MGX RESOURCES LIMITED — AGM Information 2017

Nov 7, 2017

2017 Annual General Meeting

MGX

Disclaimer

This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited.

This Document is not a Prospectus nor an Offer to Subscribe for Shares.

Mount Gibson Iron Limited and its subsidiaries (ASX:MGX, “ MGX ”) make no representations or warranty (express or implied) as to the accuracy, reliability or completeness of this document. MGX and its respective directors, employees, agents and consultants shall have no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (expressed or implied) arising out of, or contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded.

This document contains reference to certain forecasts, projections, intentions, expectations and plans of MGX, which may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ.

The performance and operations of MGX may be influenced by a number of factors, uncertainties and contingencies many of which are outside the control of MGX and its directors.

No representation or warranty (expressed or implied) is made by MGX or any of its respective directors, officers, employees, advisers or agents that any forecasts, projections, intentions, expectations or plans set out in this document will be achieved, either totally or partially, or that any particular rate of return will be achieved.

Investments in MGX shares are considered highly speculative.

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2017 Annual General Meeting FY2017 in Review – Key Outcomes

• Total Recordable Injury Rate reduced for 5th consecutive year – down 22% to 5.3[^]

• Total product sales 3.2 Mwmt* for sales revenue of $173m.

• Gross profit before tax from continuing operations of $36.5m, net profit after tax of $26.3m.

• Cash, term deposits and liquid investments of $447m at 30 June 2017, up $47m over the year, before $64m Koolan Island insurance payment received July 2017.

• $14.6m paid in State Government royalties.

• All-in group cash costs** of $52/wmt FOB including net inventory build.

• Iron Hill mine approved and commissioned, first ore sales achieved in June 2017.

• High-grade Koolan Island Mine Restart Project commenced, first ore sales early 2019.

• Fully franked final dividend of 2.0 cents per share. Total dividends paid since 2011 - $196m

• ^incidents per million man hours

• Million wet metric tonnes.

**All-in group cash costs are reported FOB and include all operating, capital, royalties and corporate costs, excluding development capital related to the Koolan Island restart project. All figures are expressed in Australian dollars unless stated otherwise

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2017 Annual General Meeting Business Objectives FY2018

• Mid West Operations - optimise Iron Hill production and costs.

• Koolan Island - rebuild the Main Pit seawall, dewater the pit and prepare the site for commercial production to achieve initial ore sales in early 2019.

• Cost reductions - continue to drive for sustainable cost improvements across the existing business.

• Treasury returns - maintain the increased yield on the Group’s cash reserves.

• Growth projects - continuation of the search for business development opportunities in the resources sector.

Guidance for 2017/18

Iron ore sales 3.5-3.8 Mwmt Site cash cost $42-46/wmt sold All-in group cash $47-52/wmt sold cost (excl. Koolan capital) Koolan capital $80-85 million spend

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2017 Annual General Meeting Strong start in September 2017 Quarter

• Quarterly ore sales increased ~40% to 0.84 Mwmt including low grade sales of 0.18 Mwmt, for ore sales revenue of $43m Free on Board (FOB).

• All-in group cash costs of $46/wmt FOB, a reduction of 27%** compared with the June quarter.

• $64m Koolan Island business interruption insurance settlement received July 2017

• Cash, term deposits and liquid investments increased to $507m at 30 September 2017.

• The high grade Koolan Island restart project continues to progress , on schedule to achieve first ore sales in early 2019.

**All-in group cash costs are reported FOB and include all operating, capital, royalties and corporate costs, excluding development capital related to the Koolan Island restart project. All figures are expressed in Australian dollars unless stated otherwise.

Quarterly sales revenue and cost figures are unaudited.

Quarter end cash is before $21.9m dividend distribution paid on 16 October 2017.

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2017 Annual General Meeting Business overview

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Koolan Island

• Koolan Island Restart Project approved April 2017.

• Development capex $97m.

• Stage One Ore Reserves 12.8Mt a 66% Fe*.

• Material site works commenced June 2017.

• Project +20% complete at end October.

• First ore sales targeted for early 2019.

  • Mid-West Region Extension Hill and Iron Hill

• Mining completed in the Extension Hill pit in November 2016, stockpile sales continued to October 2017.

• Iron Hill mine developed to extend life of the Mid-West operations to late 2018, sales commenced June 2017.

• Total Iron Hill life-of-mine sales of 5.5-6.0 Mwmt projected until planned end of production in late 2018.

• Iron Hill total Mineral Resource 8.8Mt @ 58.3% Fe^.

• *Refer ASX release dated 27 April 2017. ^Refer ASX release dated 31 August 2016.

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Mid West Operations Extension Hill and Iron Hill

• Extension Hill pit completed in November 2016, sales from stockpiles continued into mid 2017.

• Development of Iron Hill Deposit, 3km south of Extension Hill pit, approved in February 2017 and sales commenced June 2017.

• Negligible capital investment, utilises existing Extension Hill workforce, camp, mining, processing and transport infrastructure.

• Total forecast Iron Hill life-of-mine sales of 5.5-6.0 Mwmt until scheduled end of production in late 2018.

• Site cash costs^ expected to be $42-46/wmt FOB in 2017/18.

• High lump yield (+55%).

• Lump expected to average +60% Fe, fines typically ~59% Fe.

• Current market conditions realising a discount of 10-15% for higher grade products and 30-40% for lower grade products.

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*Refer ASX releases dated 31 August 2016 and 9 February 2017.

^Site cash costs are reported FOB and include royalties and capex but are before corporate costs.

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Mid West Operations Extension Hill and Iron Hill

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Iron Hill haul road
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Production drilling at Iron Hill
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Aerial view of Extension Hill crushing plant and ore stockpiles
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Koolan Island Mine Restart A premier high grade iron ore opportunity

• One of the world’s premier high grade hematite production opportunities.

• Stage 1 Main Pit Ore Reserves of 12.8Mt @ 66.0% Fe* and initial mine life of 3.5 years.

• Initial capex of $97m including $10m contingency.

• Robust economics using conservative Fe prices and FX assumptions*.

• NPV of $106m, including capex and closure costs, at 62% Fe CFR price of US$55/dmt and A$1.00/US$0.75.

• First ore sales targeted to commence in early 2019.

• Potential Stage 2 Pit extension at east end of Main Pit, subject to further geotechnical work.

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Koolan Island location and site layout showing Main Pit relative to existing site infrastructure, including crushing and port facilities, operations centre, accommodation camp and airstrip .

*Refer ASX release dated 27 April 2017 and slides at end of presentation.

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Koolan Island Mine Restart Project +20% complete at end October

Koolan Island Restart Project Schedule and Progress

Task Name	2017	2017	2017	2017	2017	2018	2018	2018	2018	2018	2019
	Q2		Q3	Q4		Q1	Q2	Q3	Q4		Q1
Rock Fill Embankment construction					compl	eted
Seepage Barrier Construction								in pr	ogress
Dewatering & Footwall Rehabilitation
Mining
First Sales Commencement
Progress achieved 31-Oct-17

• Embankment construction commenced June 2017 and completed September 2017.

• Seawall breach closed early August 2017.

• Drilling for instrumentation installation and excavation of seepage barrier panels underway.

• Dewatering scheduled to commence mid 2018.

• On track to achieve first ore sales in early 2019.

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Koolan Island Mine Restart Construction Progress

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Starter embankment showing closure of seawall breach, August 2017.

Starter embankment construction in July 2017.

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Koolan Island Mine Restart Construction Progress

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Grouting holes being drilled (upper) and vertical drains being drilled (lower), September 2017.

Overview of seawall construction activity, September 2017.

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Koolan Island Mine Restart Construction Progress

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Drilling vertical drains, August 2017.

Seepage barrier construction preparations, showing excavators, bentonite plant and ponds, September 2017.

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Koolan Island Mine Restart Construction Progress

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Excavation of pilot seepage barrier panel, September 2017.

Specialised excavator digging pilot seepage barrier panel, September 2017.

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Koolan Island Mine Restart Construction Progress

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Drilling to install seawall monitoring instrumentation, October 2017.
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Seepage barrier guide wall construction, October 2017.

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2017 Annual General Meeting Summary - our strengths set us apart

• Iron Hill mine extends life of the Mid-West operations to late 2018.

• Koolan Island Restart Project is underway and represents a premier high-grade iron ore production opportunity with excellent financial returns and targeted to commence sales in early 2019.

• Robust balance sheet provides leverage and flexibility – cash reserves, term .

• deposits and liquid investments of $507m at 30 September 2017[*]

• Proven cost reduction and control capability.

• Proven ability to generate positive operating cashflow in a volatile price environment.

• Focused team with a broad range of operating and corporate experience.

• Continued focus on seeking opportunities that leverage our strengths to provide value creation for MGX shareholders.

*Prior to payment of $21.9m dividend distribution on 16 October 2017

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2017 Annual General Meeting

MGX

Additional Information

Group Mineral Resources and Ore Reserves at 30 June 2017*

Koolan Island	Koolan Island	Koolan Island	Koolan Island	Koolan Island	Koolan Island
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured	7.69	59.1	13.53	1.16	0.018
Indicated	41.93	64.4	6.36	0.76	0.014
Inferred	10.89	60.2	12.48	0.79	0.015
Total at 30 June 2017	60.51	63.0	8.38	0.82	0.015
Ore Reserves, above 50% Fe
Proved	0.04	63.49	6.68	1.31	0.014
Probable	12.77	66.03	3.70	0.92	0.009
Total at 30 June 2017	12.82	66.02	3.71	0.93	0.009
Extension Hill
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured	1.27	55.32	9.16	2.76	0.077
Indicated	0.31	57.29	10.42	1.62	0.076
Inferred	0.20	56.61	10.49	1.66	0.055
Total at 30 June 2017	1.79	55.81	9.53	2.44	0.074
Ore Reserves, above 50% Fe
Proved	Nil	Nil	Nil	Nil	Nil
Probable	Nil	Nil	Nil	Nil	Nil
Total at 30 June 2017	Nil	Nil	Nil	Nil	Nil
Iron Hill
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured
Indicated	1.23	60.6	8.64	0.94	0.050
Inferred	6.84	57.9	8.72	1.74	0.071
Total at 30 June 2017	8.07	58.3	8.71	1.62	0.068
Tallering Peak
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured	0.41	58.9	6.26	3.50	0.082
Indicated	1.03	58.1	11.70	1.66	0.066
Inferred	0.20	54.7	17.89	1.93	0.056
Total at 30 June 2017	1.65	57.9	11.10	2.15	0.069
Shine
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured	5.73	58.9	9.04	1.81	0.076
Indicated	6.57	58.0	10.01	1.35	0.070
Inferred	3.59	56.8	9.61	1.18	0.063
Total at 30 June 2017	15.89	58.1	9.57	1.48	0.071
Discrepancies may appear due to rounding. Mineral Resources are reported inclusive of Ore Reserves. All tonnages have been estimated as dry tonnages.

Competent Persons Statements

Mount Gibson Iron Mineral Resources:

The information in this report relating to Mineral Resources for the Koolan, Extension Hill, Tallering Peak and Shine deposits is based on information compiled by Elizabeth Haren, a Competent Person who is a member and Chartered Professional of the Australasian Institute of Mining and Metallurgy and member of the Australian Institute of Geoscientists. Elizabeth Haren was a full-time employee of, and is a consultant to, Mount Gibson Iron Limited. Elizabeth Haren 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 Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Elizabeth Haren consents to the inclusion in this report of the matters based on her information in the form and context in which it appears.

Mount Gibson Iron Mineral Reserves:

The information in this report relating to Ore Reserves at Koolan Island is based on information compiled by Brett Morey, a member of the Australasian Institute of Mining and Metallurgy. Brett Morey is a full-time employee of Mount Gibson Iron Limited. Brett Morey 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 Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Brett Morey consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

*Refer ASX release dated 5 October 2017.

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