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INVESTOR PRESENTATION. May 2005. Available at www.mtgibsoniron.com.au. MOUNT GIBSON IRON GROUP RESOURCE LOCATIONS MIDWEST REGION WESTERN AUSTRALIA. CORPORATE DEVELOPMENT PHASE ONE – DIRECT SHIPPING GRADE HEMATITE. Current Focus

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Investor presentation

INVESTOR

PRESENTATION

May 2005

Available at www.mtgibsoniron.com.au


Mount gibson iron group resource locations midwest region western australia

MOUNT GIBSON IRON GROUPRESOURCE LOCATIONSMIDWEST REGION WESTERN AUSTRALIA

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Corporate development phase one direct shipping grade hematite

CORPORATE DEVELOPMENT PHASE ONE – DIRECT SHIPPING GRADE HEMATITE

Current Focus

  • Increase mining rate at Tallering Peak mine from 2.0Mtpa to 3.0Mtpa in January 2006

  • Utilise all rail capacity currently available in the MidWest region

  • Maintain current operating profit at Tallering Peak of over $25.00 per tonne

  • Mine Tallering Peak at 3.0Mtpa for 5 – 6 years then relocate operation to Mt Gibson for

    minimum of 5 years

  • Profits from Mt Gibson mine should be similar to Tallering Peak

    – additional transport costs will be largely offset by low 1.0 to 1.0 waste to ore ratio

  • All production from Tallering Peak and Mt Gibson contracted for sale to China

    for life of mines (Stemcor, Sinom, Prosperity Minerals, Shanghai Industrial)

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Investor presentation

HEMATITE RESOURCES

HEMATITE – EXPLORATION POTENTIAL

  • Extension Hill South (Mt Gibson)

  • Sheldon Hill (Mt Gibson)

  • Koolanooka South

  • Walebing

  • 60% of Poondano Exploration’s 2730km² areas in Pilbara (shallow pisolite deposits

    - major exploration targets adjacent to existing infrastructure)

  • 7% strategic shareholding in Resource Mining Corporation – Argyle deposit in

    Kimberley region

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Investor presentation

PISOLITE - PILBARA EXPLORATION AREAS

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Corporate development phase two magnetite concentrate iron pellets

CORPORATE DEVELOPMENT PHASE TWO - MAGNETITE CONCENTRATE & IRON PELLETS

The Company’s second phase of development will involve investment in magnetitemines in the Mid West region of Western Australia and the production of iron pellets in China.

  • Mount Gibson Iron Limited (“MGI”) currently has a 63% shareholding in Hong Kong based Asia Iron Holdings Limited (“Asia Iron”)

  • Asia Iron, in a 50:50 joint venture with a major Chinese steel mill, will develop a mine at Extension Hill (Mt Gibson) to produce 5.0Mtpa of magnetite concentrateand two 2.5Mtpa pellet plants at Longtan, on the Yangtze River near Nanjing, China

  • Asia Iron will sell its entitlement to 2.5Mtpa of pellets to regional steel producersunder long term contracts

  • The joint venture partner will consume 2.5Mtpa of pellets in its own blast furnaces

  • Asia Iron is well advanced in negotiations with the Nanjing Iron and Steel Group tobecome its partner and expects to finalise contract documentation in the near term

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Corporate development phase two magnetite concentrate iron pellets1

CORPORATE DEVELOPMENT PHASE TWO– MAGNETITE CONCENTRATE & IRON PELLETS

  • MGI will manage the development and operation of the Extension Hill mine and bepaid an indexed fee of $3.50 per tonne of concentrate produced ($17.5 million per year)

  • Asia Iron is currently recruiting highly experienced expatriate management to work with Chinese staff provided by Nanjing Iron & Steel, to manage the pellet plant

  • Bankable Feasibility Study to be completed in September 2005

  • Development of the Extension Hill mine and first pellet plant planned to commence

    December 2005

  • Commissioning of 5Mtpa mine and first 2.5Mtpa pellet plant is expected in early 2007 with the second 2.5Mtpa plant six months later

  • MGI is also negotiating a second joint venture with another major Chinese steel mill to produce 5.0Mtpa of pellets in 2009

  • The second joint venture will require the drilling and definition of an additional 250Mt of magnetite resources within MGI’s Group’s Midwest leases

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Mgi investment in asia iron

MGI INVESTMENT IN ASIA IRON

  • MGI expect to invest a total of A$65 million for an ultimate 75% shareholding in Asia Iron (A$15 million to date and A$50 million in December 2005)

  • Asia Iron requires A$80 million for its remaining equity contribution to the development of the 50% owned Extension Hill mine, and the Longtan pellet plants

  • Asia Iron’s equity will be provided by;

    i) share subscription by MGI December 2005 (A$50 million) ii) advance payments on purchases from long term buyers of Asia Iron’s pellets (A$25 million)iii) existing resources (A$5 million)

  • MGI can fund its A$50 million subscription to Asia Iron from current cash reserves, share option conversions and retained earnings, without further share placements

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Magnetite resources

MAGNETITE RESOURCES

  • The proposed pit at Extension Hill has been scheduled for a 20 year mine life by independent consultants

    • annual production - 5.0Mtpa 68% Fe magnetite concentrate

    • average yield, concentrate to ore- 46%

    • average waste to ore ratio - 1.1 to 1.0 by weight after prestripping

  • (final ratio and ore reserves to be determined in the near future based on results of recent geotechnical investigations)Exploration Targets

    • Extension Hill South (100% owned by MGI)

    • Iron Hill (100% owned by MGI)

    • Sheldon Hill (100% owned by MGI)

    • Koolanooka South (100% owned by Asia Iron)

    • Wolla Wolla (100% owned by Asia Iron)

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Investor presentation

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Investor presentation

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Extension hill magnetite mine longtan pellet plants financial summary

EXTENSION HILL MAGNETITE MINE & LONGTAN PELLET PLANTS – FINANCIAL SUMMARY

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Extension hill magnetite mine longtan pellet plant financial summary

EXTENSION HILL MAGNETITE MINE & LONGTAN PELLET PLANT – FINANCIAL SUMMARY

OPERATING COSTS *

……. Note: MGI is investigating constructing slurry pipeline concentrate transport system which would greatly reduce delivery costs to port

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(*Based on exchange rate of A$1.00 : US$0.78)


Advantages of pellet production in nanjing

ADVANTAGES OF PELLET PRODUCTION IN NANJING

  • lower shipping costsAsia Iron’s concept of constructing a pellet plant 450km up the Yangtze River and

    within the precinct of the port of Longtan means that it will be able to ship concentrate

    directly from Geraldton to its plant at Longtan and avoid expensive transhipment and

    barging costs incurred by competitors importing pellets or pellet feed to the Nanjing

    steel making region particularly from Brazil which ships in capesize vessels

  • lower capital costsAsia Iron’s two pellet plants will cost a total of approximately A$100 million in Chinaversus A$350 million in Australia

  • lower pelletising costs

    pelletising is expected to cost A$6.70 per tonne in China versus A$12.00 to A$15.00

    in Australia

  • low taxation in early yearsAsia Iron as a foreign investor will pay no tax in first two years of operation inChina, then 7.5% for next three years, allowing 4 year project payback

  • location at centre of expanding steel making region

  • low cost industrial land leased from Longtan Port Authority

  • skilled workforce and experienced management available in region

  • Nanjing attractive city for foreign residents

13


Iron pellets beijing shougang design institute plant similar to that proposed for longtan

IRON PELLETS – (Beijing Shougang Design Institute plant similar to that proposed for Longtan)

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Investor presentation

MOUNT GIBSON IRON GROUP CORPORATE STRUCTURE

MOUNT GIBSON

IRON LIMITED

100%

100%

100%

63% increasing to

75%

WESTRALIAN

INFRASTRUCTURE

HOLDINGS PTY LTD

SHELDON HILL

PTY LTD

MOUNT GIBSON

MINING LIMITED

ASIA IRON HOLDINGS LIMITED

(Hong Kong)

  • Slurry Pipeline Mt Gibson - Geraldton• Water Pipeline Geraldton - Mt Gibson• Port Facilities Geraldton

Magnetite • Sheldon Hill • Extension Hill South • Iron Hill

Hematite • Tallering Peak • Extension Hill (Mt Gibson) • Iron Hill (Mt Gibson) •Sheldon Hill (Mt Gibson) • Koolanooka South • Walebing

Investments • Poondano Exploration (60%)(Pilbara Pisolite) • Resource Mining Corporation (7%)(Argyle Hematite)

Manager

50%

50%

EXTENSION HILL

PTY LTD

ASIA IRON (NANJING) LTD(PRC)

Magnetite Extension Hill (Mt Gibson)

Pellet Plant Longtan (Nanjing)

50%

50%

NANJING IRON

& STEEL

GROUP

(PRC)

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Investor presentation

FINANCIAL PROJECTIONS – MOUNT GIBSON IRON LIMITED

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Anticipated growth in shares

ANTICIPATED GROWTH IN SHARES

Shares on Issue (30 April 2005) 366,819,793

Conversion of Notes (December 2005 – 30 cents)1,500,000

Listed Options (October 2005 - 22 cents)30,723,300

SHARES ON ISSUE JUNE 2006 399,043,093

Unlisted Employee Options (December 2006 -25 cents)11,225,000

Unlisted Managing Director Options (December 2007 - 50 cents)5,000,000

Unlisted Managing Director Options (December 2008 - 55 cents) 5,000,000

SHARES ON ISSUE DEC 2008420,268,093

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Top 20 shareholders as at 25 april 2005

TOP 20 SHAREHOLDERS(as at 25 April 2005)

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Directors

DIRECTORS

Bill Willis (Chairman)

Mr Willis is a geologist with extensive technical and management experience in the Australian mining

sector, particularly in iron ore. He was Executive Director and Chief Executive of Robe River Mining Co

Pty Ltd from 1993 to 1999 inclusive, and was responsible for the joint venture between North Limited,

Nippon Steel, Mitsui, and Sumitomo Metals for the management, operation and expansion of the

Robe River iron ore project in the Pilbara region of Western Australia. Prior to this, Mr Willis worked for

BHP and was responsible for exploration, mine geology and management of iron ore production at BHP’s

iron ore mines at Mt Newman, Koolyanobbing and Yampi Sound.

Brian Johnson (Managing Director)

Mr Johnson is a civil engineer with extensive experience in the construction and mining industries in Australia,

South East Asia and North America. As a major shareholder and Chief Executive, Mr Johnson was

instrumental in establishing Portman Limited’s presence in the iron ore industry between 1991 and 1994,

developing mines at Koolyanobbing and Cockatoo Island. He also personally partnered Mr Lang Hancock in

the development and operation of McCamey’s Monster iron ore mine in the Pilbara, prior to its sale to BHP.

Craig Readhead (Non-Executive Director)

Mr Readhead is a lawyer who has spent the last 24 years practicing in the resources law area and is now a

partner of the law firm Pullinger Readhead Lucas. Mr Readhead has had a significant legal role in the

development of a number of mining projects within Australia, Africa and South East Asia. Mr Readhead is a

director of a number of listed and unlisted mining and exploration companies and is a past President of the

Australian Mining and Petroleum Law Association, and a past Vice President of the Association of Mining

and Exploration Companies.

Ian Macliver (Non-Executive Director)

Mr Macliver is a Chartered Accountant with many years experience as a senior executive and director of both

resource and industrial companies (including Portman Limited), with particular responsibility for capital raising

and other corporate initiatives.

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Senior executives

SENIOR EXECUTIVES

John Arbuckle (Chief Financial Officer)

Mr Arbuckle is a CPA with over 15 years experience in the mining industry, having previously occupied

senior finance roles with Rio Tinto Limited, North Limited, Anaconda Nickel Limited and Perilya Limited.

Kevin Malaxos (General Manager Operations)

Mr Malaxos is a Mining Engineer with extensive experience in both open pit and underground mining

operations. Mr Malaxos was the Resident Manager of the Broken Hill mine of Perilya Limited and was

responsible for the start-up of that operation. Prior to this he managed the Australian operations of

contract miner, Byrnecut Mining Pty Ltd, and held senior management roles with WMC Resources Ltd

and KCGM Pty Ltd.

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Disclaimer

DISCLAIMER

This Document is not a Prospectus nor an Offer to Subscribe for Shares.

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 liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (expressed or implied) arising out of, or contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded.

This document contains reference to certain forecasts, projections, intentions, expectations and plans of 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 factors, uncertainties and contingencies many of which are outside the control of MGI and its directors.

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