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Derek Pang, Apollo Minerals: Apollo’s project updates in South Australia

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Derek Pang, Exploration Manager, Apollo Minerals delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South Australian …

Derek Pang, Exploration Manager, Apollo Minerals delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South Australian mining and regional development community and represents a unique opportunity to hear the latest developments from the major projects, mines and explorers in South Australia. For more information on the annual event, please visit the conference website: http://www.informa.com.au/miningsa2013

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  • 1. Developing high potential iron ore and base metals projects. APOLLO MINERALS 7th Mining South Australia Conference, 27 November 2013
  • 2. Disclaimer 2 This presentation has been prepared by Apollo Minerals Limited (“Apollo” or the “Company”). It should not be considered as an offer or invitation to subscribe for, or purchase any, securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. This presentation contains forecasts, projections and forward-looking information. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are out of Apollo’s control. Actual results and developments will almost certainly differ materially from those expressed or implied. Apollo has not audited or investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. To the maximum extent permitted by applicable laws, Apollo makes no representation and can give no assurance, guarantee or warranty, expressed or implied, as to, and takes no responsibility and assumes no liability for: the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission from, any information, statement or opinion contained in this presentation, and without prejudice to the generality of the foregoing, the achievement or accuracy of any forecasts, projections or other forward-looking information contained or referred to in this presentation. Throughout this presentation all figures are quoted in A$ dollars unless otherwise stated. You should not act in reliance on this presentation material. This overview of the Company does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of Apollo’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision.
  • 3. Apollo Minerals Developing quality iron ore and base-precious metals projects in premier locations around the world 3 Overview Board Apollo Minerals Limited (ASX:AON) is a highly professional iron ore, base and precious metals explorer with projects in South Australia, Western Australia and Gabon, Africa. Tony Ho Richard Shemesian Dominic Tisdell Matthew Rimes The Company’s primary focus is the development of its Commonwealth Hill Iron, and Titan Base & Precious Metals projects in the Gawler Craton, South Australia. Apollo targets Tier 1 base-precious metals prospects in proven mineral provinces, in safe and stable jurisdictions. Each prospect must have the ability to become a world-class discovery. The Company employees proven, state-of-the-art technologies and leading industry experts in the pursuit of these deposits and development opportunities. Location Map Chairman Executive Director Chief Operating Officer Non-executive Director Contact Details Headquarters Website Phone Email Sydney, Australia www.apollominerals.com.au +61 2 9078 7665 info@apollominerals.com.au Management & Special Advisors Dominic Tisdell Chief Operating Officer BE (Mining), MBA Guy Robertson Chief Financial Officer BCom (Hons), CA Derek Pang Exploration Manager BAppSc (Geology) (Hons) Chris Anderson Technical Advisor BSc (Geology, Geophysics) (Hons) 17 years’ experience in mine planning and operations, management consulting, M&A, and senior management with Rio Tinto, Accenture and Mitsubishi Corporation. Prior directorships with Australian Uranium Association and MDP Uranium. 30 years’ experience as a Director, CFO and Company Secretary of both ASX listed and private companies in Australia and Hong Kong. Experienced in corporate aggregation, IPO, capital raising and acquisition due diligence. Prior roles with Jardine Lloyd Thompson, Colliers Jardine Asia Pacific and Franklins Ltd. 18 years’ experience in mineral exploration throughout Australia and Africa. Prior roles with Blackthorn Resources, NSW Department of Mines, Huntley’s Investment, Ashton Mining, CRA Exploration and Plutonic Gold. Geophysicist with over 35 years’ experience in Australia and abroad. Key player in the Carrapateena iron-oxide, copper, gold, uranium deposit discovery. Previous roles with Placer Pacific, Equinox Resources, North Mara Gold Mines. Directorships with Euro Exploration and Renaissance Uranium. Market Capitalisation 25 ($ million) 20 15 10 5 0 Share Information (Nov. 2013) Listing details - ASX Market capitalisation Cash (30.9.2013) Top 20 shareholders AON $8.5m $1.1m 60%
  • 4. Highlights A number of high value-creating opportunies exist in both Apollo’s iron ore and base-precious metals portfolios 4 Copper Gold  Large landholding in world-class Iron-Oxide-Copper-Gold (IOCG) province  Number of quality targets identified with potential for discovery of world-class IOCGs  Limited drilling indicates mineralised systems with best grades exceeding 52% Fe, 0.1% Cu, 2g/t Au and 4 g/t Ag at Titan Base-Precious Metals Project, South Australia   Highly experienced iron ore development team (ex-Rio Tinto and Iron Ore Holdings)  Iron Ore Active explorer and project developer Portfolio of projects (South Australia, Gabon and Western Australia)  Minimal offsite capital required  Asian commodity trader and end user interest including investment by Jindal Steel & Power  Able to produce high quality products:     Circa 60% Fe sinter fines, and up to a 69% Fe pellet feed Highly scalable – opportunities to start at “Proof of Concept” (circa 500ktpa) level and scale up to over 5Mtpa sales Targets identified with the potential to deliver significant DSO-grade deposits
  • 5. Titan Base-Precious Metals Project, SA
  • 6. Gawler Craton copper belt Gawler Craton IOCG province is highly prized by the majors with most either already actively exploring and/or seeking projects 6     1880s – 1950s: Pre-Olympic Dam exploration and mining of sediment hosted, quartz-copper sulphide vein deposits and copper carbonates hosted in leached, brecciated, carbonate sediments and rhyolitic porphyry 1970s – 1980s: Primitive Olympic Dam Exploration Model - African Copper Belt-type of sediment hosted syngeneic copper deposit i.e. basement highs (magnetic and gravity highs targeting oxidised/altered basalts believed to be the source of copper mineralisation) Rio Tinto Apollo Minerals 1990s – 2000s: Modern IOCG(±U) exploration – targeting haematite-rich diatreme (breccia-filled volcanic pipe that was formed by a gaseous explosion) representative gravity highs, ideally offset from magnetic highs, in proximity to Proterozoic Gawler Range Volcanics and within 100km of the Craton margin Now: Post-modern IOCG(±U) exploration – targeting iron-oxide-rich, structurally controlled gravity highs, ideally with a co-incident electromagnetic response in proximity to primitive mafic rock units and Proterozoic (1595Ma) Gawler Range Volcanics. Not unusual to be 100Mt – 500Mt @ 1% Cu. OZ Minerals Vale Teck GlencoreXstrata BHP Billiton Geoscience Australia “High Potential IOCG Corridor” Antofagasta  FMG Exploration by Majors (note: farm-in JV partner tenements shown on occasion)
  • 7. Regionally significant surface copper Surface metal enrichment at key targets includes highgrade iron, gold and copper mineralisation 7   Very high surface copper and iron and anomalous gold mineralisation identified within likely large-scale intrusive/ volcanic complexes Anomalism believed to be related to metal-rich fluid leakage along sub-vertical dykes associated with probable Gawler Range Volcanics Mars / Aurora Tank Up to 52% Fe, 0.05% Cu, 2 g/t Au, and 4 g/t Ag Probable GRV Monzo-granites and trachyte Perfection Well GRV rhyolite Wirrida Acacia East Mafic – felsic intrusives & volcanics Iron-rich, mafic-felsic intrusives. Massive sulphides over 0.1% Cu Bundi Ibis Intermediate – felsic intrusives & volcanics Iron-rich, mafic felsic intrusives? Sequoia Iron Deposit Iron-rich, intermediate - felsic gneiss and granites GRV Dacites, rhyolites, monzo granites  3D perspective of Titan magnetics and regionally significant copper geochemistry (hotter colours = higher grade)
  • 8. Highly prospective deep crustal features Government MT and seismic data for Titan demonstrates ideal setting for large-scale mineralisation systems as per Olympic Dam 8 Conductive plumes shown to tap mantle in crustal extensional zones directly below Titan and Olympic Dam 0km -10km -20km Unnamed deep crustal fault associated with Kararan Orogeny subduction? Large scale extension of lower crust and offset of MOHO enables direct transfer of conductive, mantle-mixed, ?metal-rich fluids to surface -30km MOHO -40km S -50km Tarcoola  MOHO N Coober Pedy Magnetotelluric (MT) survey section showing unusual and important mantle plumbing conductive plume below Bundi IOCG Prospect L01 B02 L03 B04 B05 B07 B06 B08 L09 B11 B12 B13 B14 B15 L16 L18 B19 B17 Bundi IOCG Prospect Muckanippie Shear Zone B20 B22 B21 Cedric Bore Fault Zone Bulgunnia Fault Zone B23 Tunkillia Suite B24  Crustal penetrating, and MOHO offsetting structures seen at Titan (unnamed), Musgrave Province (Wintinna Hill Fault) and Olympic Dam (Elizabeth Creek Fault) B26  Titan IOCG Project covers the majority of one of the two mantle derived conductive plumes in the central and northern Gawler Craton and, the only one associated with a deep crustal extensional zone L27 
  • 9. Geological similarities to Prominent Hill Large-scale, primitive, magnetic, mafic intrusive complexes and volcanics at both the nearby Prominent Hill IOCG and Titan Project 9  Large-scale, primitive, magnetic, mafic intrusive complexes surrounded by large numbers of discrete magnetic anomalies at both the nearby Prominent Hill IOCG  Primary sulphides including the copper sulphide, chalcopyrite, noted in both intrusive complexes  Emerging evidence of genetic link to Olympic Dam at both Prominent Hill and Titan i.e. circa 1595Ma old geology  Wirrida and surrounds at the Titan IOCG Project effectively undrilled below 50m Peculiar Knob Prominent Hill IOCG 283.4 Mt @ 0.89% Cu, 0.81 g/t Au, 2.48 g/t Ag  Wirrida Intrusive Complex 32.5 Mt @ 63.2% Fe Mafic - felsic proterozoic intrusives & volcanics Bundi White Hill Intrusive Complex Sequoia Iron Deposit Mafic proterozoic intrusives Magnetics: Prominent Hill IOCG Deposit & surrounds (x-axis mirror) +100Mt IOCG Target ET 100-150 Mt @ 25-35% Fe  Magnetics: Titan Project - Bundi IOCG Prospect & surrounds
  • 10. Bundi Prospect: Large-scale IOCG target Prominent Hill IOCG Deposit & Apollo’s Bundi IOCG target share very similar gravitational geometries and tenors 10  5mgal residual gravity responses possible at both Prominent Hill and Bundi IOCG Prospect  Bundi IOCG target circa 3-5 times the size of Prominent Hill gravity anomaly  Common 3D inversion modelling suggests largest targets at Bundi could be significantly denser than at Prominent Hill Basic geometry and relationship to other systems such as the White Hill (Prominent Hill) and Wirrida Intrusive Complexes are comparable  2KM  Prominent Hill IOCG: 2.67 residual gravity image (Oxiana 2006)  Bundi residual gravity image
  • 11. Bundi conductive bodies = sulphides? EM anomalies identified potentially representative of haematite related copper sulphide mineralisation common in high quality IOCGs 11    Strong electromagnetic conductor and surrounding moderately conductive ground consistent with a large-scale disseminated sulphide alteration halo around a highsulphidation core Resistivity 900Sm BUN001 EM Conductor Plate 125m below surface Colour <50 Ohm.m Pink 50 - 100 Ohm.m Red 100 - 250 Ohm.m Orange Yellow Green 1,000 - 12,500 Ohm.m Conductive zones correlate strongly with high density and geochemically anomalous zones consistent with a large-scale IOCG mineralisation system 250 - 600 Ohm.m 600 - 1,000 Ohm.m Blue Vertical, fault zone related conductor Small outcrops display strong haematite alteration and Cu, U3O8 and Ag enrichment Coincident conductive, non-magnetic and dense zone extending beyond 2000m vertically and 1250m along strike  Altered sediment outcrop at Bundi  Bundi 3D perspective looking down & east – dense body (grey) and MT, AMT resistivity sections
  • 12. Mars Aurora Tank Prospect Previously unrecognised, potentially large-scale IOCG system with indications of remanent volcanics, brecciation and copper anomalism 12 Shallow drilling: Site 2: Breccias RAB & limited RC: 52% Fe, 2 g/t Au, 4 g/t Ag, 0.05% Cu Site 3: ?Volcanics  Site 1 – Large ironstone outcrop immediately east of gold focused drilling at Mars  Site 2 – Eastern contact of Mars Prospect: ?Haematitic breccias Site 1: Ironstone  Site 3 – ?Volcanics mesa: Hydrothermally altered dacite and porphyritic rhyolite above granite
  • 13. Mars Aurora Tank Prospect Basic geology displays striking similarities to Tasman Resources / Rio Tinto Vulcan IOCG Prospect and other South Australian IOCGs 13   Emerging evidence of several unusual lithologies common to South Australia IOCGs, including volcaniclastic sediments, can be seen in outcrop at the Mars Aurora Tank Prospect These occur in close proximity to limited, shallow historic RAB and RC drilling which returned up to 52% Fe, 2g/t Au, 4g/t Ag and 0.05% Cu    Vulcan (VUD12): Haematite breccia     Mars Site 1: Massive haematite  Mars Site 2: Haematite breccia  Vulcan (VUD7): Haematite breccia  Prominent Hill: Mineralisation Olympic Dam: Haematite breccia Haematite-matrix breccia hosted disseminated copper and gold (0.3-10% Cu and/or 0.2-2g/t Au) Massive chalcocite + haematite stockwork in dolomite (>15% Cu) Earthy and steely haematitequartz breccia hosted gold (0.5-10g/t Au) Earthy-haematite altered dolomite with carbonate and haematite veinlet hosted gold (3-100g/t Au)
  • 14. Commonwealth Hill Iron Project, SA
  • 15. Commonwealth Hill Iron Project Project supported by 1st class, open access infrastructure, unique in the Australian iron ore industry 15  1st class rail services:   High quality below rail engineering  Above rail service competition   Located at Commonwealth Hill iron ore deposit and prospects Rolling stock leasing options New, competitive port and ship loading services at Port Pirie  Basic port operational  Existing connection to rail network  Easily reconfigurable for iron ore exports and expandable  Gina rail siding at Commonwealth Hill  Rankin Dam iron rail siding (IMX Resources) Potential stockyard site Existing rail corridor Potential ship loading site  Conceptual iron ore stockyard configuration at Port Pirie  Port Pirie conceptual iron ore export infrastructure
  • 16. Commonwealth Hill Iron Project Prized 1,467km2 tenement portfolio with JORC compliant resource, demonstrated iron ore development and large exploration potential 16    Situated in Australia’s newest iron ore province - the Northern Gawler Craton, SA At-surface JORC compliant resources of 72Mt at 26% Fe from the ‘at-surface’ mineralisation of the smallest of five primary targets Defined Exploration Target of 300 – 550Mt at 25 – 35% Fe plus further major conceptual targets including substantial haematite only targets  Real DSO potential at Ibis, Mars, Bundi and Wirrida Prospects  Proven, relatively simple processing technologies Commonwealth Hill Iron Project tenements Mars Prospect Sequoia Iron Deposit National highway  10km  National railway Commonwealth Hill Iron Project: 3D perspective of TMI magnetics, leases, targets and infrastructure Lower initial capital cost options available  No need to build ‘Port Apollo’ No need to build ‘Apollo Rail’  Bundi Prospect Attractive economics  Ibis Prospect   Wirrida Prospect Demonstrated high quality, high value products Competitive operating costs  Highly scalable with potential long-term production of over 5Mtpa
  • 17. Sequoia Iron Deposit Coarse grained, meta-banded iron formation deposit producing exceptionally clean and coarse concentrates 17  Sequoia Iron-Oxide Deposit: 3D perspective of TMI magnetics  72Mt JORC-code compliant mineral resource @ 26% Fe  Defined Exploration Target of 100 – 150Mt grading 25 – 35% Fe  Metallurgical testwork demonstrates ability to produce:  circa 60% haematite sinter fines from oxidised near-surface material, and  high quality magnetite grading circa 69% Fe  Sequoia SEDD001 diamond core hole: Core tray photos circa 76m – 92m
  • 18. Sequoia Iron Deposit Positive Scoping Study results suggest long-life mine and robust economics 18  Simple processing and infrastructure paths identified and assessed  Mineable inventory of 131Mt Run of Mine (ROM)  Initial strip ratio of 0.5:1, LOM 1.1:1 (tonnes of waste per ROM tonne)  Open cut mine life of approximately 17 years at 2.5Mtpa sales Sales of 42Mt at 68.8% Fe at an exceptionally coarse sizing of approximately P80 150µm  Long-term FOB cash cost of US$64/t, (dry, 62% Fe, Pilbara FOBeq basis)   DTR Concentrate Grades Company Project Grind Size Fe SiO2 Al2O3 P P80 µm % % % % % Sequoia final pit and mineable inventory S  Apollo Minerals Commonwealth Hill 143 69.4 2.3 0.4 0.01 0.01 Gindalbie Karara 35 68.8 4.2 0.1 0.1 0.01 Equatorial Resources Mayoko 63 68.9 3.7 0.1 0.01 0.01 Xstrata Mauritania 80 70.2 1.8 0.22 n/a n/a African Iron Mayoko 59-65 69.4 3.1 0.2 0.03 Kalia 65 68.7 3.9 0.1 0.3 0.01 Xstrata Zanaga 65 66.1 4.5 0.2 n/a n/a Strong potential identified to scale the operations up to over a 5Mtpa sales rate for more than 20 years via the processing of iron ore from the Ibis Prospect 0.01 Bellzone Direct start-up capital expenditure of US$333M, including studies   Opportunities identified to further reduce the unit capital and operating costs during the Pre-Feasibility Study stage:    Peer project product quality comparison Potential operating cost reductions of $5 – 15/t product Potential unit capital cost reductions of $30 – 40/t annual capacity
  • 19. Ibis Prospects Large-scale, potential DSO iron ore targets 19   Very strong indications of shallow, large-scale, structurally controlled, iron-rich bodies similar in style to the nearby Cairn Hill DSO iron ore mine in South Australia but much larger Combined analysis of shallow, historic ‘near-miss’ drilling, geophysics and surface sampling suggestive of higher grade iron mineralisation  Southern zone responses consistent with significant haematite alteration  Near-miss Magnetics and gravity suggestive of high grade iron Targets remain untested but are very close to being ‘drill ready’ 50m RAB holes: 35% Fe 2 Km Gravity suggestive of high grade iron  Ibis Prospect: North looking 3D perspective of TMI RTP magnetics
  • 20. Kango North Iron Project, Gabon
  • 21. Kango North Iron Project Highly prospective 225km2 tenement portfolio with demonstrated iron ore development and significant gold exploration potential 21 Gabon, central-west coast Africa  Remains one of Africa’s most politically stable and economically developed countries  Currently transitioning from oil and gas focused foreign investment to mineral resources  Successful history of mining and exporting manganese (3.5Mtpa) Kango North Iron Project   Apollo maintains a 70% controlling JV interest in the Project  Iron ore occurrences exist over at least a cumulative 20km strike  Defined Exploration Target of 200 – 300Mt grading 30 – 45% Fe with further conceptual targets  Potential for significant DSO discovery  Exceptionally good product quality estimated at >69% Fe with very low levels of impurities  Unusually high mass recovering of 49% suggests low operating and capital development costs Kango North Granted ~400km2 iron ore and gold Exploration Licence in coastal Gabon Apollo Mineral  1st class location:  85km from Panamax capable, Port Owendo  20km from operational standardgauge, 10Mtpa Trans-Gabon railway (TGR), or  15km from navigitable Gabon Estuary  Within 20km of two hydroelectric dams (127 MW total)  Sealed road within 30km of site  High-use unsealed road adjoining south-eastern edge of tenement
  • 22. Kango North Iron Project Excellent initial exploration results in this vastly under-explored and emerging world-class iron ore province 22   AMAG survey has identified two large-scale, prospective zones (South-East Domain and North-West Domain) Sub-cropping iron ore mineralisation discovered over an 8km strike length in the South-East Domain  Surface samples collected average over 40% Fe  Vast majority of ground remains unexplored  Operating cost implications superior to other magnetite projects globally World’s largest Fe Resources at +40Bt and over 60% Fe Early indications of exceptional product qualities    Kango North DTR testing carried out by AMDEL, Adelaide on samples of surface and near-surface BIF Very high quality iron ore concentrate produced with a very high mass recovery (49%) and coarse grind size (75µm) Potential to produce DRI-grade concentrates or quality sinter fines products  Head DTR Concentrate Grades Fe  3D perspective of interpreted magnetic bodies and drilling result for Mount Oscar Main Mass Recovery Fe SiO2 Al2O3 P LOI % % % % % % % 41.1 * This is conceptual in nature. It is uncertain if exploration will result in the delineation of a mineral resource. 49.2 69.7 0.9 0.3 0.004 -2.0
  • 23. Kango North Iron Project Potential to become similarly attractive as Afferro Mining’s Nkout Project, Cameroon 23    IMC lodged US$190M takeover offer for Afferro Mining 22 May 2013 Nkout iron ore development likely to cost several billion dollars and require commitments from 3rd party users Apollo’s Kango North iron ore project very unlikely to require significant commitments from 3rd parties and could be a fraction of Nkout’s cost Apollo Minerals: Kango North Afferro Mining: Nkout Concessions 400km2 981km2 Mineralisation Magnetite, quartzite. DSO cap? Magnetite, quartzite. DSO cap Anomalies & Resources 20km strike. Stg 1 Exploration Target: 300Mt 20km strike. 2.5Bt at 34% Fe Power 20km from operational +100MW hydropower 200km from under construction +100MW hydropower Rail Operational. 60km to port Needs to be build. 330km to port Port Expansion of Port Owendo or barging options Deep-water port at Mamelles needs to be built 3rd Party Commitments Little to none required Major commitments required for funding of infrastructure * This is conceptual in nature. It is uncertain if exploration will result in the delineation of a mineral resource. Apollo Minerals
  • 24. Developing high potential iron ore and base metals projects. APOLLO MINERALS Contact: (02) 9078 7665; info@apollominerals.com.au