The Paulsens East tenement includes sediments of the Middle Proterozoic Wyloo Group which contain hematite mineralisation. The Wyloo Group rocks range from the continental Beasley River Quartzite to red beds of the Mt McGrath Formation that have been overlain by the shallow marine Duck Creek Dolomite.

The iron mineralisation found within the tenement occurs as a hematite conglomerate in the Mt McGrath Formation forming a prominent arcuate ridge up to 60 metres high, with cumulative average widths of ~6 metres and approximately 3,000 metres long. The conglomerate consists of hematite pebbles in a hematite rich matrix and cement. The conglomerate, when it is fully mineralised, is composed of hematite clasts in a hematite matrix. When the conglomerate is “unmineralised” (i.e. below economic cut-off grade) the clasts are composed chert and often Weeli Wolli BIF (a distinctive banded red chert alternating with a siliceous hematite BIF).

The Paulsens East iron ore deposit comprises three main bands of iron rich hematite conglomerate mappable as continuous bands along its three kilometre strike length. These bands were originally deposited in the Proterozoic and formed by erosion of mineralised bedrock and its subsequent reconstitution. During reconstitution, hematite pebbles were deposited and held together in hematite matrix along land and marine interface such that the high purity heavy hematite conglomerate bands occur interbedded with ferruginous quartzites and subordinate ferruginous clay.

The core of the deposit is generally very high grade and it is expected that sampling of blast holes and sharp colour contrast will assist greatly in grade control.

The Indicated Mineral Resource extends from the surface to 75 metres below the deepest drill intersection or the 150 metre RL (reduced level), whichever occurs first.

Mining is undertaken by conventional open pit methods of drill and blast, followed by load and haul, utilising mining equipment comprising 110t diesel hydraulic excavators and 90t off-highway dump trucks as the main production fleet. However, initial mining will be completed by a “pioneering fleet” which will progress across the ridge to ‘open’ the mine faces/benches. This pioneering fleet consists of a 50t excavator and 50t articulated dump trucks.

Iron mineralisation in the tenement (M 47/1583) crops out as a ridge up to ~60 metres above the valleys on either side. It occurs as continuous bands of iron rich conglomerate with a cumulative width averaging 6.3 metres extending over a strike distance of approximately three kilometres. It is proposed to mine the deposit using experienced contract mining and drill and blast operators, using conventional diesel-powered tracked excavators and off-road haul trucks. Mining will be open cut and is expected to occur above the water table, so no dewatering will be required.

Iron ore mineralisation outcrops on top of the ridge, which protrudes between approximately 40 to 60 metres above its base. Ore will be mined on 5 metre bench heights and 2.5 metre flitches to facilitate accurate grade control.

For the purposes of the Mining Schedule in the Study, the mine has been divided into the ‘Main Pit’ (including Starter Pit and Final Cutback) and the ‘West Pit’. The Main Pit is further divided into five ‘Slices’. The Mine Schedule envisages mining commencing at the Main Pit Starter Pit, comprising Slices 1, 2 and 3 as well as the West Pit. Slice 1, Slice 2 and Slice 3 of the Main Pit Starter Pit are completed in the second half of Year 2. During the same year, the Main Pit transitions into the final cutback of the pit, which effectively mines the pit to its final depth. Slice 4 of the Main Pit would be commenced in the first quarter of Year 1, when its upper benches are established by the pioneering fleet. At this point in time, Slice 4 would be mined independently from Slice 1, Slice 2 and Slice 3. However, in the second half of Year 2, Slice 4 catches up with the remainder of the Main Pit and is mined together with the rest of the Main Pit Final Cutback.

The pit slope is estimated vary between 26 degrees to 44.5 degrees along the footwall and 44.5 degrees along the hanging wall (north wall). The average slope along the north wall will reduce to 40 degrees, taking into account a haul road along the north wall.

Total waste movement is expected to be approximately 19 Million tonnes over LOM. Waste will be dumped in two dump locations with the main waste dump to be located south east of the pit on the southern side of the ridge (Waste Dump 1) with a second waste dump located north east of the pit (Waste Dump 2).

A diversion channel will be constructed to divert an existing creek system around Waste Dump 1.

ROM pad, crushing and screening infrastructure as well as truck loading, workshops and fuel depot are proposed to be located on a low-lying dolomite ridge to the east of the pit, outside a 500m blasting exclusion zone and located as close as practicable to the ore body.

The Ore Processing Facility involves the primary and secondary crushing of ROM ore and screening over a tri-deck screen to produce separated Lump and Fines stockpiles.

The Primary (jaw) Crusher will be fed by a front-end loader from the ROM pad and will reduce (crush) the ore from -750mm to a P90 of -150mm at a rate of 500 tph (dry) of ROM ore. The Secondary (cone) Crusher will receive 500 tph (dry) of primary crushed ore (at -150mm). The cone crusher settings will be designed to maximise Lump production, in preference to Fines. The ore discharged from the Secondary Crusher will be conveyed to a triple-deck screen, to segregate the Lump from the Fines ore (by size fractioning) and return any/all +32mm material back to the Secondary Crusher for re-processing. The ore that passes through the top two decks but does not pass through the bottom deck (being -32mm/+6.3mm ore) will be considered a Lump product. The ore would be transported by a purpose-sized conveyor (rated for 500tph (dry) with a nominal operating rate of approximately 375-400 tph (dry)) and telescopic stacker, to the Lump stockpile.

Metallurgical testwork indicates that the Lump to Fines production ratio is likely to be better than 75% Lump to 25% Fines and that the Lump product is likely to be on average 2% higher grade than the Fines product.

Prior to haulage, crushed ore will be conditioned with water to ensure that the moisture content of the ore is suitable for transport, stockpiling at the port and shipping (approximately 4%-5% by weight).