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1 Mawson Iron Project PERTH 21 ST NOVEMBER 2015 Dr Gavin England General Manager

2 DISCLAIMER AND COMPETENT PERSONS STATEMENT Slogan XXXX

3 URBANISATION & INDUSTRIALISATION Chinese urbanisation and industrialisation drove the surge in metals demand in the past 15 years. Urbanisation is GLOBAL. In 2010 urban population exceeded rural population for the first time. UN projects two thirds of the world s population will be urbanised by Urbanisation requires steel for everything buildings, cars, fridges etc.. Source: Metalytics, AUSIMM Iron Ore 2105 AMEC Presentation - Royal Resources Limited-Mawson Iron Project

4 For personal use only INEVITABLE CONSEQUENCES I Future economic growth will be the emerging markets. India, Brazil, and Indonesia will join China in the ten largest economies. South Korea, Mexico and Turkey are likely to rank in the top billion more middle-class consumers by 2030 The steel industry s role in global economic expansion - construction, machinery and automotive sectors account for 80% of steel demand. Source: Metalytics, AUSIMM Iron Ore 2105 AMEC Presentation - Royal Resources Limited -Mawson Iron Project

5 INEVITABLE CONSEQUENCES II Cycle peak prices of US$180 per tonne (62% Fe, Pilbara Fines) was not sustainable. Similarly prices sub-$55 per tonne are not sustainable. China s steel production grew at 13.4% pa in past 15 years. Even at 1.4% pa growth, China needs new supply of 350 Mtpy in next 5 years. Significant additional global iron ore supply is needed. Global iron ore output was >2 billion tonne in By 2030 it will be >3.0 billion tonne. Long-term real prices will be much higher than currently to take on new capacity. Source: Metalytics, AUSIMM Iron Ore 2105

6 WORLD STEEL PRODUCTION Asian countries outside China and the Rest of the World will take up the slack on steel growth in the medium future Strongly influenced by Urbanisation World Steel Production Source: Metalytics, AUSIMM Iron Ore 2105

7 UPSIDE Some analysts still think there is a future in iron ore in the medium term. Put this against a predicted fall in AUS $ (i.e. 50 to 70c) against the US $,the picture look not as bleak as some are saying 62% Fe Pilbara Fines, FOB Source: Metalytics, AUSIMM Iron Ore 2105

8 INEVITABLE CONSEQUENCES III Future iron ore mines need to produce high iron, low impurity, low cost iron units. This is because it gives better furnace efficiencies, less carbon units to burn and less pollution. Current producers in the Pilbara and Brazil will not be able to replace depleting resources of high quality and/or quantity, if at all. New Mines with high grade products are essential for the global steel industry.

9 THE FUTURE OF LONG TERM QUALITY IRON ORE SUPPLY IS SOUTH AUSTRALIA?

10 THE MAWSON IRON PROJECT IS POSITIONED TO BECOME THE NEXT FORCE IN IRON ORE Mawson Iron Project joins Royal s Red Dragon Venture (including Razorback) and Lodestone Equities - Olary / Braemar Iron Tenements 1. Potentially the largest undeveloped magnetite province in the world 2. Metallurgy has shown Braemar Iron Formation concentrate can produce high grade > 67% Fe 1, with low impurities, which is where the future of iron ore will be 3. Project can compare with Pilbara DSO for OPEX costs 4. South Australia is the right place to build a major resource project 1 ASX announcement 27/11/2013

11 MAWSON IRON PROJECT LOCATED IN SOUTH AUSTRALIA A GOOD JURISDICTION TO DO BUSINESS

12 WHO IS LODESTONE EQUITIES? Gordon Toll Executive Chairman of Royal and Lodestone Both entities in the process of amalgamation

13 WHY REBRAND ROYAL RESOURCES TO MAGNETITE MINES? 1. Provide focus being the Mawson Iron Project 2. Magnetite is the future in iron ore 3. First phase of a amalgamation of assets 4. Be part of a South Australian wave of innovation

14 MAWSON IRON PROVINCE LOCATED IN SOUTH AUSTRALIA - GOOD EXISTING INFRASTUCTURE Access to low cost power from the Eastern grid one sixth the cost of the Pilbara Cooper Basin gas option from an existing pipeline Dormitory town for workforce, instead of Fly in / Fly Out Existing roads and rail Local fabrication facilities available in Adelaide, Port Augusta and Whyalla Existing workforce State Government supportive Major Project Status

15 MAWSON IRON PROVINCE LARGEST UNDEVELOPED MAGNETITE PROVINCE IN THE WORLD Consortium has over 4500km 2 of tenure Royal s exploration potential of 16 to 35 Billion tonnes 1 Lodestone also with large exploration potential Studies 2 to determine viability of 100 Mtpa for 25 years + 1 ASX Announcement 29/10/2015. Note that there has been insufficient exploration todefine a Mineral Resource and it is uncertain if further explorationwill result in the determination of a Mineral Resource. The estimate of an exploration target tonnage should not be construed as an estimate of Mineral Resource. 2 Conceptual Feasibility Study has been completed by the Lodestone Group for the Braemar Iron Project, which shows the the proposed Infrastructure Solution achieve a capacity of up to 100 mtpa. The Company advises that this conceptual feasibility study is not based on any assumptions of actual use of the Ito a infrastructure Solution by the Company or any other users in the Braemar region with the exception of the Braemar Iron Project.

16 WHY IS THE BRAEMAR IRON FORMATION SO ATTRACTIVE COMPARED TO BIFS?

17 RAZORBACK AND IRONBACK HILL DEPOSITS JORC2004 RESOURCE OF NEARLY 4 BILLION TONNES 1 WITH POTENTIAL TO GROW 1 The Mineral Resource information for the project was prepared and first disclosed under the JORC Code 2014 and the information has not been updated since to comply with the JORC Code 2012 on the basis the information has not materially changed since it was last reported;.

18 RAZORBACK GOOD MINING QUALITIES Razorback Ridge Outcrop

19 CONCENTRATE FROM THE BRAEMAR IRON FORMATION WILL BE A SUPERIOR STEEL MAKING PRODUCT Concentrate grade of >67 % Fe 1 compared to a large portion of Pilbara production at ~60% Deleterious impurity level will be very low (P < 0.02%, Al304 < 0.5%, S <0.001%) High grade magnetite can reduce the energy requirements and pollution levels through the steel making process 1 ASX announcement 27/11/2013

20 METALLURGY AND BENEFICIATION Metallurgical testwork has produced high grade magnetite product 38 to 45 microns grind sizes, coarser than WA magnetite Standard magnetite processing flowsheets were designed during the Razorback PFS 1 Low rock hardness and abrasiveness has enabled a lower energy budget Optimisation underway to identify potential improvements in the flowsheet, including viability of 25 Mtpa magnetite concentrate at Razorback 1 For illustration purposes only 1 There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised

21 INNOVATION THE KEY TO LOW COST Target OPEX of < US$30 in the first quarter of the cost cost curve, thus ensuring survival even at the bottom of the commodity cycle Utilising known technologies in an innovative approach to bulk mining and transport will reduce cost Magnetite Mines will apply innovation in the areas of: 1. Mining 2. Beneficiation 3. Transportation of magnetite concentrate 4. Port

22 SOFT ROCK AND ORE BODY GEOMETRY IN THE MAWSON IRON PROJECT ENABLES THE APPLICATION OF FULLY MOBILE IN-PIT CRUSHING AND CONVEYING (IPCC) Images supplied by Braemar Iron Pty Ltd, for illustration purposes only

23 FULLY MOBILE IPCC PROVIDES A QUANTUM LEAP IN COSTS FROM CONVENTIONAL TRUCK AND SHOVEL Based on BraemarIron Pty Ltd Conceptual Feasibility Studies

24 SLURRY PIPELINE OVER TRAIN TRANSPORT HAS SIGNIFICANT COST SAVING, AND ENVIRONMENTAL AND SOCIAL BENEFITS

25 CONCEPT DE-RISKED, WITH IRON ORE SLURRY PIPELINES BEING USED THROUGHOUT THE WORLD?

26 PREFEASIBILITY STUDY HAS DETERMINED ROUTE FOR INFRASTRUCTURE CORRIDOR

27 OFFSHORE SHIP LOADER TECHNOLOGY Slurry delivered to a floating filter plant and port (FFPP) Technology applied in FFPP, already proven Facility located ~ 4 miles off the coast, north of Wallaroo, Spencer Gulf Water depth suitable for Cape-size and Valemax vessels Calm seas, cyclone free Government support Less permitting For illustration purposes only

28 SCOPING STUDIES* DEMONSTRATE COST BENEFITS OF INFRASTRUCTURE SOLUTION FOR CONCENTRATE PORT AND PIPELINE * Based on Braemar Infrastructure Pty Ltd Conceptual Feasibility Studies

29 WHERE DO WE GO FROM HERE? 1. Get the story out and raise cash 2. Offtake and construction agreements 3. Merge assets 4. Optimisation 5. DFS

30 SUMMARY The iron ore story has another chapter Largest undeveloped magnetite province in the world High grade magnetite Product low OPEX to compete with Pilbara DSO South Australia good place to do business Ready to go Chairman Royal Resources Management Exec Director Non Exec Director General Manager Gordon Toll Frank DeMarte Mal Randall Dr Gavin England Information: ASX Code: ROY