SIMS LIMITED — Capital/Financing Update 2009

Dec 14, 2009

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Aluminium Project Acquisition

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ASX Release – 15 December 2009

Highlights

• Conditional agreement to purchase Sims Metal Management Limited’s (ASX:SGM) Aluminium Salt Slag processing facility in Moolap, Victoria

• Supply contracts with Sims to treat Aluminium Salt Slag and Aluminium Dross in final stages of negotiation

• Settlement anticipated by 15 January 2010 resulting in immediate income generation. Full production capacity expected to be achieved Q2 2010

• Acquisition of exclusive global rights to proprietary processing technology, processing agreement also in place with significant additional revenue potential

• Substantial opportunities to expand business overseas, discussions commenced for two plants in the United States

• First right of refusal to acquire two additional technologies that treat waste from the aluminium industry, significant growth opportunity

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Overview

As announced on 19 October 2009, Macquarie Harbour Mining Limited ( MHM or the Company ) has been negotiating the acquisition of an Aluminium Salt Slag Project. The Company has now entered into a conditional agreement to acquire the Aluminium Salt Slag business, associated plant and equipment and underlying land and buildings from Sims Aluminium Pty Ltd, a wholly-owned subsidiary of Sims Metal Management Limited (ASX:SGM) ( Sims ). The purchase agreement is conditional on the execution of supply contracts with Sims and another global aluminium company ( Party A ) that are in the final stages of drafting, the key terms having been agreed. Party A wishes to remain unnamed until execution of the final contract. MHM has also negotiated to acquire from a third party the exclusive global rights to a proprietary technology critical to the process. This is an exciting development for the Company, with settlement expected by 15 January 2010. MHM has incorporated a wholly-owned subsidiary Alreco Pty Ltd, which will operate the aluminium division of the Company.

Background

Aluminium Salt Slag is a waste stream that results from the recycling of aluminium, a by-product from recyclers that has traditionally been placed in landfill. Due to regulatory changes by the EPA, this material can no longer be disposed in landfill and this has presented a major problem for the industry. Without a viable solution the secondary aluminium industry cannot continue to operate using the existing highly-efficient yet waste-generating processes.

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ABN 41 124 212 175

Corporate Detail

ASX Codes: MHM, MHMO

Issued Capital: 70.0M Ordinary Shares 27.5M Listed Options

Substantial Shareholders: Rogers Southern PL 17.7% Directors 22.5%

Directors

Chairman Basil Conti FCA, FCIS, FTIA Managing Director Frank Rogers

Executive Director Ben Mead B.Econ

Non-Executive Director P Robertson B.E.(Met), MBA

Non-Executive Director Dr Neil Allen B.Sc, PhD

Contact

PO Box 21 KINGSTON TAS 7050

Tel: +61 (0)3 6229 9955 Fax: +61 (0)3 6229 8430

Email: info@mhml.com.au Web: www.mhml.com.au

Prior to the incorporation of MHM, two of the Company’s Directors Frank Rogers and Peter Robertson (the Technology Providers ) developed a proprietary technology that provides a “closed-loop” solution to the Salt Slag waste issue. This technology removes the need for any of the waste to be consigned to landfill. The waste is processed and converted into its primary components being aluminium metal, salt and non-metallic product (aluminium oxide), which is a by-product that can be sold into a variety of other uses. MHM has now acquired exclusive global rights to this technology from the Technology Providers.

Sims owns a Salt Slag processing facility in Moolap, Victoria which has been used to process material from its own smelting operations, together with that of Alcoa. The Sims process, however, still requires a significant portion of the material to be consigned to landfill at considerable expense.

Since late 2008, MHM has been negotiating with Sims for the purchase of the facility in Moolap, Victoria while concurrently negotiating with the Technology Providers for the exclusive rights to the proprietary Salt Slag Processing Technology that dramatically increases the viability of the process. The Company is pleased to announce that it has successfully negotiated agreements for both. Grant Thornton Corporate Finance acted as financial advisor to the Company.

Opportunities for growth

There is significant opportunity to expand the business overseas, particularly in the United States where in excess of 40-times the volume of Aluminium Salt Slag is produced compared to Australia. MHM has commenced discussions with Party A for the construction of two processing plants in the United States, for which there is strong interest.

Details of the deal

The transaction has four components the completion of each being conditions precedent to the finalisation of the transaction.

Acquisition of the Sims Metal Management facility and Sims Supply Contract

MHM has negotiated to acquire the Sims Aluminium Salt Slag business and underlying land for $3.0M, and anticipates a further $2.0M will be spent on upgrades to the plant and equipment to implement the new technology. The site is about two hectares. The purchase and upgrades will be funded by existing cash reserves and income from operations, which will commence prior to completion of the upgrades. The purchase is conditional on the execution of a tolling contract with Sims under which the Company will treat Aluminium Salt Slag and Aluminium Dross.

Access to Party A supply contract, Alcoa landfill and technology for Australian applications

The Australian rights to use the Technology developed by the Technology Providers is currently licensed to a joint venture (Joint Venture) between three parties, two of which are entities controlled by Frank Rogers and Peter Robertson (both directors of MHM). The Joint Venture has agreed to sub-licence the right to use the Technology in Australia to the Company.

The Joint Venture has access to a landfill owned by Alcoa containing 160,000 tonnes of aluminium waste, from which an estimated 16,000 tonnes of aluminium is expected to be recoverable. The Joint Venture is in the final stages of negotiating a tolling contract with Party A for the processing of Aluminium Salt Slag.

The Joint Venture and MHM have executed a processing and sales agency agreement under which, in return for a fee, MHM will process the Aluminium Salt Slag recovered from the Alcoa landfill and sell the resulting products as agent for the Joint Venture. MHM will also perform the Joint Venture's obligations under the tolling contract with Party A as a sub-contractor.

MHM has a pre-emptive right to acquire the interest of the Joint Venture partners, with a value to be determined by an independent expert and subject to shareholder approval.

These agreements are co-conditional on completion of the transaction to purchase the Sims Salt Slag business.

Rights to the proprietary technology for international applications

MHM has negotiated to acquire the exclusive rights for the use of the technology for all international applications, and must pay the Technology Providers a 5% gross income royalty for this right, subject to compliance with the Listing Rules. The Technology Providers are entities controlled by Frank Rogers and Peter Robertson, Directors of Macquarie Harbour Mining Limited.

This agreement is co-conditional on the completion of the transaction to purchase the Sims Salt Slag business.

Technology Due Diligence

Independent technical experts “The Carnot Group” have provided an engineering assessment of the technology, the technological risk and its implications to the exploitation of the technology, the application of the technology to the Sims processing plant, and confirmation of budgeted capital expenditure and operating costs. The Independent Directors have accepted this assessment and considered it in line with their decision to proceed with the transaction.

First right of refusal for global right to two additional technologies

MHM has negotiated for the first right of refusal to acquire the exclusive global rights to two additional technologies that treat other significant waste streams from the aluminium industry.

Non-Metallic Product ( NMP ) Processing Technology is a proprietary technology under development to process NMP that results from the primary aluminium industry and from salt slag processing, and convert this NMP into aluminium metal. In Australia over 50,000 tonnes of NMP is produced, which would produce nearly 25,000 tonnes of aluminium metal per annum. In the USA more than 10 times the volume of NMP is produced as compared to Australia.

Spent Pot Lining ( SPL ) Processing Technology is a proprietary technology under development to process SPL into valuable commodities. SPL is a highly hazardous waste that results when the lining of the aluminium smelter pot lines are replaced. This waste can not be placed in landfill in Australia, resulting in significant quantities being stored above ground. Australia produces some 38,000 tonnes of SPL per annum and the technology converts SPL into carbon, fluorine products and refractories for reuse in the aluminium industry. The revenue potential from the treatment of SPL is substantial.

Image of Salt Slag processing facility (digital representation of proposed Alreco signage)

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Alreco Pty Ltd is a wholly-owned, special purpose subsidiary that will operate the aluminium division of Macquarie Harbour Mining Limited

Company Comment

Chairman Basil Conti stated “This is an extremely exciting development for Macquarie Harbour Mining. The acquisition of the Sims facility and agreement with the owners of the rights to technology and Alcoa landfill affords MHM significant profit and cashflow potential. We anticipate the processing contracts with Sims and Party A to be completed by the end of December 2009, again increasing the revenue potential for the project. Profits will be reinvested in the growth of the aluminium division, and also to fund our ongoing exploration programmes for silica, gold, nickel, copper, polymetallics and iron ore. With significant potential to grow the aluminium division overseas, and immense potential to develop significant mineral projects I am excited to continue to grow this Company and deliver robust returns to our Shareholders.”

For Further Information

For further information please contact Ben Mead on +61 (0)3 6229 9955 or at www.mhml.com.au.

Notice under section 708AA of the Corporations Act 2001 (Cth)

In accordance with Regulatory Guide 189, the Company provides the following information in connection with the non-renounceable rights issue announced on 16 November 2009 (Rights Issue):

• 1.1 The Company will offer the New Shares for issue without disclosure to investors under Part 6D.2 of the Corporations Act 2001 (Cth) (the Act).

• 1.2 The Company is providing this notice under s708AA(2)(f) of the Act.

• 1.3 As at the date of this notice, the Company has complied with:

• (a) the provisions of Chapter 2M of the Act as they apply to the Company; and

• (b) section 674 of the Act.

• 1.4 As at the date of this notice, there is no information:

• (a) that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• (b) that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

• (i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

• (ii) the rights and liabilities attaching to the New Shares.

• 1.5 If all shareholders of the Company on the record date of 25 November 2009 take up their entitlements under the Rights Issue, then the Rights Issue will have no effect on the control of the Company.

• 1.6 If the shareholders take up none or only some of their entitlements under the Rights Issue then the Rights Issue will have no effect on control of the Company. The Company has been advised by the Underwriter, Sonray Corporate Pty Ltd, that the issue is sub-underwritten by a number of separate parties, who are not associated with the Company. If no shareholder takes up its entitlement and the sub-underwriters subscribe for all the shortfall shares pursuant to the Rights Issue, the maximum voting power that any subunderwriter could have post the Offer is 6% of the fully diluted share capital of the Company.

If you have any queries in relation to the Offer please contact the Company Secretary on +61 (0)3 6229 9955.