Gladstone Nickel Project

Gavin Becker, AusIMM Technical Meeting, 10 May 2006, Brisbane

May 2006

Gladstone Pacific Nickel Limited

Presentation overview
Gladstone Pacific Nickel Limited Why Nickel? Background to this Project Why Gladstone? Current Project Status Objectives Conclusion
May 2006 Gladstone Pacific Nickel Limited 2

Company Overview
Gladstone Pacific Nickel Limited (GPNL) owns the Marlborough Deposits which contain over 1.3bn lb nickel (Ni) and approx 90m lb cobalt (Co) in JORC reserves (4 deposits, 6 others yet to be evaluated) GPNL - admitted to AIM in March 2005 raising 11m 30M shares @ (currently) ~ 1.40p Project will comprise a laterite mine at Marlborough and a high pressure acid leach (HPAL) plant sited at the Central Queensland, deepwater port city of Gladstone, complemented by imported high grade laterite ores from the South West Pacific Marlborough deposits free of debt, and GPNL also has A$29 million cash available from AIM raising to complete DFS
May 2006 Gladstone Pacific Nickel Limited 3

Source: Nickel Institute Paper ASSDA Conference October 2005

Why Nickel? Uses and Market

OVER 70% OF THE WORLDS NICKEL IS CONSUMED IN STAINLESS (and other alloy) STEELS Attraction of Nickel containing stainless steels:
Formability Weldability Toughness Corrosion resistance Reduced rate of propagation Resistance to reducing environments Lustre High temperature properties
May 2006 Gladstone Pacific Nickel Limited 4

Domestic kitchen sink

Source: Nickel Institute Paper ASSDA Conference October 2005

Type 304 stainless steel with a BA finish

May 2006
3

Gladstone Pacific Nickel Limited

stainless steel production

Source: ABARE Paper ASSDA May 2006 October 2005 Conference

Gladstone Pacific Nickel Limited

growth indexes China japan

Source: ABARE Paper ASSDA May 2006 October 2005 Conference

Gladstone Pacific Nickel Limited

New Nickel Needs

According to my calculations, another 800,000 tonnes of new nickel each year will be required to meet demand growth by 2015 (over and above that required to replace depleting existing production)
Brian Hurley Key Note Address, Australian Nickel Conference, Perth 19 Oct 2005

Only half of the requirement (at best) is on the horizon and most of that must come from laterites The Gladstone Nickel Project is needed
May 2006 Gladstone Pacific Nickel Limited 8

Project Description
A nickel mine and beneficiation plant at Marlborough
(Environmental Authority MIM800078102)

A slurry pipeline to take beneficiated ore to .. An HPAL plant and metal refinery at Gladstone Ore loading facilities (off-shore) and importation facilities (at the Port of Gladstone) A tailings storage facility located in the Aldoga Precinct of the GSDA Marlborough + Ore importation from SW Pacific : 1+1=3
May 2006 Gladstone Pacific Nickel Limited

HPAL for Nickel

Many lessons learned from 2nd generation plants (Murrin Murrin, Bulong and Cawse) Lessons being applied at Sumitomos Coral Bay (commissioned successfully), BHP Billitons Ravensthorpe Nickel, Incos Goro (under construction) and CVRDs Vermelho (approved - detailed design) 3rd generation GNP (4th generation) is learning from all of these and is assembling an excellent team with strong relevant experience

The technology works

May 2006 Gladstone Pacific Nickel Limited 10

Gladstone Nickel Project - A modern large scale nickel and cobalt operation
Currently proposed to develop Project in 3 phases: Stage 1a ~50,000 tpa nickel metal and ~2,000 tpa cobalt metal from Marlborough ores (with shipments of imported ores) Stages 1b (& 2, as the market dictates) will involve plant expansions & importation of high grade ore from SW Pacific region value adding for Australian economy The Project has the potential to be one of the largest of its type in the world producing >100,000 tpa nickel (~8-10% of world demand) and 10,000 tpa of cobalt metal from Stages 1a + 1b
May 2006 Gladstone Pacific Nickel Limited 11

Key achievements to date

Acquisition of Marlborough Deposits with mining leases over ~7,560 ha and JORC ore resources (measured, indicated and inferred) of 125Mt @ 0.80% Ni & 0.05% Co in 4 of over 10 deposits Positive Scoping Study completed by Aker Kvaerner, regarded as one of the worlds leading engineering companies MOU from Queensland Government for land and infrastructure (18 February 2005), and Project awarded Significant Status by Queenslands Coordinator General 5 October 2005. Moving towards land acquisition currently. Excellent relationship and agreement with Traditional Owners in Marlborough vicinity Definitive Feasibility Study (DFS) for the initial stage of the Gladstone Nickel Project (GNP or the Project) now underway Following DFS completion by end of Q3 2006, GPNL will be seeking joint venture partners to take the Project to construction and commissioning
May 2006 Gladstone Pacific Nickel Limited 12

Project Team
URS - EIS and Tailings Management Investigation Consultants Aker Kvaerner - Engineering and Plant Design IMC - Infill Drilling and Mine Planning RLMS - Slurry Pipeline Route Selection & EIS SSE (Slurry Systems Engineering) - Pipeline Engineering SGS Lakefield Oretest Metallurgical Tests BDA (Behre Dolbear Australia) Independent Engineer
May 2006 Gladstone Pacific Nickel Limited 13

Marlborough Deposits

May 2006

Gladstone Pacific Nickel Limited

14

Marlborough & Gladstone locations

Source: Behre Dolbear Australia Pty Ltd

May 2006

Gladstone Pacific Nickel Limited

15

Plant location has all infrastructure already in place

Gladstone plant location attributes:
Plant site at Yarwun within GSDA with a deepwater port facilitating
Modularisation during construction, and Cost effective delivery of high grade imported ores directly into the refinery site

Tailings area at Aldoga, also within GSDA, with storage volume for 25+ years Readily available power / gas / water Established infrastructure and communications Existing heavy industry service companies Skilled industrial workforce available
May 2006 Gladstone Pacific Nickel Limited 16

Gladstone port facilities are close by

May 2006

Gladstone Pacific Nickel Limited

17

Project Components
Mining Operations Ore Preparation Beneficiation Slurry Pipeline to Gladstone Acid Leaching and Saprolite Neutralisation Circuits CCD Washing Mixed Sulphide Intermediate Product Nickel and Cobalt Refinery Project Enhancements and Gladstone Synergies under study

May 2006

Saline water (cf. Fitzroy catchment) Heap leaching of beneficiation rejects Neutralisation of acid residues with alkaline residues??? Aggregates, Magnesium Sulphate and chromite by-products?
Gladstone Pacific Nickel Limited 18

Main Inputs and Outputs

Approx Process Inputs (Stage ):

1a
4 (M) 1-2 4-5 120 500 2-3 40 600 40

1b
8 (T) 1-2 8-10 240 800 4-6 90 1,400 80 Mdt pa GL pa GL pa GL pa kt pa PJ pa kt pa kt pa kt pa

Ore feedrate Marlborough water Gladstone water Sea water (cooling) Sulphur Natural gas Ammonia Limestone Lime
M = Marlborough, T = Marlborough + imported

May 2006

Gladstone Pacific Nickel Limited

19

Main Inputs and Outputs

Process Outputs (Stage 1):
Nickel Metal product Cobalt Metal product Ammonium sulphate Barren solution (MgSO4?) Leach tailings

1a
50,000 2,000 140,000 12 4.5

1b
100,000 11,000 300,000 24 9 t pa t pa t pa GL pa Mdt pa

May 2006

Gladstone Pacific Nickel Limited

20

Proposed process flow sheet

May 2006

Gladstone Pacific Nickel Limited

Source: Behre Dolbear Australia Pty Ltd

21

Provisional Project Timetable

EIS on public display August 2006 Complete DFS for Stage 1a by end Q3 2006 Complete PFS for Stage 1b in late 2006 Finalise GNP partnership arrangements late 2006 Detailed engineering (6 months) and construction for Stage 1a (30 months) complete H2 2009 Stage 1a ramp-up 2 years Stages 1b & 2 thereafter as market and / or partners dictate
May 2006 Gladstone Pacific Nickel Limited 22

Next 6 Months
Definitive Feasibility Study is underway
Marlborough infill drilling ore test-work to update resources and reserves, and confirm process plant design parameters (beneficiation emphasis) - completed HPAL and other process testwork on Marlborough ores - completed Optimisation of process plant flow sheets and engineering design Environmental studies being carried out concurrently Update of economic model and market studies

Progress imported ore supply agreements Further discussions with resource, engineering and industrial majors re potential partnerships going forward
May 2006 Gladstone Pacific Nickel Limited

23

Low cost shipping of imported ore will increase Projects competitive advantage in Stages 1b and 2
Imported high grade ore shipping will use Capesize bulk ore carriers (150,000+ tonnes capacity) Potential load points in New Caledonia and Indonesia will accommodate Capesize vessels Capesize unloading point at proposed Wiggins Island Coal Terminal (WICT) is only 4kms from the GPN Plant site. WICT has also been classified as a Significant Project by the Coordinator General
May 2006 Gladstone Pacific Nickel Limited 24

The Gladstone Nickel Project will be a large scale long life regional processor of nickel and cobalt laterites
PHILIPPINES

INDONESIA

IRIAN JAYA / PNG

SOLOMON ISLANDS

Marlborough

Gladstone

NEW CALEDONIA

May 2006

Gladstone Pacific Nickel Limited

Source: USGS (2003), AME estimates

25

Conclusion
Who will fill the Nickel supply / demand gap? Gladstone Pacific Nickel intends to play a significant part, importing ore and value adding (the opposite of Australian convention).. Providing economic benefits to CQ, Qld, the nation and GPNL stakeholders.

May 2006

Gladstone Pacific Nickel Limited

26