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1 Coziron Resources Limited ABN: Level 24, 44 St George s Terrace Perth Western Australia 6000 PO Box Z5183 Perth WA 6831 Phone: Facsimile: Website: The Company Announcements Office ASX Limited Via E Lodgement 5 February 2013 Yarraloola Project Preliminary Scoping Study on Direct-Shipping Iron-ore and Magnetite Transport Options Delivers Low Operating and Capital Cost Options. HIGHLIGHTS - Preliminary scoping study into potential lumpy DSO iron-ore and magnetite transportation options and costs from Yarraloola Project identifies low-cost alternatives. - Preferred option is for DSO-style ore is trucking to and shipping from the proposed Cape Preston East (CPE) port extension. - Estimated DSO trucking transport cost of $24.33/tonne based on a 3.7Mtpa operation. BACKGROUND In late 2012, Coziron Resources Limited (Coziron) engaged the engineering company Engenium Pty Ltd (Engenium) to conduct a preliminary scoping study on a variety of mine to port options that would quantify transport costs and preferred transport options to allow Coziron to export iron-ore (either lumpy direct shipping or magnetite) from its 85% owned Yarraloola Project. The Yarraloola Project covers 1450km 2 and spans the North West Coastal Highway and Pannawonica Road in the western part of the Pilbara s Hamersley Basin. It is located approximately 120 km southwest of Karratha and 50km south of the Sino magnetite project being developed by CITIC Pacific. Coziron has focussed on investigating and quantifying transport options and costs as these significantly impact the economics of developing iron-ore exploration targets in Australia. In contrast, iron-ore mining and processing costs at Yarraloola can be readily established as exploration progresses. 1

2 Fig 1. Location of Coziron Resources Ltd s Yarraloola Iron-ore Project in the West Pilbara of Western Australia. SCOPING STUDY OBJECTIVES The assessment of potential transport options were based on the following objectives: 1. Identify and investigate the possible mine to port paths to export iron-ore product including direct-shipping lumpy ore (DSO) and/or finer grained magnetite from Yarraloola; 2. Determine the limitations, constraints and high-level capital expenditure requirements, within 35% accuracy, of the most suitable mine to port transport options; and 3. Determine the operational expenditure requirements of the most suitable mine to port transport options. The parameters used in the assessment of these objectives are contained in Appendix 1. SCOPING STUDY RESULTS A total of eleven potential transport scenarios were initially examined, of which four were deemed to be realistic options based on costs and infrastructure. While Engenium were conducting the scoping study, Iron Ore Holdings (ASX: IOH) announced the results of its Buckland Project pre-feasibility study. The IOH study advocates the establishment of a 2

3 new transhipment facility at Cape Preston East (CPE). IOH have subsequently entered into a nonbinding Memorandum of Understanding with the Dampier Port Authority which defines the principles for the location and potential development of a small scale multi-user, barge-loading facility at CPE. The proposed private haul road linking the IOH project with CPE is to be developed by IOH through the Yarraloola Project. Engenium have identified that Coziron could potentially truck DSO ore to CPE, or alternatively construct a slurry pipeline for the transport of magnetite to CPE. Detailed breakdowns of the capital expenditure required and forecast operating-costs under both these options are contained in Appendix 2. Engenium subsequently identified the preferred option for the Yarraloola project was the new CPE extension, where CITIC Pacific have completed all the requisite environmental, heritage and social impact studies and the Government has granted approval for development. PREFERRED OPTION CAPE PRESTON EAST a) Road transport option This proposal involves the engagement of a road-haul contractor to load, haul and unload ore between a mine-site and stockpile at CPE over a proposed distance of 135km. This option assumes the use of 110 tonne road-trains, which are permitted under Main Roads WA s Restricted Access Vehicle classification system on Permit Network 9 roads and above. These road-trains would consist of a prime mover, semi-trailer and two additional trailers. A maximum of 4 trucks per hour would operate 24hrs a day, with two drivers taking shifts on each truck and residing at a Coziron mine camp. The proposed maximum of 4 trucks per hour is based on the assumption that other mining companies may be using the same route. Under these assumptions, the maximum annual output for the mine would be 3.7Mtpa. The total transport cost under this option which cover items such as truck lease fees, fuel, driver salaries and accommodation is $24.33/tonne, while the estimated capital expenditure is $35.1M. The capital expenditure estimate provides for the construction of a proposed 5km long, 20m wide, unsealed access road to the mine to be constructed from local gravel and the installation of a certified weighbridge at the loading point. However, if there was exclusive use of private roads rather than Main Roads, mine output could increase to 5.5Mtpa by reducing the loading interval to 10 minutes. b) Slurry pipeline option The Yarraloola Project hosts significant outcrop of the Brockman Iron Formation and more recently identified magnetite schists in the Ashburton Trough, both of which are being considered as potential development targets for magnetite production. In response, the transport study also focussed on assessing the costs of an initial development on magnetite mineralization close to the North West Coastal Highway. Engenium have considered costs for the transport of magnetite concentrate from the central part of the Yarraloola project over a distance of about 82km via a slurry pipeline to a dewatering plant at CPE. The potential route of the slurry pipeline is shown on Fig 2. 3

4 Fig 2. A Google-earth image of the Yarraloola area with the trace of a slurry pipeline to schistose magnetite iron-formations identified in the Ashburton Trough. Slurry pipelines offer relatively low operating costs compared to the operating costs of alternative transport options, however such an option would be quite capital intensive and design critical. The study determined that a potential Coziron pipeline would require three 1500 kw pumps to feed the polyethylene lined steel pipeline. Assuming typical dewatering facility costs, the anticipated transport cost, based on a 5Mtpa concentrate operation was estimated to be $10.73/tonne concentrate and the estimated capital cost of the slurry pipeline, dewatering facility and port facility is $298M. These costs assume that there is sufficient ground-water at the mine site to negate a requirement to return the water extracted at the port to the mine-site along a second pipeline. Exploration drilling at Yarraloola appears to support this assumption. SUMMARY In summary, the Engenium study established a preliminary basis to identify total transport operating costs for a variety of mining options should mining ever be determined as feasible. The study also established that due to the Company's favourable location, being adjacent to existing and emerging transport infrastructure and ports, the Company has the potential to be in the lowest transport cost 4

5 quartile amongst leading Pilbara iron ore producing operations. This in turn enhances commercial returns should mining operations commence. The study also provides economic guidance to exploration which is focussed on the selection of targets with the potential to yield deposits that can be developed into commercial mining operations. 5

6 APPENDIX 1: TRUCKING PARAMETERS Parameter Days available for operation Value 350/annum (includes 15 days cyclone closure) 24 hrs/day Truck payload Trucking avg speed (incl. driver breaks) Daily maximum number of truck loads Mine stockpile reclaim capacity Ship capacity Ship Length 110 tonnes (road train) 70 km/hr 96 on main public roads (15 minute intervals) (FEL s) 660 tph / 5.5 Mtpa (10 minute intervals) 55,000 80,000 DWT (Panamax) m Ship draft (max) 12.0m Ship loading duration Barge capacity Barge loader capacity Barge docking / undocking duration Barge sailing speed (with tug) Trans-shipment capacity 4 8 days (dependant on tides) 5,000 DWT 1,250 tph (10 hrs/day, high tide only) 2 x 0.5 hr 3 knots (5.5 km/hr) 500 tph (ship clam shells) 6

7 APPENDIX 2: CPE COST ESTIMATES Capital Expenditure Costs ($M) Transport Mine Site Road/Pipe Port Contingency Total Road (1) 35.1 (2) Slurry Pipeline (4) 298 (3) (1) 35% (2) Based on 3.7Mtpa (3) Based on 5Mtpa (4) 20% Operating Costs ($/tonne) Transport Mine Site Haulage Port Contingency (1) Total Road (2) Slurry Pipeline (4) (3) (1) 20% (2) Based on 3.7Mtpa (3) Based on 5Mtpa (4) Fine ore has more handling charge 7

8 ABOUT COZIRON RESOURCES LIMITED Yarraloola Project Coziron Resources Ltd is exploring seven exploration leases and two prospecting licences with an area of 1450km 2 on the Yarraloola Project, located 150km south-west of Karratha (Fig 3). The tenements cover part of the iron-ore rich Hamersley Basin, as well as part of the iron-ore, gold and base-metal bearing Ashburton Trough. Activities are focused on assessing haematite and magnetite mineralization in Hamersley Group sediments (Marra Mamba and Brockman Iron Formations) which outcrop over a strike length of approximately 50km, as well as younger channel-iron deposits. In addition to the work on iron-ore, exploration is identifying prospectivity for gold, copper and associated base-metals. Fig 3. Location and geotectonic setting of the Yarraloola Iron-Ore Project in the West Pilbara, Western Australia. 8

9 OTHER PROJECTS In addition to the Yarraloola Project, Coziron is exploring for manganese on the KingX (859km 2 granted and 2127km 2 under application) and titaniferous and vanadiferous magnetite on the Buddadoo (210km 2 granted) Projects (Fig 4). Fig 4. Location of the Coziron Resources Ltd projects in Western Australia. For further information regarding this announcement please contact Adam Sierakowski on COMPETENT PERSONS STATEMENT The information in this report that relates to mineral resources and exploration results is based on information compiled by Rob Ramsay (BSc Hons, MSc, PhD) who is a Member of the Australian Institute of Geoscientists. Rob Ramsay is a full-time Consultant Geologist for Coziron and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Rob Ramsay has given his consent to the inclusion in this report of the matters based on the information in the form and context in which it appears. 9