Source: http://www.docstoc.com/docs/132448450/OFFER-JURISDICTIONS-Northern-Iron
Timestamp: 2014-07-13 00:20:07
Document Index: 87593773

Matched Legal Cases: ['arty\n1', 'arty\n100', 'ART 2012', 'art. 652', 'art. 1156', 'art. 27']

OFFER JURISDICTIONS Northern Iron
VALKYRIEOZ\Investor Presentation\201210 - Investor Presentation_39.pptx
OPERATIONS UPDATE &amp; ANNUAL FINANCIAL RESULT*
■ SALES REVENUE USD 193.8M (2010: USD 102.4M)
■ NET PROFIT AFTER TAX USD 2,9M (2010: USD -30.4M)
■ OPERATING CASH FLOWS USD -5.8M (2010: USD -49.3M)
■ CASH BALANCE OF USD 28.6M (2010: USD 26.7)
This presentation has been prepared by Northern Iron Limited and its subsidiaries (“NFE”). No party other than NFE has authorised or caused the issue of this presentation, or takes responsibility for, or makes any
statements, representations or undertakings in this presentation.
In accepting this Presentation, you for yourself and your related bodies corporate and other affiliates and your and their respective directors, officers, employees, agents and advisers (together You) that the
presentation is provided on the terms and conditions of this disclaimer and important notice and that this disclaimer and important notice also applies to any information provided in relation to or in connection with
the information contained in the presentation.
An offer of shares is intended to be made by NFE (Offer). A prospectus under section 713 of the Corporations Act 2001 (Cth) (Corporations Act) is expected to be lodged by NFE with the Australian Securities and
Investments Commission (ASIC) on or about 8 October 2012 (the Prospectus) and is to be made available to all eligible retail shareholders. Eligible retail shareholders wishing to acquire new shares will need to
complete the relevant entitlement and acceptance form, which eligible retail shareholder will receive with their Prospectus. A person should consider the Prospectus in deciding whether to acquire the new shares.
This presentation is not a prospectus under Australian law and does not constitute an offer or invitation to issue or sell, or recommendation to subscribe for securities, and this presentation does not form the basis of
any contract or commitment other than in respect of the obligations of parties who agree to accept firm allocations on the terms of those agreements.
Nothing contained in this presentation constitutes investment, legal, tax or other advice. You should make your own assessment and take independent professional advice in relation to the information contained in
this presentation and any action taken on the basis of that information. This presentation is not intended to induce any person to engage in, or refrain from engaging in, any transaction.
NFE and its directors, officers, employees, advisers and agents and Goldman Sachs Australia Pty Ltd (“Goldman Sachs”) and its related bodies corporate or other affiliates and its and their directors, officers, employees,
advisors and agents (“Affiliates”) make no representation or warranty (express or implied) as to the accuracy, reliability or completeness of this presentation and shall have no liability (including liability to any person
by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (express or implied) arising out of, or contained in or derived from, or for any omissions from this presentation,
except liability under statute that cannot be excluded.
This presentation does not constitute an offer to sell, or solicitation of an offer to buy, securities in the United States or to any person to whom such an offer or sale would be unlawful. This presentation may not be
distributed or released in the United States. The securities have not been, and will not be, registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) or the securities laws of any state or other
jurisdiction of the United States, and may not be offered or sold in the United States unless the securities are registered under the U.S. Securities Act or pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the U.S. Securities Act and applicable United States securities laws.
The release, publication or distribution of this presentation in jurisdictions outside Australia may be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities
laws. This presentation may not be copied by You, or distributed to any other person.
All amounts are presented in Australian dollars unless otherwise stated. The information in this presentation remains subject to change without notice.
This presentation may include forward-looking statements with respect to the financial condition, results of operations and business of NFE and certain plans and objectives of the management of NFE.
Forward-looking statements can generally be identified by the use of words such as “project”, “foresee”, “plan”, “expect”, “aim”, “intend”, “anticipate”, “believe”, “estimate”, “may”, “should”, “will” or similar
expressions. Forward-looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the control of NFE , and may involve
significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Past performance information given in this presentation is given for illustrative purposes only and
should not be relied upon and is not an indication of future performance. See the “Key risks” section of this presentation for a discussion of certain risks that may impact the outcome of matters discussed in forward
looking statements. Actual values, results or events may be materially different to those expressed or implied in this presentation. You are cautioned not to place reliance on forward-looking statements.
Any forward-looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, NFE does not undertake
any obligation to update or revise any information or any of the forward-looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward-looking statements
No representation or warranty (express or implied) is made by NFE or any of its directors, officers, employees, advisers or agents that any forecasts, projections, intentions, expectations or plans set out in this
presentation will be achieved, either totally or partially, or that any particular rate of return will be achieved.
Goldman Sachs, together with its affiliates, is a full service financial institution engaged in various activities, which may include trading, financing, financial advisory, investment management, investment research,
principal investment, hedging, market making, margin lending, brokerage and other financial and non-financial activities and services including for which they have received or may receive fees and expenses. In the
ordinary course of their various business activities, Goldman Sachs and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and
financial instruments (including bank loans) for their own account and for the accounts of their customers and such investment and securities activities may involve securities and/ or instruments of NFE. Goldman
Sachs and its affiliates may also make investment recommendations and/ or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to
clients that they acquire, long and/ or short positions in such securities and instruments.
Goldman Sachs, in conjunction with its affiliates, is acting as sole lead manager and bookrunner to, and underwriter to the institutional component of, the Offer. Goldman Sachs and/ or its affiliates has received and/
or expects to receive fees and expenses for acting in this capacity (see section 9.7 of the draft Prospectus for full details). Goldman Sachs, in conjunction with its affiliates, is also acting as financial adviser to NFE in
relation to its announced Strategic Review for which it has received and/ or expects to receive fees and expenses. Goldman Sachs and/ or its affiliates have performed, and may perform, other financial or advisory
services for Northern Iron, and/ or may have other interests in or relationships with Northern Iron, and its related entities and/ or persons and entities with relationships with NFE and/ or its related entities for which
they have received or may receive fees and expenses.
 Northern Iron (“NFE” or “the Company”) today announces an accelerated pro-rata non-renounceable
entitlement offer to raise up to A$55.5 million (“Entitlement Offer”)
 Entitlement Offer will comprise an Institutional Entitlement Offer and a Retail Entitlement Offer
 Institutional Entitlement Offer is underwritten
 NFE is undertaking the Entitlement Offer to:
— Compensate for a reduction in the amount able to be drawn under the Company&#39;s working capital facility
brought on by the material decline in iron ore price
— Strengthen its working capital position
— Ensure greater financial and operational flexibility, irrespective of the outcome of the Strategic Review
— Provide increased headroom under the financial covenants of the Company’s debt facilities
 NFE also announces successful renegotiation of its banking facilities, conditional on NFE undertaking the
 Felix Tschudi, NFE’s largest shareholder, has indicated he intends to take up their pro-rata Entitlement under the
 Both Essel Mining (a wholly owned subsidiary of Aditya Birla Group) and Prominvest have been made aware of
the Entitlement Offer and are continuing to participate in detailed stage two due diligence which is scheduled to
be completed in mid-October, unless otherwise agreed
 1 for 3 accelerated non-renounceable entitlement offer to raise up to A$55.5 million
 Institutional Entitlement Offer of approximately A$47.2 million is underwritten
 Up to approximately 123.3 million new NFE ordinary shares (“New Shares”) to be
issued (33.3% of existing outstanding shares)
 A$0.45 per New Share
Offer Price                            46.4% discount to NFE’s closing price on Wednesday, 3 October 2012
 39.2% discount to TERP1
 Institutional entitlements not taken up by institutional shareholders and Entitlements
of ineligible shareholders will be placed into the institutional shortfall bookbuild
Institutional Offer                    Shareholders will not receive any proceeds from sale of Entitlements not taken up
and ineligible shareholders will also not receive any proceeds for the sale of
 Shareholders will not receive any proceeds from sale of Entitlements not taken up
Retail Offer                            and ineligible shareholders will also not receive any proceeds for the sale of
Ranking                                New Shares will rank pari passu with existing shares
1 The theoretical ex-rights price is the theoretical price at which NFE’s shares should trade immediately after the ex‐date for the Entitlement Offer. The
theoretical ex-rights price is a theoretical calculation only and the actual price at which NFE’s shares trade immediately after the ex-date will depend on
many factors and may not be equal to the theoretical ex-rights price. The theoretical ex-rights price has been calculated based on an assumed 100% take
up of the Retail Entitlement Offer.                                                                                                                           3
INDICATIVE ENTITLEMENT OFFER TIMETABLE1
Event                                                                      Date
Trading halt commences (pre-market open)                                                                Thursday, 04 October, 2012
Announcement of Offer and Institutional Entitlement Offer period commences                              Thursday, 04 October, 2012
Close of Institutional Entitlement Offer and Institutional bookbuild                                    Friday, 05 October, 2012
Shares recommenced trading on the ASX                                                                   Monday, 08 October 2012
Lodgement of Prospectus                                                                                 Monday, 08 October 2012
Record date                                                                                             7:00pm, Tuesday, 09 October 2012
Prospectus despatched                                                                                   Thursday, 11 October 2012
Settlement of the Institutional Entitlement Offer                                                       Thursday, 11 October 2012
Trading of New Shares under the Institutional Entitlement Offer                                         Friday, 12 October 2012
Retail Entitlement Offer opens                                                                          Friday, 12 October 2012
Retail Entitlement Offer closes                                                                         5:00pm, Friday, 26 October 2012
Despatch of holding statements                                                                          Wednesday, 07 November 2012
Trading of New Shares under Retail Entitlement Offer                                                    Thursday, 08 November 2012
1The above timetable is indicative only and subject to change. All times and dates refer to Sydney Time. NFE reserves the right to extend these dates
without prior notice subject to ASX Listing Rules and other applicable laws. In particular, NFE reserves the right to extend the Retail Closing Date or to
accept late Applications. The commencement of quotation of New Shares is subject to confirmation from ASX
ENTITLEMENT OFFER IMPACT AND BANKING
FACILITIES RENEGOTIATION
Impact of Entitlement Offer                                       30-Jun-2012                            Pro-Forma
and Retail Entitlement Offer
 Ordinary Shares Outstanding (m)                                     370                                     475                                    493
 Cash &amp; Cash Equivalents (US$m)                                       21                                      55                                     64
 Net Debt (US$m)                                                      95                                      58                                     49
Notes: Pro-forma for Retail Offer Calculated based on an assumed 100% take up of the Retail Entitlement Offer. Both pro-forma adjustments include the net effect of
receipts and payments for the period Jul-2012 to Sep-2012 and the fees associated with the Entitlement Offer.
 Conditional on an equity capital raising of at least US$35 million, and the transfer to Sydvaranger Gruve AS of US$6 million in
cash by the Company, DNB Bank has offered:
— an extension of the working capital facility to an amount of US$35 million until the end of quarter 4 2012 and an
increase in the borrowing base under the facility to 80% of inventory value and 90% of sales in respect of each period;
— EBITDA covenant waiver for 12 months, first test will occur on 31 December 2013, with the covenant to be re-
established in successive increases each quarter of US$7 million EBITDA up to a maximum of US$27.5 million EBITDA on
an LTM basis by 31 December 2014
 Innovasjon Norge has also provided repayment deferrals on principal amounts that were due in December 2012, and
February, June and August 2013
ENTITLEMENT OFFER RATIONALE
 Substantial progress made in establishing 2.8Mtpa capacity                      Recent historical iron ore price (US$/t)
of processing plant by end Sep-12, achieving rates of                   180
2.7Mtpa                                                                                                     CFR China 62% Fe (US$/t)
 The focus is on:
— improving operational and maintenance performance                    160
at the processing plant                                                                      $149.3
— sustaining higher production rates at the mining
operation to achieve a 2.8 Mtpa rate
 Significant pressure placed on NFE working capital position
— Material and sudden decline in iron ore prices
— Costs associated with addressing unplanned
maintenance outages                                                  100                                                    $104.2
— Reduced ability to draw on working capital facility due
to lower iron ore prices and production
 Strategic Review is ongoing and may or may not result in a              80
proposal for consideration by shareholders, with any deal
completion not likely to occur until months after receipt of
any proposal                                                            60
 Essential that NFE is appropriately capitalised throughout              3/01/2012   3/03/2012   3/05/2012   3/07/2012   3/09/2012
Source: Bloomberg as at 02-Oct-12
 Strategic review announced November 2011
 Late July 2012, NFE received indicative, non-binding and highly conditional proposals from:
— Essel Mining (a wholly owned subsidiary of Aditya Birla Group) for $1.40 per share 1
— Prominvest for $1.42 per share2
 Essel Mining and Prominvest are aware of the Entitlement Offer and are continuing to
undertaking stage two due diligence to determine whether to submit a binding offer for NFE
— This process is due to complete in mid-October, unless otherwise agreed
 There can be no certainty that any final binding proposal from either party will be made
 There can be no certainty that if a final binding proposal is made it will be at the same price
as the indicative, non-binding proposals
— Price per share of any proposal would need to be adjusted to account for New Shares
though this adjustment does not impact value of investment for shareholders taking up
 If a final binding offer is put to shareholders for consideration, the process for implementing
a transaction (provided it is acceptable to shareholders) will take several months from the
date of receipt of any final binding proposal
1   Based on proposed net debt of US$90m under Essel Mining’s revised non-binding stage one proposal
2   Based on proposed net debt of US$93m under Prominvest’s non-binding stage one proposal
 During August and September, NFE successfully implemented modifications to the concentrator at
Kirkenes towards achieving plant capacity able to deliver a 2.8Mtpa production rate
— Plant capability now depends on sustaining these higher operating rates for extended periods, which
is a function of maintenance and operations management, and increasing mining rates to meet the
new concentrator capacity
 Dry concentrate production of 469kt for Q3 2012 with C1 direct operating costs of US$83/dmt
— Costs broadly in line with Q2 2012 average C1 direct operating costs of US$78/dmt
— Costs and production have been relatively stable for three successive quarters
— Assuming a production volume of 650kt following further maintenance and operations improvement,
costs are expected to reduce in Q4 2012 to between US$60-65/dmt for the quarter
 NFE is conducting a comprehensive review of operating costs
— Mining cost reduction: working in partnership with NFE’s contractor counterparties to achieve
mutually beneficial contractual improvements; culture change driving equipment protection,
improved supervision, reduced repairs and parts usage
— Processing and maintenance costs: reduction in contractor dependency and improved maintenance
planning from increased efficiency of planned shutdowns
— G&amp;A and corporate costs: lower HR and labour on-costs as the workforce becomes local and stable
REVIEW OF 2012 MILESTONES
 Sustained production, cash costs and product                                                                                 600
quality over the course of 2012                                                                                                                                                  501
500                                                            480        469
 Completion of project to achieve &lt;5% silica
Concentrate Production (kt)
400              368
production                                                                                                                          358
 Definition of projects to produce higher quality
products and reduce freight costs                                                                                            200
 Completion of scoping study to expand production                                                                             100
to 5.6Mtpa                                                                                                                     0
Q1-11      Q2-11       Q3-11      Q4-11      Q1-12       Q2-12      Q3-12
C1 Direct Operating Unit Cost1 (US$/t)                                                             Concentrate Iron and Silica Content (%)
180                                                                                               16%                    Average Silica in Concentrate (SiO2%)               70%
160                                                                                            Average Fe grade in concentrate (Fe%)
Direct Operating Unit Cash Costs
160                                                                                               14%
Jun-12 68%
140               116                                                                             12%                                                              68.36%
Fe in Concentrate (%)
Silica in Concentrate (%)
120        95                                                                                                                                                             66%
100                                 83                      83
78       77                                            8%                                                                        64%
60                                                                                                                                                                       62%
40                                                                                                                                                             Jun-12    60%
20                                                                                             2%                                                              4.42%
0                                                                                              0%                                                                        58%
Q1-11   Q2-11   Q3-11   Q4-11   Q1-12   Q2-12    Q3-12                                      Oct-09     Apr-10       Oct-10     Apr-11      Oct-11       Apr-12
Note: Q3 2012 figures are based on management reports which are prepared for internal planning and budgeting and have not be been audited by an independent party
1 Direct operating costs include all costs associated with producing iron ore concentrate inclusive of deferred mining and ore stockpile movements though excluding
EXPECTED OPERATING COST REDUCTION
 NFE’s C1 direct operating costs were US$ 83 / dry metric tonnes (dmt) for Q3 2012
 Assuming production for Q4 reaches 650Kt, NFE expects a significant decline in direct operating costs
 A reconciliation between Q3 and Q4 guidance is shown below
C1 Direct Operating Costs (US$/t) - Q3&#39;12 vs. Q4&#39;12
$(3)                       $(2)                        $1
Impact of increase          Net impact of              Impact from cost           Unit price increases
in production on            production increase        saving intitiatives        in variable costs             $60 - $65
fixed costs per             on mining unit costs                                  under mining load &amp;
tonne                                                                             haul and drill &amp; blast
Q3&#39;12 Direct Operating Fixed Costs - Production         Mining Unit Costs -       Fixed Costs - Other       Variable Costs - Other Q4&#39;12 Direct Operating
Costs* (US$/t)                                         Production                                                              Costs Guidance (US$/t)
* Based on management accounts for the Q3 period.
Note: Direct operating costs include all costs associated with producing iron ore concentrate inclusive of deferred mining and ore stockpile movements though
excluding depreciation and amortisation costs
SUCCESSFUL IMPLEMENTATION OF TWO YEAR
 After the Sydvaranger Iron Ore Project was re-commissioned in 2009, production volumes and quality
achieved were significantly lower than anticipated
 In response, NFE announced phase one of its debottlenecking program in Jan-2010
— Phase one aimed to lift production to 2.8Mtpa concentrate with silica content of approximately 3%
by Jan-2011 for a total capital investment of US$25m
— After spending ~US$19.5m, NFE was achieving 1.5Mtpa concentrate production with silica content at
approximately ~6% through upgrades to filtration capacity, stack sizers and an additional secondary
 NFE subsequently announced phase two of its debottlenecking program commenced in October 2010
— For a further capital spend of US$25m, phase two aimed to achieve 2.8Mtpa concentrate production
and sub 5% silica content by Apr-2012
— After spending approximately US$23.1m, NFE achieved a 2.1Mtpa production rate by Jul-2012 with
sub 5% silica content from Mar-2012 through concentrator modifications, a new tertiary crushing
circuit and other plant upgrades
 Final modification to the concentrator facility has resulted in achievement of a current production
capacity of 2.8 Mtpa
— Focus for NFE is now on maintenance and operations management to realise the installed capacity of
POSITIONED FOR THE NEXT STAGE
Re-commissioning                            Today                  Optimisation               Expansion
(Q4 2009)                             (Q3 2012)                  (Target)                  (Target)
2,800 kt capacity plant
(2.7 Mtpa rate expected Q4)
Production                         788Kt                                                       2,800Kt*                  5,600Kt*
(2.5 Mtpa rate expected Q1)
(2.7 Mt expected CY13)
Costs                            US$96.7/t                          US$82.9/t                 &lt; US$55.0/t            &lt; US$40.0/t (real)
 First sale of                      Offtake arrangement          Improved product         Tata contract expires
concentrate into China              with Tata Steel for           quality opens up new      2018
in Nov-2009                         ~1.5Mtpa                      marketing opportunities
(e.g. European sinter
Marketing &amp;           Tata offtake contract,             OMH Asian marketing           markets)
Sales                  but quality non                     agreement
 1 year offtake contract
with Sinosteel
4 Capesize (after port    8 Capesize (after port
Ships/quarter                   1 Panamax                          7 Panamax
50%                               ~70%                       80+%                      80+%
(% local)
* Calculated based on life of mine average ore grades.
 NFE continues to make progress towards 2.8Mtpa nameplate capacity
— Having significantly improved the capacity of the concentrator, the focus for NFE is on implementing
the operational procedures and enhanced maintenance performance at the concentrator and the
mine necessary to ensure consistent and sustainable nameplate production
 Recent decline and continued volatility in iron ore prices, coupled with the slower than anticipated
production ramp-up have put pressure on NFE’s working capital position
 The Entitlement Offer has been launched to raise up to A$55.5m to provide the capital NFE requires to
ensure that the Company is adequately funded regardless of the outcome of the Strategic Review
— With the support of its lenders, NFE has also renegotiated its banking facilities to provide further
 NFE expects Essel Mining and Prominvest to complete their detailed stage two due diligence in mid-
October, unless otherwise agreed
— Both parties have been made aware of the Entitlement Offer and are continuing due diligence
— There is no certainty that a final binding proposal for all the shares of NFE will be forthcoming as a
result of the Strategic Review, and any final binding proposal would be adjusted in respect of the
New Shares issued under the Entitlement Offer
 If a final binding proposal is received by NFE and subsequently put to shareholders for consideration, a
transaction may take several months to complete (assuming that it was approved by shareholders)
KEY RISKS*
 The Company announced a Strategic Review in November 2011, part of which consisted of soliciting
Outcome of               interest from potential acquirers of NFE
the Strategic           There is no guarantee that any party will submit a final binding bid for consideration by the Company
Review                   either at all or at the price of the indicative, non-binding proposals submitted by each of Essel Mining
and Prominvest
 There is a risk that circumstances (including unforeseen circumstances) may cause a delay in NFE
achieving 2.8Mtpa nameplate production, or may otherwise impact production. These circumstances
Production               could include, among other things, the need for unplanned maintenance and unforeseen operational
difficulties or breakdowns of the Company’s mining, processing, rail or port equipment and
 NFE’s business is dependent on the market price for iron ore and concentrates which is driven by supply
and demand factors which are outside the control of the Company – price falls may substantially impact
the Project ‘s economics
 The Company’s ability to operate as a going concern is dependent on its ability to arrange refinancing
Financing                or relevant waivers of debt obligations as the Company’s financing needs require from time to time.
Risks                    The availability of capital to suit the Company’s financing needs may be impacted by factors in financial
markets beyond the Company’s control, such as changes in interest rates and capital market liquidity
*A number of risks and uncertainties, which are both specific to NFE and of a more general nature, may affect the future operating and financial performance of NFE
and the value of NFE shares. You should carefully consider these risk factors, as well as the other information provided to you by NFE in connection with the Offer, and
consult your financial and legal advisers before deciding whether to invest in the New Shares. The risks and uncertainties described above are not the only ones facing
NFE. Additional risks and uncertainties that NFE is unaware of, or that it currently considers to be immaterial, may also become important factors that adversely
affect NFE’s operating and financial performance
NEAR-TERM MINE PLANS
 Developing more detailed short-term and longer-term mine plans
to enable better decision making, trigger point assessment and
 Efficiency gains to be made through a number of training,
development and workflow management strategies
 Productivity gains and cost reduction to be achieved by:
— Drill &amp; Blast improvement program
— Rehabilitation of crusher tunnels to cut truck cycle times
— Review of truck &amp; shovel operations to ensure consistent
Ex-Pit Mine Production (Kt)
4,500                                                          4,190
4,000                    3,706
3,471                        3,515
Q1-11    Q2-11   Q3-11    Q4-11       Q1-12   Q2-12    Q3-12
Note: Q3 2012 figures are based on management reports which are prepared for internal planning and
budgeting and have not be been audited by an independent party
100% OWNED MINE WITH THE BEST
INFRASTRUCTURE PACKAGE IN OUR SECTOR
Open Cut Mine- 25+ Year Mine Life
Open Cut Mine - 25+ Year Mine Life                                       8km Railway - Sole User
Concentrator - High Quality                               Port - Efficient, Uncongested and Expandable
NORTHERN IRON VALUE CREATION
STRATEGY                                                                                                                                                   NFE
OPTIMISE                        PRODUCTION
NAMEPLATE                      Double the
Long life, cost
ACHIEVE                                                            concentrate                    competitive provider
 Achieve sub 4% silica for
NAMEPLATE                                                           production capacity             of high quality iron
blast furnace pellet feed
to 5.6 Mtpa                      ore pellet feed to
 Achieve sub 2% silica for
NFE                         Achieve a 2.8 Mtpa                                                     Change out the                 customers in Europe,
START 2012                      capacity in Q4 2012                                                     mining fleet with              the Middle East and
 Achieved sub 5% silica                                                  larger equipment                       Asia.
 Running at ~2.1 Mtpa                                        Upgrade the port to
 5.8% silica content                                          handle cape size vessels
Q2 ‘12                            Q3’12                           2013             2014             2014            2016
USD m (expected to be                                                                                                                          Note: capital costs in
-                             50 – 60*                       280– 360*                  2013-2016 are at
satisfied from operating
cash flows and debt)                                                                                                                           scoping study level of
accuracy.**
Expected LOM operating
&lt; 50                                &lt; 55                             &lt; 40
costs (real) USD / dmt                                                                                                                           Expansion capital
Expected life of mine sales                                                                                                                     costs vary based on
price FOB (% from base                                                                                                                            tailings disposal
100%                                120%                             120%
case)                                                                                                                                             option selected.
* Project engineering is continuing to further define future development plans. Prior to the commitment of capital expenditure, NFE will conduct a review of market
conditions and its working capital position.
** Scoping Study capital costs will be in a range of +50% / -35%, with a contingency of 25% applied                                                                   18
PORT UPGRADE OPTION
 Three main activities required to enable cape sized vessels to be
loaded at Kirkenes:
— Upgrade the shiploader to allow correct positioning of the
cargo in the wider vessels
— Dredging the berth to required depth
— Commission an additional concentrate silo to take total
storage capacity to approximately 240,000 dry metric tonnes
— Pre-feasibility study completed, with 4 options identified
— Expected capital cost between USD 22 – USD 40m
— Earliest commissioning mid 2013 assuming lowest cost option
(modify existing shiploader) feasible, likely mid 2014 if more
expensive option (new shiploader) required
— Engineering work on low cost option underway, and critical
path application for environmental approvals is being
prepared, with targeted submission in quarter 4 2012
— Will require further definition of the company’s marketing
strategy and discussions with Tata before committing to the
— Prior to the commitment of capital expenditure, NFE will
conduct a review of market conditions and its working capital
— Lower shipping costs results in higher FOB sales realized,
especially for Asian sales
FURTHER QUALITY ENHANCEMENT POTENTIAL
Two major quality improvement projects
 Sub 4% Silica Project (Blast Furnace Pellet Feed) completed
 Sub 2% (DRI Pellet Feed)
— Prior to 1997 operated a flotation circuit to produce DRI grade pellet feed
— Amine flotation agents were disposed of via the marine tailings disposal system
— Plan is to introduce flotation again, but requires an acceptable waste disposal solution. Two
avenues are being pursued:
– Different flotation agent
– Alternative tailings disposal options
— Potential commissioning in 2014 subject to Board approval
— A Project Manager has been commissioned to produce a feasibility study during Q1 2013
 Prior to the commitment of capital expenditure, NFE will conduct a review of market conditions and
its working capital position
OVERVIEW OF EXPANSION STUDY
 An engineering scoping study examining doubling concentrate production has been completed by Noramco
Engineering Corporation and Barr Engineering, with second opinions on cost and concept provided by major
Norwegian engineering consultancy Multiconsult and SRK Consulting (UK)
 The study examined four possible plant concepts to lift total SVG production to 5.6 Mtpa:
— Duplication of existing plant within existing buildings
— Construction of a new 2.8 Mtpa standalone plant adjacent to the existing facility at Kirkenes
— Construction of a new 2.8 Mtpa plant at the mine site at Bj&#248;rnevatn
— A “hybrid solution” with primary grinding at mine site and pumping of slurry to separators and filtering at
 The study also examined three different tailings disposal options:
— Continued use of the existing marine disposal system approved for the existing plant
— Construction of tailings dams adjacent to the mine site for disposal of wet tailings
— Construction of a dry tailings disposal plant for disposal of dried tailings into the planned mine waste dumps
 Update on local government and environmental approvals status:
— Scope of work for environmental and social investigation expected to be approved in November 2012
— Environmental permits targeted by Q4 2013 subject to Board approval
 Prior to the commitment of capital expenditure, NFE will conduct a review of market conditions and its working
Mineral Resource* Summary as at 30 June 2012
(at 15% Fe total cut-off grade)
Fe                                             Fe                  Total Tonnes                Fe
Deposit                       Indicated (Mt)                                   Inferred (Mt)
(Total%)                                       (Total %)                   (Mt)                (Total %)
Bj&#248;rnevatn            146.2                     32                    136.7                     30                    282.9                     31
Kjellmanns&#229;sen              13.2                     33                      4.2                     30                     17.4                     32
Fisketind &#216;st            11.1                     31                     19.2                     31                     30.3                     31
Tverrdalen            20.4                     32                     26.4                     31                     46.8                     31
Hyttemalmen               0.4                     34                      1.0                     32                      1.4                     32
Bjornfell                                                           13.6                     32                     13.6                     32
S&#246;stervann                                                              4.7                     37                     4.7                      37
Grundtjern                                                             2.9                     34                      2.9                     34
Fisketind SW                                                             17.5                     33                     17.5                     33
Jerntoppen                                                             17.0                     31                     17.0                     31
Total           191.3                     32                    243.2                     31                    434.5                     31
Ore Reserve Summary as at 30 June 2012*
 Probable Ore Reserves increased by 37% after reassessing the                                                                        (at 15% Fe total cut-off grade)
optimal size of the Bj&#248;rnevatn deposit                                                                                      Deposit
(Total%)
Kjellmanns&#229;sen             11.8                   33
Hyttemalmen              0                      0
Bj&#248;rnevatn          136.8                   32
Tverdalen           11.2                   31
Fisketind &#216;st            6.7                   30
Total         166.5                   32
* The Mineral Resource and Reserve statements are based on Wardell Armstrong International&#39;s (WAI) comprehensive 2011 review of the resources and reserves held by SVG. The
figures reported herein are based on the Company&#39;s resource and reserve models and account for mining depletion up to 1 February 2012 for all deposits except Bj&#248;rnevatn. For the
Bj&#248;rnevatn deposit resource and reserve figures were updated as of 1 June 2012 following mining on the western pit ramp, south of the primary crusher showing a lack of mineralisation
in this area. This conflicted with the previous geological model. The deviation was the result of an erroneous hole in the geological model which has since been corrected by WAI.       22
The information in this presentation that relates to Mineral Resources is based on information compiled by
Mark Owen, who is a Chartered Geologist with the Geological Society of London. Mark Owen is employed full
time by WAI. Mark Owen has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the &#39;Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves&#39;. Mark Owen consents to the inclusion in the report of the matters based on his information in
The information in this presentation that relates to Ore Reserves is based on information compiled by Lewis
Meyer, who is a Fellow of the Institute of Materials, Minerals and Mining and is a Chartered Engineer. Lewis
Meyer is employed full time by WAI. Lewis Meyer has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the 2004 Edition of the &#39;Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves&#39;. Lewis Meyer consents to the inclusion in the report of the matters
APPENDIX B: OFFER
OFFER JURISDICTIONS
International Offer Restrictions
 This document does not constitute an offer of new ordinary shares (&quot;New Shares&quot;) of the Company in any jurisdiction in which it would be unlawful. New
Shares may not be offered or sold in any country outside Australia except to the extent permitted below
Canada (British Columbia, Ontario and Quebec provinces)
 This document constitutes an offering of New Shares only in the Provinces of British Columbia, Ontario and Quebec (the &quot;Provinces&quot;) and to those
persons to whom they may be lawfully distributed in the Provinces, and only by persons permitted to sell such New Shares. This document is not, and
under no circumstances is to be construed as, an advertisement or a public offering of securities in the Provinces. This document may only be distributed
in the Provinces to persons that are &quot;accredited investors&quot; within the meaning of NI 45-106 – Prospectus and Registration Exemptions, of the Canadian
 No securities commission or similar authority in the Provinces has reviewed or in any way passed upon this document, the merits of the New Shares or
the offering of New Shares and any representation to the contrary is an offence
 No prospectus has been, or will be, filed in the Provinces with respect to the offering of New Shares or the resale of such securities. Any person in the
Provinces lawfully participating in the offer will not receive the information, legal rights or protections that would be afforded had a prospectus been filed
and receipted by the securities regulator in the applicable Province. Furthermore, any resale of the New Shares in the Provinces must be made in
accordance with applicable Canadian securities laws which may require resales to be made in accordance with exemptions from dealer registration and
prospectus requirements. These resale restrictions may in some circumstances apply to resales of the New Shares outside Canada and, as a result,
Canadian purchasers should seek legal advice prior to any resale of the New Shares
 The Company, and the directors and officers of the Company, may be located outside Canada, and as a result, it may not be possible for Canadian
purchasers to effect service of process within Canada upon the Company or its directors or officers. All or a substantial portion of the assets of the
Company and such persons may be located outside Canada, and as a result, it may not be possible to satisfy a judgment against the Company or such
persons in Canada or to enforce a judgment obtained in Canadian courts against the Company or such persons outside Canada
 Any financial information contained in this document has been prepared in accordance with Australian Accounting Standards and also comply with
International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board. Unless stated otherwise, all
dollar amounts contained in this document are in Australian dollars
Canada (British Columbia, Ontario and Quebec provinces) (cont)
 Statutory rights of action for damages or rescission
 Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or
to damages, or both, when an offering memorandum that is delivered to purchasers contains a misrepresentation. These rights and remedies must be
exercised within prescribed time limits and are subject to the defenses contained in applicable securities legislation. Prospective purchasers should refer
to the applicable provisions of the securities legislation of their respective Province for the particulars of these rights or consult with a legal adviser
 The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of
the New Shares purchased pursuant to this document (other than (a) a &quot;Canadian financial institution&quot; or a &quot;Schedule III bank&quot; (each as defined in NI 45-
106), (b) the Business Development Bank of Canada or (c) a subsidiary of any person referred to in (a) or (b) above, if the person owns all the voting
securities of the subsidiary, except the voting securities required by law to be owned by the directors of that subsidiary) shall have a statutory right of
action for damages and/or rescission against the Company if this document or any amendment thereto contains a misrepresentation. If a purchaser
elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against the Company. This right of action for
rescission or damages is in addition to and without derogation from any other right the purchaser may have at law. In particular, Section 130.1 of the
Securities Act (Ontario) provides that, if this document contains a misrepresentation, a purchaser who purchases the New Shares during the period of
distribution shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase and has a right of action for
damages or, alternatively, may elect to exercise a right of rescission against the Company, provided that (a) the Company will not be liable if it proves that
the purchaser purchased the New Shares with knowledge of the misrepresentation; (b) in an action for damages, the Company is not liable for all or any
portion of the damages that the Company proves does not represent the depreciation in value of the New Shares as a result of the misrepresentation
relied upon; and (c) in no case shall the amount recoverable exceed the price at which the New Shares were offered
 Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than (a) in the case of any action for
rescission, 180 days after the date of the transaction that gave rise to the cause of action or (b) in the case of any action, other than an action for
rescission, the earlier of (i) 180 days after the purchaser first had knowledge of the fact giving rise to the cause of action or (ii) three years after the date
of the transaction that gave rise to the cause of action. These rights are in addition to and not in derogation from any other right the purchaser may have
 Certain Canadian income tax considerations. Prospective purchasers of the New Shares should consult their own tax adviser with respect to any taxes
payable in connection with the acquisition, holding, or disposition of the New Shares as any discussion of taxation related maters in this document is not
a comprehensive description and there are a number of substantive Canadian tax compliance requirements for investors in the Provinces
 Language of documents in Canada. Upon receipt of this document, each investor in Canada hereby confirms that it has expressly requested that all
documents evidencing or relating in any way to the sale of the New Shares (including for greater certainty any purchase confirmation or any notice) be
drawn up in the English language only. Par la r&#233;ception de ce document, chaque investisseur canadien confirme par les pr&#233;sentes qu’il a express&#233;ment
exig&#233; que tous les documents faisant foi ou se rapportant de quelque mani&#232;re que ce soit &#224; la vente des valeurs mobili&#232;res d&#233;crites aux pr&#233;sentes (incluant,
pour plus de certitude, toute confirmation d’achat ou tout avis) soient r&#233;dig&#233;s en anglais seulement
 WARNING: This document has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (the
&quot;Companies Ordinance&quot;), nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures
Ordinance (Cap. 571) of the Laws of Hong Kong (the &quot;SFO&quot;). No action has been taken in Hong Kong to authorise or register this document or to permit
the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or
sold in Hong Kong by means of any document, other than to &quot;professional investors&quot; (as defined in the SFO)
 No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for
the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of
only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted
New Shares may sell, or offer to sell, such shares in circumstances that amount to an offer to the public in Hong Kong within six months following the
date of issue of such shares
 The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the
offer. If you are in doubt about any contents of this document, you should obtain independent professional advice
 This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand)
 The New Shares in the entitlement offer are not being offered or sold to the public in New Zealand other than to existing shareholders of the Company
with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies)
Exemption Notice 2002 (New Zealand)
   Other than in the entitlement offer, New Shares may be offered and sold in New Zealand only to:
— persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest
— Persons who are each required to (i) pay a minimum subscription price of at least NZ$500,000 for the securities before allotment or (ii) have
previously paid a minimum subscription price of at least NZ$500,000 for securities of the Company (&quot;initial securities&quot;) in a single transaction before
the allotment of such initial securities and such allotment was not more than 18 months prior to the date of this document
 This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June
2007. Accordingly, this document shall not be deemed to constitute an offer to the public in Norway within the meaning of the Norwegian Securities
Trading Act of 2007.
 The New Shares may not be offered or sold, directly or indirectly, in Norway except to &quot;professional clients&quot; (as defined in Norwegian Securities
Regulation of 29 June 2007 no. 876 and including non-professional clients having met the criteria for being deemed to be professional and for which an
investment firm has waived the protection as non-professional in accordance with the procedures in this regulation)
 This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with
the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation
for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the
subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with
exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the &quot;SFA&quot;), or as otherwise pursuant to, and
in accordance with the conditions of any other applicable provisions of the SFA
 This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an &quot;institutional investor&quot; (as defined in
the SFA) or (iii) a &quot;relevant person&quot; (as defined under section 275(2) of the SFA). In the event that you are not an investor falling within any of the
categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore
 Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in
Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions
relating to resale restrictions in Singapore and comply accordingly
 The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (&quot;SIX&quot;) or on any other stock exchange or
regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under
art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the
listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material
relating to the New Shares may be publicly distributed or otherwise made publicly available in Switzerland
 Neither this document nor any other offering or marketing material relating to the New Shares have been or will be filed with or approved by any Swiss
regulatory authority. In particular, this document will not be filed with, and the offer of New Shares will not be supervised by, the Swiss Financial Market
 This document is personal to the recipient only and not for general circulation in Switzerland
 Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority
in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (&quot;FSMA&quot;)) has
been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to &quot;qualified investors&quot;
(within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of
this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant
to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by
recipients to any other person in the United Kingdom
 Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of
the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the
United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company
 In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to
investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005
(&quot;FPO&quot;), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of
the FPO or (iii) to whom it may otherwise be lawfully communicated (together &quot;relevant persons&quot;). The investments to which this document relates are
available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant
person should not act or rely on this document or any of its contents
 This document may not be released or distributed in the United States. This document does not constitute an offer to sell, or a solicitation of an offer to
buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of
1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act
and applicable US state securities laws
Iron Mountain Prospectus