Iluka Resources : 2017 Half Year Results Slide Pack

2017 Half Year Results

Tom O'Leary, Managing Director

Doug Warden, Chief Financial Officer and Head of Strategy and Planning

16 August 2017

Forward Looking Statements

This presentation contains certain statements which constitute "forward-looking statements". These statements include, without limitation, estimates of future production and production potential; estimates of future capital expenditure and cash costs; estimates of future product supply, demand and consumption; statements regarding future product prices; and statements regarding the expectation of future Mineral Resources and Ore Reserves.

Where Iluka expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and on a reasonable basis. No representation or warranty, express or implied, is made by Iluka that the matters stated in this presentation will in fact be achieved or prove to be correct.

Forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumption and other important factors that could cause the actual results, performances or achievements of Iluka to differ materially from future results, performances or achievements expressed, projected or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Such risks and factors include, but are not limited to:

• changes in exchange rate assumptions;

• changes in product pricing assumptions;

• major changes in mine plans and/or resources;

• changes in equipment life or capability;

• emergence of previously underestimated technical challenges; and

• environmental or social factors which may affect a licence to operate.

Iluka does not undertake to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

None of the Limited Parties nor any independent third party has reviewed the reasonableness of the forward looking statements or any underlying assumptions.

Non-IFRS Financial Information

This document uses non-IFRS financial information including mineral sands EBITDA, Underlying Group EBITDA and Group EBIT which are used to measure both group and operational performance. Non-IFRS measures have not been subject to audit or review.

Mineral Resources Estimates

Information that relates to Mineral Resources estimates on the Puttalam Project has been previously announced to ASX. Iluka confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Iluka confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcements.

2016 Sustainability Report released April 2017

*

* excludes Sierra Rutile, which had a TRIFR of 2.5 for the 7 months since acquisition in December 2016

Sales volume growth	Strengthening market conditions Zircon / Rutile / Synthetic Rutile sales volumes up 43%
Zircon and rutile price rises	Zircon (premium and standard) prices up 7% and rutile prices up 4% on H1 2016 Mineral sands revenue up 49%
Strong free cash flow	Free cash flow of $180 million Inventory drawdown of $116 million
Net debt reduction	Net debt reduced by $202 million in six months to $305 million Gearing ratio down to 23% (Dec 2016: 32%)
Optimal operational settings	Idling of Hamilton mineral separation plant, impairment of $151 million (pre-tax) Preparation for Jacinth-Ambrosia mine restart in December 2017
Underlying improvement Reported loss	Underlying EBITDA up 147% to $155 million Reported loss for the period of $82 million, post impairment
Reduced support costs	Lower costs in support functions following Sustainable Business Review Non production costs down $31 million (31%)
Sierra Rutile progress	Implementation of mining and processing improvements delivering higher mining rates, concentrate grades and product recoveries
Mining Area C royalty income	Mining Area C royalty income up 50% to $31 million Iron ore price and volume growth
Dividend	6 cents per share fully franked