April 9th, 2013

Official Opening of Karara Project Marks Beginning of a New Era in Australian Iron Ore

9 April 2013

‘World Class Operation Sees WA’s Iron Ore Processing Dream Come to Life’

By Gindalbie Metals LTD

Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) today celebrated a defining milestone in the history of the Australian iron ore industry with the official opening of the Karara Project – Australia’s second largest magnetite project and the largest resource development in the Mid West – by the Hon. Colin Barnett, Premier of Western Australia; Minister for State Development; Science.

The landmark opening ceremony – which was held at the Karara mine site, located approximately 225km east of Geraldton – was attended by over 150 dignitaries including Federal Resources Minister the Hon. Gary Gray AO, Gindalbie Chairman George Jones AM, Ansteel Group Chairman Zhang Guang Ning, representatives of the Project’s Chinese banks, Traditional Owners, Karara Mining Limited (KML) employees, contracting partners, representatives of Mid West communities and other stakeholders.

“This is a tremendous milestone for the Australian iron ore industry, a very significant event for the Mid West region and the State, and a momentous day for Gindalbie and our Chinese partner, Ansteel,” said Gindalbie Chairman, Mr George Jones.

“The successful financing, development, construction and commissioning of this world-scale project, marks the realisation of a long-held dream to establish downstream processing and value adding opportunities for the Australian iron ore industry.

“For decades, people have dreamed about unlocking the value of the extensive deposits of low-grade magnetite ore in the Mid West region by processing it to produce high-grade, premium quality magnetite concentrate for export to China,” he added.

“I am proud to have been part of this venture which, through KML, has made this dream a reality. The 8 million tonne per annum (Mtpa) Concentrator at the heart of this project turns magnetite ore – which would otherwise have little value – into a valuable premium quality product which is increasingly in demand in global markets.

“At the same time, by investing more than $1 billion in new rail, port, power and other infrastructure, KML has been able to unlock a large stranded iron ore deposit and create exciting growth opportunities for the exploration and development of other iron ore deposits in the region. In the process, this project will generate enormous wealth for the region, the State and the nation.”

Karara is the second largest magnetite project in Australia, with production currently being ramped up to its nameplate capacity of 8Mtpa of high-grade magnetite concentrate grading 68% Fe. The project also comprises a substantial direct shipping ore (DSO) hematite business, currently producing at the rate of 2Mtpa.

The official opening of the Karara Project marks the completion of a three-year construction period which began in late 2009 with a ground-breaking ceremony where WA Premier Colin Barnett also officiated. For Gindalbie, it represents the culmination of a highly successful partnership with Ansteel which commenced in April 2006 with the signing of the original joint venture agreement in Canberra.

At its peak, Karara was one of the largest construction projects in Australia employing over 2,500 people. It will provide long-term employment for over 500 people. The construction phase was completed broadly within the revised construction budget of $2.57 billion, representing an outstanding achievement in the current environment of cost inflation in the Australian resource sector.

First magnetite concentrate was produced at Karara in November 2012, signalling the start of the six-month commissioning and ramp-up plan. Nameplate capacity of 8Mtpa of magnetite concentrate is on track to be achieved by the end of this month. The historic first shipment of magnetite concentrate, comprising approximately 55,000 tonnes was completed in early January, representing the first-ever commercial shipment of magnetite from WA.

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