Sintering of Laterite ores Confidential GITS Sintering Services Inc. Sintering of Laterite ores The technology & economics of Reduction Sintering 19th June 2010

The issue facing most Nickel Laterite producers in the Philippines is… How to Add Value to a large resource of low grade laterite?

The Philippines has a large resource base of laterite nickel… GITS Ore Coke Flux

The majority of nickel laterites is exported to China for processing… GITS Approx. 16Mt laterite imported into China in 2009 Imports are equivalent to > 110,000 t Ni metal For higher grade Ni ores, Indonesian ore is preferred over Philippine ores Philippine exports are mainly lower Ni grade ores 4

Direct shipping of Nickel laterite ore is of low intrinsic value… GITS Ore Coke Flux Laterite Nickel Grade, % Ni Chinese Purchase Price, US$/t 1.0% US$12/t 1.5% US$20/t 1.75% US$30/t 2.0% US$50/t >30% “water” shipped to China with every tonne exported

Traditionally, value added processing has been too expensive… GITS Ore Coke Flux

Sintering is significantly cheaper & has significantly lower barriers to entry GITS Ore Coke Flux Sintering is the intermediate step in producing either- laterite nickel feed for an EAF/Blast Furnace [Ni PI], or iron ore feed for the steel industry Capital Costs for a sinter plant are low- Approx. US$4M per 100,000 tpy production module Sintered products command a higher price then DSO- Laterite nickel sinter @ ~1.8% Ni = US$130/t FOB Iron ore feed @ ~60% Fe = US$85 to US$100/t FOB

What is Reduction Sintering? GITS Ore Coke Flux A process of heating laterites to 900oC – 1,200oC, under reducing conditions, to induce a phase change of hematite to magnetite resulting in a semi-fused metallic sinter which can be further upgraded by simple magnetic means. Nickel Laterites: Upgrades Ni content in sinter product & eliminates water Iron Laterites: Upgrades 40% to 50% Fe in limonite to >60% magnetite sinter & eliminates water

Why is Reduction Sintering economic today? GITS Ore Coke Flux Historical low iron ore prices (<US$30-US$40/t @ 60% Fe) have prevented the industry from expanding, until recently. As iron ore prices increase, the economics of sintering improves The Chinese are a ‘test-bed’ and very innovative when it comes to seeking alternatives to high grade iron ore prices

(Nickel) Laterites & Processing Options

Ferronickel technologies suitable for nickel laterite ores… [Pyrometallurgy] GITS Ore Coke Flux Chinese Blast Furnace Process 1% Ni to 1.5% Ni Ore  3% to 5% Ni Pig Iron Requires high Fe laterite Low Capital...but environmental issues Electric Arc Furnace Process >1.5% Ni to 2% Ni Ore  5% to 15% Ni Pig Iron Requires low Fe laterite High electrical consumption AlloyStream Process 1% Ni to 3% Ni Ore  3% to 50% Ni Pig Iron No constraints on Ni or Fe Low electrical consumption Untested – only ferromanganese

Leaching technologies suitable for nickel laterite ores… [Hydrometallurgy] GITS Autoclave Intermediate Product -Ni Hydroxide High Pressure Acid Leach [HPAL] High Temp High Pressure $$$$ Recovery > 90% >75% Ni Pay Agitation Tanks Atmospheric Agitation Leach [AL] Low Temp Low Pressure $$$ Recovery 70%-85% Processing Plant – same for all Tech. Laterite Ore Heaps Heap Leach [HL] Low Temp Low Pressure $$ Recovery 60%-75% 100% Ni Pay Cathode Nickel

The laterite ore types will dictate the processing routes… GITS Traditional Processing Routes New Processing Routes Schematic Laterite Profile Heap Leaching Turkey [ENK] Phil. [Rusina] HPAL Coral Bay Goro Revensthorpe Limonite Ni < 1.3% Fe > 30% Agitation Leaching Toledo Mining (TMC) Saprolite Ferro-nickel - Chinese Blast Furn. Elect Arc Furnace Reduction process Ni > 1.8% Fe < 20% Bedrock

Sintering is an intermediate step in the value-added chain… [Pyrometallurgy] GITS Intermediate Products Schematic Laterite Profile A Sintered Iron Ore >60% Fe A Sinter Reduction Ni < 0.9% Fe > 40% Limonite B B BF or EAF Feed >3% - 6% Ni PI Ni < 1.2% Fe > 30% C Saprolite C Ni > 1.8% Fe < 20% EAF Feed >10% Ni PI Bedrock

Reduction Sintering is a proven technology and is widely used around the world? GITS Ore Coke Flux Krupp Renn in Germany: 1930-1940 Nippon Yakin in Japan: currently processing Ni laterites Minnesota low grade iron ores (35% Fe – 50% Fe) Chinese - today

Sintering is a relatively simple process with basic inputs… GITS Product

Plan view and layout of a typical Reduction Sintering plant… GITS Ore Coke Flux

“The Size of the Prize”

The economics of the sintering process are compelling… GITS

Total cash operating costs are approx. US63/t sinter product… GITS ‘Margin’ over current SP of US$130/t = ~US$67/t

Annual cash flow [US$M] is healthy in all years [500,000 tpy SP]… GITS P & L US$M Cash Flow US$M Assumes BOI income tax holiday for 6 years

The modular nature of the plant allows for financial flexibility… GITS

Sensitivities indicate a robust project is achievable… GITS