Yalyirimbi Iron Project Annual report EL 24548 1 December 2013 to 30 November 2014

Abstract

Work in the initial part of the Reporting Period centred on wrapping up post-drilling activities such as site rehabilitation. The new Resource modelling was also completed by CSA Global. The iron ore industry in Australia is undergoing major structural upheaval at the date of this Report. It is not possible to determine where future iron ore pricing will settle and this future bench mark is critical to the potential future of the Yalyirimbi Iron Project. Ferrowest believes that the project has good prospects to produce an excellent product, with some minimal processing, but its location at such a distance from the coast makes it very sensitive to transport costs and iron ore prices. Currently fuel prices are very low but so are iron ore prices and the current market conditions would not support development of the project. However, Ferrowest believes that if iron prices return to higher levels, the prospect for the Yalyirimbi Iron Project would be significantly boosted. Currently, this would justify ongoing exploration.