Macquarie WA Emerging Leaders Conference October 2009 1 Disclaimer - PDF document

Macquarie WA Emerging Leaders Conference October 2009 1

Disclaimer This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a Prospectus nor an Offer to S ubscribe for S hares. Mount Gibson Iron Limited and its subsidiaries (“ MGI” ) makes no representations or warranty (express or implied) as to the accuracy, reliability or completeness of this document. MGI and its respective directors, employees, agents and consultants shall have no liability (including liabilit y to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (expressed or implied) arising out of, or contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded. This document contains reference to certain forecasts, proj ections, intentions, expectations and plans of MGI, which may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ. The performance and operations of MGI may be influenced by a number of fact ors, uncertainties and contingencies many of which are outside the control of MGI and its directors. No representation or warranty (expressed or implied) is made by MGI or any of its respective directors, officers, employees, advisers or agents that any forecasts, proj ections, intentions, expectations or plans set out in this document will be achieved, either totally or partially, or that any particular rate of return will be achieved. Investments in shares in MGI is considered highly speculative. 2

Company overview • Australian based multi-operation hematite iron ore producer exporting to China • Increasing production from current Ore Reserves • 3 open pit mining centers within two geographic regions • Access to infrastructure • Experienced management team • Produces lump and fine iron ore products • Low capex requirements and lowest capital intensity of any iron ore producer in Australia • Mine life 5-9 years at existing operations with strong exploration upside • S trong balance sheet 3

Spot price & volume plunge Event Fines spot price versus Benchmark price – Rapid deterioration in the spot price for iron ore – S pot volumes evaporated – MGI customers sought to defer and cancel shipments $200 – MGI customers breached offtake agreements $190 Act ion $180 – Reconfigured business to preserve cash $170 – Three customers terminated $160 • S inom (Hong Kong) Limited $150 • Pioneer Iron and S teel Group Ltd $140 • Rizhao S teel Holding Group Co Ltd $130 – S ecured short, medium and long t erm offtake agreements for available production $120 – Raised funds $110 US$/t • Rights issue –A$96.5 million $100 • Placement – A$66 million $90 – Pursuing terminated customers through arbitration $80 for loss and damage $70 – Cautious development strategy $60 Learning $50 – Quality of customer is more important t han number of customers $40 – Legal reciprocal rights enhances performance and $30 relationship $20 – Relativity of spot price and contract price drove $10 customer behaviour $0 – MGI’ s relative size and influence in t he iron ore Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- market was disabling 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09 – MGI’ s vulnerability given the relative stages of operations development Iron Ore Fines Price - Spot FOB @ 63.5% (US$/t) - Dampier Iron Ore Fines Price - Benchmark FOB @ 63.5% (US$/t) Iron Ore Fines Price - Spot CFR @ 63.5% (US$/t) - China – S taged approach to proj ect development reduces risk appreciably – S upport of maj or shareholder omnipotent – Banks supportive but predatory – S trong cash position is vital 4

Key investment themes 1 Quality assets 2 S olid growth profile 3 Earnings leverage to strong iron ore price outlook 4 Disciplined financial strategy & strong performance 5 Experienced - disciplined Board & executive team with proven track record …Mount Gibson has a strong investment case 5

Quality assets 1 Koolan Island – 4 mt pa product ion Tallering Peak – 3 Mt pa product ion Extension Hill – 3 Mt pa product ion 6

7 Mid-West Region of Western Australia Quality assets 1

Quality assets 1 Tallering Peak Main Range Pits looking west - September 2009 • S imple process – mine, crush, road, rail and load vessels • First hematite ore shipped Feb 2004 • Producing 3 Mtpa • 65% Lump & 35% Fines ratio • Remaining LOM contains quality high grade, low contaminant product 12 months 12 months 12 months 12 months Annualised • Access to installed 2005-2006 2006-2007 2007-2008 2008-2009 Variance infrastructure ‘000 ‘000 ‘000 ‘000 % Ore Mined wmt 1,122 2,932 3,841 2,388 (38% ) Ore Crushed wmt 1,608 2,711 3,364 2,620 (22% ) Shipped wmt 1,386 2,312 2,568 2,692 5% 8

Quality assets 1 Extension Hill • Under development – first ore shipped March qtr 2011 • Low capital cost: $100m • S imple process – mine, crush, road, rail and load vessels • 3 Mtpa production rate • Low strip ratio • 50% Lump & 50% Fines ratio • Product sold over LOM • Operationally robust and straightforward • Immediate cash generator 9

Koolan Island provides significant upside potential … 10 Quality assets 1

Quality assets 1 Koolan Island Crushing, port & ship-loading facilities • Ex BHP mine – closed 1992 • Historical BHP production 66.5% Fe, 3.48% S iO 2 , 0.69% Al 2 O 3 , 0.019% P, 0.3 LOI • Mine, crush and shipload • First hematite ore shipped June 2007 • Production ramping up to 4 Mtpa by June qtr 2010 • Currently mining from satellite orebodies • Access premium Main Pit orebody – 2010 • 30% Lump & 70% Fines ratio (initial production 40% Lump & 60% Fines) 12 months 12 months 12 months Annualised • Remaining LOM contains high grade, low 2006-2007 2007-2008 2008-2009 Variance contaminant product ‘000 ‘000 ‘000 % Ore Mined wmt 559 3,047 3,524 16% • Installed infrastructure capacity 6 Mtpa Ore Crushed wmt 274 2,973 2,926 (2% ) Shipped wmt 150 2,900 2,707 (7% ) 11

Solid growth profile 2 S ales growth to reach full production by 2011 …based on reserves 12Mt 10Mt 8Mt tpa 6Mt 4Mt 2Mt 0Mt 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Year Shipping - Tallering Peak Shipping - Koolan Island Shipping - Extension Hill 12

Solid growth profile 2 Organic & M&A growth opportunities … • Koolan: – Western side of the Island unexplored with known surface hematite identified – Exploration and Heritage Agreement executed – Heritage Impact Assessment completed – Work Program Clearance completed – S tatut ory application and approvals process commenced • Mt Gibson Ranges provide DSO upside • T1 & North Ridge at Tallering Peak • Prospective tenement holding • Actively pursuing opportunities in carbon steel materials and diversified mineral commodities 13

Earnings leverage to strong iron ore price 3 Increasing trend in iron ore prices… 250 10 Mount Gibson leveraged to Sales volume 9 increasing iron ore price Consensus Lump price 200 8 trend … ales Million WMT 7 Current production with Usc / dmtu 150 6 � developments to reach full 5 9.5 100 8.0 4 production by 2011 6.5 S 3 5.6 � 5.4 100% of existing operations 50 2 production is sold 2.5 1 1.4 � 0 0 Capturing price upside through 2006 Act ual 2007 Act ual 2008 Act ual 2009 Act ual 2010 Forecast 2011 Forecast 2012 Forecast Hamersley benchmark contract prices Source: Macquarie, Merrill Lynch, UBS, Goldman Sachs, Citi, Morgan S tanley, RBC, JP Morgan, CRU forecasts 14

Disciplined financial strategy & strong 4 performance 2005-2009 sales revenue 2005-2009 net profit 433 425 113.3 450 400 ales revenue (A$m) 100 350 CAGR 2005 –2009: 53% CAGR 2005 –2009: 33% NPAT (A$m) 300 250 47.8 1 42.6 200 163 50 150 23.5 77 73 13.5 100 S 50 0 0 2005A 2006A 2007A 2008A 2009A 2005A 2006A 2007A 2008A 2009A Disciplined risk management strategy S trong cash flow generation � Mount Gibson has… Growing production profile � � First mover status & access to existing infrastructure Robust iron ore price outlook � � S ubstantially improved operational performance Clean & strong balance sheet � Divested high risk, high cost and capitally intensive � Continued operating and capital cost pressures assets � Provided a comprehensive organic growth plan Reinvestment of capital for growth � Demonstrated M&A credentials —organic (exploration, development) � Protected the business in adverse market —M&A environment Or return to shareholders Source: Mount Gibson, Company reports Note: 15 1. Includes contribution of $18 million on sale of magnetite proj ect during period