ASX Release Carrapateena Pre-Feasibility Study successfully demonstrates viability

Transcription

1 18 AUGUST 2014 ASX Release Carrapateena Pre-Feasibility Study successfully demonstrates viability This announcement should be read in conjunction with the attached of the Carrapateena Pre-Feasibility Study Report and the Ore Reserve Statement released separately today. An accompanying presentation will also be released. OZ Minerals is pleased to release the attached of the Pre-Feasibility Study report for the Carrapateena Project (100 percent owned by OZ Minerals). The Pre-Feasibility Study demonstrates that the Carrapateena Project is both technically and financially viable, with a risk and opportunity profile that is competitive with or better than other global long life copper assets at a similar stage of development. OZ Minerals CEO and Managing Director Terry Burgess said, We are highly encouraged by the results of this Pre-Feasibility Study which show that the Carrapateena Project is viable when based on conservative assumptions, with potential for improved results from a number of options. We have reviewed in detail numerous copper-gold projects around the world over the past five years and there are very few like Carrapateena which offer the potential of multi-decade production at low operating costs, with the demonstrated potential for further discoveries nearby, located relatively close to all necessary infrastructure and in one of the best and safest mining jurisdictions in the world. We believe these features will be highly attractive to potential partners to join with OZ Minerals in advancing the development of the Carrapateena Project. Mr Burgess also commented, With the completion of the study we are pleased to have been able to estimate an initial Ore Reserve for Carrapateena. This Ore Reserve estimate is the subject of a separate announcement today. Project key points 1 : Net cash flow of $8.5 billion 2, including capital expenditure. A net present value at 8 percent discount rate of $1.15 billion and an internal rate of return of 13 percent, both on a post tax basis. Total revenue over life of mine of $22.1 billion. 1 All amounts are projected as detailed in the attached. 2 All figures in Australian dollars unless otherwise stated. 01

2 Project capital cost of $2.985 billion. A low risk jurisdiction relative to other parts of the world with a stable and well understood regulatory environment and encouraging state government. Orebody will cave with pre-conditioning, as confirmed by three independent geotechnical consulting firms. Demonstrated ability to produce a high quality copper-gold concentrate averaging percent copper over life of mine with uranium and fluorine below typical penalty levels and no arsenic. High metal recoveries of 92 percent and 70 percent for copper and gold respectively. Average annual production rate of 114,000 tonnes of copper and 117,000 ounces of gold at assumed steady state. Average C1 unit cost of production of US$0.49 per payable pound of copper including by-product credits. 3 Mine life of 24 years, from a plant operating at a production rate of 12.4 million tonnes per annum. The site offers an ideal location for access, construction and operation, being relatively flat, at low elevation and in a low rainfall environment. Good infrastructure when compared to other jurisdictions with close access to power, water, roads, rail, ports and a skilled labour market. Supportive community and other stakeholders, with an approved Retention Lease in place for development of an exploration decline. A number of opportunities exist with the Carrapateena project where further study and/or consideration under alternate assumptions could add significant value. These will be further assessed during future stages of the project to determine their potential and include: Extensions to the Block Cave Lift One and Lift Two footprints and the addition of Lift Three to access large, contiguous lower grade mineralised areas adjacent to and below the current proposed footprints. Exploiting these additional resources could increase the metal recovered from the resource from 42 percent to around 66 percent. Exploitation of Khamsin, for which an initial Mineral Resource has been announced 4, and other regional exploration targets including Saddle and Fremantle Doctor which may provide upside by either enabling an expansion of the proposed operation, or extending the mine life. OZ Minerals holds 3,624 square kilometres of exploration tenements in the area around Carrapateena and northwest towards Olympic Dam, which contain a number of identified targets. Potential for mining fleet automation, which is not assumed in the base case. Experience at other block cave operations suggests mine fleet automation can 3 C1 Costs are the costs of mining, milling and production of copper concentrate, onsite administration and general expenses, property and production royalties not related to revenues or profits, concentrate treatment charges, and freight and marketing costs less the net value of the by-product credits. 4 See Khamsin Mineral Resources Statement as at 23 March 2014 which was released to the market on 26 May 2014 and which is available to view at 02

3 substantially reduce the operating labour component once the block cave is in steady operation. Use of ports closer to Carrapateena is not assumed in the base case which proposed the use of Port Adelaide as the port of export. A number of ports are substantially closer to Carrapateena and offer potential transport cost savings. Incremental increase in throughput or a reduction in equipment sizing may be possible with further metallurgical characterisation during the Feasibility Study and allow for optimisation of the process plant sizing as ore hardness variability is more thoroughly quantified. Inclusion of tax benefits, which have been excluded from the project net present value calculation, such as OZ Minerals carried forward fractional tax losses as well as Research and Development tax offsets. Synergies with Prominent Hill operations by utilising the Prominent Hill concentrator to improve project financials, either by railing ore from Carrapateena to Prominent Hill or relocating the Prominent Hill concentrator to Carrapateena. OZ Minerals opened a data room for the Carrapateena project to provide projectrelated information under confidentiality agreements to parties which expressed interest in participating in the project. With the release of this to the ASX today, the Pre-Feasibility Study full report will be available in the data room to allow those parties due diligence processes to continue. The Pre-Feasibility Study recommends that the project advance to the next stage of development which would involve the execution of a Feasibility Study and the development of the exploration decline. However, OZ Minerals has previously stated that the sole development of the Carrapateena project is beyond its prudent financial capacity. With the completion of the Pre-Feasibility Study, there is now a sound basis to progress discussions with potential partners to continue to advance this exciting project with the additional information now available from the release today. For further information please contact: Investors Natalie Worley T M [email protected] Media Rachel Eaves T M [email protected] 03

4 Carrapateena Pre-Feasibility Study 15 August 2014 Issue Date: 15 August 2014 Page 1 of 50

5 Forward Looking Statements This document includes certain forward looking statements. Forward looking statements are often characterised by words such as plan, expect, project, intend, believe, anticipate, estimate and other similar words, or statements that certain events or conditions may, will or could occur. All statements other than statements of historical fact included in this document are forward looking statements. Such statements and information in this document include, but are not limited to statements regarding mining parameters (including processing rates, and processing plant feed), concentrate production, estimates of capital costs and operating costs, internal rates of return, net present values, availability and development of infrastructure, life of mine estimates, annual mining and production estimates and targets and revenue related assumptions such as commodity prices and exchange rates. These statements represent current expectations and internal projections of the Company and are based on information currently available to it. There can be no assurance that these statements will prove to be accurate and actual results and future events could differ materially from those anticipated in the forward looking statements. Compliance Statement Mineral Resources Carrapateena The information in this report which relates to the Carrapateena Mineral Resource as at 31 October 2012 is extracted from the report entitled the Mineral Resource Explanatory Notes Carrapateena Project as at 31 October 2012 ( The MRENC as at 31 October 2012 ), released to the market on 21 January 2013 and is available to view at The MRENC as at 31 October 2012 has subsequently been updated as at 30 June 2013 and is named the Annual Carrapateena Mineral Resource Update and Mineral Resource Explanatory Notes as at 30 June 2013 ( The ACMRU as at 30 June 2013 ),which was released to the market on 28 November 2013 and is available to view on The company confirms that it is not aware of any new information or data that materially affects the information included in the ACMRU as at 30 June 2013 and, in the case of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the ACMRU as at 30 June 2013 continue to apply and have not materially changed. The company confirms the form and context in which the Competent Person s findings are presented have not been materially modified from the ACMRU as at 30 June Khamsin The information in this report which relates to the Khamsin Mineral Resource is extracted from the report entitled Initial 202 million tonnes at 0.6 percent Copper Resource for Khamsin and Khamsin Mineral Resource Explanatory Note as at 23 March 2014 released to the market on 26 May 2014, is available at The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the Issue Date: 15 August 2014 Page 2 of 50

6 form and context in which the Competent Person s findings are presented have not been materially modified from the original market announcement. Currency: all dollars are expressed in Australian Dollars unless noted. Issue Date: 15 August 2014 Page 3 of 50

7 TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY Project Key Points Objectives of the Prefeasibility Study Project Location Project Features Project Exclusions Safety, Health, Environment and Community Environment Geology and Mineral Resource Regional Geology Mineralisation Mineral Resource Estimation Audit Mining Orebody Description Geotechnical Background Mining Methods Block Caving Mineral Processing Testwork Process Plant Tailings Storage Facility Infrastructure and Services Site Water Supply and Distribution Site Power Supply and Distribution Accommodation Village Operations, Administration, Workshops and Maintenance Facilities Waste Management Facilities Issue Date: 15 August 2014 Page 4 of 50

8 Fuel, Gas and Oil Storage and Distribution Surface Fleet Logistics Concentrate Transportation and Mine Access Road Human Resources Technology and Information Systems Ownership and Legal Project Approvals and Land Access Project Execution Operations Capital Costs Operating Costs Marketing Financial Analysis Funding Business Risk and Opportunity Opportunities Risks Recommendations Advancement of Studies Commencement of Early Works Feasibility Study Work Plan Status of Study Summary Status and Quality of Study Issue Date: 15 August 2014 Page 5 of 50

9 LIST OF TABLES Table 1-1: Project Features Table 1-2: Summary of the Mineral Resource Estimate for the Carrapateena Deposit at Various Cu Cut- Off Grades as at 31 October Table 1-3: Carrapateena Mineable Inventory Table 1-4: Draw Rate (t/m 2 /day) Table 1-5: Key Process Design Criteria - Concentrator Table 1-6: Execution Schedule Milestones Table 1-7: Estimate Summary Level 1 - Initial Project Table 1-8: Operating Costs Component Summary (12.4Mtpa Production Average) Table 1-9: Economic Assumptions Table 1-10: Key Financial Metrics Table 1-11: Major Project Execution Risks Table 1-12: Feasibility Phase Key Tasks Table 1-13: Study Class Appraisal LIST OF FIGURES Figure 1-1: Project Location Figure 1-2: Two Lifts Option - Cross Section Looking North (N = ) Figure 1-3: Footprints Two Lifts Option Figure 1-4: Schematic plan views for herringbone and Teniente draw pattern layout Figure 1-5: Production Schedule Figure 1-6: Overall Execution Schedule Features Figure 1-7: Capital Investment System Issue Date: 15 August 2014 Page 6 of 50

10 1.0 EXECUTIVE SUMMARY 1.1 Project Key Points The study has demonstrated that the Carrapateena Project is both technically and financially viable, with a risk and opportunity profile that is competitive with or better than other global long life copper assets at a similar stage of development. Key points for the project are: Net cash flow of $8.508 billion, including capital expenditure. A net present value at 8 percent discount rate of $1.146 billion and an internal rate of return of 13 percent, both on a post-tax basis. Total revenue over life of mine of $ billion. Project capital cost of $2.985 billion including contingency ($335 million) and Feasibility Study. A low risk jurisdiction relative to other parts of the world with a stable and well understood regulatory environment and encouraging state government. The orebody will cave with preconditioning, as confirmed by three independent specialist geotechnical consulting firms. Demonstrated ability to produce a high quality copper-gold concentrate averaging percent copper over life of mine with uranium and fluorine below typical penalty levels and no arsenic. High metal recoveries of 92 percent and 70 percent for copper and gold respectively. Average annual production rate of 114,000 tonnes of copper and 117,000 ounces of gold at assumed steady state. Average C1 unit cost of US$0.49 per payable pound of copper including by-product credits. Mine life of 24 years from a plant operating at a production rate of 12.4 million tonnes per annum. The Carrapateena site offers an ideal location for access, construction and operation, being relatively flat, at low elevation and in a low rainfall environment. Good infrastructure when compared to other jurisdictions with close access to power, water, roads, rail, ports and a skilled labour market. Supportive community and other stakeholders, with an approved Retention Lease in place for development of an exploration decline. A number of opportunities exist with the Carrapateena Project where further study of these areas and/or consideration under alternate assumptions could add significant value. These will be further assessed during future stages of the project to determine their potential and include: Extensions to Lift One and Lift Two footprints. There are large, contiguous lower grade mineralised areas adjacent to both Lift One (120 million tonnes at 0.5 percent copper and 0.2 grams per tonne of gold) and Lift Two (90 million tonnes at 0.5 percent copper and 0.2 grams per tonne of gold) that at the time of the Pre-Feasibility Study were not considered to improve the project cash flow, primarily as these resources are assumed to be exploited 30 years into the future and so cash flows are heavily discounted. Issue Date: 15 August 2014 Page 7 of 50

11 Lift Three. There is also deeper mineralisation (110 million tonnes at 0.5 percent copper and 0.2 grams per tonne of gold) below Lift Two that was added to the Mineral Resource estimate in the 30 June 2013 Carrapateena Mineral Resource estimate update 1 and was not considered for the Pre-Feasibility Study. Options to include a larger proportion of the Resource would include reducing the mine cut-off grade. Exploiting these additional resources could increase the resource metal recovered from 42 percent to around 66 percent. Exploitation of Khamsin and other regional exploration targets. Exploitation of the Mineral Resource estimate defined at Khamsin 2 (202 million tonnes at 0.6 percent copper and 0.1 grams per tonne of gold) and exploration targets including The Saddle and Fremantle Doctor provide future upside by either enabling an expansion of the proposed operation, or extending the mine life. Mining fleet automation. Experience at other block cave operations suggests mine fleet automation can substantially reduce the operating labour component once the block cave is in steady operation and cave performance is understood. The base case assumes no automation. Use of ports closer to Carrapateena. A number of ports are substantially closer to Carrapateena than Port Adelaide that offer potential savings in rail transport costs of $0.10 per tonne per kilometre. This option was considered during the Pre-Feasibility Study, however insufficient information was available at the time to recommend this for the base case. Incremental increase in throughput or a reduction in equipment sizing. Further metallurgical characterisation during the Feasibility Study may allow for optimisation of the process plant sizing as ore hardness variability is more thoroughly quantified. Tax Benefits. OZ Minerals carried forward fractional tax losses as well as research and development tax offsets have not been included in the project net present value. Synergies with Prominent Hill operations. It may be possible to utilise the Prominent Hill concentrator and improve project financials either by railing ore from Carrapateena to Prominent Hill or relocating the Prominent Hill concentrator to Carrapateena. 1.2 Objectives of the Pre-feasibility Study The principal objectives of the Carrapateena Pre-Feasibility Study were to: Review previous Scoping Study work and identify areas of improvement in the option(s) presented; Consider different mining, process, location and project configuration cases and recommend a single preferred optimum case for further development via a Feasibility Study; Assess the likely technical and economic viability of the project; Outline the features of the recommended project; Determine if there may be any fatal flaws in the project; 1 See Carrapateena Mineral Resource compliance statement on page 2. 2 See Initial 202Mt at 0.6% Copper Resource for Khamsin and Khamsin Mineral Resource Explanatory Note as at 23 March 2014 compliance statement on page 2. Issue Date: 15 August 2014 Page 8 of 50

12 Determine the risk profile of the project related to the key business drivers; Determine the work plan, costs and schedule for the Feasibility Study and development activities following completion of the Feasibility Study. 1.3 Project Location In May 2011, OZ Minerals purchased the Carrapateena, copper-gold Project. This project comprised four exploration licences covering approximately 1,070 square kilometres in central South Australia on the eastern margin of the Gawler Craton. In April 2013, additional tenements were acquired from Straits Resources as shown in Figure 1-1, bringing the total land holding to 3,624 square kilometres. Carrapateena is a copper-gold deposit hosted in a brecciated granite complex, with both bornite and chalcopyrite copper mineralisation present. The bornite is a distinct higher grade zone and contributes approximately 25 percent to the final metal produced. The deposit is approximately 470 metres below the surface. The map below (Figure 1-1) shows the location of the Carrapateena project site at approximately 130 kilometres north from the regional centre of Port Augusta, approximately 100 kilometres south-east of the BHP Billiton Olympic Dam Site, and approximately 250 kilometres south-east of the current OZ Minerals copper-gold mine site at Prominent Hill, in South Australia. Carrapateena is located outside the Woomera Prohibited Area (WPA) and as a result is therefore not subject to any additional access or ownership conditions. The turn-off to the site is 75 kilometres from Port Augusta along the Stuart Highway. The site is currently accessed via a graded unsealed road, approximately 90 kilometres in distance from the Stuart Highway turn-off. Issue Date: 15 August 2014 Page 9 of 50

13 Pre-Feasibility Study Figure 1-1: Project Location Issue Date: 15 August 2014 Page 10 of 50

14 1.4 Project Features The Pre-Feasibility Study has examined options relating to project infrastructure and execution methodologies, and has identified the following key features which form the basis for the study outputs. A summary of these features is given in Table 1-1 below. Table 1-1: Project Features Area Sub-Area Feature Remarks Primary mining method Block cave - two Lifts Nominally 500 metres per Lift Production rate 12.4 million tonnes per annum (ROM Ore) Both Lift One and Lift Two Mining Mine Life 24 years Main access Decline (ramp) Mined using a Tunnel Boring Machine (TBM) Production access Decline (ramp) Mined using conventional drill and blast method Two jaw/gyratory crushers per Mine Primary crushing Underground Lift Infrastructure Ore handling Incline conveying Product Copper and gold in concentrate Process Waste Regional Infrastructure Logistics Production rate Comminution Flotation Tailings disposal Power Water Concentrate transport Average of 114,000 tonnes copper and 117,000 ounces gold per year SAG Mill, Ball Mill and Pebble Crushing Roughing followed by three stage cleaning Valley fill tailings storage facility High Voltage connection to existing SA grid Borefield supply Loaded to containers on site, road to rail head, rail to Port Adelaide. Contained in a clean copper concentrate at percent copper Including fine grinding (IsaMill) circuit Two connections Borefield located 55 kilometres northwest of the plant site Issue Date: 15 August 2014 Page 11 of 50

15 1.5 Project Exclusions The Pre-Feasibility Study scope focussed on the development of a new greenfields facility on site at Carrapateena. It may be possible to utilise Prominent Hill infrastructure, however it was considered that initially Carrapateena should be assessed as a standalone operation. In the event that this outcome was found to be favourable any alternatives that capitalise on other assets offers upside potential. On this basis the following considerations have been excluded from the current Pre-Feasibility Study: Other adjacent resources (Khamsin, Fremantle Doctor and Saddle) have not been investigated for inclusion into the Carrapateena Project in this study. Synergies with Prominent Hill Operations With both the Carrapateena Project and Prominent Hill Operations situated in South Australia they share common features. At this stage the study has not considered any optimisation of infrastructure options combining the two facilities. 1.6 Safety, Health, Environment and Community Management of OZ Minerals operations is governed by the OZ Minerals Integrated Management System (OZIMS). This system provides a framework to manage risk and coordinate emergency response, occupational health and hygiene, safety, environment and social responsibility management activities. The OZIMS framework is consistent with OZ Minerals core values of Respect, Integrity, Action and Results. The OZIMS framework has been taken into account during the Pre-Feasibility Study and will be taken into account for future phases of the project. Plans which will be developed for the construction, operation and closure of the project include Community Health and Safety Plans, Regulatory Environmental Management Plans and Operational Environmental Management Plans. 1.7 Environment The environmental baseline was commenced in 2007 under the previous owners program managed by Teck Australia Pty Ltd (Teck) and further developed in 2012 by OZ Minerals, initially focussed within the approved Retention Lease (RL127) boundary. Baseline data collection continued through 2013 with an expanded boundary to take in the potential infrastructure corridors and to further develop a regional groundwater model, inclusive of springs, surface water systems and ecosystem connections. The Carrapateena Project is located in the Gawler Interim Biogeographic Regionalisation of Australia (IBRA) Bioregion, which is characterised by semi-arid to arid, flat topped to broadly rounded hills of the Gawler Range Volcanics and Proterozoic sediments. The northern boundary of the existing Retention Lease 127 is bounded by the ephemeral salt lake, Lake Torrens. The project is located on a low sandstone and quartzite plateau with an undulating surface of aeolian sand or gibber. There are colluvial footslopes and creeks dominated by bluebush/saltbush and open chenopod shrub lands. Issue Date: 15 August 2014 Page 12 of 50

16 The climatic condition for the project area is described as an arid climate with high temperatures, very low rainfall and high evaporation rates throughout most of the year. The mean monthly rainfall is constant and typically ranges between 10 millimetres and 20 millimetres, and annual mean rainfall is around 185 millimetres. Evaporation rates range between a minimum of around 90 millimetres to a maximum of around 440 millimetres per month, exceeding rainfall in every month of the year. Temperature ranges between 20 degrees Celsius to above 35 degrees Celsius during summer months (November to March), and 5 degrees Celsius to 25 degrees Celsius throughout the winter months (April to October). Average wind speeds for the area range between 3.0 metres per second and 4.3 metres per second, with a prevailing southerly wind direction. Local drainage is dominated by Eliza Creek and associated tributaries, which are non-perennial streams that only flow after rain events. The receiving water body is Lake Torrens. The surface water modelling that was undertaken indicates that creeks in the project area do not contain broad flood plains but are incised into the landscape. Flood waters remain in the defined creek lines for storm events up to one in 200 year flow events. The seismic setting of the area is categorised using the peak ground acceleration from earthquakes which have an annual exceedence probability of one in 500. The project area is located within an area of relatively low likelihood of occurrence compared with the rest of Australia, with peak ground acceleration in the range of to g based on the 2012 Australian Earthquake Hazard Map. The earthquake hazards peak ground accelerations data is categorised into nine levels of likelihood of occurrence, and the project area is within the third to least likely category. The hydrogeological system of the area is dominated by hard rock lithologies of South Australia s Gawler Craton and bounded by Lake Torrens in the east. The hard rock aquifers are heterogeneous and typically report saline to hypersaline water quality. Within the area there are three main aquifer systems, the Tent Hill Aquifer, Pandurra Formation and Whyalla Sandstone (which has the characteristics of an aquifer off lease where the fracture permeability has been found to be relatively high). Groundwater discharge occurs through salt (playa) lakes with Lake Torrens acting as the dominant regional evaporation sink for both surface water and groundwater. The project as presented has been thoroughly assessed for ecological, industrial and social environmental risks and determined to have a low risk profile. 1.8 Geology and Mineral Resource Regional Geology The Carrapateena Project is located within the Olympic Dam copper-gold province, a metallogenic belt along the eastern margin of the Gawler Craton in South Australia, which hosts the Prominent Hill mine, Olympic Dam mine and the Moonta-Wallaroo historic mining district. The Gawler Craton comprises variably deformed and metamorphosed sedimentary, volcanic and plutonic rock spread from the Late Archean to Mesoproterozoic, and it has been subdivided into a series of domains, the Carrapateena deposit being part of the Olympic Domain. The age of the iron oxide copper gold (IOCG) mineralisation in the Gawler Craton is uncertain although it is interpreted in the literature to be associated with Mesoproterozoic magmatism of the Hiltaba Suite and the Gawler Range Volcanics. Issue Date: 15 August 2014 Page 13 of 50

17 1.8.2 Mineralisation The vast majority of copper and gold mineralisation within the deposit is hosted by hematite dominated breccias with moderate mineralisation occurring within hematite altered granite breccias (Eastern copper domain). Sulphides are the primary copper-bearing minerals in the Carrapateena Breccia Complex (CBC). Copper and gold mineralisation is structurally and chemically controlled, with subsequent alteration destroying mineralising structures. The most abundant sulphides are Chalcopyrite > Pyrite > Bornite, and constitute the vast majority of the sulphides at Carrapateena. The less common sulphides and their relative abundances are: Chalcocite Digenite Covellite >> Sphalerite Galena. Gold mineralisation at Carrapateena is almost exclusively hosted by hematite altered breccias. Gold grains are usually very small (10 microns), and when seen in polished section, are often intimately associated with copper sulphides. Gold grains are commonly a combination of gold and minor silver (electrum) Mineral Resource Estimation a) Overview The Pre-Feasibility Study mine design is based on the Mineral Resource estimate as at 31 October 2012 (release date of 21 January 2013) 3. b) Mineral Resource estimate details A summary of the Mineral Resource estimate used in the Pre-Feasibility Study is shown below in Table 1-2. Table 1-2: Summary of the Mineral Resource Estimate for the Carrapateena Deposit at Various Cu Cut-Off Grades as at 31 October Classification Indicated Inferred Total Cut-Off Grade (Cu %) Tonnes (Mt) Cu (%) Au (g/t) U (ppm) Ag (g/t) It should be noted that post the analysis undertaken for the Pre-Feasibility Study a Mineral Resource estimate update was released as at 30 June 2013 (release date 28 November 2013) 5 3 See Carrapateena Mineral Resource compliance statement on page 2. 4 See Carrapateena Mineral Resource compliance statement on page 2. 5 See Carrapateena Mineral Resource compliance statement on page 2 Issue Date: 15 August 2014 Page 14 of 50

18 In this update an additional seven drill holes (including five wedged holes) totalling 11,187 metres were included in the data modelling, bringing the total number of holes and metres drilled and intersecting mineralisation to 100 holes and 65,690 metres respectively. Total Indicated and Inferred Resources (at a 0.3 percent copper cut-off) have increased from 760 million tonnes at 0.8 percent copper, 0.3 grams per tonne of gold for 5.9 million tonnes of contained copper and 7.3 million ounces of contained gold to 800 million tonnes at 0.8 percent copper, 0.3 grams per tonne of gold for 6.3 million tonnes of copper and 8.4 million ounces of gold reflecting: An increase in tonnage of 5 percent; An increase in contained copper of 7 percent; and An increase in contained gold of 14 percent. This increase is mainly attributable to the additional drilling information that has allowed geologists to better understand and interpret the deeper parts of the deposit as well as extend the copper mineralisation envelope. While the Mineral Resource estimate was expanded with this additional information, the Indicated Resources considered in the Pre-Feasibility Study for the block cave mine design were not materially changed. This additional data was not considered in the current Pre- Feasibility Study but can only offer potential upside to the project in the future Audit An external review of the data collection and sampling procedures was undertaken during an audit of the Mineral Resource estimate. The consultant formed the view that the data collection procedures in general were industry standard practice. The Carrapateena Mineral Resource estimate (as at 31 October 2012) 6 was audited by an external consultant during 2013 to assess whether it was suitable for use in the Pre-Feasibility Study. The audit found that there were no fundamental flaws in the Mineral Resource estimate and, with minor caveats regarding local grade estimation which may be relevant for the evaluation of selective mining options, it is fit for purpose. 1.9 Mining Orebody Description Carrapateena is best described as a vertical mineralised pipe of hematite breccia and haematised granite occurring within granitic basement. It is overlain by 470 metres of barren horizontally-bedded sandstones, shales and quartzite. The Carrapateena orebody is a zone of moderate grade copper mineralisation (one percent copper) in the south-west of the haematite breccia. It is about 300 metres in diameter and extends more than 1,000 metres vertically. Economic gold and silver are present in the orebody Geotechnical Background Geotechnical data was gathered in two drilling campaigns undertaken by Teck and more recently by OZ Minerals. Teck recovered 54,700 metres of core from a drilling campaign dominated by vertical 6 See Carrapateena Mineral Resource compliance statement on page 2. Issue Date: 15 August 2014 Page 15 of 50

19 holes and point load tested basement rocks from five drill holes. Teck recorded orientated structure from four holes. Basement core samples were tested for unconfined compressive strength, uniaxial tensile strength and elastic modulus. The OZ Minerals program recovered 49,500 metres of diamond core from inclined holes and cored a limited number of holes through the overburden. Specimens from all domains including overburden were sent for the full suite of materials testing including triaxial testing and testing of joint shear strength. Approximately 22,000 orientated structures were measured from all holes. Twelve samples from various levels within the orebody were subjected to acoustic emission stress testing. OZ Minerals drilled three water bores above the orebody in order to test aquifers in the overburden. OZ Minerals also had 19 lines of seismic survey shot over the top of the orebody in order to better define the various horizons and major structures traversing the mine area. The work described above was used to define the geological and geotechnical environment in which the mine is to be built. Of note is the 270 metre thick Woomera Shale which is fissile, rapidly breaks down to fines and contains clay. The mineralisation itself has only two interpreted faults anywhere near it. It is massive showing broadly spaced joints, has intact rock strength ranging from about 120 to 150 megapascals and the block model of rock mass rating (Bienwiawski) shows typical values ranging from 70 to 80. This is equivalent to rock mass rating (Laubscher) of 63 to 72. The orebody preconditioning that is planned for the project will lower the rock mass rating range by approximately five. The acoustic emission stress measurements for the project indicate principal stress at the undercut levels of 50 megapascals and 80 megapascals for Lift One and Lift Two respectively. The principal stress is orientated west-south-west east-north-east and is sub-horizontal. A total of three international external consultants have carried out geotechnical assessments of the Carrapateena orebody during the course of the Scoping Study and Pre-Feasibility Study. Caving at Carrapateena is characterised by primary fragmentation showing 60 to 75 percent passing two metres (ie coarse to very coarse). Two industry standard methodologies were used for assessing the caveability at Carrapateena. The Laubscher methodology indicates that the cave will propagate without any problem, however the Karzulovic and Flores methodology indicates that there may be problems with vertical cave propagation due to the high aspect ratio of the cave. The latter result is supported by numerical modelling. In order to ensure complete cave propagation, preconditioning using hydrofracturing and confined blasting has been proposed and costed for the project. It has been assumed that existing vertical drill holes can be used for preconditioning, thereby reducing the cost. Preconditioning is routinely carried out across many other block caves globally. As with all block caves, fines at Carrapateena are expected to migrate through the caved ore column two to three times faster than the average migration rate and will result in dilution at the drawpoints. There is a greater potential for rock bursts on the second lift and heavier dynamic support may be required. All of these issues have been accounted for in the design, mine plan and cost estimates for the project. Issue Date: 15 August 2014 Page 16 of 50

20 1.9.3 Mining Methods A key conclusion from the Scoping Study was that at the commencement of the Pre-Feasibility Study further work was required to determine the most appropriate orebody extraction/mining methodology. The Scoping Study considered the following mining concepts:- Block cave (BC); Sub level cave (SLC); Sub level open stoping (SLOS); and Hybrid options that were derived from the above. The Scoping Study concluded that the dual lift block cave returned the highest net present value, however it was acknowledged that there are inherent risks associated with block caving. On this basis it was recommended that both block caving and sub-level open stoping should be carried into the Pre-Feasibility Study. Sub-level open stoping was included in the Pre-Feasibility Study to ascertain whether the additional technical detail undertaken during this phase could identify any further financial upside from this option. The sub level open stoping option had been identified as the option that returned the next highest overall net present value. A study was undertaken to develop the conceptual mine design, schedule and cost estimation for the sub level open stoping option using the updated resource model. The outcome from this study confirmed that the conclusions reached during the Scoping Study were still valid, and the overall net present value generated by this method was no better than that achieved by the Scoping Study analysis. On this basis the sub level open stoping option was not considered further for the Pre- Feasibility Study, with the remainder of the work focusing on the development of the mine design using the dual block cave methodology as presented below Block Caving a) General Comments Block caving is a process where large blocks of ore are undercut, causing the ore to break or cave under its own weight and stress. The block cave method is most suited to a massive style of orebody in a semi-competent rock mass with a relatively coarse fill material. It is important to note that a very competent rock mass, such as may be expected at Carrapateena, can result in coarse to very coarse ore material and an increased requirement for secondary breakage of ore in the drawpoints prior to extraction. These factors can be mitigated with a focus on orebody preconditioning and mine design but remain as project risks. Mine operating costs and the production plan include allowances for secondary breakage assuming coarse to very coarse primary fragmentation. b) Undercut Elevation Definition Caving the orebody in one, two and three lifts was considered. One lift of 1,000 metres high is well outside industry practice and was ruled out. A comparison of two and three cave lifts revealed little economic difference between the options. Issue Date: 15 August 2014 Page 17 of 50

21 The additional capital required to mine three lifts was balanced by early access to high grade ore. Two lifts of approximately 500 metres high were selected because there would be a reduced likelihood of interference between the lifts. Figure 1-2 and Figure 1-3 below show the cross section and footprints of the two lifts. Figure 1-2: Two Lifts Option - Cross Section Looking North (N = ) 500 m Level m Level 3660 Issue Date: 15 August 2014 Page 18 of 50

22 Figure 1-3: Footprints Two Lifts Option LOWER 3660 UPPER 4160 Area: 106,500 m2 Hydraulic radius: 57 m Area: 97,400 m2 Hydraulic radius: 57 m c) Undercut Extents The lateral extents of the undercuts were determined by comparing drawpoint construction, mining, processing and general and administration costs to the value of ore above each drawpoint. A Net Smelter Return (NSR) cut off of $23 per tonne was used in this analysis. Using Indicated Resources only (Inferred grades set to zero) all profitable drawpoints were identified and taken into the next stage of the design process. Once the profitable drawpoints were identified Inferred grades reporting to those drawpoints were reset. d) Cave Layout Design The first stage in mine design is the definition of the drawpoint layout for Lift One and Lift Two. There are two drawpoint layouts in use in block caves around the world, the herringbone and Teniente layouts. These are shown in Figure 1-4. The Teniente layout was selected for the extraction level for its ease of construction and drive orientation with respect to stress directions and its improved loading productivity. A drawbell spacing of 32 metres x 17 metres was selected for Lift One and 34 metres x 17 metres for Lift Two. The shape of the cave footprint was adjusted to take into account the drive orientations and drawpoint spacings. Issue Date: 15 August 2014 Page 19 of 50

23 Figure 1-4: Schematic plan views for herringbone and Teniente draw pattern layout e) Undercutting Strategy Post-undercutting with a high undercut was the selected method. The method allows for simpler construction scheduling and a shorter production ramp-up. It does however increase the likelihood of damage to the extraction level due to the effects of abutment stress. Preconditioning will reduce the effects of stress. In addition development on the extraction level will be limited to that needed for efficient undercutting until the abutment stress has passed. f) Materials Transport A fleet of 16 Load Haul Dump loaders (LHD s) will deliver ore from drawpoints into two jawgyratory crushers located on the periphery of the extraction level. The dimensions of the footprints are such that loader travelling distance will not be excessive. Coarsely fragmented ore will be easier to manage using this system. A series of production simulations were carried out culminating in an estimated production rate of 12.4 million tonnes per annum. The simulations took into account draw point hang up frequency and secondary breakage requirements. g) Access and Mine Design The Scoping Study assumed shafts would be used for access and production. The lead time to production was about seven years. In the Pre-Feasibility Study initial mine access was assumed to be developed using a tunnel boring machine. The tunnel boring machine was chosen for its development speed and because the conveyor used for the tunnel boring machine was of sufficient capacity to handle the development requirements of the block cave mine. Issue Date: 15 August 2014 Page 20 of 50

24 A second decline will be developed by drill and blast. Drill and blast has been selected for the second decline as multiple headings will be available to accelerate decline development. The second decline will accommodate the production conveyor. The lead time to production has been reduced to approximately five and a half years. A trade-off study showed there to be no material economic difference between a shaft and conveyor for mine production. Ventilation shafts will be developed as five metre diameter raise-bored holes. Teleremote fibrecreting of overburden was assumed to control weathering of the strata. h) Level Designs There will be four main levels developed for each cave lift, undercut, extraction, intake ventilation and exhaust ventilation along with ancillary development for pump stations, workshops, offices, magazines and stores. i) Subsidence The subsidence crater at the end of mine life will be about two kilometres in diameter projected upwards at 60 degrees from the Lift Two undercut. Mine development is designed to be outside the zone of influence of the final subsidence. j) Mineable Inventory The mineable inventory is shown in Table 1-3. It is noted that the selected cave footprint design that results in this inventory is based on a net smelter return cut off of $23 per tonne. There are large, contiguous lower grade mineralised areas adjacent to both Lift One (120 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) and Lift Two (90 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) that at the time of the Pre-Feasibility Study were not considered to improve the project cash flow, primarily as these resources are as assumed to be exploited 30 years into the future and so cash flows are heavily discounted. There is also deeper mineralisation (110 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) below Lift Two that was added to the Mineral Resource estimate in the 30 June 2013 update 7 and so was not considered for the Pre-Feasibility Study. During future stages of the project (most likely once Lift One has commenced and actual cave performance data is available) it may be considered appropriate to implement extensions to Lift One and/or Lift Two as well as Lift Three which could extend the mine life beyond the current 24 years with minimal capital investment. Factors including an assessment as to the likelihood of the remaining portions of the orebody to cave, associated geotechnical issues, dilution, grade versus life trade-off (particularly in the case of Lift One extension versus Lift Two start-up) would need to be considered at that point. 7 See Carrapateena Mineral Resource compliance statement on page 2 Issue Date: 15 August 2014 Page 21 of 50

25 Table 1-3: Carrapateena Mineable Inventory 8 Mt Cu (%) Au (g/t) Ag (g/t) Cu (kt) Au (Moz) Ag (Moz) Lift 1 Lift 2 Total Indicated Inferred Dilution Total Indicated , Inferred Dilution Total , Indicated , Inferred Dilution Total , k) Undercutting and Draw Rates The undercut rate is defined per caving face. For this project, three caving faces can be active per lift giving a maximum undercutting rate of 60,000 square metres per year. The estimated production rate is 12.4 million tonnes per annum. When all drawpoints are producing this equates to a draw rate of 0.34 tonnes per square metre per day. As drawpoints are exhausted and the active production area becomes smaller the rate increases to a peak of 0.49 tonnes per square metre per day. These are well within industry benchmarks. Table 1-4: Draw Rate (t/m 2 /day) Extraction % of ore column Extraction height (m) Draw rate (t/m 2 /day) > Undercut rate (m 2 /year/caving face) 20,000 8 Table is subject to rounding errors. Issue Date: 15 August 2014 Page 22 of 50

26 l) Carrapateena Production Schedule Shown below in Figure 1-5, the production schedule shows a ramp up of Lift One over three years, reaching near to full production in year four. Construction of Lift Two begins in year seven, with first production in year ten and full production achieved in year 13. Approximately 11 million tonnes of ore grade material is left behind in Lift One as it is more economical to bring the higher grade Lift Two online rather than continuing to mine diminishing grades from Lift One; this material is recovered at the end of Lift Two. Figure 1-5: Production Schedule m) Manpower Mining manpower peaks in year two at about 450 people as production from Lift One ramps up while mine development is ongoing. A second peak of about 500 people occurs in year 11 as the same situation occurs in Lift Two. n) Ventilation Ventilation requirements peak at 1,300 cubic metres per second when the mine is in full production and Lift Two is under development. The steady state ventilation requirement is approximately 900 cubic metres per second. A cooling plant capable of delivering 23 megawatts (refrigeration) of cooling power is required due to ambient rock temperatures. o) Materials Handling The materials extracted from the drawpoints will be delivered by Load Haul Dump (LHD) loaders to one of two run of mine (ROM) Bins on the extraction level (East and West). The bulk materials handling system provided downstream of the ROM bins provides the mechanism for crushing and transport of ROM ore from the extraction level to the surface for plant feed. The system has been sized for the 12.4 million tonnes per annum block cave production with an industry standard 70 percent utilisation factor. Issue Date: 15 August 2014 Page 23 of 50

27 Each ROM bin has four tipple points for simultaneous bin loading. Ore is passed via an apron feeder to Thyssen Krupp BK63x75 Gyratory Crushers. The crushers are designed to produce material with an eighty percent passing size (P 80 ) of 150 millimetres. The system includes facilities for tramp removal, prior to collection in a surge bin. Materials are transported to the surface via the decline conveyor. The decline conveyor was selected as the preferred production haulage method following a trade-off study which reviewed both conveying and hoisting options. On the surface, material is delivered to a crushed ore stockpile for reclaim to the process plant via an elevated stacking conveyor. The combination of underground collection surge bin and stacking conveyor with emergency by-pass provides a means of flow control and by-pass if any part of the system is unavailable. p) Underground Infrastructure To provide support for underground operations, both mining and materials handling, the following infrastructure has been included: Ventilation and Refrigeration - including bulk cooling of fresh air drawn into the mine with primary fans at the surface and distribution via secondary fans through the ventilation circuits provided. System design has been established for both Lift One and Lift Two ventilation. Mine Dewatering - sized to cater for both steady state inflows and transient inflows up to 70 litres per second via strategically located sumps. Water collected underground is screened and stored in a vertical dam prior to pumping to the surface to tailings. System design has been established for both Lift One and Lift Two dewatering. Underground Mine Services including electrical power distribution, communications, water reticulation, fire services, compressed air, fuel distribution and concrete have been provided. Workforce and maintenance facilities have also been provided with the inclusion of underground workshops, wash bays, crib rooms, emergency refuge bays and emergency egress Mineral Processing Testwork For the Pre-Feasibility Study a metallurgical test work program was conducted. The test work discussed in this report was carried out under the direction of OZ Minerals on drill core selected with the aid of a geo-metallurgical model developed by an external consultant. OZ Minerals aimed to generate metallurgical data and a solid understanding of the deposit metallurgy using a mineralogical based approach. Test work data was generated to allow for the development of a flowsheet and equipment selection with the test work data acting as inputs into the study. The metallurgical test work program was designed based on experience at Prominent Hill. Initial geo-metallurgical modelling was based on the ore types present at Prominent Hill. The process design presented for the Pre-Feasibility Study was developed based on inputs from a range of external consultants. Issue Date: 15 August 2014 Page 24 of 50

28 Process Plant The concentrator is designed to treat 12.4 million tonnes per annum (dry) of pre-crushed ore received from underground at an eighty percent passing size (P 80 ) of 150 millimetres to produce a copper-gold flotation concentrate. Mineralogy is predominantly chalcopyrite with 15 percent bornite, allowing production of a 30 to 35 percent copper concentrate grade at 92 percent recovery from blended feed. Gold is recoverable into the flotation concentrate at 70 percent recovery. Significant uranium and fluorine rejection from the feed occurs during the flotation process with these elements being below typical penalty levels in the concentrate. There is no arsenic present. The flow sheet includes the following steps: Crushed run-of-mine ore stockpiling and reclaiming; Grinding, classification and recycle crushing; Rougher flotation; Rougher concentrate regrind; Scalping of rougher concentrate to final concentrate; Three stages of cleaner flotation; Concentrate filtration and storage; Tailings thickening and disposal; Reagent mixing, storage and distribution; Water distribution; and Other services. Key process design criteria are shown in Table 1-5 below. Issue Date: 15 August 2014 Page 25 of 50

29 Table 1-5: Key Process Design Criteria - Concentrator Item Basis Nominal Value Design Maximum Annual Feed Rate Mine plan 12.4 Mtpa 12.4 Mtpa Hourly Feed Rate Mine plan 1,550 tph 1,550 tph Copper Feed Grade Mine plan 1.0% 1.1% Gold Feed Grade Mine plan 0.5 g/t 0.6 g/t Feed Size Distribution Underground crushing at up F 80 = 150 mm F 100 = 250mm to 2,110 tph Ore Hardness (UCS) 75 th percentile 150 Mpa 159 MPa Axb 75 th percentile 38.5 BWi 75 th percentile 17.9 kwh/t - ROM Stockpile Live Capacity 12 hours reclaim 18,600 t - ROM Stockpile Total Capacity 30 hours reclaim 45,000 t - SAG Mill Size Comminution study 38.0 x SAG Mill Power 75 th percentile 16.6 MW 20.4 MW Ball Mill Size Comminution study 28.0 x Ball Mill Power 75 th percentile 16.6 MW 19.2 MW Recycle Crushers 25% nominal / 35% max. 2 by 194 tph 542 tph Mill Cyclones 250% circulating load 10 by 650 mm 12 by 650 mm Grind Size Optimisation Study P 80 = 106 µm - Rougher Flotation 20 minutes 8 by 200 m 3 - Regrind Mill 25 µm, 12.8 kwh/t 132 tph - Regrind Mill M10000 IsaMill 2.30 MW 2.85 MW Cleaner Scalper Concentrate Upgrade 800 m 3 /hr - Cleaner 1 26 minutes 4 by 200 m 3 - Cleaner 2 26 minutes 4 by 70 m 3 - Cleaner 3 26 minutes 4 by 50 m 3 - Mass Pull to Concentrate Testwork 3.34% - Concentrate Cu Grade 9 Testwork 30% - Concentrate Gold Grade Testwork 8.0 g/t - Copper Recovery 9 Blended feed 91% - Gold Recovery 9 Blended feed 67% - Concentrate Thickener 0.25 t/m 2.h, 51.7 tph 17 m diam. - Concentrate Stock Tank 24 hrs 821 m 3 - Concentrate Filter 0.6 t/m 2.h, 51.7 tph 100 m 2 - Concentrate Storage 24 hrs 5,000 t - Tailings Thickener 1.0 t/m 2.h 44 m diam. - 9 The concentrator design criteria were set early in the Pre-Feasibility Study with a nominal concentrate grade of 30 percent copper, 91 percent copper recovery and 67 percent gold recovery. Ongoing metallurgical testwork optimisation and production modelling has increased these figures to those quoted in sections 1.1 and above and used in the financial modelling. Issue Date: 15 August 2014 Page 26 of 50

30 Table 1-5: Key Process Design Criteria - Concentrator Item Basis Nominal Value Design Maximum Tailings Disposal Density Assumed 65% 70% Raw Water Demand Mass balance 23.7 Ml/d 33.2 Ml/d Plant Power Demand Load study 53 MW 62 MW Tailings Storage Facility An investigation was completed on possible sites for a tailings storage facility and on paddock, valley and hybrid approaches to facility construction. In addition, air dispersion modelling of dust emissions and seepage modelling from selected sites was conducted. The selected location, approximately two kilometres south east of the concentrator, was chosen so as to limit the size of the upstream catchment area, thereby minimising the effect on stream flows into Lake Torrens, and also minimising the amount of runoff collected in the facility during storm events. The tailings storage facility is formed by a cross valley embankment which will be constructed in four stages with the second, third and fourth stages constructed using the downstream raise method. At the fourth stage, two saddle embankments will be constructed at the heads of the valley system to constrain tailings storage. Tailings will be deposited sub-aerially from the head and sides of the valley, and also from the tailings storage facility embankment to form a depression in the north east area of the tailings storage facility for management of excess water Infrastructure and Services Site Water Supply and Distribution Supply of bulk raw water to the site is considered technically feasible using either one of the two following options: a) Delivery of seawater, extracted from Port Augusta, and delivered via a transmission pipeline with associated pumping systems; or b) Delivery of borewater, extracted from a borefield consisting of 35 bores to the northwest of the lease and delivered via a series of intermediate collector tanks, pumping system and transmission pipeline to the site. In both cases, the water is saline and a small portion of the site usage will require reverse osmosis desalination for use. It has been estimated that the operations will have a raw water demand of 34.7 megalitres per day, with 23.7 megalitres per day required for concentrator operations. Test drilling has demonstrated the feasibility of providing the required operational volumes via a borefield and as a result this option has been selected as the basis for the Pre-Feasibility Study due to the lower capital cost relative to sea water supply. Issue Date: 15 August 2014 Page 27 of 50

31 Raw water from the borefield will be stored within a turkey s nest style terminal reservoir. Two day s storage capacity will be contained within the terminal reservoir, providing a sufficient buffer against maintenance and failures in the borefield supply. On-site water consumption will consist of raw water, reverse osmosis (RO) permeate, potable water and brine. The water treatment plant will produce approximately five megalitres per day of desalinated water and a further one megalitre per day of potable water. The terminal reservoir, water treatment plant and associated tanks are located adjacent to the process plant to centralise infrastructure, minimise development, minimise pumping and piping, and provide a fail-safe gravity feed mechanism to the underground workings. Site water will be reticulated by buried high density polyethylene pipe. Peak day flow rates, along with peaking factors for each consumption area have been utilised to calculate capacity for peak demand periods Site Power Supply and Distribution Supply of power to the site is considered technically feasible using a number of options: a) Nominal 150 megawatt supply via connection to the existing Electranet 275 kv Davenport Substation, or; b) Nominal 100 megawatt supply via connection to the existing Electranet 132 kv Line at Mount Gunson and connection to the BHP 275 kv Olympic Dam Line near Mount Gunson, with Power supplied on a 45 megawatt / 55 megawatt split from Electranet and BHP Billiton respectively, or; c) Nominal 100 megawatt via connection to the existing Electranet 132 kv Line at Mount Gunson and an additional 132 kv line connected to Davenport Substation. Due to the lower capital expenditure of the second of these options, it was selected as the basis of the Pre-Feasibility Study. Current peak annual demand is forecast at 88 megawatts. For the purpose of the Pre-Feasibility Study, it has been assumed that BHP Billiton will allow for a megawatt supply and will accept the proposed connection arrangement technically and commercially as per the existing agreement with Prominent Hill. BHP Billiton has made no representations to this effect. Discussions with BHP Billiton have commenced and will continue throughout the Feasibility Study. An emergency backup power supply is to be provided via onsite diesel generation of up to 20 megawatts Accommodation Village The accommodation village will initially provide accommodation for up to 2,000 persons, including 200 mine workers and 1,800 construction workers. The village will consist of 600 purchased new rooms which will be retained for ongoing operations, 1,200 leased rooms retained for the construction period only and the relocation of the existing (OZ Minerals owned) exploration village consisting of 200 rooms. It is intended that the 200 exploration rooms will later provide for overflow or short term accommodation during operations. Issue Date: 15 August 2014 Page 28 of 50

32 Operations, Administration, Workshops and Maintenance Facilities There will be two operational bases on the surface for the site, being the Mine Industrial Area (MIA) and the Process Plant. The general list of infrastructure provided for each operational base is as follows: Process Plant - process plant bathhouse, process plant administration office, emergency services facility, security gatehouse, maintenance administration office, process plant workshop, process plant workshop wash bay, warehouse, concentrate transport office, concentrate transport truck wash and process plant wheel wash; Mine Industrial Area - mine bathhouses, mine development management office, mine infrastructure construction office, light vehicle workshop, MIA washdown facility and MIA wheel wash. Facilities have been based on a combination of operational manning estimates and historical data from other similar projects Waste Management Facilities Excluding tailings and waste rock management (covered elsewhere), the following facilities have been provided for waste management: Waste transfer portal for sorting of wastes for onsite or offsite disposal; Salvage yard; and Landfill for disposal of non-hazardous wastes. For the purposes of the Pre-Feasibility Study, it has been assumed that wastes classified as toxic or used hydrocarbons will be collected and transported offsite for disposal by an external contractor. Costs are included in site operating costs Fuel, Gas and Oil Storage and Distribution The design includes major infrastructure for a central mobile vehicle fuel facility. The total tank farm capacity is 220,000 litres. Supply from offsite will be via an unloading apron accommodating an AB triple tanker and including bunds for spill containment. Unloading and dispensing pump sets are arranged by service and located in a separate bund adjacent to the tank farm and unload apron. An opportunity for future investigation is the integration of the surface fuel facility with the emergency power generation fuel storage. For the Pre-Feasibility Study this has been excluded due to geographical separation; however potential synergies should be considered as the site layout is further developed Surface Fleet A review was undertaken of typical operational requirements to establish a fleet of surface mobile equipment to support operations and associated costs. These costs are included in the estimate. Issue Date: 15 August 2014 Page 29 of 50

33 1.12 Logistics Concentrate Transportation and Mine Access Road The Carrapateena Project site is located approximately 50 kilometres east of the Stuart Highway and the railway access to Adelaide. The Scoping Study identified two access routes for consideration, namely, the southern access road and northern access road. Both access roads connected back to the Stuart Highway. The study identified the northern access road as the preferred alignment for an infrastructure corridor (power and water) and that this provided the shortest haul route for concentrates to a rail siding intermodal facility. Alternative options have been investigated for the transport of the copper concentrate product and a trade-off study has been undertaken to establish a preferred model for the Pre-Feasibility Study. The key features of the preferred concentrate product export model are: a) Logistics Modes Transport from the Carrapateena Concentrate Storage Shed to the intermodal facility using sealed containers on trucks; Transfer of containers to rail at the intermodal facility; Unloading of the containers from the rail to a laydown at the Port of Export (POE), which for the purpose of the Pre-Feasibility Study is assumed to be Port Adelaide; Decanting of the containers into ship hold at POE; and Bulk shipping to customer port. b) Aviation To meet the workforce transport requirements it is intended to operate closed charter fly in-fly out services between Adelaide and Carrapateena. A new airfield is planned to service the Carrapateena mine development. It is assumed this will be classified as a Code 3C facility capable of accommodating aircraft up to the Fokker F50 or equivalent. This classification may be adjusted to suit the recommended aircraft type by the selected air charter operator. The airfield is located adjacent to the village such that the arrivals and departures are linked to camp operations Human Resources OZ Minerals has adopted its existing corporate policies and procedures in relation to Human Resources at Carrapateena. Carrapateena operations employees will work a 14 days on / seven days off shift roster, alternating day and night shifts every second swing. Staff or non-shift workers including operational management and administration will work a nine days on / five days off roster. Issue Date: 15 August 2014 Page 30 of 50

34 1.14 Technology and Information Systems A number of emerging or well established trends related to information and communications technology enablement in the mining and resources sector, largely driven by risk, safety, productivity and utilisation factors, have become apparent in recent years. While cognisant of these developments this study is based on adopting a cautious and risk averse approach to technology enablement with the specification of proven and well established information and communications technology practices and solutions that support the needs of project execution and life of mine operations. Accordingly, information and communications technology has been scoped within the Pre-Feasibility Study in sufficient detail to support the basis of the capital cost estimate for the Pre-Feasibility Study stage of the project Ownership and Legal The project is owned 100 percent by OZ Minerals Limited (34 percent OZ Minerals Carrapateena Pty Ltd and 66 percent OZM Carrapateena Pty Ltd). The applicable legal jurisdiction is that of South Australia. Mining activities in South Australia are conducted in accordance with the requirements of the Mining Act 1971 (Mining Act). The Mining Act is administered by the Department of State Development (DSD). OZ Minerals has developed positive relationships with South Australian regulators as a result of the Prominent Hill project and believe this will continue through the Carrapateena Project development. The legal framework, including tenure, land access and royalties related to the project is based on the permitting process under the Mining Act. Of note, a discounted royalty rate of two percent of revenue is applicable for the first five years of production. Alternative approvals routes under the South Australian Development Act 1993 have been assessed, however it is currently expected that the project will be permitted via the Mining Act. Other relevant South Australian legislation is applicable and will be taken into consideration for the proposed project Project Approvals and Land Access The key approvals stakeholders for the project are the South Australian Department of State Development (DSD) who regulate mining activities in the state and the Federal Department of the Environment who administer the Environment Protection and Biodiversity Conservation Act 1999 (Cth). The key land access stakeholders are the Kokatha Uwankara, who have made a native title claim over the area and the pastoral lease holders of Pernatty Station, which covers much of the project area. OZ Minerals has established strong relationships with each of these stakeholders to ensure they are involved in the ongoing development of the project and support for the project across all stakeholders remains high. An approvals and land access plan has been developed, covering a three year period nominally from 2014 to 2016, to ensure the appropriate regulatory approvals are in place prior to the commencement of site early works. The necessary mining lease proposal documentation and supporting environmental baseline work is complete and has been prepared as an appendix to the Pre-Feasibility Study which can be submitted as soon as the project proceeds to Feasibility Study. The development of the exploration decline, a critical part of the Feasibility Study, will be conducted under Retention Issue Date: 15 August 2014 Page 31 of 50

35 Lease 127, which is already approved by all regulators and stakeholders. The Retention Lease 127 is valid for five years. It is recommended, based on project knowledge to date that OZ Minerals pursue an approvals process similar to that followed by the Prominent Hill project. This would involve completing a mining lease proposal with addenda for off lease infrastructure. OZ Minerals has a developed compliance and communications system for recognising permits required, expiry date of existing permits and any communications relating to the legal requirements of the project. This process has been established across Prominent Hill and the Carrapateena Retention Lease and will continue to be followed for the mining lease stage of the project Project Execution Carrapateena, although not unique in its description of an underground mine providing ore to a concentrator, does propose unique challenges. With the top of the ore-body nominally 470 metres below the surface and a block cave mining method, final project execution will be reliant on key information. Through consultation with a number of external geotechnical consultants it has been identified that there is a need for OZ Minerals to gain access to the orebody to accurately define the underground mine design and ore body geotechnical characteristics to support key Feasibility Study outcomes. This work will build on and confirm the already significant body of geotechnical information and analysis to allow fine tuning of the mine layout. With this requirement taken into consideration a tunnel boring machine has been selected to achieve rapid advancement of an early access decline. This machine has been purchased, refitted and is currently in storage in Adelaide allowing immediate activation. Once at depth, several geotechnical parameters will be investigated, including but not limited to stress testing, inspection of rock defect parameters of length, terminations and spacing. Due to the time required to access the orebody and undertake the geotechnical characterisation works it has been proposed that the Feasibility Study be undertaken using the current Pre-Feasibility Study level assumptions pending the detailed orebody data results. As can be seen below in Figure 1-6, there is an 18 month delay between substantial completion of the Feasibility Study and when the geotechnical information is available for final completion of the Feasibility Study. This delay will be utilised to further advance early works engineering and procurement packages. Once the geotechnical characterisation has been completed the collated data will be assessed for any impact it may have on the Feasibility Study outcomes. Upon project approval, and during the mine development phase, engineering, procurement and construction activities will commence for surface infrastructure and processing facilities. Issue Date: 15 August 2014 Page 32 of 50

36 Figure 1-6: Overall Execution Schedule Features The execution schedule has been conceived according to the following key principles. Execution of the Feasibility Study in tandem with orebody access and geotechnical investigations (as described above). Execution of early works following mining lease approval in order to achieve rapid mobilisation following project approval. Infrastructure and process plant design and construction to coincide with the expected earliest date for commissioning. The commissioning date has been selected to allow the mine production rate to build to the point where a concentrate product can be produced at the minimum process plant throughput. The completion of the project is at the point where concentrate is produced at the minimum achievable process plant rate (nominally 60 percent of rated). Mining output then continues to increase until the target 12.4 million tonnes per annum ore production is achieved. Note that all costs associated with operating the infrastructure prior to project completion (preproduction costs) are capitalised prior to project completion in mid-2022, as demonstrated in Figure 1-6. Issue Date: 15 August 2014 Page 33 of 50

37 Table 1-6: Execution Schedule Milestones Milestone Date Study Phase Milestones Feasibility Study Commencement Jan 2015 Exploration (TBM) Decline Mining Commencement Mar 2015 Exploration (TBM) Decline Mining Complete Jul 2016 Mining Lease (ML) Approval Granted Aug 2016 Mine Geotechnical Sampling and Testing Complete Sep 2017 Feasibility Study Completion Nov 2017 Project Approval Jan 2018 BC1 Execution Phase Milestones Airfield Establishment Complete Aug 2018 TSF Earthworks Commence Apr 2019 Permanent Accommodation Camp Complete Jul 2019 Permanent Borefield Complete Dec 2019 Site Power Supply Complete Dec 2019 BC1 Start of Mine Production (beginning of production year 1) Jan 2021 Haul Road Complete Mar 2021 Tailings Storage Facility Earthworks Complete May 2021 BC1 Materials Handling System Complete Oct 2021 BC1 Start of Process Plant Operation Feb 2022 Project Completion Jun 2022 Process Plant at Rated Capacity Nov 2023 BC2 Execution Phase Milestones BC2 Crushing & Materials Handling System Commissioned May 2031 BC2 at Full Production Rate Nov 2032 The project execution and contracting strategy proposed for Carrapateena is based on industry norms and structured around a contracting strategy for individual packages of work based on the most suitable contract type (i.e. Lump Sum, Schedule of Rates etc) for a particular package of work. Combined with a risk management framework this will allow work to progress based on fit for purpose strategies. Carrapateena will be developed based on a staged Capital Investment System of six stages of structured review and gated commitment. Each of these phases will be guided by minimum standards to ensure sufficient information is provided to support investment decisions. The stages can be seen below in Figure 1-7. Issue Date: 15 August 2014 Page 34 of 50

38 Figure 1-7: Capital Investment System Phase One (Scoping Study) was completed in 2012 and proposed the review of two mining methods (Block cave and sub-level open stoping) during Phase Two (Pre-Feasibility Study). The Pre-Feasibility Study has proven that the best business case to proceed with is a 12.4 million tonnes per annum block cave mine with onsite processing. OZ Minerals intention is to have an increased Owners Team to execute the next three stages of the project and reduce the reliance on external and sub-consultant services. It has been identified that by seconding the correct resources directly into the company, skill sets can be obtained without conflicting commercial objectives that govern external consultancies Operations Ore production and processing will be conducted on a 24 hours per day, seven days per week basis. Managerial, supervisory and technical staff will work a nominal 12 hours per day on dayshift, while shift production employees will work a continuous 12 hour shift roster. Production employees will generally work a nominal three panel, two times 12 hour shift roster. All site-based employees and contractors will be accommodated in a single status village built to support the operations and will attend the site on a fly in-fly out (FIFO) basis. There will be a different rotational roster dependent on position, nominally staff not required to work shift work will work on a nine days on, five days off roster cycle. Workers required for shift work will work a 14 days on, seven days off roster cycle. After the development phase of the mine and the construction of the associated processing facility, OZ Minerals will operate under an owner operator model. This is consistent with several other block cave operations and provides for a lower operating cost while still retaining the expertise of contractors during the development phase. Issue Date: 15 August 2014 Page 35 of 50

39 The site will be supported by a project office based in Adelaide and a corporate headquarters based in Melbourne Capital Costs A capital cost estimate has been prepared in accordance with the estimate plan and project minimum standards. The capital cost estimate to the project completion date (initial project capital cost) is $2,985,110,787 excluding goods and services tax and including a contingency allowance (inherent and contingent) of $334,682,958 (12.6 percent) with a nominal accuracy of +/- 25 percent. This cost estimate is as of the estimate date (31 March 2014) and excludes escalation. Owner s costs include commissioning and preproduction costs ($208,846,617) and contingency ($334,682,958) Table 1-7 summarises the Initial Project Estimate to level 1 Work Breakdown Structure (WBS). Table 1-7: Estimate Summary Level 1 - Initial Project WBS Description Total (A$m) CAPF 1000 Underground Mining $693 CAPF 2000 Underground Infrastructure $298 CAPF 3000 Process Infrastructure $446 CAPF 4000 Onsite Infrastructure And Utilities $234 CAPF 5000 Regional Infrastructure And Utilities $288 CAPF 6000 Temporary Works $26 CAPF 7000 Logistics $56 CAPF 8000 Project Costs And Services $273 CAPF 9000 Owners Costs $671 TOTAL $2, Operating Costs An operating cost estimate has been prepared based on OZ Minerals minimum standard. The operating cost estimate is based on common rates for power, fuel and water. As part of the assessment of operating costs from the commencement of operations, pre-production costs associated with the commencement of operations of support infrastructure prior to production of a saleable concentrate were captured in this exercise and provided for the capital cost estimate. A nominal sustaining capital estimate is included in the operating costs. Operating costs are presented un-escalated with an estimate date of 31 March A breakdown of the operating cost is shown below in Table 1-8. Issue Date: 15 August 2014 Page 36 of 50

40 Table 1-8: Operating Costs Component Summary (12.4Mtpa Production Average) Component Cost ($/t of Ore) Mining and underground mine infrastructure 6.93 Processing 7.45 Remainder of Operations Costs; 5.91 Logistics Levies Sustaining Capital Fixed infrastructure maintenance costs Fleet and fuel consumption General infrastructure maintenance & consumables General labour General energy use Total Marketing The Carrapateena concentrate will be a desirable product for most copper smelters, with a relatively high copper content by world standards, low sulphur and no arsenic. The copper grade (30 to 35 percent on average) is suitable as a custom feed stock, with uranium being the only element that will require some degree of management but which will still be well below typical penalty levels. OZ Minerals has successfully marketed a similar concentrate from Prominent Hill since 2009 with a consistent five to six customers across Europe, India and China accepting approximately 200,000 tonnes of concentrate per year. Established and mature logistics routes to domestic export ports provide ease of mine-to-market access Financial Analysis The financial analysis for the project used the assumptions shown in Table 1-9. Table 1-9: Economic Assumptions Copper price (US$/lb) $3.20 Gold price (US$/oz) $1,225 Exchange Rate (AU$ / US$) 0.82 Issue Date: 15 August 2014 Page 37 of 50

41 The project is expected to deliver an after tax net present value (NPV) of $1,146 million using a weighted average cost of capital of eight percent ($2,057 million pre-tax). The project internal rate of return is 12.9 percent. Average copper equivalent 10 mine production once steady state is achieved is 138,000 tonnes per annum. The project is expected to generate cumulative after tax cash flows of $8,508 million over the total project including a mine life of 24 years. The pre-production capital expenditure pay back is expected to be four and a half years from first concentrate production, with the total project expected to be cash flow positive six years from first concentrate. Sensitivities applied to the project financial and underlying commodity assumptions indicate a significant level of robustness within the project economics. Critical finance measures are contained in Table Table 1-10: Key Financial Metrics Total Revenue* Project Capital Total capital Total net cash Average C1 Pre Tax Post tax NPV IRR flow cost 8% A$m A$m A$m A$m (US$/lb) % A$m A$m 22,091 2,985 4,354 8, ,057 1,146 * Revenue from Copper, Gold and Silver sales less TC/RC's, sea freight and royalties Funding It is unlikely that OZ Minerals will have the financial capacity to bear all of the cost and all of the project risk on its own. Therefore a sell-down of some of the current 100 percent interest through a joint venture arrangement could form part of the funding mix. A range of options are open to OZ Minerals to fund the development of Carrapateena. These include bank debt, project finance, a high yield US dollar issue, the term loan B market, leasing and export credit agency options, convertible notes, royalty based capital, equity at the project level and equity at the corporate level. Given the scale of the potential funding requirement, it is unlikely that a single source of funding for the project will either be possible or optimal. A mix of equity and debt funding sources is likely to be required Business Risk and Opportunity Opportunities A number of opportunities exist with the project where further study of these areas and/or consideration under alternate assumptions could add value. These will be further assessed during future stages of the project to determine their potential. a) Extensions to Lift One and Lift Two footprints and Lift Three. There are large, contiguous lower grade mineralised areas adjacent to both Lift One (120 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) and Lift Two (90 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) that at the time of the Pre-Feasibility Study were 10 CuEq = Average Cu contained production +((Average Au contained production multiplied by LOM Au price (US$)) + (Average Ag contained production multiplied by LOM Ag price (US$)))/LOM Cu price US$/t)) Issue Date: 15 August 2014 Page 38 of 50

42 not considered to improve the project cash flow, primarily as these resources are assumed to be exploited 30 years into the future and so cash flows are heavily discounted. There is also deeper mineralisation (110 million tonnes at 0.5 percent copper and 0.2 grams per tonne gold) below Lift Two that was added to the resource in the 30 June 2013 update and so was not considered for the Pre-Feasibility Study. During future stages of the project (most likely once Lift One has commenced and actual cave performance data is available) it may be considered appropriate to implement extensions to Lift One and/or Lift Two as well as Lift Three which could extend the mine life beyond the current 24 years with minimal capital investment. Factors including an assessment as to the likelihood of the remaining portions of the orebody to cave, associated geotechnical issues, dilution, grade versus life trade-off (particularly in the case of Lift One extension versus Lift Two start-up) would need to be considered at that point. Options to include a larger proportion of the Mineral Resource estimate would include reducing the mine cut-off grade. Exploiting these additional resources could increase the resource metal recovered from 42 percent to around 66 percent. b) Exploitation of Khamsin and other regional exploration targets. Exploitation of the Mineral Resource estimate defined at Khamsin 11 (202 million tonnes at 0.6 percent Cu and 0.1 grams per tonne gold) and exploration targets including Saddle and Fremantle Doctor provide upside by either enabling an expansion of the proposed operation, or extending the mine life. By introducing a second source of mine feed, they potentially lower the overall risk of the project. c) Mining Fleet Automation. Experience at other block cave operations in Australia suggests mine fleet automation can substantially reduce the operating labour component, with one operator able to oversee and control several units of equipment from a surface control room. The other key benefits of automation are in the areas of occupational health and safety and possibly ventilation through the reduction of people required underground. Automation is expected to be implemented once the block cave is in steady operation but is not included in the base case. d) Use of ports closer to Carrapateena. There are a number of ports substantially closer to Carrapateena than Port Adelaide that offer potential savings in rail transport costs of $0.10 per tonne per kilometre. This option was considered during the Pre-Feasibility Study, however insufficient information was available at the time to recommend this for the base case. Further engagement with the appropriate parties during the Feasibility Study will be required to determine if this option offers upside to the project. 11 See Initial 202Mt at 0.6% Copper Resource for Khamsin and Khamsin Mineral Resource Explanatory Note as at 23 March 2014 compliance statement on page 2. Issue Date: 15 August 2014 Page 39 of 50

43 e) Incremental increase in throughput or reduction in equipment sizing. It is industry standard practice when sizing key pieces of process equipment to account for uncertainty in the ore hardness by sizing mills and crushers to produce average throughput at above average hardness. In this way average ore can be processed at above average throughput rates. Further metallurgical characterisation during the Feasibility Study may allow for optimisation of the process plant sizing. f) Tax Benefits. OZ Minerals carried forward fractional tax losses have not been included in the Carrapateena Project s net present value. These fractional tax losses are currently available and if they remain available during the production phase they will reduce the 30 percent Australian corporate income tax rate by 2.7 percent to 27.3 percent. This will be a permanent tax benefit applying to all taxable profits derived by the Carrapateena Project during life of mine. Other tax incentives such as the Research and Development tax offset have not been included in the net present value. Every 100 cents of qualifying Research and Development expenditure generates a permanent 10 cent cash tax benefit. g) Synergies with Prominent Hill operations. It may be possible to utilise the Prominent Hill concentrator and improve project financials either by railing ore from Carrapateena to Prominent Hill or relocating the Prominent Hill concentrator to Carrapateena. OZ Minerals has initiated Scoping Studies on both of these options Risks A risk assessment of the Carrapateena Project at Pre-Feasibility Study stage was undertaken, and executed in accordance with OZ Minerals risk management framework and study-specific procedures. Seventy risks across sixteen Pre-Feasibility Study elements were identified and are included in the Risk Register. Currently there are eight major project execution risks associated with the project. These are predominantly associated with the Geology, Mining and Ore Reserves study elements. These risks and associated risk treatments are summarised in Table 1-11 below. Issue Date: 15 August 2014 Page 40 of 50

44 Table 1-11: Major Project Execution Risks Risk No. Element Risk Details Recommended Additional Risk Treatments 16 Geology and Mineral Resources 19 Mining and Ore Reserves 32 Mineral Processing 22 Mining and Ore Reserves Locations of mine access, ventilations shafts and tailings storage facility may need to change as more geological and geotechnical information becomes available. Impact on cost and schedule. Block cave geotechnical conditions vary from predicted leading to longer ramp up, cave stalling, lower production or higher operating costs. Changing regulations or customer expectations in relation to radioactivity in concentrate increase marketing costs or reduce customer base. Block cave seismicity is higher than predicted leading to higher operating costs. Undertake early identification of infrastructure locations and identify alternate locations. Undertake targeted geotechnical investigations during Feasibility Study for each location. Capture findings and make available as a geological model or equivalent. Undertake mapping when underground access is obtained. Undertake comprehensive sensitivity analysis (current block models are showing limited variability). Undertake detailed geotechnical program when underground access is obtained during Feasibility Study. Early engagement with regulators and customers to demonstrate the concentrate can be safely processed into safe products. Develop the option of blending with third party concentrates. Consider developing a concentrate treatment process for complete removal of radioactivity. Development of preconditioning methodology to reduce seismicity. Detailed geotechnical program when underground access is obtained during Feasibility Study. Develop operational controls and ongoing seismic monitoring processes during Feasibility Study. Issue Date: 15 August 2014 Page 41 of 50

45 25 Mining and Ore Reserves 26 Mining and Ore Reserves Cave preconditioning may not improve cave performance as predicted, leading to longer ramp up, cave stalling, lower production or higher operating costs The design of the undercut level and block cave development sequence is not yet fully optimised. Optimisation during the Feasibility Study may impact the cost or schedule. Carry out a preconditioning trial during Feasibility Study to understand the potential for preconditioning to be effective. Detailed review and optimisation of undercut level during Feasibility Study. Detailed geotechnical program when underground access is obtained during Feasibility Study to confirm undercut parameters. Peer review and industry benchmarking to be undertaken. No risks were identified which would prevent the project moving to the Feasibility Study phase Recommendations Subsequent to the completion of the Pre-Feasibility Study, the following recommendations are made with respect to the Carrapateena Project: Advancement of Studies It is recommended that the project as described in this Pre-Feasibility Study be subjected to a Feasibility Study. The key purpose of this additional study would be to determine, at a greater level of certainty, the likely economic and technical viability of the project. This recommendation is made with due consideration of: The strategic fit and context within which the project fits into OZ Minerals core business. The potential return on investment over the proposed life of the operations. The level of project execution risk as identified and treated at this stage of the project s development. The potential for additional value-adding through optimisation of the selected infrastructure, mine and process options. The basis for the Feasibility Study will include the recommendations made in the section Status of Studies; however the project base case would be as described in Table 1-1 above. Essential to the completion of the Feasibility Study phase will be the completion of the following significant bodies of work: Finalisation of a commercial arrangement to secure funding via joint venture agreement or other means to enable the Feasibility Study and further works to commence; Issue Date: 15 August 2014 Page 42 of 50

46 Feasibility level infrastructure, mine and process engineering in order to refine the project cost estimate, optimise the base case options and reduce the risk profile of the project prior to execution; Development of an access decline which would allow geotechnical characterisation of the orebody to confirm mine design parameters and block cave mineral extraction viability; Progress towards achieving mine lease approval based on the outcomes of the Pre-Feasibility Study and subsequent work, in order to gain access for construction works in accordance with the proposed execution schedule Commencement of Early Works The Pre-Feasibility Study has also identified areas that warrant early execution of engineering and implementation in order to support the Feasibility Study and prepare for possible project execution subsequent to Feasibility Study completion. These are described in the section Project Execution, and include (in summary): Infrastructure engineering airfield, haulage road, regional water supply, accommodation village, site water treatment and distribution, and temporary construction facilities; Mine design early mine development planning; High Voltage power supply - engineering and commercial negotiations; Project readiness development of execution phase procedures, standards, systems and processes; and Sourcing of bulk materials examine and evaluate sources of civil earthworks materials and quarry products in the vicinity of the proposed project site Feasibility Study Work Plan The execution of the above Feasibility Study and early works tasks are included in the Project Execution Schedule, and in summary the main tasks and expected durations are as shown in Table 1-12 below. Table 1-12: Feasibility Phase Key Tasks Task Duration Remarks Feasibility Study 18 Months Based on assumed geotechnical characteristics. preliminary Access Decline 19 Months Including mobilisation and demobilisation Development Geotechnical sampling and analysis 11 Months Including lateral development required once access decline development is complete Final Feasibility Study 1 Month Completed after geotechnical analysis Report Mining Lease Approval 20 Months From Feasibility Study commencement Issue Date: 15 August 2014 Page 43 of 50

47 Based on the tasks noted above, the feasibility phase of the project development is expected to take between 28 and 30 months to complete, including exploration decline development and orebody sampling activities Status of Study Summary A Scoping Study was completed in late 2012 which was subsequently progressed into a Pre-Feasibility Study phase in March This Pre-Feasibility Study was delivered in two distinct phases; Early Options Assessment The Early Options Assessment process facilitated a broadening of options developed during the Scoping Study and through elimination of unviable options, provided a base case and set of options analyses for the Pre-Feasibility Study. Pre-Feasibility Study The Pre-Feasibility Study phase commenced in July 2013 was completed in July 2014 and approved by the OZ Minerals Board in August Status and Quality of Study a) Significant Outcomes. At the completion of the Pre-Feasibility Study in July 2014, the study was able to achieve the following significant outcomes. Pre-Feasibility Study options selected the Pre-Feasibility Study was able to validate the principal options of mine design and development strategy, mine production rate, process selection, materials handling and infrastructure options. Pre-Feasibility Study options eliminated the Pre-Feasibility Study was able to eliminate Early Options Assessment phase options including shaft haulage, tunnel boring machine development of the main haulage conveyor decline, option for smelting concentrate on site, road transportation of concentrate to port, rail transport of concentrate from site and the lower capacity sub level open stoping mining option. Base case options changed base options identified in the Early Options Assessment were changed; secondary coarse crushing was eliminated, and sea water supply to site was replaced with a previously-eliminated option (borefield water supply). b) Compliance With Project Standards The Pre-Feasibility Study has been delivered in accordance with the OZ Minerals minimum standard with comments to compliance with this standard noted below in Table From a project definition viewpoint, the following table highlights the extent of work performed against the standard; which includes specific requirements for project development to achieve the nominated Class 4 estimate accuracy outcomes. Issue Date: 15 August 2014 Page 44 of 50

48 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS Level of Definition (expressed as a percentage of complete engineering using appropriate indicators i.e. % of EPCM, % of Engineering Cost) Typical Accuracy Range based on the P10 and P90 levels Quotations / Tenders Supporting the Estimates SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 1% to 2% of full project engineering definition 10% to 15% of full project engineering definition 15% to 25% of full project engineering definition 40% to 60% of Full Project Definition being completed with minimum 60% engineering completed, minimum 40% procurement by value fixed by quotation and minimum 10% construction fixed by quotation or tender ± 30 to ± 35% ± 20 to ± 25% ± 10 to ± 15% ± 5 to ± 10% NOTE: for novel technology or underground projects for which there are no benchmarks the accuracy maybe +35 to +50% None Benchmark Data from existing mine, rail and port contracts Equipment Quotes and benchmark material supply and construction rates. Mine, rail and port contracts factorised from existing arrangements with preliminary negotiations as to the likely differences. Multiple firm equipment quotes. Multiple material supply and construction quotes and rates checked. Mine, rail and port contracts negotiated to binding heads of agreement or near final agreements specific to the business case. Equipment on order, tendered or firm quotes available. Tenders for Material Supply and Construction costs. Some contracts awarded. Completed and executed mine, rail and port contracts specific to the project. A. CAPITAL COST ESTIMATES METHODOLOGY: A1 Mining Costs: A1.1 Mineral Resource Indicated and Inferred Indicated and Inferred Measured, Indicated and Inferred Measured, Indicated and Inferred Classification A1.2 Geotechnical Conditions Assumed or Started Preliminary Defined Detailed A1.3 Hydrological Conditions Assumed or Started Preliminary Defined Detailed A1.4 Site Layout Sketch Preliminary Defined Generally optimised Complete A1.5 Mine Design Criteria Assumed or Started Preliminary Defined Generally optimised Defined for year 1 and Complete thereafter A1.6 Waste Dump Design Criteria Assumed or Started Preliminary Defined Generally optimised Defined for year 1 and Complete thereafter A1.7 Mine Schedule Assumed Approximated Optimised or Preliminary - Matched to Fleet Defined for year 1 and Complete thereafter A1.8 Mine Equipment None or Assessed Budget Priced Calculated or Detailed Final - Quoted Specifically A1.9 Mine Services Assessed Budget Priced - sketch designed Calculated or Detailed - full outlines Final A1.10 Mine Environmental Assumed Preliminary Defined Generally optimised Complete Compliance A1.11 Ore Reserve Classification Not required Probable Payback x 1.5 Proven; Balance Probable Payback x 1.5 Proven; balance Probable Issue Date: 15 August 2014 Page 45 of 50

49 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 A2 Plant and Infrastructure Costs: A.2.1 Equipment Quotes None or Factorised Budget Priced - Single check price Detailed - Multiple quotes Final on Prices firm A.2.2 Civil / Structural Assessed - sketched only Budget Priced - Take-off sketch Calculated or Detailed - MTO & multiple quotes for supply costs, benchmarked hours to install A2.3 Mechanical / Piping Assessed - % of key equipment Budget Priced - Mix of MTOs and factors Calculated or Detailed - MTO & multiple quotes Benchmarked to similar plus hours to install data. Small bore piping may be factorised. A.2.4 Electrical / Instruments Assessed - $ per kw Calculated for HV drives and over 100kw drives. Factorised - $ per kw per drive, for LV and less than 100kw A2.5 Information Systems / Control Systems A2.6 Labour Rates Not required Factorised or benchmarked off best current information Calculated - MTO & Hours with benchmarked or budget quotes Final -Tender or Contract Prices Final - Tender or Contract Prices Final - estimates or Tender Prices Calculate as % of total direct costs Calculate as % of total direct costs Calculated - Mix of calculated and multiple quotes Detailed Tender or Contract Prices Budget Priced, by contractors or equivalent and benchmarked. Detailed or Final - tenders or Contracts Prices A2.7 Labour Productivity Included in general factorisation Assessed Calculated Detailed - Tenders or Contracts Prices A2.8 Construction Equipment Not required Factorised - $ / Hr on Labour Rates Calculated - $ / Hr on Labour Rates quoted or calculated for large cranes and special equipment costs Detailed or Final on Quotes Firm A3 Indirect Costs: A3.1 Temporary Facilities Calculate as % of direct costs Calculate as % of direct costs Calculated Detailed or Final - Tender or Contract Price A3.2 Construction Support Calculate as % of direct costs Calculate as % of direct costs Calculated Detailed or Final - Tender or Contract Price A3.3 EPCM Services Calculate as % of direct costs Calculate as % of direct costs, checked to benchmarks Calculated in detail Benchmarks used to verify Detailed or Final - Tender or Contract Price A4 Owners Management Services: A4.1 Contingency (refer to notes in text) Basis Minimum Others Assessed or Factorised for overall project 25% to 35% of total costs Add up to 5% for project in existing operation Add up to 5% for new or novel technology or underground projects Calculated or Detailed - by area 15% to 25% of total costs Add up to 5% for project in existing operation Add up to 5% for new or novel technology or underground projects Detailed - by trade and area 10% to 15% of total costs Add up to 5% for project in existing operation Add up to 5% for new or novel technology or underground projects Final - by trade and area 5% to 10% of total costs Add up to 5% for project in existing operation Add up to 5% for new or novel technology or underground projects Issue Date: 15 August 2014 Page 46 of 50

50 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 A4.2 Commissioning Calculate as % of direct costs Calculate as % of direct costs Calculated or Detailed Detailed or Final based Quotes - firm A4.3 Preproduction Calculate as % of direct costs Calculate as % of direct costs Calculated or Detailed Detailed or Final based Quotes - firm A4.4 Corporate Costs Calculate as % of direct costs Calculate as % of direct costs Calculated or Detailed Detailed or Final based on Quotes - firm A4.5 Provisions Calculate as % of direct costs Calculate as % of direct costs Calculated or Detailed Detailed or Final based on Quotes - firm A4.6 Foreign Exchange Only identify major equipment components exposed to foreign exchange Identify equipment and commodities to be imported, basis, values and likely currency. Quantify to level 3. Refer to Section 4.3 below for basis of calculation of Working, Deferred, Sustaining Closure and Rehabilitation Costs and Residual Values. B. BASIS OF DELIVERABLES AND GENERAL PROJECT DATA NEEDED TO BE AVAILABLE TO SUPPORT THE ESTIMATE CLASS: B1 General Project: B1.1 Baseline Reports (Climate, Soils, Geotech, Hydrology, Wind, Wave, etc.) B1.2 Environment and Community Reports Identify equipment and commodities to be imported basis, values and likely currency. Provide forecasts of changes. Quantify to Level 3. Assumed Preliminary Defined or Complete Complete Started - General Assessment Preliminary - Focusing on constraints and issues Defined - Specific constraints, issues and commitments declared B1.3 Project Scope Description Started Approximate to Preliminary Defined Complete B1.4 Integrated Project Execution Plan B1.5 Contracting Strategy Implementation B1.6 Project Master Schedule Implementation B1.7 Project Master Schedule Commissioning and Ramp-up Started Approximate Defined - Specific Complete - Specific Detailed - calculations of actuals or basis. Assumed Outlined Defined and generally optimised Defined and Detailed Outlined to Level 2 Preliminary (Bar chart) to Level 3 and critical path verified. Preliminary resource analysis. Defined and resourced to Level 4 and the critical path fully detailed to activity Level 4. Resourced at Level 3 or lower. Assumed to Level 2 Outlined to Level 3 and critical path verified Defined to Level 4 and the critical path fully detailed to activity Level 4 Complete - Management Plans Defined and Detailed Actual to Date, Detailed and Resourced To Go. Complete - Resources and critical path detailed B1.8 Work Breakdown Structure Outlined to Level 2 Level 3 and Preliminary to Level 4 Defined to Level 4 Defined to Levels 5 and 6 B1.9 Project Code of Accounts None Preliminary Defined Defined B1.10 Escalation Strategy None Preliminary Defined and Detailed to source currency for Defined individual items B1.11 Foreign Exchange Strategy None Preliminary Defined Defined Issue Date: 15 August 2014 Page 47 of 50

51 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 B1.12 Contingency Methodology Assessed overall, or by areas Approximate or Calculated by Area or Trade. Maybe Detailed Calculation and Risk Analysis Complete -Calculation on the committed and the To based on Risk Analysis. Go costs checked with risk analysis B1.13 Accuracy Assessed by Judgement Evaluated by area and sub-areas Detailed Analysis Monte Carlo Detailed Analysis Monte Carlo B1.14 Basis of Estimate and Methodology Statement B2 Engineering Deliverables: Outline Preliminary Complete Complete B2.1 Block Flow Diagrams Started to Optimised Preliminary to Complete Complete Complete B2.2 Process Flow Diagrams Assumed - Basic outline Started to Preliminary Preliminary to Complete Complete B2.3 P&ID's Some sketches only Started Preliminary to Complete Complete B2.4 Heat & Material Balances Started Preliminary Preliminary to Complete Final B2.5 Design Criteria Outline Preliminary Preliminary to Complete Final B2.6 Overall Site Plan Outline Sketch Started Preliminary to Complete Final B2.7 Plot Plans None Started to Preliminary Preliminary to Complete Final B2.8 Process / Mechanical Started / Preliminary Started to Preliminary Preliminary to Complete Final Equipment List B2.9 Electrical Equipment List None Started to Preliminary Preliminary to Complete Final B2.10 Specifications and Datasheets B2.11 GA Drawings by Facility / Area B2.12 Mechanical / Piping Discipline Drawings B2.13 Civil / Structural Discipline Drawings B2.14 Electrical Single Line Diagrams None Preliminary - Possibly for some major Mechanical Started Preliminary for major mechanicals Preliminary to Complete None Started and some initial Preliminary Preliminary to Complete Final None Started Preliminary to Complete - Small bore piping may Complete only be Started None Started Preliminary to Complete Complete None Started to Optimised Preliminary to Complete - Low Voltage Cabling and Trays may only be Started. B2.15 Electrical Discipline Drawings None Started Started to Optimised - Low Voltage Cabling and Trays may only be started. Final Complete Preliminary / Complete Issue Date: 15 August 2014 Page 48 of 50

52 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 B2.16 Instrumentation & Control None None Started to Optimised - Low Voltage Cabling and Preliminary / Complete Discipline Drawings Trays may only be started. B2.17 Process / System Capacity None Preliminary Complete Complete Simulations B2.18 Communications and Data None Stated to Optimised Preliminary to Complete Complete Capture Systems B2.19 Information Systems Plan, as None Started Preliminary to Complete Complete per PEP B2.20 Spare Parts Listings None Started Optimised or Preliminary Complete B2.21 Environmental Management Assumed Preliminary Defined Complete B2.22 Cash Flow Not required Preliminary annual Detailed Updated Monthly B2.23 Information Systems None Started to Preliminary Preliminary to Complete Complete B2.24 Information Systems Plan, as None Started Preliminary to Complete Complete per PEP B2.25 Spare Parts Listings None Started Optimised or Preliminary Complete B3 Owners Deliverables: B3.1 Project Execution Plans and Procedures Assumed Outline or Preliminary Execution Plan Defined - Project Execution Plan Complete Project Execution Plan, and defined Operations Plans B3.2 Operational Readiness Plan Assumed Outlined Preliminary - included in Project Execution Plan Defined B3.3 Permits and Approvals Assumed Identified and Commenced Essentially complete with Headline Approval Complete Document and Management Plans issued B3.4 Baseline Environmental Desktop review Baselines commenced Complete (known basis) Complete Conditions B3.5 HSEC Standards and Policies Declared Policy Declared Policy and Basis Declared Policy and expanded to suit circumstances Complete B3.6 Communications and Not required Started / Preliminary Preliminary / Complete Complete - Ongoing status review Stakeholder Liaison B3.7 Human Resources Strategy Not required Preliminary Defined Complete - Ongoing status review B3.8 Financing Plan and Strategy Not required Not required Defined - Conditions Precedent Identified Complete Issue Date: 15 August 2014 Page 49 of 50

53 Table 1-13: Study Class Appraisal KEY Less Than the Minimum Standard for Class 4 Study and Estimate Achieved the Minimum Standard for Class 4 Study and Estimate Superior to the Minimum Standard for Class 4 Study and Estimate ESTIMATE CLASS SCOPING STUDY PHASE 1 PREFEASIBILITY STUDY PHASE 2 FEASIBILITY STUDY PHASE 3 AND INVESTMENT DECISION QUALITY PROJECT EXECUTION PHASE 4 DEFINITIVE ESTIMATE Class 5 Class 4 Class 3 Class 2 B3.9 Marketing Plan and Strategy Not required Broad Market assessed and particular market Defined Plan and Offtake Negotiated Complete identified B3.10 Purchasing Plan and Strategy Not required Not required Defined Plan Complete B3.11 Economic Modelling Assumed - Rudimentary Annual Cash Flows Optimised - Cash Flow Model Integrated with Production Scenarios Defined - Cash Flow Model with all cash flows (including financing and taxation), plus multiple scenario analysis and simulation Complete - Regular update and Review Issue Date: 15 August 2014 Page 50 of 50