage will require pre-stripping of the oxidised material to a depth of approximately 55 m prior to commencing ore mining procedures. Each stage has been designed with separate ramp access using dual lane ramps except for the final two benches where single lanes were adopted. The cutback distance between stages targeted a mining width of 120 m to provide sufficient working room for the mining equipment.

Pit Optimisation

A mining model was developed for a proposed open pit mining method. Overall mining dilution was 2.5% at an average grade of 14% DTR and ore losses were 2.0% at an average grade of 30% DTR.

Open pit optimisation was conducted to determine the optimal economic geometry of the open pits. A cut-off grade of 15% DTR was used for ore definition. This was rounded up from the calculated breakeven cut-off grade of 14.2% DTR. The pit optimisation was undertaken in Whittle software using the parameters presented in Table 3.

Ore Reserves represent 87% of the Measured and Indicated mineral resources. The production target of the Feasibility Study is underpinned by 22% of Proven and 78% of Probable Ore Reserves. No inferred resources have been incorporated into the Ore Reserve or production target.

Table 3. Pit Optimisation parameters

Table 3. Pit Optimisationparameters
Optimisation Parameter Unit Value
Financial Parameters
Iron Ore Price for 66% Product USD/t concentrate 125
Shippingand Insurance USD/t concentrate 13.20
Price FOB USD/t 111.80
Exchange rate USD: AUD 0.73
Government Royalty % 5.0
Net Price **AUD/t ** 145.49
Discount Rate % 8.0
Selling Parameters
Concentrate Production Mt/a(wet) 3.3
Road transport AUD/wt
concentrate		 9.09
Rail transport AUD/wt
concentrate		 15.64

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Port Charges AUD/wt
concentrate		 7.58
Moisture content % 9.0
Total selling cost AUD/dt
concentrate		 29.64
Processing Parameters
Design throughput capacity Mt/a(dry) 9.68
Owner MiningOverhead AUD/dt ore 1.26
Grade control AUD/dt ore 0.13
Ore mining premium:
> 265 mRL:
< 265 mRL:		 AUD/dt ore
AUD/dt ore		 OMP = (5.093 x LN (Bench RL) – 30.32)/SG
OMP =(-0.039 x(Bench RL) + 8.11)/SG
Ore Blasting premium AUD/dt ore 0.33
Ore Feed Rehandle(55%) AUD/dt ore 0.80
Reclaim from Stockpile(20% of ore mined) AUD/dt ore 0.49
Dryreject rehandle(149 t/h) AUD/dt ore 0.31
Crushing AUD/dt ore 0.84
Processing AUD/dt ore 10.21
Tailings & Filtration AUD/dt ore 0.97
Sitegeneral and administration AUD/dt ore 1.13
SustainingCapital AUD/dt ore 0.30
TOTAL Processing Cost(excl. OMP) AUD/dt ore 16.44
Mining parameters
Miningrate Mt/a 45
Slopes (OSA):
Oxide Moonshine Nth HW
Oxide others
Fresh FW (Domains1, 3, 4)
Fresh HW (Domain 6A)
Fresh HW (Domains 2,5,6B)		 Degrees
Degrees
Degrees
Degrees
Degrees		 27
33
41
37
41
Drill and Blast:
Oxide waste
Fresh Waste		 AUD/dt
AUD/dt		 0.50
0.81
Load and Haul waste AUD/dt MCAF = (0.0000736 x (Bench RL) 2 –
0.0723 x(Bench RL) + 22.58)/SG

Scheduling Inventory

The shell with a revenue factor of 0.88 was selected as the basis for design. Stage design was guided by the nested pit shells and practical design considerations for the selected mining fleet. The mine inventories for each stage, as summarised in Table 4, were imported to Evolution scheduling software to generate the LOM schedule. Figure 2 shows the nested stage designs within the overall pit design.

Table 4. Scheduling Inventory reported by Stage

Stage Ore Grades Grades Grades Grades Grades Grades Grades Waste Total Strip Ratio
Mt Fe % SiO2 % Al2O3 % P % S % LOI % DTR % Mt Mt W:O
1 22.4 28.3 50.5 1.5 0.05 1.2 1.2 31.2 81.9 110.2 2.9
2 7.8 31.3 44.3 1.3 0.05 1.3 3.0 35.1 53.6 61.3 6.9
3 28.2 33.3 39.0 1.8 0.06 1.5 3.7 35.1 64.0 86.2 2.9
4 22.2 27.8 51.6 1.2 0.05 0.9 1.4 31.2 52.8 75.2 2.4
5 69.9 27.3 51.9 1.3 0.05 1.0 1.4 30.7 152.6 222.5 2.2
6 55.9 27.4 52.1 1.3 0.05 0.9 1.4 31.1 133.9 189.9 2.4
7 30.2 26.7 52.7 1.8 0.04 1.1 1.7 28.5 77.9 108.1 2.6
TOTAL 236.6 28.2 50.1 1.4 0.05 1.1 1.8 31.3 616.8 853.4 2.6

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Figure 2. Moonshine and Moonshine North pits showing stages and mineralisation coloured by DTR

Mine Scheduling

The Moonshine North pit has ore with higher DTR head grade and higher Silica in concentrate values than Moonshine and consequently the two pits are scheduled to be mined at the same time as part of the blending strategy.

The mine schedule has a 9-month pre-strip period and requires a mining rate of approximately 43 Mt per year to balance waste stripping requirements with continuous ore supply and the blending strategy. The mining sequence is presented in Figure 3.

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----- Start of picture text -----

50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
-
Stage MS 1 Stage MSN 2 Stage MSN 3 Stage MS 4 Stage MS 5 Stage MS 6 Stage MS 7
TONNES (Mt)
----- End of picture text -----

Figure 3. Overall mining rate by stage

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Approximately, 65% of the ore from both pits is categorised as high DTR material and sent directly to the ROM pad for processing. The low DTR material is split into high silica and low silica stockpiles and used to control the silica content of the concentrate. Figure 4 shows the ore feed blend with constant silica grade and DTR grade gradually reducing over time.

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----- Start of picture text -----

12.0 36.0
10.0 30.0
8.0 24.0
6.0 18.0
4.0 12.0
2.0 6.0
- 0.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Year
High DTR Low DTR Hi Silica Low DTR Lo Silica DTR head grade (%) Silica in Concentrate (%)
Grades (%)
Ore Feed (MT)
----- End of picture text -----

Figure 4. Ore feed blend showing DTR head grade and Silica in concentrate grade

Processing Methods and Assumptions

The proposed flow sheet is based on conventional gyratory crushing/ cone crushing followed by HPGR grinding. Product from the HPGR is screened with the +12 mm returning to the HPGR, the -12 +3 mm material undergoes dry magnetic separation with the magnetics returning to the HPGR and the non-magnetics being discarded. The -3 mm material is fed to two ball mills followed by magnetic separation with the magnetics undergoing further size reduction to P80 38 microns in two vertimills followed by magnetic separation. Reverse flotation of the magnetic concentrate is followed by a final stage of magnetic separation. The concentrate produced is dried using pressure filtration and then transferred to the product stockpile.

The above process will yield a saleable magnetite concentrate with a LOM grade of 66% Fe. The process is well tested, widely used in the mining industry and there are no novel steps in the flowsheet.

Tailings is directed to a wet tailings impoundment from which process water is recovered. The tailings storage facility (TSF) design was undertaken by engineering consultants Stantec. The TSF utilises available topography at the project with waste ore and borrow pits contemplated as construction materials with future raises utilising processing by- products. Mine closure and rehabilitation assume profiling and seeding of the TSF based on high settling and local evaporation rates.

Revenue Factors and Market Analysis

Pit shells were generated at a long-term iron ore price for the Lake Giles concentrate of USD 125/dmt on a CFR basis.

The forward iron ore price adopted for the Lake Giles Iron Project is based on the Company’s assessment of published consensus pricing, forecasts derived directly from steel mills, various analyst reports and a comparison of historical analyst forecasts against actual pricing over time.

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Operating Costs

Operating costs for mining have been developed from contractor rates and in-house estimates. Processing and crushing costs were provided by the Feasibility Study engineering consultant based on feasibility level engineering studies for the processing plant and supporting infrastructure. Product logistics encompassing road, rail and port operations were sourced from budget quotations from haulage operators and asset infrastructure owners. Site operating costs total AUD 101.05/dmt FOB (USD 71.74/dmt) and summarised in Table 5. Operating costs inclusive of WA State royalties total AUD109.56/dmt FOB (USD 77.79/dmt) calculated against the base case sales price of USD 131.40/dmt.

Table 5: Summary of operating cost ($/t concentrate)

Area USD/dmt AUD/dmt
Mining 26.08 36.73

Crushing & Processing		 22.41 31.56

Logistics		 21.25 29.93

General & Administration		 2.00 2.82
Total operating costs 71.74 101.05

Capital Costs

Capital cost estimates were completed at a Feasibility Study level estimate with an expected accuracy range of between +/-10% to +/-15% (AUSIMM Class 3), based on engineering to 25% definition.

The Project capital cost is estimated at AUD801m with an additional AUD61.6m in pre-production mining costs. The capital breakdown is summarised in Table 6 below.

Table 6: Summary of direct & indirect capital costs

Area USDm AUDm
DIRECTS
Facilities process plant 11.6 16.4

Process plant		 227.6 320.5

Product transport logistics		 36.5 51.4

Port storage & ship loading		 24.2 34.0

Infrastructure & headworks		 72.0 101.3
General and administration 1.3 1.8
Total direct costs 373.1 525.5
INDIRECTS
Construction Indirects 83.6 117.8
EPCM 52.2 73.5
Spares & Commissioning 4.8 6.8

Freight		 11.2 15.7

Contingency		 43.9 61.9
Total indirect costs 195.7 275.7
Total Directs & Indirects 568.8 801.1
MINE DEVELOPMENT
Capitalised pre-strip 43.8 61.6

TOTAL PROJECT CAPITAL		 612.5 862.7

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Project Economics

A full financial model has been developed for the Feasibility Study inclusive of capital and operating costs, taxes, and State royalties payable at 5% of FOB sales price. The model uses constant (real, non-inflated) 2021 Australian dollars for operating and capital costs with shipping and iron ore sales in US dollars and cash flows modelled in monthly periods. The Project valuation was based on a discounted cashflow analysis. The key assumptions and financial outcomes are summarised in Table 7.

At a 6% discount rate, the model reports a pre-tax NPV of AUD816 M with an IRR of 13%. After tax the NPV is AUD443 M with an IRR of 10.1%.

Table 7: Summary of Project Economics

Production
Ore mined 236.6 Mt
Waste mined 624.9 Mt
Total mined 861.5 Mt
Stripratio 2.64
Concentrateproduced 74 Mt
Concentrate irongrade 66.1
Plant recovery 31%
Financials AUDm USDm
Sales revenue 12,614 8,956
OperatingExpenses 8,116 5,672
Initial Capital Expenditure
Construction capex 801.1 568.8
Miningoverburdenpre-strip 61.6 43.8
Total initial capital 862.7 612.5
Future Capital Expenditure
Sustainingcapital 203.0 144.1
Deferred capital - Tailings 39.8 28.3
Capitalised non-operational waste mining 355.7 252.5
Total future capital 598.0 424.6
Closure Expenditure
Closure and rehabilitation 58.2 41.3
Total Operating Cash Flows 3,625 2574
Taxes & Royalties
Taxpaid 873 620
Royalties 631 435
Valuation AUDm USDm
NPV(6%)Pre-tax 816 579
NPV(6%)Post-tax 443 314
IRR Pre-tax 13.0% -
IRR Post-tax 10.1% -

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The Competent Person has reviewed the financial model and determined that the Ore Reserve estimate disclosed in this release is based on a Feasibility Study level of accuracy with inputs from open pit mining, processing, logistics, project capital and contingencies scheduled and costed to define the Ore Reserve. The Competent Person is satisfied that the Ore Reserve returns a positive NPV based on the Feasibility Study and associated modifying factors.

The Company confirms all material economic and non-economic assumptions that form the basis of the Ore Reserve have been disclosed in accordance with ASX Listing Rule 5.9.

Environment and Approvals

An environmental impact assessment is required to obtain environmental approval for development. The Company has commenced the scoping process to identify the key environmental risks and level of survey to be undertaken. The Company has mapped out an approval pathway and schedule for the primary and secondary approvals required and intends to commence desktop and baseline surveys at the conclusion of the feasibility study. The Company has previously gained EPA approval for its adjacent hematite project and is not aware of any major environmental obstacles that would prevent approval of the Project.

Native Title and Heritage

The Project sits within the Marlinyu Ghoorlie native title claim. The claim was registered on 28 March 2019 but is currently not determined. Native title rights in registration or grant give claimants the right to negotiate during the grant of mineral tenure. Macarthur’s Mining Leases were all granted prior to registration of the Native Title claim and the current claim does not confer rights to negotiate or affect the tenure. There were no Native Title claims over the area at the time of grant and therefore no access agreements were required to be negotiated with Claimants.

Current applications for tenure as described below are subject to native title. Macarthur is currently progressing heritage agreements with the native title claimants to progress the tenure to grant.

Heritage surveys have been conducted in accordance with EPA Guidance Statement No. 41 (EPA 2004a) across some areas, including both archaeological and ethnographical surveys. To date, one archaeological site has been identified within the Project area. The location of the heritage site does not impact the Project and a suitable buffer distance has been employed to avoid any impact to the site. Additional surveys will be undertaken with the traditional owners across outstanding project areas in due course.

Tenure

The Lake Giles Iron Project includes 15 granted mining leases covering a total area of approximately 6,256 Ha. All tenements are 100% controlled by Macarthur Iron Ore Pty Ltd (MIO), a 100% owned subsidiary of Macarthur, as itemised in Table 8. MIO has also made applications for miscellaneous licences to support supporting infrastructure of the Project and to explore for groundwater resources.

MIO has entered into an agreement with Arrow Minerals to acquire adjacent tenure to locate the proposed processing plant, waste rock dumps, tailings storage facility and other supporting infrastructure. An application for a general purpose lease is in progress.

The tenements are not subject to any royalty agreements or encumbrances that would restrict the ability to exploit the Ore Reserve.

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Table 8. MIO Tenure Details and Expenditure Commitments

Tenement ID Holder Area (ha) Grant or
(Application)
Date		 Expiry date Annual expenditure
Commitment (AUD)
M30/0206 MIO 189 02/07/2007 01/07/2028 $18,900
M30/0207 MIO 171 02/07/2007 01/07/2028 $17,100
M30/0213 MIO 258 13/06/2011 12/06/2032 $25,800
M30/0214 MIO 260 13/06/2011 12/06/2032 $26,000
M30/0215 MIO 521 13/06/2011 12/06/2032 $52,100
M30/0216 MIO 55 13/06/2011 12/06/2032 $10,000
M30/0217 MIO 114 13/06/2011 12/06/2032 $11,400
M30/0227 MIO 504 13/06/2011 12/06/2032 $50,400
M30/0228 MIO 362 02/07/2007 01/07/2028 $36,200
M30/0229 MIO 205 02/07/2007 01/07/2028 $20,500
M30/0248 MIO 585 22/02/2012 21/02/2033 $58,500
M30/0249 MIO 1206 22/02/2012 21/02/2033 $120,600
M30/0250 MIO 102 05/03/2013 04/03/2034 $10,200
M30/0251 MIO 1246 27/11/2012 26/11/2033 $124,600
M30/0252 MIO 478 27/05/2013 26/05/2034 $47,800
E15/7775 MIO 590 (24/06/20) $15,000
L15/409 MIO 97 (25/06/20) NA
L16/133 MIO 923 (25/06/20) NA
L30/89 MIO 23663 (26/03/21) NA
L30/92 MIO 31660 (26/03/21) NA

Andrew Bruton, CEO of Macarthur Minerals commented:

“The release of the Maiden Ore Reserve Statement for the Lake Giles Iron Project will support a positive Feasibility Study for the project.

Macarthur has worked hard over the course of the last 12 months to deliver this result, and the Company looks forward to releasing the Feasibility Study shortly.”

On behalf of the Board of Directors, Mr Cameron McCall, Chairman

For more information please contact:

Joe Phillips Managing Director +61 7 3221 1796 [email protected]

Investor Relations – Australia Investor Relations - Canada Advis ir Investor Cubed Sarah Lenard, Managing Partner Neil Simon, CEO [email protected] +1 647 258 3310 [email protected]

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Competent / Qualified Person Statement

Mineral Resources:

The information in this report that relates to Mineral Resources is based on, and fairly reflects, information compiled by Mr. David Williams, a Competent Person, who is an employee of CSA Global Pty Ltd, a member of the ERM group of companies, and a Member of the Australian Institute of Geoscientists (#4176). Mr Williams has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr Williams consents to the disclosure of information in the form and context in which it appears.

Ore Reserves:

The information in this report relating to Ore Reserves is based on information compiled by Stephen Craig, a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Craig is a full-time employee of Orelogy Consulting Pty Ltd. Mr. Craig has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr Craig consents to the disclosure of information in the form and context in which it appears.

Company profile

Macarthur is an iron ore development, gold and lithium exploration company that is focused on bringing to production its Western Australia iron ore projects. The Lake Giles Iron Project mineral resources include the Ularring hematite resource (approved for development) comprising Indicated resources of 54.5 million tonnes at 47.2% Fe and Inferred resources of 26 million tonnes at 45.4% Fe; and the Lake Giles magnetite resource of 53.9 million tonnes (Measured), 218.7 million tonnes (Indicated) and 997 million tonnes (Inferred). Macarthur also holds 24 square kilometre tenement area iron exploration interests in the Pilbara region of Western Australia. In addition, Macarthur has lithium brine Claims in the emerging Railroad Valley region in Nevada, USA.

This news release is not for distribution to United States services or for dissemination in the United States

Caution Regarding Forward Looking Statements

Certain of the statements made and information contained in this press release may constitute forward-looking information and forwardlooking statements (collectively, “forward-looking statements”) within the meaning of applicable securities laws. All statements herein, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, including but not limited to statements regarding expected completion of the Feasibility Study; conversion of Mineral Resources to Ore Reserves or the eventual mining of the Project, are forward-looking statements. The forward-looking statements in this press release reflect the current expectations, assumptions or beliefs of the Company based upon information currently available to the Company. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct as actual results or developments may differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include but are not limited to: unforeseen technology changes that results in a reduction in iron or magnetite demand or substitution by other metals or materials; the discovery of new large low cost deposits of iron magnetite; the general level of global economic activity; failure to complete the FS; inability to demonstrate economic viability of Mineral Resources; and failure to obtain mining approvals. Readers are cautioned not to place undue reliance on forward-looking statements due to the inherent uncertainty thereof. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. The forward-looking statements contained in this press release are made as of the date of this press release and except as may otherwise be required pursuant to applicable laws, the Company does not assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

12 | P a g e

APPENDIX 1

JORC Code 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary
Sampling
techniques		 •
Nature and quality of sampling (e.g. cut
channels, random chips, or specific
specialised industry standard
measurement tools appropriate to the
minerals under investigation, such as
down hole gamma sondes, or handheld
XRF instruments, etc.). These examples
should not be taken as limiting the
broad meaning of sampling.
•
Include reference to measures taken to
ensure sample representivity and the
appropriate calibration of any
measurement tools or systems used.
•
Aspects of the determination of
mineralisation that are Material to the
Public Report.
•
In cases where ‘industry standard’ work
has been done this would be relatively
simple (e.g. ‘reverse circulation drilling
was used to obtain 1 m samples from
which 3 kg was pulverised to produce a
30 g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is coarse
gold that has inherent sampling
problems. Unusual commodities or
mineralisation types (e.g. submarine
nodules) may warrant disclosure of
detailed information.		 •
The deposit was sampled using diamond core and reverse
circulation (RC) drill holes between 2008 (commencement of
the assessment of the Lake Giles Magnetite Project) and 2019.
RC drilling was the dominant sampling technique used.
Diamond core samples were largely reserved for metallurgical
and geotechnical studies; however, some were used for
Mineral Resource estimation.
•
Diamond core recoveries were recorded by measuring the
length of drill core retrieved per metre of drill penetration. RC
samples were weighed and a recovery (%) was estimated per
metre of drill penetration. RC chip recovery information was
recorded in digital logs.
•
RC drilling was used to obtain 1 m samples, via 3-tier riffle
splitter or rotary cone, with a 3 kg sample split submitted to
the assay laboratory and pulverised to produce a 30 g pulp
charge for XRF analysis.
•
Some compositing of samples is used to reduce costs of DTR
analysis, whereby composites of between 1 m and 7 m are
used, depending on the continuity and metre-scale head grade
decided by a geologist.
Drilling techniques •
Drill type (e.g. core, reverse circulation,
open-hole hammer, rotary air blast,
auger, Bangka, sonic, etc.) and details
(e.g. core diameter, triple or standard
tube, depth of diamond tails, face-
sampling bit or other type, whether
core is oriented and if so, by what
method, etc.).		 •
RC drill holes were drilled by either a Schramm T660 (Volvo 8x4
wheel rig), or a track mounted Schramm T450WS rig or a
Hydco 350 mounted on a 2008 Tatra 8x8 truck. Choice of drill
rig was dependent upon the terrain hosting the drill pads.
Drilling diameter for RC holes was generally 140 mm. Diamond
drilling for metallurgical purposes used mostly HQ diameter
core with occasional PQ core depending on the mass of core
required. Core orientation was performed using Reflex
apparatus and was unsuccessful for the majority of weathered
core.
Drill sample
recovery		 •
Method of recording and assessing core
and chip sample recoveries and results
assessed.
•
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
•
Whether a relationship exists between
sample recovery and grade and
whether sample bias may have		 •
Diamond core recoveries were recorded by measuring the
length of drill core retrieved per metre of drill penetration. RC
samples were weighed and a recovery (%) was estimated per
metre of drill penetration.
•
If sample recoveries were observed becoming sub-optimal by
the project geologist, the information was relayed to the driller
who adjusted the drilling penetration rate, or other sample
recovery drill rig characteristics such as air compression, in
order to improve sample recovery. A geologist was present at
the drill rigs at all times whilst drilling procedures were under

13 | P a g e

Criteria JORC Code explanation Commentary
occurred due to preferential loss/gain of
fine/coarse material.		 way, and logged all drill samples.
•
No relationship was observed between sample recovery and Fe
(%) grade. No loss of haematite or goethitic fines was observed
during drilling.
•
In heavily fractured zones with strong groundwater flow,
recovery can suffer unless appropriate measures are taken.
Logging •
Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
•
Whether logging is qualitative or
quantitative in nature. Core (or costean,
channel, etc.) photography.
•
The total length and percentage of the
relevant intersections logged.		 •
Diamond drill core and RC chip samples have been geologically
and geotechnically logged to a level of detail to support
appropriate Mineral Resource estimation, mining studies and
metallurgical studies. Not all drill holes penetrated the BIF host
units, but all were used to guide the geological interpretations
supporting the Mineral Resource estimates.
•
Geological logging of drill samples was qualitative in nature for
all RC drilling and diamond core samples.
•
All (100%) drill holes were geologically logged, with lithologies,
oxidation, structure, alteration and mineralogy among the
geological categories logged.
•
Moonshine and Moonshine North recorded nine diamond
holes (1,807.5 m) and 236 RC holes (43,156 m) in the drill hole
database
•
Clark Hill North recorded five diamond holes (8,551 m) and 60
RC holes (8,551 m).
•
Clark Hill South recorded nine RC holes (2,086 m).
•
Sandalwood recorded 38 RC holes (6,933 m).
•
Snark (magnetite units only) recorded 16 RC holes (3,007 m).
Sub-sampling
techniques and
sample
preparation		 •
If core, whether cut or sawn and
whether quarter, half or all core taken.
•
If non-core, whether riffled, tube
sampled, rotary split, etc. and whether
sampled wet or dry.
•
For all sample types, the nature, quality
and appropriateness of the sample
preparation technique.
•
Quality control procedures adopted for
all sub-sampling stages to maximise
representivity of samples.
•
Measures taken to ensure that the
sampling is representative of the in-situ
material collected, including for
instance results for field
duplicate/second-half sampling.
•
Whether sample sizes are appropriate
to the grain size of the material being
sampled.		 •
Some diamond core was for metallurgical and geotechnical
purposes and therefore not used to support the Mineral
Resources estimate, apart from the geological logging.
•
Diamond core was cut using an Almonte electric core saw in
competent ground and hand split in clay at either 1 m intervals
or to geological contacts. RC samples were collected at the rig
using riffle splitters. Samples were generally dry with some
areas wet due to perched water tables. Industry standard
diamond and RC drilling techniques were used and are
considered appropriate for use in Mineral Resource estimation.
For RC drilling, sample quality was maintained by monitoring
sample volume and by cleaning the splitters on a regular basis.
Field duplicates were taken every 20 metres for RC drilling.
Quarter splits of core have been taken and recorded as
duplicates in the database.
•
RC samples passed through a cyclone then passed through a
three-tier riffle splitter or rotary cone (depending on drilling
campaign and equipment used). Samples were predominantly
dry. Occasional single wet samples were obtained at the start
of drill rods when groundwater flow was particularly strong. A
total of 75% of the sample passed through the splitter to be
captured in a residue bucket whilst the remaining 25% of the
sample was evenly distributed through the primary sample
chute and the field duplicate chute.
•
RC samples were securely delivered to the analytical laboratory
where they were crushed to 3 mm fraction, then pulverized to
105µm (p95). The laboratories are accredited to industry
standards, and the sample preparation stages likewise to
industry standard. The sample preparation is considered
appropriate for the mineralisation investigated.
•
Samples wereground top95 75µm and subjected to DTR

14 | P a g e

Criteria JORC Code explanation Commentary
testing with XRF analysis performed on head and concentrate
material. A mass recovery via DTR was also calculated. A
magnetic field strength of 3,000 Gauss was used. A total of 498
samples delivered DTR results from the Moonshine and
Moonshine North deposits, 579 from Clark Hill North, 157 from
Clark Hill South, 523 from Sandalwood and 64 from Snark.
•
The laboratory collected splits of the sub samples at the
crushing and pulverizing stages, with the splits stored. The pulp
splits were sourced for laboratory duplicate XRF analyses.
•
Field duplicate samples were taken at the drill rig via the 3-tier
riffle splitter or rotary cone.
•
Sample sizes are appropriate to the grain size of the material
being sampled.
Quality of assay
data and
laboratory tests		 •
The nature, quality and appropriateness
of the assaying and laboratory
procedures used and whether the
technique is considered partial or total.
•
For geophysical tools, spectrometers,
handheld XRF instruments, etc., the
parameters used in determining the
analysis including instrument make and
model, reading times, calibrations
factors applied and their derivation, etc.
•
Nature of quality control procedures
adopted (e.g. standards, blanks,
duplicates, external laboratory checks)
and whether acceptable levels of
accuracy (i.e. lack of bias) and precision
have been established.		 •
All samples were dispatched to one of three assay laboratories;
samples prior to mid-2007 were sent to Genalysis, and from
mid-2007 to 2013 dispatched to an Amdel / UltraTrace, and
samples from 2019 were analysed by SGS. Pulp samples were
analysed for the standard suite of Fe ore elements by XRF,
considered industry standard practice for iron ore.
•
DTR work was performed by Amdel / UltraTrace until 2010 and
then SGS for the 2019 work.
•
Geophysical analyses etc., were used to assist with the
geological interpretation.
•
Standards were used throughout the drilling programs to test
analytical accuracy, at a rate of 1:50 and at least one standard
inserted per drill hole. Field duplicates were captured at a rate
of 1:25 prior to 2019 and 1:20 in 2019. Pulp duplicates were
also analysed to test for analytical accuracy. The assay labs
conducted their own QAQC analyses and results were provided
to Macarthur. The QAQC procedures and results showed that
acceptable levels of accuracy and precision were established.
Verification of
sampling and
assaying		 •
The verification of significant
intersections by either independent or
alternative company personnel.
•
The use of twinned holes.
•
Documentation of primary data, data
entry procedures, data verification,
data storage (physical and electronic)
protocols.
•
Discuss any adjustment to assay data.		 •
Significant intercepts were independently verified by alternate
company personnel including senior geological management.
•
Selected RC holes were twinned by diamond core holes. The
purpose of the twinning was to provide diamond drill core for
geotechnical purposes, especially within the oxidised zones of
the deposit. The diamond tails that penetrated the primary
zone of mineralisation were no longer twinned to an RC hole.
The geological logging from both the RC and diamond holes
demonstrate consistency in logging of the primary lithologies
and weathering profiles.
•
Drill hole data was logged by hand at the drill rig, then data was
manually entered into spreadsheets. These were imported into
an SQL database independently maintained by CSA Global. The
database has various criteria, relationships, and triggers to
ensure the data entered into the database is valid. Strict
security and daily backups are managed by SQL server
software. Data was verified by the CP (resources) by randomly
cross-checking collar and survey data in the database with
independently recorded geospatial data from the drill sites.
•
No data adjustments were made to assay data in the database.
Location of data
points		 •
Accuracy and quality of surveys used to
locate drill holes (collar and downhole
surveys), trenches, mine workings and
other locations used in Mineral
Resource estimation.		 •
All drill hole collars included in the Mineral Resource estimates
were surveyed after drilling by high accuracy Real Time
Kinematic GPS (RTKGPS). RTKGPS surveys, which were
undertaken by licensed surveyors, are accurate to within 50
millimetres in three dimensions.

15 | P a g e

Criteria JORC Code explanation Commentary
•
Specification of the grid system used.
•
Quality and adequacy of topographic
control.		 •
Down-hole surveys were performed by external contractors
(Surtron and ABIMS) before 2019 and by the drilling contractor
in 2019, using a Reflex EZ-Giro tool. Measurements were
generally taken at 10 m intervals.
•
All coordinates are in Geocentric Datum of Australia (GDA94,
Zone 50).
•
A LIDAR topographic survey was flown in June 2011. The data
was re-sampled from 1 m to 2 m and exported as a wireframe
surface in dxf format. The choice of a coarser contour interval
has not resulted in any noticeable difference to resource
volumes at the ‘outcropping’ surface of the BIF strata. Drill
collars were validated against the DTM elevation. The
topographic survey is considered adequate to support the
Mineral Resource estimates.
Data spacing and
distribution		 •
Data spacing for reporting of
Exploration Results.
•
Whether the data spacing, and
distribution is sufficient to establish the
degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve estimation
procedure(s) and classifications applied.
•
Whether sample compositing has been
applied.		 •
Drill holes were sited on the many outcropping ridges of
haematite / goethite mineralisation, although not all ridges had
been drill tested prior to late 2012. Drill hole section lines along
the ridges were typically spaced 100 m. Across strike drilling
was occasionally used to define depth to base of complete
oxidation and verify grades.
•
Drill hole spacing is deemed sufficient to establish the degree
of geological and grade continuity appropriate for the Mineral
Resource classifications applied.
•
Samples were not composited at the drill rig.
Orientation of
data in relation to
geological
structure		 •
Whether the orientation of sampling
achieves unbiased sampling of possible
structures and the extent to which this
is known, considering the deposit type.
•
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered to
have introduced a sampling bias, this
should be assessed and reported if
material.		 •
Holes were generally angled at 60° across the strike of
mineralisation, with occasional vertical orientations, targeting
strata typically dipping at 70° to 90° towards the angle of
drilling. Some bias of sampling was anticipated based upon the
angle of drill hole interception against the dip of haematite
bearing strata, however this bias is not considered detrimental
to the Mineral Resource estimate.
Sample security •
The measures taken to ensure sample
security.		 •
On completion of each hole the calico sample bags were
placed in polyweave bags, then transferred to the Ularring
exploration compound where they were securely stored. The
polyweave bags were placed in large bulka bags and
transported to the assay laboratory depot in Kalgoorlie and
then Perth using a contracted freight company. At all times the
samples were under the security of either Macarthur or the
transport company personnel, and then under the security of
the assay laboratory. Security tags were used for all bulk
sample dispatches (i.e. ‘bulka’ bags), as well as the majority of
individual polyweave bags.
Audits or reviews •
The results of any audits or reviews of
sampling techniques and data.		 •
The Competent Person (Mineral Resources) reviewed sampling
procedures during site visits. Any problems observed were
discussed with the geological staff on roster, and the problems
were quickly corrected, with no detrimental impact upon the
Mineral Resources noted. Senior geological staff from
Macarthur regularly vetted sampling procedures.

16 | P a g e

Section 2 Reporting of Exploration Results

Criteria JORC Code explanation Commentary Commentary Commentary Commentary Commentary Commentary
Mineral tenement
and land tenure
status		 •
Type, reference name/number, location
and ownership including agreements or
material issues with third parties such
as joint ventures, partnerships,
overriding royalties, native title
interests, historical sites, wilderness or
national park and environmental
settings.
•
The security of the tenure held at the
time of reporting along with any known
impediments to obtaining a licence to
operate in the area.		 •




l

•



•

 At present Macarthur manages 15 contiguous Mining Leases
covering a total area of approximately 62.4 km². Macarthur
also has two pending miscellaneous licences for a haul road
and rail siding to facilitate transport of iron ore from the mining
eases to the rail line approximately 90 km south of the project,
and a further two pending licenses for water exploration.
Macarthur Minerals Ltd, through its wholly owned subsidiary
Macarthur Iron Ore Pty Ltd, is the registered holder of or
registered applicant for the Tenements.
The following table details the tenure at the Project, effective 3
August 2020.
Stat
us
Holder
Area
(Ha)
Grant
Date
Expiry
Date
Live
Macarthur Iron Ore
PtyLtd
189
2/07/20
07
1/07/20
28
Live
Macarthur Iron Ore
PtyLtd
171
2/07/20
07
1/07/20
28
Live
Macarthur Iron Ore
PtyLtd
258
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
260
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
521
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
55
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
114
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
504
13/06/2
011
12/06/2
032
Live
Macarthur Iron Ore
PtyLtd
362
2/07/20
07
1/07/20
28
Live
Macarthur Iron Ore
PtyLtd
205
2/07/20
07
1/07/20
28
Live
Macarthur Iron Ore
PtyLtd
585
22/02/2
012
21/02/2
033
Live
Macarthur Iron Ore
PtyLtd
1206
22/02/2
012
21/02/2
033
Live
Macarthur Iron Ore
PtyLtd
102
5/03/20
13
4/03/20
34
Live
Macarthur Iron Ore
PtyLtd
1246
27/11/2
012
26/11/2
033
Live
Macarthur Iron Ore
PtyLtd
478
27/05/2
013
26/05/2
034
Tenem
ent		 Stat
us		 Holder Area
(Ha)		 Grant
Date		 Expiry
Date
M30/0
206		 Live Macarthur Iron Ore
PtyLtd		 189 2/07/20
07		 1/07/20
28
M30/0
207		 Live Macarthur Iron Ore
PtyLtd		 171 2/07/20
07		 1/07/20
28
M30/0
213		 Live Macarthur Iron Ore
PtyLtd		 258 13/06/2
011		 12/06/2
032
M30/0
214		 Live Macarthur Iron Ore
PtyLtd		 260 13/06/2
011		 12/06/2
032
M30/0
215		 Live Macarthur Iron Ore
PtyLtd		 521 13/06/2
011		 12/06/2
032
M30/0
216		 Live Macarthur Iron Ore
PtyLtd		 55 13/06/2
011		 12/06/2
032
M30/0
217		 Live Macarthur Iron Ore
PtyLtd		 114 13/06/2
011		 12/06/2
032
M30/0
227		 Live Macarthur Iron Ore
PtyLtd		 504 13/06/2
011		 12/06/2
032
M30/0
228		 Live Macarthur Iron Ore
PtyLtd		 362 2/07/20
07		 1/07/20
28
M30/0
229		 Live Macarthur Iron Ore
PtyLtd		 205 2/07/20
07		 1/07/20
28
M30/0
248		 Live Macarthur Iron Ore
PtyLtd		 585 22/02/2
012		 21/02/2
033
M30/0
249		 Live Macarthur Iron Ore
PtyLtd		 1206 22/02/2
012		 21/02/2
033
M30/0
250		 Live Macarthur Iron Ore
PtyLtd		 102 5/03/20
13		 4/03/20
34
M30/0
251		 Live Macarthur Iron Ore
PtyLtd		 1246 27/11/2
012		 26/11/2
033
M30/0
252		 Live Macarthur Iron Ore
PtyLtd		 478 27/05/2
013		 26/05/2
034
Exploration done
by other parties		 •
Acknowledgment and appraisal of
exploration by other parties.		 •








i		 The property was previously explored for nickel (1968 to 1972)
and gold (Aztec, Battle Mountain, 1993 to 1998) with limited
success. Internickel Australia undertook a detailed evaluation
of previous exploration from 2001 to 2005. Macarthur
Minerals took over the tenements in 2005 and has been
actively exploring for iron mineralisation since. The Ularring
Hematite Project has reported Mineral Resources, with the
hematite deposits located adjacent to, and sometimes
nterspersed, with the Lake Giles Magnetite deposits.
Geology •
Deposit type, geological setting and
style of mineralisation.		 •



 The outcropping geology of the project area is comprised of a
combination of un-altered silica rich banded iron formations
(BIFs) and altered, enriched haematite / goethite BIFs.
Weatheringhas resulted in the leachingof the majorityof the

17 | P a g e

Criteria JORC Code explanation Commentary
silica from the BIFs, thus producing a rock rich in iron and low
in silica, near surface. Below the depth of oxidation (generally
between 45–90 m from surface) the BIF units are comprised
almost entirely of ferrous/ferric Fe(II,III) iron, silica and small
amounts of alumina with occasional incipient iron sulphides
(predominantly pyrite). The Fe grades are consistently between
20 and 40% Fe. Macarthur believes the majority of the
underlying BIF units have experienced minimal metamorphism
beyond their original formation. A notable exception to this is a
pocket of high grade magnetite mineralisation (up to 15 m true
thickness, and continuous along strike for >200m) found in the
Moonshine North prospect, which was targeted as part of a co-
funded EIS drilling program in 2012 with two diamond drill
holes. The pocket of high-grade magnetite mineralisation (in
excess of 60% in-situ Fe) was interpreted to be the result of
structural and geothermal alteration of the primary BIF fabric.
•
The main zones of mineralisation are interpreted as a series of
thick tabular units, steeply dipping eastward at ~70° with
moderate to minimal structural deformation. More intense
deformation is modelled at the south edge of the Moonshine
prospect with several synclinal structures and possible shearing
related to recumbent folds, which increase the apparent
thickness of the zones of mineralisation.
•
Depth and consistency of mineralisation has been confirmed in
excess of 250 m below surface through several drill holes,
confirming a consistent dip of the hanging wall for the majority
of the Moonshine and Moonshine North prospects.
•
A region of lower grade, highly siliceous (> 60% SiO2) is
occasionally observed in the footwall of the thicker Western
units, especially in Moonshine, and is generally referred to as
the siliceous footwall. The siliceous footwall is characterised by
strongly siliceous BIF with much thinner iron rich bands. It
appears to be a secondary feature of the primary source BIF
unit, as it varies in thickness itself, but the general thickness of
the main BIF units tends to remain fairly constant over the
entire strike of the larger tabular BIF bodies.
Drillhole
information		 •
A summary of all information material
to the understanding of the exploration
results including a tabulation of the
following information for all Material
drillholes:
o
easting and northing of the
drillhole collar
o
elevation or RL (Reduced
Level – elevation above sea
level in metres) of the drill
hole collar
o
dip and azimuth of the hole
o
downhole length and
interception depth
o
hole length.
•
If the exclusion of this information is
justified on the basis that the
information is not Material and this
exclusion does not detract from the
understanding of the report, the
Competent Person should clearly
explain why this is the case.		 •
The Lake Giles Magnetite Project consists of 374 diamond and
RC drill holes (66,542.5 m). This includes 14 diamond holes for
2,809.5 m and 359 RC holes for 63,733 m. All of these holes
were used to support the Mineral Resource estimate. The
Mineral Resource estimate conveys the tenor of grade from
the drill holes.

18 | P a g e

Criteria JORC Code explanation Commentary
Data aggregation
methods		 •
In reporting Exploration Results,
weighting averaging techniques,
maximum and/or minimum grade
truncations (e.g. cutting of high grades)
and cut-off grades are usually Material
and should be stated.
•
Where aggregate intercepts
incorporate short lengths of high grade
results and longer lengths of low grade
results, the procedure used for such
aggregation should be stated and some
typical examples of such aggregations
should be shown in detail.
•
The assumptions used for any reporting
of metal equivalent values should be
clearly stated.		 •
Exploration results are not being reported here.
Relationship
between
mineralisation
widths and
intercept lengths		 •
These relationships are particularly
important in the reporting of
Exploration Results.
•
If the geometry of the mineralisation
with respect to the drill hole angle is
known, its nature should be reported.
•
If it is not known and only the down
hole lengths are reported, there should
be a clear statement to this effect (e.g.
‘downhole length, true width not
known’).		 •
True width of mineralisation is derived from detailed three-
dimensional geological rock models.
•
Various ore bodies are intercepted at varying degrees of
obliqueness, therefore a simple conversion to true thickness
from down hole intercepts is not possible.
•
General geometry of mineralisation is sub-vertical tabular
bodies generally dipping between 60° and 90°, with true
thickness of mineralisation between several metres and 140 m.
Diagrams •
Appropriate maps and sections (with
scales) and tabulations of intercepts
should be included for any significant
discovery being reported These should
include, but not be limited to a plan
view of drill hole collar locations and
appropriate sectional views.		 •
Maps showing drill hole collar locations and prospects are
presented in the body of this report.
Balanced
reporting		 •
Where comprehensive reporting of all
Exploration Results is not practicable,
representative reporting of both low
and high grades and/or widths should
be practiced to avoid misleading
reporting of Exploration Results.		 •
Drill hole information is incorporated into the Mineral
Resource estimates.
Other substantive
exploration data		 •
Other exploration data, if meaningful
and material, should be reported
including (but not limited to): geological
observations; geophysical survey
results; geochemical survey results; bulk
samples – size and method of
treatment; metallurgical test results;
bulk density, groundwater, geotechnical
and rock characteristics; potential
deleterious or contaminating
substances.		 •
Additional exploration data such as ground/air magnetic
surveys, gravity and geochemical soil sampling are mentioned
in technical reports available from the company website.
Metallurgical testing is reported in full detail in all technical
reports and updated as required. Bulk density data is reported
in full detail with explanations of final assumptions and
modelling parameters included in technical reports. All relevant
geotechnical and rock characteristic data is fully described in
reports.
Further work •
The nature and scale of planned further
work (e.g. tests for lateral extensions or
depth extensions or large-scale step-out
drilling).
•
Diagrams clearly highlighting the areas		 •
A Bankable Feasibility Study (BFS) is planned for the Moonshine
and Moonshine North deposits. A metallurgical test work
program will be undertaken using representative core samples
to develop an optimal grind size and flowsheet to produce a
saleable magnetite concentrate.
•
Further resource drillingmaybe conducted in the future to

19 | P a g e

Criteria JORC Code explanation Commentary
of possible extensions, including the
main geological interpretations and
future drilling areas, provided this
information is not commercially
sensitive.		 upgrade the Mineral Resource category for Mineral Resource
currently classified as Inferred. This work will be undertaken as
required after the release of the BFS.
•
No immediate resource drilling is planned for the Snark, Clark
Hill South, Clark Hill North and Sandalwood deposits. These
deposits are planned for future development after
development of the Moonshine Project, comprising the
Moonshine and Moonshine North deposits.
•
Diagrams and maps of potential areas for resource expansion,
extension and upgrading (in category) are produced in-house
for review and approval by management before
drilling/exploration programs are finalized and executed.

Section 3 Estimation and Reporting of Mineral Resources – Moonshine and Moonshine North

Criteria JORC Code explanation Commentary
Database integrity •
Measures taken to ensure that data has
not been corrupted by, e.g. transcription
or keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
•
Data validation procedures used.		 •
Data used in the Mineral Resource estimate is sourced from
relational database in MS Access format, maintained by
Macarthur.
•
Relevant tables from the data base are exported to MS Excel
format and converted to csv format for import into Datamine
software for use in the Mineral Resource estimate.
•
Validation protocols for the data entered into the database
are described in Section 1.
Site visits •
Comment on any site visits undertaken by
the Competent Person and the outcome
of those visits.
•
If no site visits have been undertaken
indicate why this is the case.		 •
The Competent Person (Mineral Resources) inspected the
property on several occasions between 2008 and 2012.
During each site visit, drilling operations and sampling
procedures were inspected, proposed drill hole locations
reviewed, geological outcrops were inspected, and geological
and project discussions held with Macarthur staff.
•
COVID 19 travel restrictions have prevented the Competent
Person from visiting the project during 2020. When travel
restrictions are lifted, the Competent Person will aim to
conduct a site visit in conjunction with other technical staff
during the preparation of the Moonshine BFS.
Geological
interpretation		 •
Confidence in (or conversely, the
uncertainty of) the geological
interpretation of the mineral deposit.
•
Nature of the data used and of any
assumptions made.
•
The effect, if any, of alternative
interpretations on Mineral Resource
estimation.
•
The use of geology in guiding and
controlling Mineral Resource estimation.
•
The factors affecting continuity both of
grade and geology.		 •
There is a reasonable to high level of confidence in the
geological interpretation of the Moonshine and Moonshine
North deposits, as reflected in the classification levels of the
Mineral Resource. The confidence level is higher for the
geometry of the mineralisation, and the true width, than for
the depth of mineralisation.
•
Geological interpretations were based upon geologically
logged and chemically analyses drill hole samples and
mapping of outcrop. A lower cut-off of 15% DTR or 30% head
Fe was used to constrain the mineralisation domains. A
highly siliceous zone in the footwall of the Moonshine
deposit was domained out from the geological model, which
also exhibited low levels of magnetite mineralisation.
•
Geological factors such as strike and dip of the individual BIF
lenses controlled the geometry of the mineralisation
domains. Surface mapping of the BIF outcrops guided the
geological interpretations.
•
Mineralisation domains along strike and down dip were
curtailed when the grade consistently fell below 30% Fe. The
mineralised interpretation used for the estimates extends
from the base of oxidation(at an average of approximately

20 | P a g e

Criteria JORC Code explanation Commentary
65 m below surface) to the depth of the mineralised drill
intersections ranging from approximately 200 m to 350 m
below surface.
•
A base of complete oxidation was modelled to constrain the
reported Mineral Resource within the fresh rock zones only.
This was guided by geological logging and sample assays.
Dimensions •
The extent and variability of the Mineral
Resource expressed as length (along
strike or otherwise), plan width, and
depth below surface to the upper and
lower limits of the Mineral Resource.		 •
The mineralisation extends along a strike extent of 7,000 m
(Moonshine and Moonshine North).
•
Mineralisation true widths vary from 10 m to 140 m. Depth
of mineralization commences below the base of oxidation.
The classified Mineral Resource extends between 200 m and
250 m below the base of oxidation.
•
The mineralization is open at depth with the current drilling.
For resource estimation the mineralisation has been
constrained by geological knowledge, the available drilling
and where appropriate, expected pit depths.
Estimation and
modelling
techniques		 •
The nature and appropriateness of the
estimation technique(s) applied and key
assumptions, including treatment of
extreme grade values, domaining,
interpolation parameters and maximum
distance of extrapolation from data
points. If a computer assisted estimation
method was chosen include a description
of computer software and parameters
used.
•
The availability of check estimates,
previous estimates and/or mine
production records and whether the
Mineral Resource estimate takes
appropriate account of such data.
•
The assumptions made regarding
recovery of by-products.
•
Estimation of deleterious elements or
other non-grade variables of economic
significance (e.g. sulphur for acid mine
drainage characterisation).
•
In the case of block model interpolation,
the block size in relation to the average
sample spacing and the search employed.
•
Any assumptions behind modelling of
selective mining units.
•
Any assumptions about correlation
between variables.
•
Description of how the geological
interpretation was used to control the
resource estimates.
•
Discussion of basis for using or not using
grade cutting or capping.
•
The process of validation, the checking
process used, the comparison of model
data to drillhole data, and use of
reconciliation data if available.		 •
Datamine Studio and Surpac software were used for
geological modelling, block modelling, grade interpolation,
Mineral Resource classification and reporting. GeoAccess
Professional and Snowden Supervisor were used for
geostatistical analyses of data. Mineralisation domains were
based upon a lower cut-off of 30% head Fe or 15% DTR.
Mineralisation domains were encapsulated by means of 3D
wireframed envelopes. Domains were extrapolated along
strike or down dip to half a section spacing or if a barren hole
cut the down dip extension before this limit. Drill hole
samples were composited to 5 m sample lengths, and
statistical analyses for Fe(%), P(%), SiO2(%), Al2O3(%), LOI(%)
and S(%) were carried out. Grade cutting was employed to
ensure excessively high grades, for any of the grade
variables, would not have an undue influence upon the grade
interpolation by smearing high grades through the domains.
•
A block model was created incorporating all the geological
domains, with block sizes 25 m x 25 m x 10 m. Sub-celling of
2.5 m x 2.5 m x 1 m was used to ensure the domain volumes
were adequately filled with blocks.
•
Variograms were modelled for head grades for Fe, SiO2,
Al2O3, MgO, P, S and LOI; and for concentrate grades for Fe,
SiO2, Al2O3, MgO, P, S and LOI. A plunge to the
mineralisation towards the southeast was modelled for all
variograms. Low to moderate relative nugget effects were
modelled for all grades, with short ranges of between 80 m
and 110 m modelled, accommodating over half of the sample
population variance.
•
Kriging neighbourhood analysis (KNA) was carried out to
assist with determining appropriate sample search and
selection criteria.
•
All RC and diamond drill hole data constrained within the
mineralisation envelopes were utilised in the grade
interpolation. Grade estimation was by OK with IDS
estimation concurrently run as a check estimate. A minimum
of 8 and maximum of 18 samples were used in any one block
estimate. A maximum of 4 composited samples per drill hole
were used in any one block estimate. Cell discretisation of 3 x
3 x 3 was used. Grade interpolation was run within the
individual mineralisation domains, acting as hard boundaries.
Search ellipsoid radii varied between the deposits, typically a
primary search ellipse of 240 m along strike and down
plunge,by120 m down dipby40 m across strike. Grades

21 | P a g e

Criteria JORC Code explanation Commentary
were interpolated into the parent cells.
•
Datamine’s Dynamic anisotropy functionality was used to
control the orientation of the search ellipse, relative to the
local orientation of the mineralisation domain.
•
Grade interpolation results were compared with previous
Mineral Resource estimates and any anomalous differences
were investigated.
•
Head grades were estimated for Fe, SiO2, Al2O3, P, MgO,
LOI, S, CaO, K2O, MnO, Cr, TiO2 and V. Concentrate grades
were estimated for the same elements and oxides. The Mass
Recovery percentage was also estimated using DTR results.
•
Grades were also interpolated into the waste domains and
the oxide zone of the mineralisation domains.
•
No SMU assumptions were made.
•
The grade models were validated by 1) creating slices of the
model and comparing to drill holes on the same slice; 2)
swath plots comparing average block grades with average
sample grades on nominated easting, northing and RL slices;
and 3) mean grades per domain for estimated blocks and
flagged drill hole samples. No mining has taken place
therefore no reconciliation data was available.
Moisture •
Whether the tonnages are estimated on a
dry basis or with natural moisture, and
the method of determination of the
moisture content.		 •
Tonnages are estimated on a dry basis.
Cut-off
parameters		 •
The basis of the adopted cut-off grade(s)
or quality parameters applied.		 •
The Mineral Resources are quoted from blocks above 15%
DTR. This cut-off grade is also the domain cut-off. The DTR
cut-off is required to ensure a higher volume of magnetite
bearing mineralisation is selected, removing the rock
volumes with low magnetite content.
Mining factors or
assumptions		 •
Assumptions made regarding possible
mining methods, minimum mining
dimensions and internal (or, if applicable,
external) mining dilution. It is always
necessary as part of the process of
determining reasonable prospects for
eventual economic extraction to consider
potential mining methods, but the
assumptions made regarding mining
methods and parameters when
estimating Mineral Resources may not
always be rigorous. Where this is the
case, this should be reported with an
explanation of the basis of the mining
assumptions made.		 •
Mineralisation outcrops at surface and was modelled to a
depth to which open pit mining would operate. No
assumptions have been made to date regarding minimum
mining widths or dilution controlling the Mineral Resource
estimates.
Metallurgical
factors or
assumptions		 •
The basis for assumptions or predictions
regarding metallurgical amenability. It is
always necessary as part of the process of
determining reasonable prospects for
eventual economic extraction to consider
potential metallurgical methods, but the
assumptions regarding metallurgical
treatment processes and parameters
made when reporting Mineral Resources
may not always be rigorous. Where this is
the case, this should be reported with an
explanation of the basis of the
metallurgical assumptions made.		 •
Metallurgical test work was considered sufficient to support
a Preliminary Economic Assessment (2019) for the
Moonshine deposit.
•
A metallurgical sample was prepared using drill samples from
two RC holes, one located in Moonshine and the other in
Moonshine North. The DTR and head Fe grades from the
samples are higher than the average grades and recoveries
of surrounding samples.
•
The Low Intensity Magnetic Separators (LIMS) test results
yielder a poorer quality concentrate than was determined
from the DTR preliminary analysis. The reason for this is
unknown and will be investigated further during the
proposed BFS.

22 | P a g e

Criteria JORC Code explanation Commentary
Environmental
factors or
assumptions		 •
Assumptions made regarding possible
waste and process residue disposal
options. It is always necessary as part of
the process of determining reasonable
prospects for eventual economic
extraction to consider the potential
environmental impacts of the mining and
processing operation. While at this stage
the determination of potential
environmental impacts, particularly for a
greenfields project, may not always be
well advanced, the status of early
consideration of these potential
environmental impacts should be
reported. Where these aspects have not
been considered this should be reported
with an explanation of the environmental
assumptions made.		 •
Environmental factors and assumptions have been examined
as part of the PFS for the Ularring Hematite Project,
overlapping or immediately adjacent to the Lake Giles
Magnetite Project. The Ularring Hematite Project has
received State and Commonwealth environmental approvals.
Additional environmental surveys are required over areas of
the magnetite deposits that are not included in the
environmental approvals for the Ularring Hematite Project.
The Company is not aware of any significant environmental
reasons why approval is unlikely to be granted for the Lake
Giles Magnetite Project.
Bulk density •
Whether assumed or determined. If
assumed, the basis for the assumptions. If
determined, the method used, whether
wet or dry, the frequency of the
measurements, the nature, size and
representativeness of the samples.
•
The bulk density for bulk material must
have been measured by methods that
adequately account for void spaces (vugs,
porosity, etc.), moisture and differences
between rock and alteration zones within
the deposit.
•
Discuss assumptions for bulk density
estimates used in the evaluation process
of the different materials.		 •
A total of 624 drill samples were captured within the
mineralisation domains and statistically assessed to
determine the mean and data ranges, and to see if any
excessively low or high SG values were present. Three
mineralisation domains contain SG data. A further 400
samples were taken from the BIF oxide zones, or the footwall
and hangingwall waste zones. Core samples were sealed
prior to immersion in water. A conventional Archimedes
wet/dry weighing was used to measure density.
•
Density was determined by way of algorithms comparing
head Fe versus the measured SG values from diamond core
billets, from the domained data.
o
For main Moonshine zone, DENSITY = (0.0241FE)
+ 2.624
o
For eastern Moonshine, DENSITY = (0.0293FE) +
2.492
o
For Moonshine North, DENSITY = (0.0295*FE) +
2.468
o
Where FE is the estimated block grade.
•
The Moonshine northeast zones used the Moonshine North
algorithm
•
Algorithms were developed for the other non-mineralised
domains.
Classification •
The basis for the classification of the
Mineral Resources into varying
confidence categories.
•
Whether appropriate account has been
taken of all relevant factors (relative
confidence in tonnage/grade estimations,
reliability of input data, confidence in
continuity of geology and metal values,
quality, quantity and distribution of the
data).
•
Whether the result appropriately reflects
the Competent Person’s view of the
deposit.		 •
Classification of the Mineral Resource estimates was carried
out taking into account the geological understanding of the
deposit, QAQC of the samples, density data and drill hole
spacing.
•
The Measured Mineral Resources were based upon a
confirmed understanding of the geological and grade
continuity. Drill spacing is typically 25 m along the northerly
strike, with often 2 to 3 holes per section. The Measured
volumes also contain samples which were subject to DTR test
work, with associated assays from the recovered
concentrates. SG measurements were also available.
The Indicated Mineral Resources were based upon an assumed
understanding of the geological and grade continuity. Drill spacing is
typically 25 – 50/100 m along the northerly strike, with at least one
hole per section. The Indicated volumes also contain samples subject
to DTR test work,with associated assays from the recovered

23 | P a g e

Criteria JORC Code explanation Commentary
concentrates. SG measurements may also be available.
•
The Inferred Mineral Resources were based upon an implied
understanding of the geological and grade continuity. Some
mineralisation domains are only cut by one drill hole, and the
geological models are strongly guided by surface mapping of
the BIF outcrops. Drill spacing is typically ≥100 m along the
northerly strike. DTR and SG results are generally absent
from within the Inferred volumes.
•
All available data was assessed and the Competent Persons
relative confidence in the data was used to assist in the
classification of the Mineral Resource.
•
The current classification assignment appropriately reflects
the Competent Person’s view of the deposit.
Audits or reviews •
The results of any audits or reviews of
Mineral Resource estimates.		 •
No independent audit of the Mineral Resources has been
conducted. Alternate CSA Global resource geologists
reviewed the Mineral Resource estimates prior to release of
the results to Macarthur Minerals, as part of CSA Global’s
procedures.
Discussion of
relative accuracy/
confidence		 •
Where appropriate a statement of the
relative accuracy and confidence level in
the Mineral Resource estimate using an
approach or procedure deemed
appropriate by the Competent Person. For
example, the application of statistical or
geostatistical procedures to quantify the
relative accuracy of the resource within
stated confidence limits, or, if such an
approach is not deemed appropriate, a
qualitative discussion of the factors that
could affect the relative accuracy and
confidence of the estimate.
•
The statement should specify whether it
relates to global or local estimates, and, if
local, state the relevant tonnages, which
should be relevant to technical and
economic evaluation. Documentation
should include assumptions made and the
procedures used.
•
These statements of relative accuracy and
confidence of the estimate should be
compared with production data, where
available.		 •
No other estimation method or geostatistical analysis has
been performed.
•
The Mineral Resource is a local estimate, whereby the drill
hole data was geologically domained above a nominated
Fe(%) cut-off grade, resulting in fewer drill hole samples to
interpolate the block model than the complete drill hole
dataset, which would comprise a global estimate.
•
Relevant tonnages and grade above a nominated cut-off
grade are provided in the body of this report. Tonnages were
calculated by filtering all blocks above the cut-off grade and
sub-setting the resultant data into bins by deposit and
classification. The volumes of all the collated blocks were
multiplied by the dry density value to derive the tonnages.
The Fe (%) metal value (g) for each block was calculated by
multiplying the Fe grade (%) by the block tonnage. The total
sum of all metal (g) for the deposit for the filtered blocks was
divided by the total tonnage to derive the reportable Fe
grade (%). The other elemental species mentioned in this
table were similarly reported, based upon the Fe (%)
reporting cut-off grade.
•
The Mineral Resource is not a precise calculation of volumes
and metal, rather it is an estimate based upon relatively wide
spaced sampling locations. The Inferred Mineral Resource
tonnages and grades reported here are an approximation
and further geological testwork, by way of drilling, sampling
and mapping, is required to increase confidence levels.

Section 4 – Estimation and Reporting of Ore Reserves

Orelogy Consulting Pty Ltd estimated the Ore Reserve in accordance with The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition) . The following information is provided in accordance with Table 1 of Appendix 5A of the JORC Code 2012.

24 | P a g e

Criteria JORC Code Explanation Commentary
Mineral Resource
estimate for
conversion to Ore
Reserves		 Description of the Mineral Resource estimate used as
a basis for the conversion to an Ore Reserve.		 The Mineral Resource Estimate used as a basis for the conversion to
the Ore Reserve was dated 29thSeptember 2020 with Mr. David
Williams, of CSA Global Pty Ltd, as the Competent Person.
The total Mineral Resource for the Moonshine and Moonshine
North deposits, reported above 15% Davis tube recovery (DTR),
includes:
•
Measured at 53.9 Mt at 30.8% Fe & 32.2% DTR.
•
Indicated at 218.7 Mt at 27.5% Fe & 31.0% DTR.
•
Inferred at 449.1Mt at 27.1% Fe & 29.2% DTR.
The estimation and reporting of Mineral Resources are outlined in
Section 3 of this Table.
Clear statement as to whether the Mineral Resources
are reported additional to, or inclusive of, the Ore
Reserves.		 Mineral Resources are reported inclusive of Ore Reserves.
Site visits Comment on any site visits undertaken by the
Competent Person and the outcome of those visits.		 Mr. Stephen Craig, the Competent Person for this Ore Reserve
statement is a full-time employee of Orelogy Consulting Pty Ltd
(Orelogy). A site visit to the Lake Giles Iron Ore Project (LGIP) was
untaken on the 1-2 Nov 2021 accompanied by Dean Carter
(Macarthur), Jake Fitzsimons (Orelogy) and Matt Clark (CSA Global)
on behalf of David Williams as CP for the Mineral Resource Estimate.
The site visit found that:
•
The terrain is rugged with medium density scrub
underlying trees of up to 30 m in height.
•
The pits are located on elevated ridges with
shallow cover.
•
Infrastructure will be in gently sloping areas with
thick soil cover that will not be trafficable in wet
weather.
•
Core examined for the Oxide material was
moderately hard and often broken. Fresh rock
was very hard with few joints. All rock will
require blasting.
If no site visits have been undertaken indicate why this
is the case.		 A site visit was undertaken as described above.
Study status The type and level of study undertaken to enable
Mineral Resources to be converted to Ore Reserves.		 The Ore Reserve estimate is based on a Feasibility Study (FS) for the
Moonshine and Moonshine North deposits.
The objective of this FS was to develop an integrated Life of Mine plan
for mining and processing the magnetite ore to produce 3.0 Mt (dry)
of concentrate to be transported to market via the port at Esperance
in Western Australia.
The FS study was compiled by Engenium (now Stantec) with input
from:
•
CSA Global (Geology & Mineral Resources)
•
Pells Sullivan and Meynink (Geotechnical)
•
Orelogy Consulting (Mine Planning)
•
Engenium (metallurgical test work, process
design and non-process infrastructure)
•
Stantec (tailings storage and port reclaim)
•
Engenium (hydrology and hydrogeology)
•
Engenium and Macarthur (Environment)
•
Macarthur & LJF Consulting (marketing)
•
Macarthur and FTI (financial analysis)
•
Macarthur and Projectus (logistics)

25 | P a g e

Criteria JORC Code Explanation Commentary
Cut-off
parameters		 The basis of the cut-off grade(s) or quality parameters
applied.		 Revenues for Iron ore are based on tonnes of product within a grade
specification. The magnetite concentrate specification for the LGIP
was for a concentrate with:
•
66.1% Fe
•
4.9% SiO2
•
0.02% P
•
0.1% Al2O3
•
0.6% S
•
-2.7% LOI
A cut-off grade of 15% DTR was used for ore definition and reporting
after applying dilution to the block model.
The 15% DTR cut-off grade was rounded up from the breakeven cut-
off grade of 14.2% DTR using the formula:
BECOG (DTR) = (Process cost)/(Price – Selling costs).
Mining factors or
assumptions		 The method and assumptions used as reported in the
Pre-Feasibility or Feasibility Study to convert the
Mineral Resource to an Ore Reserve (i.e. either by
application of appropriate factors by optimisation or
by preliminary or detailed design).		 The Open Pit Ore Reserve Estimate is underpinned by mine plans that
deliver ore for processing on site to produce a concentrate for export.
The mine planning activities included to derive the Ore Reserve were:
•
Detailed dilution modelling for a bulk mining
operation.
•
Blasting analysis for ore and waste with ore
patterns optimised for the crusher feed
specifications.
•
Open pit optimisation and selection of a viable
economic shell as the basis for design.
•
Development of ultimate pit designs with
practical internal stages suitable for the size of
the mining equipment and batter-berm
parameters based on recommendations from
PSM.
•
Mine scheduling using blending of ore types to
provide consistent ore feed to the plant for
processing. Blending was based on balancing DTR
grade, with Fe and SiO2 in concentrate grades to
eliminate variability of feed grades and
concentrate production.
•
Haulage simulations based on rim-pull curves and
fuel burn factors were used to develop haulage
cycle times and fuel consumption for each source
and destination.
•
Contract mining costs were sourced via a request
for pricing sent to seven Mining Contractors with
four submissions received. The costs used in the
estimate were based on the lowest complete
submission.

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Criteria JORC Code Explanation Commentary
The choice, nature and appropriateness of the selected
mining method(s) and other mining parameters
including associated design issues such as pre-strip,
access, etc.		 Conventional open pit mining method using excavators and rigid
dump trucks was selected as the most appropriate mining method.
The bench heights were reviewed in parallel with the dilution
modelling and 5 m flitch height selected with blasting on 10 m
benches. This suited the selected equipment size of 300-400 t
excavators in backhoe configuration matched to 180 t rear dump
trucks.
The pits and internal stages were each designed with separate access
using dual lane ramps except for the final two benches where single
lanes were adopted.
All oxide material (generally to a depth of approximately 55 m) will be
pre-stripped in each stage prior to commencement of ore mining
procedures.
The assumptions made regarding geotechnical
parameters (e.g. pit slopes, stope sizes, etc.), grade
control and pre-production drilling.		 A geotechnical assessment of the slope design was undertaken by
Pells Sullivan Meynink (PSM) with batter / berm configurations
provided for design of the final walls based on weathering profiles
and footwall / hanging wall conditions.
Grade control drilling is proposed using a 12.5 m by 12.5 m pattern
angled 60operpendicular to the strike of the pits using RC drilling to
minimise contamination. Drilling will be campaigned with ½ the
pattern drilled at 20 m vertical intervals to a depth of 40 m in advance
of mining.
The major assumptions made and Mineral Resource
model used for pit and stope optimisation (if
appropriate).		 The Mineral Resource model created to estimate the Mineral
Resources was used as the basis for pit optimisation and scheduling.
To establish mineable quantities, open pit optimisation and
sensitivities were completed on the diluted Mineral Resource model.
Waste mining costs and an ore mining premium were applied at the
block level in the diluted model. The base case optimisations
considered Indicated materials only, and applied grade control, ore
handling, processing, G&A, road transport, rail, and port costs to the
tonnes processed or the concentrate produced.
The net revenue used in the optimisation was derived using a base
price of US$125/t for 66% Fe concentrate, supplied by Macarthur,
with 5% royalties and 0.73 USD/AUD exchange rate.
Only diluted blocks with a positive value were identified as Ore during
pit optimisation.
The shell selection was based on the business objectives of
maximising the discounted cash flow whilst providing sufficient mine
life for the Project. A conservative open pit optimisation shell, at a
revenue factor of 0.88 times base net concentrate price, was selected
as the basis for design.
The mining dilution factors used. Dilution was applied to the Mineral Resource model. The model was
initially re-blocked to 6.25 m by 6.25 m by 5.0 m with ore and waste
parcels. This averages the ore grades within the regular blocks. No
dilution was applied to blocks with 100% ore. Blocks that straddle an
ore-waste boundaries are indicative of an edge block and dilution was
applied using a 2 m skin.
As a result of applying dilution using this method, the model reported
dilution of 2.5% at a grade of 14% DTR and ore loss of 2.0% at grade
of 30% DTR. All grades were diluted in this manner. The low dilution
numbers are considered consistent with the wide orebodies at
Moonshine and Moonshine North.

27 | P a g e

Criteria JORC Code Explanation Commentary
The mining recovery factors used. No additional recovery factors were applied.
Any minimum mining widths used. The mine design used minimum mining width of 30 m for the base of
pits. The stage designs targeted a minimum mining width of 120 m as
a practical mining without compromising operability. This was
reduced to 50 m over short distances to maintain access.
The manner in which Inferred Mineral Resources are
utilised in mining studies and the sensitivity of the
outcome to their inclusion.		 Only Indicated and Measured Mineral Resources were used for the
reporting of the Ore Reserve estimate. Inferred Mineral Resource was
treated as waste.
The infrastructure requirements of the selected mining
methods.		 The Project contains no site facilities with all mining infrastructure to
be supplied and constructed by the Mining Contractor including:
•
ROM pad
•
Mine haul roads to pits and waste dumps
•
Magazine and bulk explosives storage
•
Heavy and light vehicle maintenance workshops
and wash bays
•
Mine administration facilities, ablutions, crib
rooms and training rooms
•
Water storage dams for dust suppression and
dewatering.
The
mining
contractor
will
be
supplied
power,
water,
accommodation, flights, fuel and fuel storage facilities by the
Company. Such facilities have been considered in the Feasibility Study
and designed by Engenium.
Metallurgical
factors or
assumptions		 The metallurgical process proposed and the
appropriateness of that process to the style of
mineralisation.
Whether the metallurgical process is well-tested
technology or novel in nature.
The nature, amount and representativeness of
metallurgical test work undertaken, the nature of the
metallurgical domaining applied and the
corresponding metallurgical recovery factors applied.
Any assumptions or allowances made for deleterious
elements.
The existence of any bulk sample or pilot scale test
work and the degree to which such samples are
considered representative of the orebody as a whole.
For minerals that are defined by a specification, has
the ore reserve estimation been based on the
appropriate mineralogy to meet the specifications?		 Conventional crushing, grinding and magnetic separation processing
is proposed with flotation to remove silica, which will yield a saleable
magnetite concentrate with a LOM grade of 66% Fe. The process is
well tested, widely used in the mining industry and there are no novel
steps in the flowsheet.
Metallurgical test work was undertaken on two bulk samples
representing two broad geological domains of the Moonshine and
Moonshine North deposits. Recovery factors used in mine schedule
were based on DTR assays in the Mineral Resource block model. The
recovery factors are considered to align with the bulk sample test
work.
The bulk sample test work included two composite samples from
several diamond drill holes from across the extent of the Moonshine
and Moonshine North deposits. Head grade assays of the bulk
composites are similar to the average grades of the Mineral Resource.
No penalties were applied for any deleterious elements as the
Company advised the product specification achieved in the test work
is of saleable grade and no price penalty should apply.

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Criteria JORC Code Explanation Commentary
Environmental The status of studies of potential environmental
impacts of the mining and processing operation.
Details of waste rock characterisation and the
consideration of potential sites, status of design
options considered and, where applicable, the status of
approvals for process residue storage and waste
dumps should be reported.		 Some ecological surveys have been conducted across parts of the
project.
Baseline environmental factors to be addressed in an environmental
impact assessment (EIA) have been scoped and assessment of the
approval process and risks has been completed.
The Company intends to commence the EIA and approval process on
completion of the Feasibility Study. Infrastructure placement was a
key consideration in the design phase of the study to minimise
impacts to the surrounding environment. From desktop studies there
is potential for listed species to occur in the area but none have been
identified across the mining area. Further studies will be conducted,
and mitigation strategies will be adopted ahead of final design.
Waste rock characterisation will be undertaken as part of the EIA.
Based on past waste rock characterisation of the oxide material north
of the project, significant AMD issues are not expected to occur and
could be managed through appropriate encapsulation in the waste
dump. Waste dump locations are not expected to have significant
impacts on sensitive environments or groundwater.
Infrastructure The existence of appropriate infrastructure: availability
of land for plant development, power, water,
transportation (particularly for bulk commodities),
labour, accommodation; or the ease with which the
infrastructure can be provided, or accessed.		 No infrastructure currently exists at the proposed mining area. The
project is located in close proximity (200 km) to the regional mining
town of Kalgoorlie which is easily accessible from the main capital of
Perth. The Project is located within 100 km of an existing heavy
haulage rail line with direct access to the Port of Esperance. The port
is a deep-water port accessible by Cape class vessels and has ship
loading infrastructure for iron ore export. The feasibility study has
assessed the port and rail capacity and has made appropriate
allowances for engineering works to support its export target.
Land tenure for the mining area is held by the Company as described
in section 2 of this table. Mining Leases are granted and provide
adequate access to mine the deposit.
The Company will require land tenure for the development of
processing infrastructure, haul road, bore fields, accommodation,
airstrip and a rail siding.
Tenure surrounding the mining leases is Crown Land and accessible
for mining related infrastructure. The Company has entered into an
agreement with a neighbouring tenement holder to obtain the rights
to the ground for its waste dumps and processing infrastructure. The
Company is currently progressing the application of a General-
Purpose Lease under the Mines Administration Act for this purpose.
The Company is also progressing with land tenure applications to
support development of its haul road, rail siding and bore field. On
final definition of the project the Company will advance all other
tenure applications for supporting facilities such as a camp and
airstrip.
The mine will operate on a mostly FIFO basis from Perth and the
feasibility study has made adequate allowance for a private airfield
located adjacent to the mine site.

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Costs The derivation of, or assumptions made, regarding projected capital costs in the study.

The methodology used to estimate operating costs. Allowances made for the content of deleterious elements.

The source of exchange rates used in the study.

Derivation of transportation charges.

The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

The allowances made for royalties payable, both Government and private.

The mining costs in 2021 AUD prices are supported by contractor submissions provided during a Request for Pricing for mining services at LGIP, in accordance with a Class 3 estimate.

The capital cost estimate in 2021 AUD prices has been developed by Engenium based on a mechanical equipment list and material takeoffs with vendor pricing for large mechanical items and in-house Engineering estimates for process and non-process infrastructure in accordance with Class 3 estimate.

Engenium developed capital cost estimates for:

  • Camp accommodation

  • • Airfield • Bulk earthworks • Water supply, storage, and treatment facilities • Crushing, concentrator and associated process service infrastructure

  • • Tailings storage facility • Haul road, access roads and civils • Mine supporting infrastructure • Electrical services • Rail loading facilities • Port infrastructure including rail unload, product storage and reclaim.

Operating costs in 2021 AUD prices for the processing plant, mining, and site administration for a production rate of 9.7 Mtpa of ore have been estimated by appropriately experienced industry consultants.

Operating costs were developed by Engenium in accordance with the level of engineering for a Class 3 estimate for mineral processing and associated services. Cost estimation for product logistics including road and haulage and shipping were obtained by the Company from contractor submissions.

Capital costs that have been absorbed into operating costs include mine facilities and workshops, power generation and port infrastructure development.

Mine closure and rehabilitation liability costs have been included in the financial model based on areas of disturbance. These commitments are in line with the DMIRS cost estimates.

Operating and capital costs were estimated using the following exchange rate assumptions, based on historical Forex data over 5 years up to 30 June 2021 rounded to the nearest whole unit). Specific 5 year averages were: USD 0.7262 (rounded to 0.73); Euro 0.6261 (rounded to 0.63); JPY 79.17 (rounded to 79.0).

AUD: USD 0.73
AUD: EURO 0.63
AUD: JPY 79.0

Concentrate transport charges have been applied on a contractorbased solution for haulage to the rail head, rail charges to Esperance and port charges for loading of the ship for sea freight to China. Access to the existing rail line is based on quoted tariffs provided by the network operator.

No penalties for deleterious elements including have been applied in the financial model on the basis of the test work product specification and Company engagement with various end users. Government royalties have been applied at the rate of 5%.

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Criteria JORC Code Explanation Commentary
Revenue factors The derivation of, or assumptions made regarding
revenue factors including head grade, metal or
commodity price(s) exchange rates, transportation and
treatment charges, penalties, net smelter returns, etc.
The derivation of assumptions made of metal or
commodity price(s), for the principal metals, minerals
and co-products.		 Price forecasts supplied by Macarthur for 66% magnetite iron ore
product were applied in the pit optimisation, development of the
mine schedule and financial model.
Metal prices used to estimate the Ore Reserve were:
•
US$125/dmt for iron ore
Selling cost used to estimate the Ore Reserve were:
•
Concentrate road transport of $9.09/t wet
•
Concentrate rail transport of $15.64/t wet
•
Port charge of $7.58/t wet
Market
assessment		 The demand, supply and stock situation for the
particular commodity, consumption trends and factors
likely to affect supply and demand into the future.
A customer and competitor analysis along with the
identification of likely market windows for the product.
Price and volume forecasts and the basis for these
forecasts.
For industrial minerals the customer specification,
testing and acceptance requirements prior to a supply
contract.		 Demand for iron ore globally is strong. It is the key component used
in the steel making process. Steel is the most widely used metal in
modern society and it is the primary building material and indicator
for industrialization, urbanisation and economic wealth.
China dominates steel production and its industrialisation programs
over the last several decades have seen it emerge as the largest
consumer of iron ore products globally. China produced over
1000 Mt of steel in 2020 (Commonwealth Department of Industry,
Innovation and Science,’ Resources and Energy Quarterly’, March
2021). However future iron ore consumption growth is expected to
be driven from countries such as India and other developing south-
east Asian nations.
There have been no formal market assessment investigations or price
and volume forecasts however, the product specification is a high-
grade concentrate that is expected to be attractive to blend into
sinter feed, improving the sinter quality, or potentially for blast
furnace pellet production. The product grade is expected to be 66.1%
Fe, with correspondingly low levels of silica and alumina. As a
headline grade, the product is consistent with Anglo’s Minas Rio BF
product (which grades between 66-67% Fe) and Champion Iron’s
Bloom Lake product (66.5% Fe), both of which have achieved
substantial sales at prices that are considerably higher than the major
fines brands.
All current and future iron ore product produced by Macarthur from
the Lake Giles Iron Project will be traded by Glencore Plc under an
existing binding Offtake Agreement. The likely markets are
anticipated to be Asian customers. Demand in this market is driven
by internal consumption.
Economic The inputs to the economic analysis to produce the net
present value (NPV) in the study, the source and
confidence of these economic inputs including
estimated inflation, discount rate, etc.
NPV ranges and sensitivity to variations in the
significant assumptions and inputs.		 A discount rate of 6% (using industry standard assumptions in
calculating WACC) has been utilised to determine NPV for the Lake
Giles Iron Project.
Orelogy was provided with the Feasibility Study financial model
demonstrating the economic viability of the project based on this Ore
Reserve Estimate.
A range of sensitivities was produced for the pit optimisation which
showed that the project was moderately sensitive to most changes in
the significant inputs and assumptions and highly sensitive to
reductions in commodity price.
The Ore Reserve Estimate is based on a FS level of accuracy with
inputs from open pit mining, processing, sustaining capital and
contingencies scheduled and costed to generate the Ore Reserve cost
estimate and cashflows.
The Ore Reserve returns a positive NPV based on the FS and
associated modifying factors.

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Criteria JORC Code Explanation Commentary
Social The status of agreements with key stakeholders and
matters leading to social licence to operate.		 The Mining Leases are situated in the Marlinyu Ghoorlie Native Title
Claim (WC2017/007) accepted for registration 28/3/19. The
Company’s mining leases were granted pre native title and are
therefore not subject to any native title agreements. Future
tenement applications will be subject to negotiation with the
claimants.
The Company is progressing tenure for its proposed rail siding. This
tenure requires a lease under the Land Administration Act for which
the Company is currently negotiating an Indigenous Land Use
Agreement (ILUA) with the native title claimants.
The tenements are free from any private royalties or encumbrances.

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Criteria JORC Code Explanation Commentary
Other To the extent relevant, the impact of the following on
the project and/or on the estimation and classification
of the Ore Reserves:
Any identified material naturally occurring risks.
The status of material legal agreements and marketing
arrangements.
The status of governmental agreements and approvals
critical to the viability of the project, such as mineral
tenement status, and government and statutory
approvals. There must be reasonable grounds to
expect that all necessary Government approvals will be
received within the timeframes anticipated in the Pre-
Feasibility or Feasibility study. Highlight and discuss
the materiality of any unresolved matter that is
dependent on a third party on which extraction of the
reserve is contingent.		 No material naturally occurring risks have been identified that would
significantly impact the design basis employed in the Feasibility
Study. Natural impacts such as weather and flooding have been
addressed at an appropriate Average Recurrence Interval (ARI) for
the relevant infrastructure.
Approval status is addressed under the environmental section.
There are reasonable grounds to assume that required Government
approvals will continue to be granted within the timeframes
anticipated in the mine schedules supporting the Ore Reserve
reporting.
Macarthur has entered into an Offtake Agreement with Glencore Plc
for the sale and purchase of up to 4 Mtpa of iron ore from the Lake
Giles Product for 10 years, with an option for a further 10 years. The
Offtake Agreement is binding and guarantees the purchase of
Macarthur’s product after it passes the ship rail. Under the
agreement, Glencore is responsible for the marketing of all product
and Macarthur assumes no credit risk.
There are no other material binding legal agreements or marketing
agreements in place that are anticipated to impact on the Ore
Reserve, however the Company has entered into the following
arrangements:
1.
Macarthur entered into a non-binding Memorandum of
Understanding with Southern Ports Authority in January 2021
which provides a pathway for agreeing a potential access and
operating solution for the export of Macarthur’s high grade
magnetite iron ore product via the Port of Esperance. The
MOU contemplates engagement around the current master-
planning process for Esperance Port. The agreement does not
provide for access or an allocation of capacity at the Port,
which will be conditional upon identification and approval of
an acceptable infrastructure development solution at the port
and various approvals, as well as agreed milestones being met
by Macarthur (including securing project financing for its Lake
Giles Iron Project).
2.
Macarthur has received an Indicative Track Access Pricing
proposal from Arc Infrastructure, which owns and operates the
below rail assets between Macarthur’s proposed rail siding
west of Kalgoorlie and Esperance Port. The ITAP confirms that
Arc will be able to make available sufficient below rail paths to
transport Macarthur’s product to Esperance Port, subject to a
binding agreement being entered into.
The extraction of the reserve is contingent upon binding port and rail
agreements being finalised. Whilst matters concerning the final
design and layout of any new infrastructure at Esperance Port is yet
to be agreed with Southern Ports Authority and the Western
Australian State Government, Macarthur considers that there are
reasonable grounds to expect that all necessary third party and
Government approvals will be received within the timeframes
anticipated by the Feasibility Study.

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Criteria JORC Code Explanation Commentary
Classification The basis for the classification of the Ore Reserves into
varying confidence categories.
Whether the result appropriately reflects the
Competent Person’s view of the deposit.
The proportion of Probable Ore Reserves that have
been derived from Measured Mineral Resources (if
any).		 Open Pit Ore Reserves have been derived from a mine plan that is
based on extracting the magnetite mineralisation defined in the
September 2020 Mineral Resource Estimate.
Proven and Probable Ore Reserves were determined from Measured
and Indicated material respectively after applying appropriate
modifying factors as per the guidelines.
These results reflect the Competent Person’s view of the deposit.
Audits or reviews The results of any audits or reviews of Ore Reserve
estimates.		 No audits have been undertaken.
Discussion of
relative accuracy/
confidence		 Where appropriate a statement of the relative
accuracy and confidence level in the Ore Reserve
estimate using an approach or procedure deemed
appropriate by the Competent Person. For example,
the application of statistical or geostatistical
procedures to quantify the relative accuracy of the
reserve within stated confidence limits, or, if such an
approach is not deemed appropriate, a qualitative
discussion of the factors which could affect the relative
accuracy and confidence of the estimate.
The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation
should include assumptions made and the procedures
used.
Accuracy and confidence discussions should extend to
specific discussions of any applied Modifying Factors
that may have a material impact on Ore Reserve
viability, or for which there are remaining areas of
uncertainty at the current study stage.
It is recognised that this may not be possible or
appropriate in all circumstances. These statements of
relative accuracy and confidence of the estimate
should be compared with production data, where
available.		 The Mineral Resource Estimate and hence the Ore Reserve Estimate
relate to global estimates.
The Ore Reserve Estimate is an outcome of the 2022 Mining
Feasibility Study with geological, mining, metallurgical, processing,
engineering, marketing, and financial considerations to allow for the
cost of finance and tax. Engineering and cost estimations have been
completed to a -10%/+15% level of accuracy, consistent with a study
of this nature.
There has been an appropriate level of consideration given to all
modifying factors to support the declaration and classification of the
Ore Reserves.
No production or reconciliation data is yet available for comparison.

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