MGX RESOURCES LIMITED — AGM Information 2018

Nov 13, 2018

Annual General Meeting 2018 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.

2

Mount Gibson Iron Corporate Overview

Issued capital 1,128.4 million shares Market capitalisation A$660 million (at $0.585/share, 13 Nov 2018) Cash and investments A$452 million (30 September 2018)

Borrowings Nil Index ASX All Ordinaries

Shareholder Distribution (% issued shares)

==> picture [342 x 172] intentionally omitted <==

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

MGX Share Price (last 12 months)
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$-
Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18
----- End of picture text -----

Board and Management

• Lee Seng Hui – Non-Executive Chairman

• Simon Bird – Independent Non-Executive Director

APAC Resources 0.4% 17.8% Australian Institutions 1.3% 33.2% Shougang Fushan Australian Retail 6.3% North America 7.5% UK & Europe Management 14.5% Other 19.0%

• Russell Barwick– Independent Non-Executive Director

• Paul Dougas – Independent Non-Executive Director

• Alan Jones – Independent Non-Executive Director

• Li Shaofeng – Non-Executive Director

• Peter Kerr - CEO

• Scott de Kruijff - COO

• Gill Dobson - CFO

• David Stokes – Co. Sec. & General Counsel

3

Mount Gibson Iron Business Overview

==> picture [307 x 436] intentionally omitted <==

Koolan Island

• Australia’s highest grade DSO hematite mine provides direct exposure to increasing high grade premium.

• Ore Reserves upgraded to 21.0Mt @ 65.5% Fe.*

• Seawall seepage barrier completed July 2018, dewatering progressing to plan and mining activities now underway.

• On track for first ore sales at end of March 2019 Quarter.

• Projected FY2019 ore sales of 0.7-1.0 Mwmt.

• Mid-West Region

• Extension Hill & Iron Hill, Perenjori Siding, Geraldton Port

• Planned DSO sales of 2.0-2.3 Mwmt in FY2019 at projected site cash cost of $38-42/wmt FOB.

• Mining on track for completion in late 2018, followed by final ore sales in early 2019.

• Lump and fines currently grading ~60% Fe.

• Total site closure costs provisioned at ~$15m, of which ~$8m is anticipated to be spent in FY2019.

• Right earned to a future income stream based on third party rail volumes, capped at ~$35 million.

4

*Refer ASX release dated 20 April 2018, and slide at end of this presentation.

September Quarter - Recap Strong start to FY2019

• Quarterly product sales of 1.1 Mwmt * for revenue of $65 million Free on Board (FOB).

• Underlying operating cashflow of $18 million before Koolan Island restart expenditure of $23 million in the quarter.

• Cash and liquid investments of $452 million at 30 September 2018.

• All-in group cash costs of $40/wmt** FOB, and Mid West site cash costs of $37/wmt FOB^.

• Mining at the Mid-West Iron Hill deposit scheduled for completion in late 2018, with ore sales to conclude in early 2019.

• High-grade Koolan Island Mine Restart Project on track to commence ore sales late in March 2019 Quarter.

• CEO transition from Jim Beyer to Peter Kerr completed.

• Sales guidance for 2018/19 of 2.7- 3.3 Mwmt at all-in group cash cost of $52-57/wmt FOB**

• Net profit after tax of $99.1 million announced for FY2017/18 including $64.3 million insurance settlement proceeds.

• Fully franked final dividend for FY2017/18 of 3.0 cents per share paid on 15 October 2018.

• Million wet metric tonnes (Mwmt).

**All-in group cash costs are reported FOB and include all operating, sustaining capital, royalties and corporate costs, excluding Koolan Island restart project development capital. ^Site cash costs are reported FOB and include royalties and sustaining capital.

All figures are expressed in Australian dollars unless stated otherwise

5

Koolan Island Mine Restart A premier high grade iron ore opportunity

off the northern Kimberley coast of Western Australia approximately 140 kilometres north of Derby.

==> picture [43 x 10] intentionally omitted <==

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

Seawall
----- End of picture text -----

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

• Self-contained standalone site.

• Main Pit Ore Reserves upgraded to 21.0Mt @ 65.5% Fe* extending mine life to 2023/24.

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

• Peak cash draw of $175m , including ~$100m development capex and pre-production mining.

• On track for first ore sales late in March 2019 Quarter.

*Refer ASX release dated 20 April 2018 and slide at end of presentation..

Koolan Island Mine Restart An unrivalled high grade direct shipping hematite deposit

• High grade hematite (65.5% Fe).

• Low contaminants (P, Al, Si).

• Well understood orebody, consistent grade and width.

• Well understood mining characteristics.

• High grade price premium currently almost double the 10% base case assumption for ores grading 65% Fe.

• Highly sought-after product.

• Life-of-Mine production committed under existing long term offtakes.

*Refer slide at end of presentation for Competent Person’s information and ASX release dated 20 April 2018.

Main Deposit - Ore Reserves	Main Deposit - Ore Reserves	Main Deposit - Ore Reserves	Main Deposit - Ore Reserves	Main Deposit - Ore Reserves	Main Deposit - Ore Reserves
Ore Reserves reported above 50% Fe
Category	Mt	Fe %	SiO2 %	Al2O3 %	Phos %
Proved	0.1	63.4	7.25	1.11	0.013
Probable	20.9	65.5	4.53	0.88	0.012
Total	21.0	65.5	4.54	0.88	0.012
Discrepancies may appear due to rounding. Mineral Resources are reported inclusive of Ore Reserves. All tonnages have been estimated as dry tonnages.

7

Koolan Island Mine Restart High grade premium is significant

Iron Ore Price (US$/dmt CFR North China)

HG Premium / LG Discount (% per dmtu relative to 62% index)

==> picture [726 x 206] intentionally omitted <==

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

120 50%
40%
100
30%
20%
80
10%
60
0%
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18
-10%
40
-20%
20 -30%
-40%
0
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 -50%
65% 62% 58% HG Premium LG Discount
----- End of picture text -----

Koolan Island will be Australia’s highest grade DSO hematite producer at a Ore Reserve Grade of 65.5% Fe*:

• 65% Fe premium currently ~19% per dry metric tonne unit (dmtu) of contained iron relative to 62% Fe price.

• Differential pinches and swells but has widened since early 2016.

• The high grade premium reflects the Chinese clampdown on airborne pollutants, a transition to higher efficiency steel plants and steel makers seeking to maximise plant productivity and profit margins.

• Demand for high grade feedstock imports by Chinese mills has increased as domestic production has reduced.

*For Ore Reserves information refer to slide at end of presentation and ASX release dated 20 April 2018.

8

Koolan Island Mine Restart Forecast Operational Profile

Operating Year (from production commencement)	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	21 Mt Total
Ore Mined (Mt)	2.9	1.9	5.1	7.4	4.0	-	21.3#
Waste Mined (Mt)	19.1	20.5	16.3	8.8	2.7	-	67.5
Total Movement (Mt)	22.0	22.4	21.4	16.3	6.7	-	88.8
Strip Ratio	6.6	10.8	3.2	1.2	0.7	-	3.2
Ore Crushed (Mt)	2.5	2.3	4.6	5.4	5.4	1.1	21.3#
Ore Shipped (Mt)	2.1	2.6	4.6	5.5	5.3	1.2	21.3#
Fe Grade (%)	65.8%	65.6%	65.0%	65.8%	65.2%	65.8%	65.5%
A$/wmt FOB cash operating cost*	76	68	41	34	28	17	41
Discrepancies may appear due to rounding. Schedule is indicative only, and subject to ongoing optimization, actual mine performance, and prevailing market conditions. *Cash operating costs include operating expenditure, royalties, sustaining capital expenditure and corporate cost allocations. #Includes approximately 0.3Mt of Inferred Resources within the pit shell, representing <1.5% of total anticipated production and which is not material to the viability of the Project.

At base case assumptions: (Platts 62% Fe of US$55/dmt CFR, USD:AUD FX rate of 0.75, 10% high grade premium).

• Peak cash draw prior to cashflow of approximately $175m. Total spend of $111m to end Sept, including development capex.

• Estimated payback period of 36 months from commencement of sales.

• Life of Mine (LOM) all-in cash cost of $48/wmt FOB (including development capex and closure) and $41/wmt FOB (excluding development capex and closure).

• Cash breakeven at US$40/dmt CFR ( Platts 62% Fe) , including capex and closure costs.

• Cash costs progressively reduce in line with strip ratio.

• Estimated pre-tax NPV of $252m and IRR of 37% .

• Estimated pre-tax NPV rises to well over $800m with IRR of ~90% at current spot prices. (Platts 62% Fe of US$77/dmt CFR, USD:AUD FX rate of 0.72 and high grade premium of 19%).

Note: All figures expressed in Australian dollars unless stated otherwise. For supporting information, refer to ASX release dated 20 April 2018.

9

Koolan Island Mine Restart Dewatering progressing to plan

==> picture [721 x 417] intentionally omitted <==

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

Main Pit October 2017
Main Pit dewatering and footwall refurbishment
progressing, mid October 2018. Water level now
down ~24 metres.
----- End of picture text -----

10

Koolan Island Mine Restart Dewatering progressing to plan

==> picture [738 x 359] intentionally omitted <==

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

Starter embankment before closure of breach , July 2017
Re-profiling of central inner seawall nearing completion, looking south-west, end October 2018
----- End of picture text -----

11

Koolan Island Mine Restart Dewatering progressing to plan

==> picture [563 x 422] intentionally omitted <==

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

Shotcreting barge
Geotech drilling barge
Final stages of inner seawall re-profiling,
looking west, late October 2018
----- End of picture text -----

12

Koolan Island Mine Restart Main Pit footwall refurbishment – shotcreting & meshing

==> picture [562 x 422] intentionally omitted <==

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

Avalanche mesh installation on
footwall, October 2018
Shotcreting footwall and avalanche mesh installation on Main Pit footwall, November 2018
----- End of picture text -----

13

Koolan Island Mine Restart Site infrastructure and mining fleet

==> picture [163 x 217] intentionally omitted <==

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

Koolan Island
Shiploader
----- End of picture text -----

Mining fleet on-site at Koolan Island

Koolan Island jetty and shiploader

Crushing facility & stockpile yard

14

Mount Gibson Iron FY2019 Business Objectives

• Mid-West operations – complete mining and sales from the Iron Hill operation and transition the Mid West operations to closure in early 2019.

• Koolan Island – conclude pit dewatering and commence production as scheduled in order to achieve first ore sales by the end of the March 2019 Quarter.

• Cost reductions - continue to drive for sustainable cost improvements.

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

• Growth projects - continuation of the search for acquisition opportunities.

Guidance for 2018/19(currency in A$)	Guidance for 2018/19(currency in A$)
Iron ore sales	2.7 - 3.3 Mwmt
Site cash cost – Mid West	$38 - 42/wmt
Site cash cost – Koolan Island, initial sales*	$70 - 75/wmt
All-in group cash cost (excl. Koolan capital)	$52 - 57/wmt
Remaining Koolan Island spend to first sales (from 30-Sep-18)**	~$65 million

Notes:

• Site cash costs are reported FOB and include royalties and sustaining capital expenditure.

• All-in group cash costs are reported FOB and include all operating, sustaining capital, royalties and corporate costs, excluding development capital related to the Koolan Island restart project.

• Site cash costs are for the initial early stage of production, and are projected to progressively decline over the mine life as the strip ratio reduces.

• ** Comprises remaining capital spend and pre-production costs prior to the commencement of ore sales.

15

Mount Gibson Iron Summary

• High Grade Koolan Island Restart Project represents a compelling investment that capitalises on the structural shift in favour of high grade iron ores.

• MGX is the only Australian producer that will provide investors with direct exposure to cashflows from sales of high grade direct shipping hematite (+65% Fe) products.

• Koolan Island Restart Project on track to commence high grade sales by the end of the March 2019 Quarter.

• Sales from Iron Hill ores in the Mid-West provide a bridge to the commencement of high grade sales from Koolan Island.

• Robust balance sheet – cash and investment reserves of $452 million at 30 September 2018.

• Experienced team with a broad range of operating and corporate experience, and proven cost reduction and control capability, and ability to generate positive operating cashflows in a volatile price environment.

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

16

Annual General Meeting 2018 MGX

Supplementary Information Mineral Resources and Ore Reserves Information at 30 June 2018

Koolan Island	Koolan Island	Koolan Island	Koolan Island	Koolan Island	Koolan Island
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Mineral Resources, above 50% Fe
Measured	3.71	60.2	13.29	0.30	0.007
Indicated	38.23	65.1	5.48	0.65	0.013
Inferred	9.97	60.6	12.21	0.59	0.013
Total at 30 June 2018	51.91	63.9	7.33	0.62	0.013
Ore Reserves, above 50% Fe
Proved	0.1	63.4	7.25	1.11	0.013
Probable	20.9	65.5	4.53	0.88	0.012
Total at 30 June 2018	21.0	65.5	4.58	0.89	0.012
Extension Hill
Mineral Resources, above 50% Fe
Measured	1.27	55.3	9.16	2.76	0.077
Indicated	0.31	57.3	10.42	1.62	0.076
Inferred	0.20	56.6	10.49	1.66	0.055
Total at 30 June 2018	1.79	55.8	9.53	2.44	0.074
Iron Hill
Mineral Resources, above 50% Fe
Measured	-	-	-	-	-
Indicated	3.63	56.3	12.85	1.53	0.073
Inferred	1.54	56.1	9.08	2.42	0.081
Total at 30 June 2018	5.17	56.2	11.73	1.79	0.076
Tallering Peak
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 2018	1.65	57.9	11.10	2.15	0.069
Shine
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 2018	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 drytonnages.

Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)	Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)	Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)	Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)	Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)	Total Group Mineral Resources and Ore Reserves at 30 June 2018 (above 50% Fe)
	Tonnes millions	Fe %	SiO2 %	Al2O3 %	P %
Total Mineral Resources at 30 June 2018	76.4	61.8	8.23	0.95	0.032
Total Ore Reserves at 30 June 2018	21.0	65.5	4.58	0.89	0.012
Total Mineral Resources at 30 June 2017	87.9	61.4	8.70	1.07	0.032
Total Ore Reserves at 30 June 2017	12.82	66.02	3.71	0.93	0.009
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 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. Ms Haren was previously a full-time employee of, and is now a consultant to, Mount Gibson Iron Limited, and 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’. Ms 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 Ore Reserves

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

For more information, refer to Annual Statement of Mineral Resources and Ore Reserves released 11 October 2018

18