MAGNETITE MINES LIMITED. — M&A Activity 2017

Apr 11, 2017

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ASX Announcement

12 April 2017

Proposed Lodestone Merger - Potential Gateway to Early Production

• Proposed merger with Lodestone Equites Limited, will position Magnetite Mines Limited (MGT) as the major tenement holder of Braemar Iron Formation in the Mawson Iron Province of South Australia adding Several Mineral Resource Estimates and 80 km of additional prospective stratigraphy

• MGT would acquire Lodestone’s highly prospective Olary Project, based on existing rail infrastructure and development of an offshore port

• The merger would include 100% ownership of the South Australian infrastructure solutions being developed by Braemar Infrastructure Pty Ltd

• MGT would continue in parallel, developing the larger scale Razorback Project based on development of pipeline and offshore port infrastructure.

The Board of Magnetite Mines Limited (ASX: MGT) ( Company ) recently released to the market, the details for a proposed merger with Lodestone Equities Limited ( Lodestone ) ( ASX announcement 07/04/2017 – “Framework Agreement for proposed merger with Lodestone Equities Limited”). This additional release provides information in relation to the Lodestone assets, in particular the rail-based Olary Project. This proposed merger has been foreshadowed in prior ASX releases .

The proposed merger will provide the Company;

1. With significant increase in the total magnetite exploration potential and JORC Resources. This includes over 80 km of strike length of prospective Braemar Iron Formation in South Australia, to the east of the Razorback Deposit and 1,407 km[2] of additional tenure. In addition, Lodestone have an Inferred Resource of 543 Tonnes @ 19% recovered magnetite fraction via DTR (Davis Tube Recovery), with an Fe concentrate grade of 69.6% Fe. ( See details below regarding Lodestone’s Resource and Competent Person Statement ). This Mineral Resource estimate at the Olary Project includes the Red Dam and Nippon Hill Prospects. Two other highly prospective exploration prospects are identified at Wadnaminga and Devonborough (see Figure 1). These two prospects display magnetic anomalies with long strike lengths (> 10km), outcropping or sub-cropping, and are seen as walk up drilling targets in the future.

Magnetite Mines Limited | ABN: 34 108 102 432 | 118B Glen Osmond Road, Parkside, SA 5063 | email: info@magnetitemines.com | www.magnetitemines.com | Tel: +61 8 8427 0516 | Fax: +61 8 8427 0515

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1. 100% ownership of Lodestones’ railway-based, Olary Project. A scoping study has been undertaken by Lodestone on the Red Dam Prospect, that examines the use of existing railway infrastructure and the idea for a deep water port north of Port Germein, Spencers Gulf, South Australia. Preliminary studies have indicated that the Olary Project has the potential of being developed more rapidly than the Razorback Project at a small to medium (start-up) scale, and then later expanded (see Figure 1 and 2). There is also potential access to water supply which is the key to the "start small and ramp up fast" approach. An important feature of the Olary Project will be the potential to produce Direct Reduction (DR) quality feed (69% Fe and above), which yields the highest price premium in the market. This high grade has been demonstrated in DTR analysis and preliminary metallurgical studies of drill sample completed by Lodestone. Further work will be required to qualify that these concentrate grades can be achieved at a larger scale. The Lodestone Scoping Study referred to in this release is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

2. Give the Company complete ownership of all infrastructure developments via 100% ownership of Braemar Infrastructure Pty Ltd (BIPL). All the major and successful iron ore companies fully control their overland transport, their ports, and their shipping. BIBL is planning to develop at least two fully integrated transport solutions:

3. (1) The Olary Project would implement slurry pipeline transport from the Red Dam prospect to a rail loading station at Olary. From the rail dumper 275 rail kilometres away north of Port Germein, the concentrate would be pumped as a slurry via an underwater pipeline to a proprietary offshore 250,000 dwt capable port for storage and dispatch to global steel makers (see Figure 2); and

4. (2) The Razorback Project would use a slurry pipeline to transport magnetite concentrate from mine directly to a proprietary offshore 400,000 dwt capable port north of Wallaroo for storage and dispatch to global steel makers (Figure 3). All pipeline systems would have a return water pipeline to minimise water usage or to make high quality water available for municipal, industrial and agricultural purposes. These BIPL infrastructure proposals have been given “Major Project” designation by the South Australian Government.

Previous studies by the Company in relation to the larger scale Razorback Project are continuing, although the Company’s focus in the immediate future will be on investigating the potential for a smaller scale startup at the Olary Project. A significant advantage to the Company, is that a large part of the work completed at Razorback during the PFS and optimisation studies, is transferable and applicable to the Olary studies. The Board believe that if the Olary Project can be developed, then it may provide the Company with funding from cash flow to progress the Razorback Project and associated pipeline infrastructure development, as well as provide confidence in the market that developments in the Mawson Iron Province are economically viable ventures.

Magnetite Mines Limited

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Figure 1. Aeromagnetic image, with Mawson Iron Project MGT and Lodestone tenements (GDA94 – Z54)

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Figure 2. Regional plan for the Olary Deposit rail transport option

Magnetite Mines Limited

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Figure 3. Regional plan for the Razorback Deposit pipeline transport alternative

About Lodestone

Lodestone Equities Limited is an Isle of Man registered company. Coffee House Group is the major owner of Lodestone. Lodestone, through its wholly owned subsidiaries, Fe Mines Limited (previously Braemar Iron Pty Ltd) and Olary Magnetite Pty Ltd , own outright or have exclusive iron rights to prospective tenements containing Braemar Iron Formation to the east of the Company’s exploration licences. The ground that Lodestone holds, or has exclusive rights to, has over 80 km of Braemar Iron Formation prospective strike length. Together with the Company’s ground, this comprises over 200 km of Braemar Iron Formation prospective strike length. The Braemar Region is one of the largest unexploited magnetite provinces in the world.

Lodestone also owns Braemar Infrastructure Pty Ltd (BIPL), which is developing cost effective methods of transporting and shipping magnetite concentrate in and from South Australia. The South Australian Government has granted the infrastructure being developed by BIPL Major Project status. A task force and case officer from the Department of State Development has been assigned to the infrastructure project.

Olary JORC Resource Estimate Summary

Lodestone Equity Limited has used the services of independent consulting geologists’ H & S Consultants Pty Ltd (“H&SC”) of Sydney, Australia, to complete a maiden resource estimate for the Olary Project in South Australia in September 2016. The new resource estimates are classified according to the 2012 JORC Code & Guidelines. The primary commodity is iron ore in the form of disseminated magnetite hosted by the Braemar Iron Formation, which is a known host to several other magnetite deposits in the general Western NSW/Northern South Australia area.

Magnetite Mines Limited

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The Olary area under review was joint ventured by Lodestone with Helix Resources, but Lodestone now has full ownership of the property. The Olary Project deposits occurs within EL 5267, covering an area of 259 km[2] and located approximately 150km south-west of Broken Hill. The area is divided into northern (Nippon Hill area) and southern zones (Red Dam area) with prospects AREA B in the former and prospects AREA D and AREA E in the latter.

The Olary Project is located at the eastern end of the Adelaidian Fold-Belt, within the Olary Province. The ‘ironstone’ rocks of the Braemar Formation occur as a stratigraphic package of magnetite-rich siltstone associated with diamictite within the lower Umberatana Group. Typically, the magnetite is disseminated in fresh rock with no obvious structural stretching. The magnetite intensity is bed controlled linked to certain grain sizes and sediment composition i.e. a function of the sedimentary regime rather than any obvious structural overprint. There has been no previous exploration for magnetite in the licence areas.

The maiden resource estimates are based on previous diamond and RC drilling completed by Helix Resources Ltd in 2011 to 2013. This comprised 57 holes for 10,751m of RC drilling and 987m of diamond drilling. Drill hole spacing is nominally 300 to 400m along strike and 100 to 150m down dip.

Lodestone has supplied the drillhole database for the deposit to H&SC who have performed limited validation of the data including error checking, and completed some data processing to improve the database and enable easier geological interpretation. H&SC have accepted the drillhole database as satisfactory for resource estimation purposes.

Density data was derived from the downhole geophysics which comprises a density measurement every centimetre. Lodestone completed a series of 75 check density measurements on core samples from one drillhole which showed an overall average difference of <0.4% with the corresponding geophysicallyderived measurements.

H&SC has also completed a set of geological interpretations for the areas that were drilled by Helix. The wireframes were based on a cross sectional review of the drilling combining logging codes including oxidation levels, the topographic surface, Davis Tube Recovery assays (“DTR”) at a nominal 5% DTR cut-off, and downhole geophysics. The work has also utilised geophysical modelling of airborne magnetic data, completed by Graeme Mackee of GeoDiscovery, to guide the structural interpretation of the host sediments.

The wireframes were used to select a total of 1,132 with 4m composites for subsequent modelling using the Ordinary Kriging (“OK”) method with unfolding techniques. Downhole geophysical logs were also composited to the same interval length and subsequently modelled. Variogram models were created for AREA B and AREA D for DTR and concentrate grades for Fe, SiO2, Al2O3, P, S, and LOI as well as for the downhole probe data of gamma, magnetic susceptibility and density data. The AREA D variogram models were also used with modelling for AREA E (as shown in figure 4).

Grade interpolation was undertaken using the Micromine software with the mineralised wireframes acting as hard boundaries. AREA E comprised an additional high grade domain which was used to control the grade interpolation. The resource model was then loaded into a Surpac block model for resource reporting and possible subsequent mine planning studies. Block sizes were generally 100m in the strike (X) direction, a function of the drill spacing, with a range of 10-50m in the Y direction and 10-20m in the Z direction, the latter two ranges took into account the geometry of the mineralisation and the likely open pit mining method.

For AREA B and AREA D, a three pass search strategy was applied to estimate the volumes using the composite data for each element; for AREA E a fourth pass was added to enable a majority of the blocks inside the wireframe to have an interpolated grade. Search distances initially were 300m (strike) by 150m (down dip) by 20m (across strike) increasing to 450m by 225m by 40m. Minimum number of data was initially 16 decreasing to 8 for Passes 1 to 3 with the Pass 4 search in AREA E using the same maximum distances but this time using a minimum number of 4 data.

Magnetite Mines Limited

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The density grade was interpolated using OK on the downhole density composites where real density values were available. Failure to complete geophysical surveying occurred for certain holes and so blocks with no interpolated grades had default density values assigned derived from a regression equation relating density with the estimated DTR grade.

Block model validation consists of visual comparisons of block grades with drillhole composite grades, a review of the summary statistics for the block grades and composite values as well as cumulative frequency plots of composite values and block grade data. No issues were noted with the modelling.

Reporting of the resource estimates for all areas used the block centroid inside the wireframe constraint for a DTR cut-off grade of 12%. A further constraint was an elevation limit of 300m below surface. All resource estimates are classified as Inferred.

The resource classification is a function of the search passes which themselves are a function of the data point spacing and the variography i.e. the drillhole spacing and the grade continuity. Additional consideration has been given to sampling and assaying techniques, QAQC outcomes, density data, the geological continuity, drilling recoveries and H&SC’s knowledge of other similar deposits. The classification could be upgraded to Measured and Indicated with a substantial amount of infill drilling.

Three main areas of opportunity for exploration potential are deemed to exist, namely AREA A in the Nippon Hills Area, blocks with no interpolated grades within the interpreted mineral wireframes and the remaining untested magnetic anomalies for the general licence area.

Area	Classification	Tonnes (million)	DTR %	Con Fe%	Con **SiO2% **	Con Al2O3	Con P%	Con S%
Areas D and E (Red Dam)	Inferred	472.1	19.7	69.8	2.56	0.24	0.005	0.007
Area B (Nippon Hill)	Inferred	70.7	14.4	68.5	4.06	0.32	0.003	0.003
Total	Inferred	542.9	19.0	69.6	2.76	0.25	0.005	0.006

Table 1: Olary Deposit, Mineral Resource Estimates (12 % DTR cut off)

Magnetite Mines Limited

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• Figure 4. Aeromagnetic image, with drill hole location and Resource Outline for the Olary Deposit (GDA94 – Z54)

Competent Persons

The details contained in this resource report that pertains to Mineral Resource Estimates for the Olary Project are based upon information compiled by Mr Simon Tear (BSc(Hons), MAusIMM, PGEO, EurGeol, IOM3), a Director of H&S Consultants Pty Ltd. Mr Tear is a member of Australian Institute of Mining and Metallurgy. Mr Tear has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a Competent Persons as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC 2012 Code). Mr Tear gives consent to the inclusion in this report of the matters based upon his information in the form and context in which it appears.

The details contained in this report that pertains to exploration results is based upon information compiled by Gavin England BSc (Hons), PhD, a full-time employee of the Magnetite Mines Limited. Dr England is a member of Australian Institute of Geosciences (AIG) and Australian Institute of Mining and Metallurgy. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC 2012 Code). Dr England consent to the inclusion in this report of the matters based upon their information in the form and context in which it appears.

Magnetite Mines Limited

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The details contained in this report that pertains to ore and mineralisation and the resource for the Razorback Project and Ironback Hill Deposit is based upon information compiled by Gavin England BSc (Hons), PhD, a full-time employee of the Magnetite Mines Limited and Mr Lynn Widenbar BSc(Hons), MSc, DIC, Principal Consultant Widenbar and Associates Pty Ltd. Dr England and Mr Widenbar are members of Australian Institute of Geosciences (AIG) and Australian Institute of Mining and Metallurgy. These two people have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC 2004 Code), as well as the current JORC 2012 Code. Dr England, and Mr Widenbar consent to the inclusion in this report of the matters based upon their information in the form and context in which it appears. The information for the Razorback Deposit was prepared and first disclosed under the JORC Code 2004. The information has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

For further information, contact:

Gordon Toll Chairman and Chief Executive Officer +61 8 8427 0516

Peter Schubert Executive Director +61 416 375 346

Magnetite Mines Limited

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2012 JORC Code & Guidelines - Table 1

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MAGNETITE MINES LIMITED

2012 JORC Code & Guidelines - Table 1 Olary Project

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary	Commentary
Sampling	 Nature and quality of sampling (e.g. cut channels, random chips, or		A total of 57 holes were drilled in the Olary Magnetite Project, of
techniques	specifc 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		which 34 were then used to estimate an Inferred Mineral Resource. Phase 1 drilling occurred in July 2011 consisting of 1,534 m of RC drilling. Phase 2 during later 2012 – early 2013 consisted of approximately 11,000 m RC and 1000 diamond core
	and the appropriate calibration of any measurement tools or systems		drilling.
	used.		Reverse Circulation (RC) drilling obtain individual metre
	 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 fre assay’). In other cases more explanation may be required,		samples collected in green plastic bags. Sampling consisted of a geologist and/or feld assistant sampling individual metres for assay determination (generally collecting 3 kg sample which was pulverized to produce 500 g aliquot for XRF determination), taking magnetic susceptibility measurements, and geologic
	such as where there is coarse gold that has inherent sampling		logging completed on every drillhole.
	problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.		Diamond core drillholes (DD), all with RC pre-collars had sampling process involving: clean and photograph the core,
			geological logging (including orientation, lithology, mineralogy,
			grain size), record magnetic susceptibility, density determination
			(Archimedes method and bulk tray method), mark the
			mineralised zones for sampling, cut the core, and sample.
			GAA Wireline carried out down hole geophysical logging and
			gyroscopic hole deviation surveying on all drillholes in the
			second phase of drilling. Surveys were conducted open hole. In
			the frst phase of drilling, down hole deviation reverted to down
			hole camera, or in the absence of that a clinometer and compass
			readingwas taken at the collar. Thegeophysical logging

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2012 JORC Code & Guidelines - Table 1

Criteria		JORC Code explanation	Commentary	Commentary
				consisted of natural gamma, magnetic susceptibility, density,
				resistivity and calliper readings.
				MM has a suite of documented procedures for drilling related
				activities
				Consistency of sampling method maintained.
				Samplingtechnique is considered appropriate for deposit type
Drilling		 Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air		Drilling was a combination of RC and DD
techniques		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.).		Industry standard drilling rigs suitable for the required task were used.
				RC drilling was carried out using a Me�ke RC rig on an 8x4
				carrier with auxiliary compressor (350psi/900cfm) and Arial
				Booster (900psi) on a separate carrier. It used a 5 ½ inch face
				sampling hammer on 4 inch drill rods.
				DD drilling carried out using a UDR650, with NQ and HQ
				diameter triple tube.
Drill	sample	 Method of recording and assessing core and chip sample recoveries		Sample recoveries for RC drilling were estimated by the feld
recovery		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 occurred due to preferential		technicians at the time of drilling and recorded in the feld sampling sheets. Sample recoveries for DD were recorded by feld technicians after measuring the length of core recovered divided by the
		loss/gain of fne/coarse material.		length of each individual core run; expressed in metres in the
				“Recovery_Dif” feld, and as a percentage in the “Recovery pct”
				feld. Core loss is noted in a comments column when
				encountered.
				No studies were undertaken to specifcally examine possible
				biases.
Logging		 Whether core and chip samples have been geologically and		Every RC and DD drillhole was geologically logged on paper
		geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.		and then entered into an excel spreadsheet. Fields recorded include - colour, weathering, regolith, lithology, grain size,

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MAGNETITE MINES LIMITED

Criteria	JORC Code explanation	Commentary	Commentary
	 Whether logging is qualitative or quantitative in nature. Core (or		foliation, texture, min%, min. style, alteration, alteration
	costean, channel, etc) photography.  The total length and percentage of the relevant intersections logged.		intensity, alteration style, vein min, vein%, vein style, sulphide% and description being recorded. Data was uploaded to a
			customised Access database
			Logging used a mixture of qualitative and quantitative codes
			A sample of sieved wet chips from all RC holes were collected
			into chip trays every metre for every hole.
			All un-sampled diamond core was retained in core trays at
			MM’s core storage facility in Adelaide
			Once a DD hole had been orientated, metre marked, magnetic
			susceptibility recorded, and the geologist has fnished logging,
			the core was photographed starting from tray one through to the
			last tray.
			All drill core was photographed wet and dry after logging but
			before cu�ing.
			All relevant intersections were logged
			Geological logging was of sufcient detail to allow the creation
			of ageological model to support stated resource classifcation.
Sub-sampling	 If core, whether cut or sawn and whether quarter, half or all core		RC drill rigs were f�ed with either a rife spli�er (dry) or cone
techniques and sample preparation	taken.  If non-core, whether riffed, 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.		spli�er (minor moist samples) which produced a 3–5 kg sub- sample for every metre drilled. This subsample was collected in plastic bags at the drill rig. The spli�ers were cleaned when necessary as the hole progressed and cleaned thoroughly at the
	 Quality control procedures adopted for all sub-sampling stages to		end of each hole.
	maximise representivity of samples.		The 1 metre splits passed through a 25/75 rife spli�er to
	 Measures taken to ensure that the sampling is representative of the in		produce a 4m composite sample of >2kg minimum ideal weight
	situ material collected, including for instance results for feld duplicate/second-half sampling.  Whether sample sizes are appropriate to the grain size of the material being sampled.		(spring scales). Material passed through spli�er for several passes to obtain composite weight of >2kg with optimal composite sample weight ~4kg. The end of hole composites may vary in length.
			Four metre RC composite is then tested with a magnetic

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MAGNETITE MINES LIMITED

Criteria		JORC Code explanation	Commentary	Commentary
				susceptibility metre to determine if samples are sent on for DTR
				analysis
				As a quality control measure for RC samples, the feld
				technicians recorded sample conditions.
				For DD, sampling intervals selected on the basis of logged
				lithology and single point KT9 magnetic susceptibility values for
				each metre averaged over 4m with readings >10 x 10-3 SI plus
				bufer of 4 composites (16m).
				DD core was sampled by sawing in half lengthways. One
				quarter of the core was submi�ed to the laboratory for head
				grade determination (and some for Davis Tube Recovery(DTR))
				with the remaining half retained in core trays. Samples were
				submi�ed as a 4 metre composite.
				The sampling methods and sample sizes are considered to be
				generally in accordance with common industry practice.
				Samples sent to ALS Adelaide were crushed to <3.35mm, slit to
				~2kg using Jones Rife Spli�er, homogenise sample via rolling
				mat and selectively sub-sample a 150g sample.
				Sample measured using laboratory magnetic susceptibility meter
				(SATMAGAN) and expected DTR recorded by comparison
				against ALS in-house magnetite calibration curve.
				Samples of predicted >/=5% DTR from magnetic susceptibility
				selected for DTR analysis.
				Samples of <5%predicted DTR retained at ALS Adelaide
				DTR samples freighted by ALS Pooraka, SA to ALS Wangara,
				WA for DTR analysis
				Field duplicates, blanks (river sand) and certifed standards we
				used for quality control measures
				All sampling methods and samples sizes are deemed
				appropriate
Quality	of	 The nature,quality and appropriateness of the assaying and		DTR and XRF analysis was completed at ALS Adelaide,using

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2012 JORC Code & Guidelines - Table 1

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Criteria	JORC Code explanation	Commentary
assay data and	laboratory procedures used and whether the technique is considered	standard industry techniques. The DTR process is described
laboratory tests	partial or total.  For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument	below: Pulverizing
	make and model, reading times, calibrations factors applied and their	o	Crush the sample to 100% below 3.35mm
	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.	o o	Separate a sample of 150gm for pulverizing in a C125 ring pulveriser (record weight) – DTR SAMPLE For soft ferro-silicate rocks - initially pulverize the 150gm sample for 60 seconds
		o	Wet screen the DTR sample at XX (38, 45, 75 etc) micron
			and dry the products.
		o	Record the oversize weights – if less than approximately
			20gm is oversize, stop the procedure – failure.
		o	If failure - select another 150 gm DTR Sample and
			reduce the initial pulverization time by 5 secs, repeat
			until initial grind pass returns greater than
			approximately 20 gm oversize. Once achieved retain the
			– XX micron undersize.
		o	Regrind only the oversize for 1 second for every 5 gms
			of oversize sample weight
		o	Repeat the wet screening, drying and weighing stages
			until less than 5gm above 45 micron remains.
		o	Ensure the remaining < 5gm oversize is returned back
			into the previously retained -45 micron undersize.
		o	Report the times and weights for each grind pass phase.
		o	Combine and homogenize all retained -XX micron
			aliquots and <5gm oversize, pressure flter and dry,
			break up and de-lump dried material with 1mm sieve
			and dry rehomogenise - fnal pulverized product
		o	Sub-sample the fnal pulverized product to give a 20gm
			feed sample for DTR work and a ~10gsample for HEAD

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Criteria JORC Code explanation Commentary

Criteria JORC Code explanation Commentary

analysis via XRF or ICP fusion. o The objective of the pulverizing procedure is to achieve a nominal P80 of approximately 70% of 45 micron screen. Davis Tube Recovery (DTR) Analysis The nominal procedure has the following condition: o Pulveriser bowl 150 ml o Stroke Frequency 60/minute o Stroke length – 38mm o Magnetic feld strength – 3000 gauss o Tube Angle – 45 degrees o Tube Diameter – 40mm o Water fow rate – 540-590 ml/min o Washing time 20 minutes o Collect the concentrate in small collector (magnetic fraction) and discard tails. Assaying (usually XRF Fusion) Head Sample o Using the Head Sample, analyse by XRF or method for the following elements: Al2O3 %, As % , Ba % , CaO % , Cl % , Co % , Cr % , Cu % , Fe % , K2O % , MgO % , Mn % , Na2O % , Ni % , P % , Pb % , S % , SiO2 % , Sn % , Sr % , TiO2 % , V % , Zn % , Zr % & LOI.

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2012 JORC Code & Guidelines - Table 1

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Criteria		JORC Code explanation	Commentary	Commentary
				DTR Concentrate Sample
				o Dry the DTR concentrate and report the weight of the
				concentrate as a percentage of measured feed and
				report – DTR Mass Recovery.
				o Analyse concentrate by XRF or ICP fusion method for
				the following elements: Al2O3 %, As %, Ba % , CaO
				% , Cl % , Co % , Cr % , Cu % , Fe % , K2O % , MgO %
				, Mn % , Na2O % , Ni % , P % , Pb % , S % , SiO2 % ,
				Sn % , Sr % , TiO2 % , V % , Zn % , Zr % & LOI
				No certifed standards, blanks, umpire lab samples or feld
				resamples were undertaken during or after drilling occurred.
				QAQC included limited feld and laboratory duplicates.
				Internal QAQC measures were also undertaken by ALS.
				Specifc gravity (SG) was measured on representative diamond
				core samples using the displacement method.
				All sampling and assay methods and samples sizes are deemed
				appropriate.
Verifcation	of	 The verifcation of signifcant intersections by either independent or		No twinned holes were drilled
sampling assaying	and	alternative company personnel.  The use of twinned holes.  Documentation of primary data, data entry procedures, data verifcation, data storage (physical and electronic) protocols.  Discuss any adjustment to assay data.	 	Data is stored in an Access database stored in the Adelaide Ofce and a backup version in an external location. Data was originally stored in the Helix Resources server when project was still in the company’s control. For data verifcation, all sample results were checked and
				verifed against core logging and photography by Braemar Iron
				personnel post Helix Resources drilling. In addition, Braemar
				staf reviewed the sample data and assay results.
				No adjustments or ‘factors’ were applied to raw assaydata

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Criteria	Criteria	Criteria		JORC Code explanation	Commentary	Commentary
Location			of	 Accuracy and quality of surveys used to locate drill holes (collar and		Drillhole coordinates were picked up by contractors GAA
data points				down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.  Specifcation of the grid system used.  Quality and adequacy of topographic control.		Wireline and Helix Resources using DGPS. Coordinates were supplied in GDA94 - MGA Zone 54. Topographic control was by a Digital Terrain Model (DTM) provided by geophysical contractors with the results of close
						spaced, fxed wing magnetic and radiometric survey and DGPS.
						The DTM was modifed around drill collar positions to refect
						the greater accuracy of topographic control in these areas.
						Down hole surveys were recorded using a gyroscope due to the
						highly magnetic nature of the deposit.
						Location methods used to determine accuracy of drillhole collars
						are considered appropriate
Data		spacing		 Data spacing for reporting of Exploration Results.		The deposit is drilled approximately 400 m x 100 m spacing
and distribution				 Whether the data spacing and distribution is suffcient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifcations applied.  Whether sample compositing has been applied.		(between section and on section respectively). The interpreted continuity and classifcation of the reported resource takes the drill spacing into account, relative to the style of mineralisation in question.
						Samples were composited for submission for assayto 4 metres.
Orientation			of	 Whether the orientation of sampling achieves unbiased sampling of		Drilling (sampling) was completed with best knowledge of
data in relation to geological structure				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.		geology, heavily infuenced by interpretation from 3D modelling of aeromagnetic data. This is considered appropriate to gather representative samples from an orebody. Drilling was completed at -60o, generally sub-perpendicular to
						the bedding, which is the primary control to the magnetite
						mineralisation.
						Diferent azimuths were used to refect the changing strike of the
						beds associated with folding of the sediments and were
						designed to maintain the steep angle to the bedding
						Drillingorientations are considered appropriate with no bias.
Sample				 _The measures taken to ensure sample security. _		As RC hole is drilled theplastic bagassaysamples are collected

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Criteria		JORC Code explanation	Commentary	Commentary
security				into large green or polyweave bags three at a time and are
				fastened at the top with cable ties and left in sequence for
				collection or put directly onto a vehicle and transported back to
				the sample facility on site.
				DD samples, once marked up by a geologist or feld assistant,
				are cut and collected in calico bags and placed in clearly labelled
				large plastic bags (or similar) and are stored at the sample
				facility on site.
				Samples were transported by Helix staf from site to a freight
				forwarding company in Broken Hill which forwarded them to
				ALS Perth, via ALS Adelaide in sealed ‘Bulka Bags’. Upon
				receipt of the samples the laboratory would check the sample
				dispatch form with the consignment received and advise of any
				missing/damaged samples
Audits	or	 The results of any audits or reviews of sampling techniques and data.		No external audits have been completed.
reviews				The QAQC data was reviewed by Lodestone staf

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria			JORC Code explanation	Commentary	Commentary
Mineral			 Type, reference name/number, location and ownership including		Olary tenement EL5267 is granted and owned by Olary
tenement and land tenure status			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	 	Magnetite Pty Ltd (subsidiary of Lodestone Equities Pty Ltd). The tenement is located approximately 150 km Southwest of Broken Hill, on the Olary 1:250,000 sheet. EL5267 is situated on the Maldorky Pastoral Lease
			known impediments to obtaining a licence to operate in the area.		The area is subject to a Native Title Claim by the Wilyakali
					Group. Olary Magnetite have a native title agreement with the
					Wilyakali for access.

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Criteria	JORC Code explanation	Commentary	Commentary
			There are no national parks or conservation reserves within the
			tenement area.
			EL5267 is subject to a 1% royalty (FOB) to the previous owners
			of the tenement.
Exploration	 Acknowledgment and appraisal of exploration by other parties.		All drilling relating to this resource was performed by Helix
done by other			Resources Ltd.
parties
Geology	 Deposit type, geological setting and style of mineralisation.		The Olary Magnetite Project is located at the eastern end of the
			Adelaidian Fold-Belt, within the Olary Province. The ‘ironstone’
			rocks of the Braemar Formation occur as a stratigraphic package
			of magnetite-rich siltstone associated with diamictite within the
			lower Umberatana Group.
			The Braemar Formation comprises a series of narrow, strike
			extensive magnetite-bearing siltstones generally that have been
			substantially deformed.
			The airborne magnetic data clearly indicates the magnetite
			siltstones as a series of narrow, high amplitude magnetic
			anomalies. Geophysical forward modelling has generated
			insight to the structural deformation including isoclinal and
			recumbent folding
			Large areas of the prospective stratigraphy are concealed by
			transported ferricrete and other younger cover. The base of
			oxidation due to weathering over the prospective horizons is
			variable with estimates up to 80m from surface.
			Typically, the magnetite is disseminated in fresh rock with no
			obvious structural stretching. The magnetite intensity is bed
			controlled linked to certain grain sizes and sediment
			composition i.e. a function of the sedimentary regime rather than
			any obvious structural overprint.
			The Olary project comprises a number ofprospects. Resource

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Criteria		JORC Code explanation	Commentary	Commentary
				Estimates have been generated for AREA B, AREA D and AREA
				E; the last two are interpreted to be contiguous. AREA A has an
				ambiguous geological interpretation which resulted in no
				resource estimates being generated.
				The depositional environment for the Braemar Iron Formation is
				believed to be a subsiding basin, with initial rapid subsidence
				related to rifting possibly in a graben se�ing as indicated by. the
				occurrence of diamictites in the lower part of the sequence. A
				possible sag phase of cyclical subsidence followed with
				deposition of fner grained sediments with more consistent, as
				compared to the diamictite units, bed thicknesses, style and clast
				composition.
				The Olary prospects are similar to other resources in the
				Braemar Ironstone egHawsons and Muster Dam.
Drill	hole	 A summary of all information material to the understanding of the		Exploration results not being reported
Information		exploration results including a tabulation of the following information for all Material drill holes:
		o easting and northing of the drill hole 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 down hole length and interception depth
		o hole length.
		 If the exclusion of this information is justifed 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.
Data		 In reporting Exploration Results, weighting averaging techniques,		Exploration results not being reported
aggregation methods		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

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Criteria		JORC Code explanation	Commentary	Commentary
		such aggregations should be shown in detail.
		 The assumptions used for any reporting of metal equivalent values
		should be clearly stated.
Relationship		 These relationships are particularly important in the reporting of		Drilling has tended to be at a steep angle to the dip angle of the
between mineralisation		Exploration Results.  If the geometry of the mineralisation with respect to the drill hole		sedimentary beds.
widths intercept	and	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. ‘down hole length, true
lengths		width not known’).
Diagrams		 Appropriate maps and sections (with scales) and tabulations of		Exploration results not being reported
		intercepts should be included for any signifcant discovery being
		reported These should include, but not be limited to a plan view of
		drill hole collar locations and appropriate sectional views.
Balanced		 Where comprehensive reporting of all Exploration Results is not		Exploration results not being reported
reporting		practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of
		Exploration Results.
Other		 Other exploration data, if meaningful and material, should be reported		The area is covered by a detailed government generated airborne
substantive exploration data		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.		magnetic survey Downhole geophysics comprises magnetic susceptibility, gamma and density and has been completed for a majority of the holes. This has resulted in the defnition of a magnetic (and
				density-related)stratigraphy
Further work		 The nature and scale of planned further work (e.g. tests for lateral		Exploration results not being reported
		extensions or depth extensions or large-scale step-out drilling).
		 Diagrams clearly highlighting the areas of possible extensions,
		including the main geological interpretations and future drilling areas,
		provided this information is not commercially sensitive.

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Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria	JORC Code explanation	Commentary	Commentary
Database	 Measures taken to ensure that data has not been corrupted by, for example,		Independently customised Access database was complied by
integrity	transcription or keying errors, between its initial collection and its use for		Helix Resources while they were managers of the project.
	Mineral Resource estimation purposes.		Validation of database was undertaken by Lodestone Equity in
	 Data validation procedures used.		2016. The data was found to be of a sound nature suitable to
			produce an Inferred Resource.
			Limited validation was conducted by H&S Consultants (H&SC)
			to ensure the drill hole database is internally consistent.
			Validation included checking that no assays, density
			measurements or geological logs occur beyond the end of hole
			and that all drilled intervals have been geologically logged. The
			minimum and maximum values of assays and density
			measurements were checked to ensure values are within
			expected ranges. Further checks include testing for duplicate
			samples and overlapping sampling or logging intervals
			H&SC has not performed detailed database validation and
			Lodestone Equity personnel take responsibility for the accuracy
			and reliability of the data used to estimate the Mineral
			Resources.
			Data was loaded by H&SC into an Access database for use with
			the Surpac mining software to complete 3D visualisation,
			geological interpretation and resource reporting.
Site visits	 Comment on any site visits undertaken by the Competent Person and the		The drilling project was undertaken by Helix Resources as
	outcome of those visits.		managers of the project. This was later reviewed by Gavin
	 If no site visits have been undertaken indicate why this is the case.		England in 2015 and 2016, who acts as the Competent Person
			with responsibility for reporting the exploration results and the
			integrity and validity of the database on which resource
			estimates were conducted.

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Criteria	JORC Code explanation	Commentary	Commentary
			The two faults are possibly a conjugate pair, and have caused
			ofsets in the mineral-bearing stratigraphy.
			H&SC created a series of wireframes representing the outlines of
			individual magnetite-rich lithological units based on drill hole
			data. These wireframes were treated as hard boundaries during
			estimation.
			H&SC also used the geological logs of the drill holes to create
			wireframe surfaces representing the base of colluvium, the base
			of complete oxidation and the top of fresh rock.
			Any additional faulting in the deposit is assumed to be
			insignifcant on the scale important to resource estimation.
			H&SC is aware that alternative interpretations of the mineralised
			zones and fault are possible but consider the wireframes to
			adequately approximate the locations of the mineralised zones
			for the purposes of resource estimation. Alternative
			interpretations mayhave a limited impact the resource estimate.
Dimensions	 The extent and variability of the Mineral Resource expressed as length		The resources reported here are from three discrete areas that lie
	(along strike or otherwise), plan width, and depth below surface to the upper		in a rectangle around 15km long and 4.5km wide.
	and lower limits of the Mineral Resource.		The mineralisation at AREA A has a strike length of around
			2.1km in an east south easterly direction. The plan width of the
			mineralisation varies from 140m to 420m with an average of
			around 320m. The upper limit of the mineralisation occurs at a
			depth of 4m below surface and the lower limit of the reported
			resource is limited to a depth of 300m below surface.
			The resources at AREA B have a strike length of around 1.5km in
			an east south easterly direction. The plan width of the resource
			varies from 260m to 470m with an average of around 330m. The
			upper limit of the mineralisation occurs at a depth of 4m below
			surface and the lower limit of the reported resource is limited to
			a depth of 300m below surface.
			The resources at AREA D are split into two discrete areas that

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Criteria	JORC Code explanation	Commentary	Commentary
			Gavin England has made several drill site visits from 2015 to
			2016 and examined samples stored in Adelaide.
			No site visit has been undertaken by H&SC due to time and
			budgetaryconstraints
Geological	 Confdence in (or conversely, the uncertainty of) the geological		The magnetite mineralisation is stratabound as opposed to
interpretation	interpretation of the mineral deposit.		stratiform.
	 Nature of the data used and of any assumptions made.		The downhole geophysical data has been used in conjunction
	 The efect, if any, of alternative interpretations on Mineral Resource		with DTR recovered magnetic fraction grades and geological
	estimation.		logging to allow for the generation of a set of 3D wireframes
	 The use of geology in guiding and controlling Mineral Resource estimation.		representing the mineral units and some cursory geological
	 The factors afecting continuity both of grade and geology.		controls.
			The lithological interpretations are therefore relatively simple
			and reasonably well constrained by the drilling and the high
			amplitude magnetic anomalies.
			AREA A is interpreted to consist of two layers of magnetite-rich
			zones and is considered to be a more complex area for geological
			understanding. This is mainly because it is in an area of
			diamictite dominant sediments with an associated level
			discordancy linked to the sediment deposition.
			AREA B is also interpreted to consist of two magnetite-rich
			layers that dip around 25° towards 205°.
			AREA E comprises an anticline associated with an isoclinal fold
			with the E-W hinge line roughly sub-horizontal. The southern
			limb dips almost vertical whilst the northern limb dips at a
			slightly shallower angle to the north.
			AREA D is more complex in that the isoclinal folding has
			become more recumbent. AREA E and AREA D are believed to
			be the same body of mineralisation separated by a combination
			of a NW-SE and an E-W cross-cu�ing faults. At this stage the
			faults have been used to limit the extent of the mineralisation by
			providinglateral control to interpretingthe mineral wireframes.

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Criteria	JORC Code explanation	Commentary	Commentary
			are interpreted to be linked at depth. Overall it has a strike
			length of around 1.5km in a north-south direction. The plan
			width of the resource varies from 300m to 700m with an average
			of around 600m. The upper limit of the mineralisation occurs at a
			depth of 4m below surface and the lower limit of the reported
			resource is limited to a depth of 300m below surface.
			The resources at AREA E have a strike length of around 2.2km in
			an east-west direction. The plan width of the resource varies
			from 400m to 530m. The upper limit of the mineralisation occurs
			at a depth of 4m below surface and the lower limit of the
			reported resource is limited to a depth of 300m below surface.
Estimation and	 The nature and appropriateness of the estimation technique(s) applied and		The head iron, Davis Tube Recovery (DTR) and concentrate iron,
modelling	key assumptions, including treatment of extreme grade values, domaining,		silica, alumina, phosphorous, sulphur and Loss on Ignition (LOI)
techniques	interpolation parameters and maximum distance of extrapolation from data		were estimated using Ordinary Kriging on 4m composites in the
	points. If a computer assisted estimation method was chosen include a		Micromine software. H&SC considers Ordinary Kriging to be an
	description of computer software and parameters used.		appropriate estimation technique for the type of mineralisation
	 The availability of check estimates, previous estimates and/or mine		and extent of data available from the deposits. All data have
	production records and whether the Mineral Resource estimate takes		low coefcients of variation.
	appropriate account of such data.		Some intervals had no DTR values. A regression based on
	 The assumptions made regarding recovery of by-products.		Satmagan test work was used to calculate likely DTR values for
	 Estimation of deleterious elements or other non-grade variables of economic		untested intervals. A regression based on the hand held
	signifcance (e.g. sulphur for acid mine drainage characterisation).		magnetic susceptibility data was used to estimate the DTR
	 In the case of block model interpolation, the block size in relation to the		values where Satmagan data was not available. Missing Fe
	average sample spacing and the search employed.		concentrate grades were calculated using a regression based on
	 Any assumptions behind modelling of selective mining units.		the DTR grades and the remaining concentrate elements were
	 Any assumptions about correlation between variables.		calculated using a regression based on the iron concentrate
	 Description of how the geological interpretation was used to control the		grade. All of the missing DTR grades were from poorly
	resource estimates.		magnetic, low grade, intervals. The missing concentrate grades
	 Discussion of basis for using or not using grade cu�ing or capping.		were either the result of a lack of DTR test work or due to
	 The process of validation, the checking process used, the comparison of model		insufcient sample being available for XRF due to low DTR
			recovery.

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Criteria	JORC Code explanation	Commentary	Commentary
	data to drill hole data, and use of reconciliation data if available.		For AREA B and AREA D each of the mineral wireframes were
			treated as hard boundaries so that only composite samples
			inside the wireframe were used to estimate blocks within the
			corresponding wireframe.
			For AREA E the outer low grade zone was estimated using only
			composite samples from within the outer low-grade zone
			whereas the inner high grade zone was estimated using samples
			from both the inner and outer mineralised zones. This approach
			is considered to be conservative and more drilling is needed to
			be�er constrain the high grade zone.
			The geological interpretation of AREA D and AREA E indicate
			signifcant folding has afected the mineralised lodes on a scale
			that is the same or shorter than the drill hole spacing. H&SC
			therefore used the unfolding technique available in Micromine
			to unfold the block model and composite data relative to a
			central wireframe surface.
			The search ellipse and variography were rotated to be parallel to
			the orientation of each of the mineralised domains. A fat search
			was used to estimate the unfolded AREA D and AREA E.
			No recovery of any by-products has been considered in the
			resource estimates as no products beyond iron are considered to
			exist in economic concentrations.
			No top-cu�ing was applied as extreme values were not present
			and top-cu�ing was considered by H&SC to be unnecessary
			Several estimates were conducted to assess sensitivity to various
			parameters however no check estimate was carried out by a
			diferent estimator or technique.
			The concentrations of deleterious silica, alumina, phosphorous
			and sulphur in the magnetic concentrate were estimated.
			Block dimensions for AREA E are 100m x 10m x 20m (Local E, N,
			RL respectively)Whereas block dimensions for AREA B is 100m

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Criteria	JORC Code explanation	Commentary	Commentary
			x 20m x 10m. Block dimensions for AREA D is 100m x 50m x
			10m.
			Each element was estimated separately. For AREA B and AREA
			D a three pass search strategy was employed with progressively
			larger radii and/or decreasing search criteria. In AREA E a fourth
			pass was added in order to populate certain blocks, mainly in
			the outer low grade zone, that had not been populated due to
			the thin nature of the mineralised zone.
			All passes used a four sector search ellipse in order to aid de-
			clustering. The frst pass used a search ellipse of 300x150x20m
			(along strike, down dip and across mineralisation respectively)
			and required a minimum of 16 composites from at least three
			drill holes. The maximum total number of composites was set to
			32 with a limit of eight per drill hole. The second pass criteria
			were similar except the search ellipse was 450x225x40m and only
			two drill holes were required. The third and fourth passes also
			used a search ellipse measuring 450x225x40m but the minimum
			number of composites required was set to eight and four
			respectively and no restriction on the number of drill holes was
			applied.
			The H&SC block model was reviewed visually by H&SC and it
			was concluded that the block model fairly represents the grades
			observed in the drill holes. H&SC also validated the block model
			usinga varietyof summarystatistics and simpleplots.
Moisture	 Whether the tonnages are estimated on a dry basis or with natural moisture,		Tonnages of the Mineral Resource are estimated on a dry weight
	and the method of determination of the moisture content.		basis.
Cut-of	 The basis of the adopted cut-of grade(s) or quality parameters applied.		The resources are reported at a cut-of of 12% DTR within the
parameters			mineral wireframe which is consistent with the original
			reporting of the Hawsons and Muster Dam deposits.
			The estimated resources reported are limited to a vertical depth

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Criteria		JORC Code explanation	Commentary	Commentary
				of 300m.
				The cut-of grade at which the resource is quoted refects the
				intended bulk-miningapproach
Mining factors		 Assumptions made regarding possible mining methods, minimum mining		The Olary resources were estimated on the assumption that the
or assumptions		dimensions and internal (or, if applicable, external) mining dilution. It is		material is to be mined by open pit using a bulk mining method.
		always necessary as part of the process of determining reasonable prospects		Minimum mining dimensions are envisioned to be around 25m
		for eventual economic extraction to consider potential mining methods, but		x 10m x 10m (strike, across strike, vertical respectively). The
		the assumptions made regarding mining methods and parameters when		block size is signifcantly larger than the likely minimum mining
		estimating Mineral Resources may not always be rigorous. Where this is the		dimensions.
		case, this should be reported with an explanation of the basis of the mining		A conceptual study was completed in 2013, which examined
		assumptions made.		mining methods. Given the Resource is of an Inferred nature, the
				parameters were not of a rigorous nature. The study found the
				proposed mining method to be a fully mobile In-Pit Crushing
				and Conveying,combined with shovel. .
Metallurgical		 The basis for assumptions or predictions regarding metallurgical		A small mineralogical study was completed on 3 core samples
factors	or	amenability. It is always necessary as part of the process of determining		from one hole by Elaine Wightman of SMI-JKMRC. The study
assumptions		reasonable prospects for eventual economic extraction to consider potential		indicated discrete abundant magnetite and hematite crystals in a
		metallurgical methods, but the assumptions regarding metallurgical		size range of 38-53 microns.
		treatment processes and parameters made when reporting Mineral Resources		The idioblastic nature of the magnetite is likely to lend itself to
		may not always be rigorous. Where this is the case, this should be reported		relatively easy liberation as per other similar deposits
		with an explanation of the basis of the metallurgical assumptions made.		The ROM material is likely to be relatively soft for a magnetite
				deposit with a bond work index much lower than typical
				Banded Iron Formation deposits.
				Sighter metallurgical testwork in 2016 at Bureau Veritas
				Minerals, Perth Australia, using standard crushing and milling,
				as well as magnetic and gravity separation, has replicated the
				concentrategrade and mass recoveryseen in the Resource.
Environmen-		 Assumptions made regarding possible waste and process residue disposal		The deposits lie in fat open country typical of North Eastern
tal factors	or	options. It is always necessary as part of the process of determining		South Australia.
assumptions		reasonable prospects for eventual economic extraction to consider the		Predominantly scrub vegetation that allows for sheep grazing.
		potential environmental impacts of the mining andprocessing operation.		There are large fat areas for waste and tailings disposal

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2012 JORC Code & Guidelines - Table 1

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MAGNETITE MINES LIMITED

Criteria	JORC Code explanation	Commentary	Commentary
	While at this stage the determination of potential environmental impacts,		Small number of creeks with only seasonal fows
	particularly for a greenfelds project, may not always be well advanced, the		Baseline data collection of a variety of environmental parameters
	status of early consideration of these potential environmental impacts should		is in progress e.g. dust monitoring, surface water, weather
	be reported. Where these aspects have not been considered this should be		records
	reported with an explanation of the environmental assumptions made.
Bulk density	 Whether assumed or determined. If assumed, the basis for the assumptions.		Density data was derived from the downhole geophysics short-
	If determined, the method used, whether wet or dry, the frequency of the		spaced measurement, which comprises a density measurement
	measurements, the nature, size and representativeness of the samples.		every centimetre.
	 The bulk density for bulk material must have been measured by methods that		Lodestone Equity completed a series of 75 check density
	adequately account for void spaces (vugs, porosity, etc), moisture and		measurements on core samples from one drillhole which
	diferences between rock and alteration zones within the deposit.		showed an overall average diference of <0.4% with the
	 Discuss assumptions for bulk density estimates used in the evaluation		corresponding geophysically-derived measurements.
	process of the diferent materials.		The data was composited to 4m prior to modelling.
			The density at Olary was estimated using Ordinary Kriging
			using the same search criteria as used for the estimation of DTR.
			Blocks that were not estimated due to missing density data were
			populated from values estimated from the DTR head grade of
			each block usinga regression created from drill hole data.
Classifcation	 The basis for the classifcation of the Mineral Resources into varying		Factors relevant to the classifcation of the estimates are the
	confdence categories.		geological understanding, the drillhole spacing, the QAQC data,
	 Whether appropriate account has been taken of all relevant factors (i.e.		and the downhole geophysical data, including density.
	relative confdence in tonnage/grade estimations, reliability of input data,		The resources have all been classifed as Inferred, mainly due to
	confdence in continuity of geology and metal values, quality, quantity and		the wide-spaced drilling, drilling method and the limited QAQC
	distribution of the data).		data. Whilst the drilling at Olary is relatively widely spaced
	 Whether the result appropriately refects the Competent Person’s view of the		decent aeromagnetic data indicate the structure and continuity
	deposit.		of the geology.
			H&SC believes the confdence in tonnage and grade estimates,
			the continuity of geology and grade, and the distribution of the
			data refect Inferred categorisation. The estimates appropriately
			refect the Competent Person’s view of the deposit. H&SC has

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Making Steel Stronger

2012 JORC Code & Guidelines - Table 1

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MAGNETITE MINES LIMITED

Criteria		JORC Code explanation	Commentary	Commentary
				not assessed the reliability of input data and Magnetite Mines
				personnel take responsibility for the accuracy and reliability of
				the data used to estimate the Mineral Resources.
Audits	or	 The results of any audits or reviews of Mineral Resource estimates.		The estimation procedure was reviewed as part of an internal
reviews				H&S Consultants peer review.
Discussion	of	 Where appropriate a statement of the relative accuracy and confdence level		No statistical or geostatistical procedures were used to quantify
relative		in the Mineral Resource estimate using an approach or procedure deemed		the relative accuracy of the resource.
accuracy/		appropriate by the Competent Person. For example, the application of		The relative accuracy and confdence level in the Mineral
confdence		statistical or geostatistical procedures to quantify the relative accuracy of the		Resources are considered to be in line with the generally
		resource within stated confdence limits, or, if such an approach is not		accepted accuracy and confdence of the nominated Mineral
		deemed appropriate, a qualitative discussion of the factors that could afect		Resource categories. This has been determined on a qualitative,
		the relative accuracy and confdence of the estimate.		rather than quantitative, basis, and is based on the Competent
		 The statement should specify whether it relates to global or local estimates,		Person’s experience with similar deposits.
		and, if local, state the relevant tonnages, which should be relevant to		The Mineral Resources are considered to be accurate globally.
		technical and economic evaluation. Documentation should include		All of the material has been classifed as Inferred and as such, is
		assumptions made and the procedures used.		not relevant to technical and economic evaluation.
		 These statements of relative accuracy and confdence of the estimate should		No mining of the deposit has taken place so no production data
		be compared with production data, where available.		is available for comparison.

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