CARPENTARIA WELCOMES SA MAGNETITE STRATEGY

Emerging iron producer Carpentaria Exploration Limited (ASX:CAP) has welcomed the South Australian Government's launch of its new Magnetite Strategy as a major boost to the state's mining future.

A member of the Strategy's Steering Committee, Carpentaria, which is developing its flagship Hawsons Iron Project near Broken Hill, is keen to support the growth of an industry which is targeting $10 billion worth of iron ore investments over the next five years, with an annual export goal of 50 million tonnes of iron ore by 2030.

The Strategy also seeks to establish South Australia as the foremost global source of quality magnetite product for steelmaking, a goal reflected by Carpentaria's push to deliver one of the world's highest grade sources of seaborne iron concentrate via its Hawsons Supergrade product.

Recent tests have shown the Hawsons project has the potential to produce amongst the world's highest quality pellets, improving productivity and reducing pollution for steelmakers. The quality of the product has resulted in significant international interest, including recent letters of intent with blue-chip Japanese trading company Mitsubishi and leading Middle Eastern producer Bahrain Steel.

Commenting on the new Strategy, Carpentaria's Managing Director, Quentin Hill, said: "Government support is crucial to ensuring the success of this emerging industry for South Australia and we congratulate the South Australian Government for their efforts in this area.

"Projects such as Hawsons have the potential to deliver an enormous boost to the State's economic development, delivering new job opportunities, supply and procurement opportunities and other economic benefits, including direct jobs at export centres like Port Pirie."

A February 2015 study conducted jointly with Port Pirie operator Flinders Ports showed that a 20 million tonnes per annum (mtpa) export facility at the port is both technically and economically feasible. Carpentaria's development plans aim to maximise community benefits, with new jobs and design choices sensitive to community expectations at Port Pirie.

According to the South Australian Chamber of Mines and Energy (SACOME), the minerals sector remains South Australia's largest exporter and further developing the State's resources wealth will benefit both the economy and community significantly, through jobs, royalties, taxes, infrastructure and other benefits.

"Carpentaria is focused on developing its flagship Hawsons project for the benefit of all stakeholders, including the community of South Australia. By working together with the South Australian Government and other parties, we can help ensure the swiftest path to production and to delivering the project's significant economic gains to the State," Mr Hill said.

About the Hawsons Iron Project

The Hawsons Iron Project joint venture (Carpentaria 62%, Pure Metals P/L 38%) is currently undertaking elements of a bankable feasibility study based on the low cost, long term supply of a high grade, ultra-low impurity iron concentrate to a growing premium blast furnace market and the direct reduction (DR) market.

The project has a clear technical and permitting pathway. It is located 60km southwest of Broken Hill, an ideal position for mining operations with existing power, rail and port infrastructure available for a conceptual 10 Mtpa start-up operation. A mining lease application has been lodged.

The project's soft rock is different from traditional hard rock magnetite and allows a very different approach to the typical magnetite mining and processing challenges (both technical and cost-related). The soft rock enables simple liberation of a product of rare quality without complex and expensive processing methods.

The Company is targeting two markets with its Supergrade product, the DR market, which requires ore to meet the exacting requirements of Midrex and HYL DRI production facilities, and the growing premium high grade blast furnace market. The targeted cost structure is very competitive and profitable at consensus long-term price forecasts for these sectors, and DR pellets have attracted approximately $50/t premium over the 62% iron fines prices.

The project is underpinned by Inferred and Indicated Resources totalling 1.8 billion tonnes at 15% mass recovery for 263 million tonnes of concentrate grading at 69.7% Fe (refer ASX Announcement 26 March 2014).