REDIVIUM LIMITED — Capital/Financing Update 2013

Feb 12, 2013

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13 February 2013

ASX & MEDIA ANNOUNCEMENT

SCOPING STUDY CONFIRMS DEVELOPMENT POTENTIAL OF RAKKURIJOKI IRON DEPOSIT, SWEDEN

Highlights:

• Positive Scoping Study confirms development potential of Rakkurijoki Iron deposit.

• Scoping Study based on a 12 year mine life, supplying an iron fines product, at a premium price, to the European and the Middle East North African markets.

• Pre-feasibility Study to be initiated and expanded to include the Rakkurijärvi Iron deposit.

• Joint Venture partner being sought to fund Pre-feasibility Study.

Hannans Reward Ltd (ASX:HNR) ( Hannans or Company ) is pleased to announce a positive outcome from the recently completed Scoping Study for the Rakkurijoki Iron deposit ( Rakkurijoki deposit ), located 5 kilometres south of Kiruna, a full service mining town in Sweden (refer to Figures 1 and 2 on pages 3 and 4 for detailed location maps).

The Scoping Study determined the Rakkurijoki deposit has the potential to supply iron product over a 12 year mine life, at a premium price, to the European and the Middle East North African ( MENA ) markets (refer to Table 1 on page 2 and Scoping Study Summary on page 5 for further information).

The Scoping Study evaluated the practicality of combining a low-cost logistics solution with the least mining, processing, financial and execution risk.

A decision has now been made to initiate a Pre-feasibility Study ( PFS ) on the Rakkurijoki deposit and to expand the PFS to include the Rakkurijärvi Iron deposit, located 2½ kilometres south-west of Rakkurijoki (refer to Figure 2 on page 4). In the future, the two deposits collectively will be referred to as the Rakkuri Iron Project ( Rakkuri Project ).

The combination of the two deposits may further enhance the economics of the Rakkuri Project with relatively minimal additional capital expenditure.

Damian Hicks, Hannans Managing Director said,

“The results from the Scoping Study are encouraging and we’ll complete a far greater level of analysis during the PFS. In terms of funding the PFS, our plan is to joint venture with a company that has a long history in developing iron ore mines. A partner that has an excellent track record in delivering bulk commodity projects within budget and on time .”

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The focus for the Rakkuri Project PFS will be on developing strict CapEx and OpEx disciplines, detailed planning, thorough financial analysis, developing a deeper understanding of both the markets for premium quality product in Europe and the MENA region, and the ability of the Company to obtain the necessary environmental and social licenses.

Sweden has a low sovereign risk compared to other countries, excellent mining knowledge, a supportive mining law and a long history of producing premium grade iron products, both fines and pellets. Hannans provides potential joint venture partners with a unique opportunity to enter Sweden with a strong project, in-country expertise and excellent logistics options.

The Rakkurijoki deposit is located less than 1 kilometre from a modern, government owned, open access heavy gauge rail line. The line connects the Rakkurijoki deposit to two modern iron ore export ports. This premium location with regard to logistics differentiates the project from other iron projects in Scandinavia and represents a significant competitive advantage.

With the successful completion of the Scoping Study and the search having begun for a joint venture partner, Magnus Arnqvist, Managing Director of Kiruna Iron AB ( KIAB ) a Hannans wholly owned subsidiary, has now moved to the position of non-executive Director. Mr Arnqvist said,

“The Rakkurijoki deposit is a robust iron project with an excellent location and this has been a very thorough Scoping Study. The actual mining process is straight forward, but we must now do more detailed planning during the PFS to fully understand the logistics chain, the processing, the market and the social licenses we need to operate in Kiruna. I look forward to continue providing oversight during that process.”

Project highlights and future milestones

	Scoping Study	PFS	DFS
Accuracy (%)	± 30	± 15	± 5
Completion Date	January 2013	1stQuarter 2014	-
Relevant study costs	US$250,000	US$10 million1	-
JORC Resource	Inferred	Indicated	Measured
Drilling Required	Nil	25,000m
Expected Mine Life	12 years	>15 years
Average Life-of-Mine OpEx (includes all mining, processing, haulage and port handling costs)	US$54/tonne of concentrate sold
CapEx	US$629 million
Long Term Iron Price (69% Fe)	US$125/dmt
LongTerm Iron Price(62% Fe)	US$100/dmt

Table 1. Project highlights and future milestones

For further information please contact:

Hannans Reward Ltd

Damian Hicks Managing Director Tel: +61 8 9324 3388 Email: damianh@hannansreward.com

Ben Della-Vedova Business Development Manager Tel: +61 8 9324 3388 Email: bendv@hannansreward.com

1 Inclusive of drilling, assay and metallurgical test work.

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Rakkurijoki Project Background

Location

The Rakkurijoki deposit is located 5 kilometres south of Kiruna (a full service mining Town). Kiruna is located above the Arctic Circle within the county of Norrbotten, approximately 1,200 kilometres north of Sweden’s Capital, Stockholm (refer to Figure 1).

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Figure 1. Scandinavian Iron Projects (including rail infrastructure)

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The Rakkurijoki deposit is situated within the Rakkurijärvi nr 2 permit. KIAB (a wholly owned subsidiary of Hannans) acquired the permit from Rio Tinto Mining & Exploration Ltd and Anglo American Exploration BV in December 2010 (refer to Figure 2).

The Rakkurijoki deposit is extremely well located within close proximity to key project infrastructure (refer to Figure 2) including:

• power (overhead);

• roads (less than 250m); and

• rail (less than 1km) which will reduce CapEx requirements over other competitors.

The close proximity to infrastructure provides the Rakkuri Project with a significant competitive advantage over other iron projects in Scandinavia.

The Swedish Government has committed to investing a further c.US$550 million in mining infrastructure in the Norrbotten Region.

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Figure 2. Rakkuri Iron Deposits, Kiruna, Sweden

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Scoping Study Summary

Scoping Study Contributors

The Scoping Study was managed by KIAB and various aspects were completed by specialised independent consultants (refer to Table 3), which formed the basis of the Scoping Study report.

Scoping Study Contributors	Scoping Study Contributors
Responsibility	Organisation	Name	Role
Mining	Rock Team Pty Ltd	Nicole Player	Senior Mining Engineer
		Denis Grubic	Technical Services Manager
Logistics	Vectura Consulting AB	Jenny Widmark	Project Manager
		Anders Lundberg	Senior Consultant
		Robert Sommar	Planning Manager- Cost calculations transport and logistics.
		Fredrik Barthel	Planning Manager - Traffic and terminals.
		John Fridlund	Planning Manager - Infrastructure and costs calculations.
Engineering	Rapallo Group	Peter George	Managing Director
Metallurgy	METS	Damian Connelly	Director/Principal Consulting Engineer
		Denis Yan	Consulting Metallurgist
Processing	METS	Damian Connelly	Director/Principal Consulting Engineer
CAPEX		Denis Yan	Consulting Metallurgist
Environmental	Advokatbyran Kaiding	Michael Lundberg	Lawyer
		Jonas Holmqvist	Lawyer
	Golder Associates	Erik Karlsson	Consulting Environmental Engineer
Marketing	Raw Materials Group	Anton Lof	Senior Iron Ore Consultant
Engineering		Christer Nordstrom	MiningEngineering

Table 3. Scoping Study Contributors

Project Enhancement Opportunities

The Scoping Study identified potential opportunities that could enhance the Rakkurijoki deposit economics. During the PFS, Hannans will focus on evaluating the following opportunities:

• Including the Rakkurijärvi Iron deposit (this has the potential to produce an additional 19.8Mt of iron product).

• Determining the end saleable product and pricing by performing detailed metallurgical test work and identifying potential customers in the MENA and European region.

• Reviewing the potential markets and processing options for the extraction of copper and gold from the Rakkuri Project (the value of credits have not been included in the Scoping Study).

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Scoping Study Parameters

The Scoping Study was completed using the following project assumptions:

Rakkurijoki Project Assumptions		Luleå, Sweden	Narvik, Norway
Expected Mine Life	Yrs	12	12
LOM average strip ratio	waste:ore	4.23:1	4.28:1
LOM average iron price (69% Fe)	US$/t	125	125
CapEx	US$ million	629	679

Table 4. Rakkurijoki Project Assumptions

The key considerations in the Scoping Study were assessing the potential of mining, processing, railing and shipping an iron product to the market in Europe or the MENA region. The minimum life of the Rakkurijoki deposit is 12 years, but has the potential to be significantly increased with the inclusion of the Rakkurijärvi deposit (plus 3 to 4 additional years).

Less focus was placed on geology, metallurgy and processing as it was considered that at this stage sufficient information had already been obtained to confirm the potential of the Rakkurijoki deposit to produce a high iron/low impurity iron product.

Operating Costs

The expected FOB operating cash cost per tonne ranges from approximately US$54 to US$57 (including production ramp up costs) depending on the shipping option selected from either the Luleå (Sweden) or Narvik (Norway) Port (refer to Table 5). The various Port options including detailed solutions will be considered in future studies.

Expected FOB Operating Cash Costs (real)	Expected FOB Operating Cash Costs (real)		Luleå, Sweden	Narvik, Norway	Narvik, Norway
			US$/t saleable		US$/t saleable
			concentrate		concentrate
Mining cost2	US$/t mined ore	1.93	c.23.8	1.93	c.23.8
Processing costs3	US$/t processed ore	5.70	c.13.4	5.70	c.13.4
Administration costs	US$/t processed ore	1.09	2.4	1.09	2.4
Loading train	US$/saleable concentrate	1.0	1.0	1.0	1.0
Rail transport to port	US$/saleable concentrate	7.3	7.3	6.3	6.3
Unloading train	US$/saleable concentrate	0.7	0.7	1.2	1.2
Port handling	US$/saleable concentrate	3.3	3.3	6.3	6.3
Royalties	US$/saleable concentrate	2.1	2.1	2.1	2.1
Total			54.0		56.5

Table 5. Expected FOB operating cash cost

2 Mining costs are expected to be approximately US$3.7 and US$2.5/t mined ore in the first two years respectively. The US$23.8/t saleable concentrate includes production ramp up costs. 3 Processing costs are expected to be approximately US$10.8 and US$7.4/t processed ore in the first two years respectively. The US$13.4/t saleable concentrate includes production ramp up costs.

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Capital Costs

The Rakkuri Project will supply an iron fines product to either the Port of Luleå (Sweden) or the Port of Narvik (Norway), not both. The actual Port selection will be determined in future studies.

Initial capital costs are estimated to be approximately US$629 million to the Port of Luleå (Sweden) or US$679 million to the Port of Narvik (Norway) (refer to Table 6).

Expected Initial Capital Costs (real)	Expected Initial Capital Costs (real)		Luleå, Sweden	Narvik, Norway
Pre Strip		US$	24	24
Mining Yr 1		US$	120	120
Mining Yr 2		US$	60	60
Processing		US$	325	325
Logistics		US$	100	150
Total			629	679

Table 6. Expected Initial Capital Costs

Hannans initial capital costs have been prepared on the basis of an owner/operator mine. Hannans will be looking at leasing options for the mining equipment fleet and contract mining options and therefore not all these initial costs may form part of Rakkurijoki’s CapEx.

The expected cost of a processing facility is based on the following assumptions:

• Magnetite feed (Feed grade = 45% Fe, >5% SiO2, 0.8%P and 0.2%S).

• Feed is crushed and ground to P80 = 75μm 4.

• Magnetic separation circuit and a reverse flotation circuit.

• Thickening and filtration of concentrate product.

• Concentrate grades >60% Fe, <5% SiO2, <0.05%P and <0.05%S.

A residual value for mining equipment and processing plant and equipment has been determined to be US$120 million (undiscounted).

The initial capitals costs include sufficient sustaining capital for the 12 year mine life.

Iron Resource

The Rakkurijoki deposit has a JORC compliant inferred resource of 74.5Mt at 39.7% Fe using a cutoff grade set at 20% Fe (refer to Table 7).

The mineral resource estimate was prepared and signed off by Mr Thomas Lindholm, FAusIMM, of Geovista AB, following the guidelines of the JORC Code. The effective date of the resource statement was 27 July 2011.

Inferred JORC Resource
Prospect	Mt	Fe (%)	P (%)	S (%)
Rakkurijoki	74.5	39.7	0.28	0.89
Rakkurijåvi	69.6	28.5	0.07	0.93

Table 7. Rakkurijoki and Rakkurijärvi Inferred JORC Resource[ii]

The mineral resource has been defined from diamond core drilling which has been conducted on a grid with a general density of 80x200 metre spacing. Approximately 5,500m of drilling remain to be

4 Preliminary metallurgical test work has been conducted at a 45μm grind size, although this has not been optimised. It is anticipated the Rakkurijoki deposit will be capable of being processed at 75μm grind size. If a smaller grind size is required this may lead to additional CapEx and OpEx.

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drilled to complete a 100x100 metre grid that will enable an indicated JORC Resource to be calculated.

Block models were constructed for iron, phosphorus and sulphur for the mineralised lenses as part of the estimation study.

Inverse distance squared was used for the grade interpolation of all elements. The search ellipses were modelled to follow the geometry of the mineralised lenses.

Iron Quality

Mineral Engineering Technical Services ( METS ) have supervised and assessed preliminary metallurgical test work. The purpose of the test work was to determine if the magnetite ore was upgradeable to a premium iron product, this has been proven successful.

The Davis Tube Recovery ( DTR ) test work was carried out at 45 μm (the grind size has not been optimised) (refer to Table 8).

Preliminary	Metallurgical Test Work.	Metallurgical Test Work.
	% of feed mass	Fe recovered	DTR	DTR	DTR	DTR	DTR
	recovered in the	in DTR as % of	conc Fe	conc	conc	conc P	conc S
Deposit	DTR	Fe in feed	grade	SiO2	Al2O3	grade	grade
Rakkurijoki	45.2	83.8	69.2	1.0	0.3	0.009	0.365
Rakkurijåvi	25.5	76.1	68.9	2.2	0.4	0.005	0.022

Table 8. Rakkurijoki and Rakkurijävi Preliminary Metallurgical Test Work

Core from five diamond drill holes at Rakkurijoki has been the subject of preliminary metallurgical test work comprising head grade assay and DTR. DTR tests were carried out on selected composites based on head assay results.

METS results for the Rakkurijoki deposit are summarised below:

• Iron feed grades were variable with an average, medium grade iron (35.9% Fe). DTR concentrate grades were high at an average of 69.2% Fe and 84% Fe recovery (refer to Table 8).

• The alumina, silica and phosphorus grades were acceptable in a majority of test holes (some elevated levels of phosphorus was identified).

• Sulphur levels are high (average 0.3%S) and the ore would require some beneficiation to reduce the sulphur levels to produce a saleable iron concentrate (a reverse flotation circuit has been accounted for in the processing CapEx).

The aim of the next phase of test work will be to determine if the Rakkuri Project is capable of producing a DR or BF pellet feed or a fines product.

Mining

The Rakkurijoki open pit will be staged in three pushbacks. Mining will be a top down, bench by bench method. Conventional mining activities will occur as part of the sequence; drill and blast with blast hole sampling for grade control, followed by load and haul.

Processing

The Rakkurijoki deposit is a magnetite ore which requires a magnetic separation beneficiation plant with reverse flotation for the rejection of phosphorus and sulphur.

Preliminary analysis confirms other contaminants; SiO2 and AI2O3 are at levels which are able to be processed based on the proposed plant design.

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Rail

The Rakkurijoki deposit is located within 1km of the Malmbanan railway line (Sweden’s only heavy gauge railway line). The existing Malmbanan railway runs from Kiruna to Narvik (Norwegian Port) and Kiruna to Luleå (Swedish Port) (refer to Figure 1 on page 3). The distance is approximately 180 kilometres and 340 kilometres respectively.

There is capacity at current traffic rates to transport the initial loading to both Narvik and Luleå. Future expansion of the railway including twinning the track from Kiruna to Narvik is being considered by both the Swedish and Norwegian railway authorities.

Port

There are two main seaports connected to the Malmbanan railway line that ship iron ore today, Narvik at the Atlantic coast (Norwegian Port) and Luleå in the Gulf of Bothnia (Swedish Port) (refer to Figure 1). There is current capacity of 2Mt per annum at the Luleå Port with a development option to increase this capacity. The Narvik Port option will need to be considered further in future studies. It is likely the end use of the product will be Europe or the MENA region.

Social and Environmental

Rakkurijoki nr 2 permit is within an Area of National Importance for both mineral deposits and reindeer herding as defined by chapter 3 of the Environmental Code.

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Figure 3. Area of National Importance (Kiruna district, Northern Sweden)

Area of National Importance is an area (whether it is for mineral deposits, reindeer herding, outdoor life etc) that has been identified by the relevant governmental agency.

The classification does not have any protective attributes but its status is taken into account when the area is to be exploited whether it is a new mine, a new building or a new road etc.

The Swedish Government is currently considering a case whereby two different Areas of National Importance overlap; in this case it is where an Area of National Importance for mineral deposits overlaps with an Area of National Importance for reindeer herding and a decision is expected in 2013.

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The information in this document that relates to exploration results is based on information compiled by Ms Amanda Scott, Exploration Manager, Hannans Reward Ltd, who is a Member of the Australian Institute of Mining and Metallurgy. Ms Scott has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2004 edition of the “Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms Scott consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Competent Persons Statement-Rakkurijärvi, Rakkurijoki, Discovery, Tributary Zone, and Puoltsa Mineral Resources

The mineral resource estimate for Rakkurijärvi, Rakkurijoki, Discovery, Tributary Zone and Puoltsa is effective from 13 January 2012 and has been prepared by Mr Thomas Lindholm, MSc of GeoVista AB, Luleå, Sweden acting as an independent “Competent Person”. Mr Lindholm is a member of the Australasian Institute of Mining and Metallurgy (Member 230476). Mineral resources of the Rakkuri iron deposits have been prepared and categorised for reporting purposes by Mr Lindholm, following the guidelines of the JORC Code. Mr Lindholm is qualified to be a Competent Person as defined by the JORC Code on the basis of training and experience in the exploration, mining and estimation of mineral resources of gold, base metal and iron deposits.

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