Mineral Resources : 23/10/2020 Quarterly Activities Report

Quarterly Exploration and Mining Activities Report

July to September 2020 (Q1 FY21)

Q1 Highlights

• Safety performance continued to improve, with a 12-month rolling Lost Time Injury Frequency Rate (LTIFR) of zero and a Total Reportable Injury Frequency Rate (TRIFR) of 3.19 at September 2020, an improvement of 3% over the quarter.
• COVID-19Polymerase Chain Reaction (PCR) screening testing continued with 42,055 tests completed during the quarter and more than 75,000 completed this year through MRL's 10 screening facilities in metropolitan Perth and regional areas across Western Australia (WA).
• Mining Services volumes increased 24% versus Q120 and 7% versus Q420, in line with expectations. Guidance remains for FY21 volumes to increase 20 to 25%.
• Total iron ore production remained steady at 4.2 million (m) wet metric tonnes (wmt) for the quarter.
• Koolyanobbing operations shipped 2.2m wmt iron ore for the quarter with production expected to ramp up to meet full year guidance.
• Iron Valley shipped 1.3m wmt iron ore for the quarter, in line with the mine plan and guidance.
• Average iron ore revenue received of US$97 per dry metric tonne (dmt) during the quarter, 15% higher than the previous quarter.
• Mt Marion Lithium Project achieved record production of 133,000 dmt and record shipments of 118,000 dmt of spodumene concentrate during the quarter.
• During the quarter, MRL agreed to purchase the Wonmunna Iron Ore Project (Wonmunna) from Australian Aboriginal Mining Corporation Limited (AAMC). The purchase was for an immaterial cash consideration and a royalty which MRL will pay AAMC in respect of the first 40m dmt extracted and removed from the area. Wonmunna has a forecast capital cost of approximately $126m (including the acquisition cost) with an initial design of 5.0m wmt per annum production. Exports of 1.0m to 2.0m wmt are expected in H2 FY21. Operating costs are expected to be similar to MRL's nearby Iron Valley operation.

Mineral Resources Limited - Quarterly Exploration and Mining Activities Report - July to September 2020 (Q1 FY21)

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COVID-19 Update on Operations

MRL continues to monitor developments around the world along with guidelines introduced by the Federal and State Governments and health authorities to minimise the risks that COVID-19 presents to our community and the resource industry in WA. MRL continues to screen all workers and visitors to operational sites, with the aim of ensuring that anyone entering our sites is free of the virus.

MRL has conducted more than 75,000 COVID-19 PCR screening tests for resource industry workers through MRL's 10 screening facilities in metropolitan Perth and regional areas across WA.

This initiative complements other actions taken on our sites. Further details of our actions are available at www.mineralresources.com.au/home-page/covid19-response/.

Production and Commodity Shipments

'000 wet metric tonnes	Q1 FY21	Q4 FY20	Q1 FY20
	P RODUCED	SHIP P ED	P RODUCED	SHIP P ED	P RODUCED	SHIP P ED
IRON ORE ('000 wet metric tonnes)
Iron Valley	1,543	1,313	1,674	1,783	1,409	2,056
Koolyanobbing	2,644	2,236	2,521	2,647	1,679	1,413
TOTAL IRON ORE	4,187	3,549	4,195	4,430	3,088	3,469
SPODUMENE ('000 dry metric tonnes)
Mount Marion ¹	133	118	116	110	93	92

1 Volumes presented as 100% for the Mt Marion project. MRL operates 100% of the Mt Marion project, in which it owns a 50% interest.

IRON ORE

Koolyanobbing

'000 wet metric tonnes	Q1 FY21	Q4 FY20	Q1 FY20
Mined	2,076	2,236	1,852
Produced	2,644	2,521	1,679
Shipped	2,236	2,647	1,413

Ore delivery and hydrogeology issues in the Deception pit caused material handling issues in the supply chain, which hampered production for the quarter. This required changes to blending to allow efficient crushing and railing activities while still maintaining quality.

Mining operational procedures were amended to compensate for the hydrogeology issues by substituting low strip ratio material movement in W7. Work in the F1 pit commenced in earnest during the quarter, with access established in July. Windarling and Jackson pits remained in steady state with some delays experienced in August across all pits due to weather impacts.

Crushing operations, hampered in part by the impacts of Deception material, prompted MRL to introduce a new Mobile Crushing Plant to supplement the primary Koolyanobbing crusher in order to meet the required run rate. The new plant was successfully commissioned in early August.

Shipped tonnes of 2.2Mt in the quarter were down due to the material handling issues. Production and shipping are being ramped up in Q2 to Q4 as planned. FY21 guidance remains unchanged at 12 to 12.7mt with a year-end run rate of 13mtpa.

Mineral Resources Limited - Quarterly Exploration and Mining Activities Report - July to September 2020 (Q1 FY21)

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Iron Valley

'000 wet metric tonnes	Q1 FY21	Q4 FY20	Q1 FY20
Mined	1,601	2,313	1,167
Produced	1,543	1,674	1,409
Shipped	1,313	1,783	2,056

At Iron Valley, a successful dewatering campaign and robust risk management of ground conditions facilitated the completion of the C8 pit. Focussed effort on waste movement in Stage 1 and 2 in C10 has exposed the ore body to meet the shipping schedule in Q2.

Mining and crushing were supplemented by the recommenced Phils Creek pit, which will provide lower phosphorus blending options. Shipped tonnes of 1.3Mt in the quarter were down on Q4 FY20 because of the timing of the final shipment, which fell into Q2. FY21 Guidance remains unchanged at 7.5 to 8.5mt with a year-end run rate of 9mtpa.

LITHIUM

Mt Marion

SPODUMENE

	'000 dry metric tonnes		Q1 FY21			Q4 FY20		Q1 FY20
	Mined	632	667		712
	Produced	133	116		93
	Shipped	118	110		92

Volumes presented as 100% for the Mt Marion project. MRL operates 100% of the Mt Marion project, in which it owns a 50% interest. In response to requests from the market, Mt Marion volumes are reported on a dry metric tonne (dmt) basis

The MRL-operated Mt Marion Lithium Project is a joint project between MRL (50%) and one of the world's largest lithium producers, Jiangxi Ganfeng Lithium Co., Ltd (50%) (Ganfeng).

During the quarter, operations continued in line with the optimised mine plan and with the product requirements of Ganfeng. This has resulted in improved lithium recovery and increased yields. During the quarter, 632,000 dmt of ore were mined and 7.4m dmt total material moved.

The processing plant's total utilisation remained in line with the prior quarter at 92% and the throughput rate remained at 292 tph, in line with the optimised mine plan. This resulted in beneficiated feed tonnes of 567,000 dmt compared to 559,000 dmt in the previous quarter. The proportion of high-grade spodumene concentrate produced during the quarter was 73%, compared to 74% in the previous quarter. Shipped tonnes increased to 118,000 dmt in the quarter as a result of the increase in produced tonnes.

Wodgina

The Wodgina Lithium Project is structured as an unincorporated joint venture (MARBL JV) between MRL (40%) and Albemarle Corporation (60%) (Albemarle) effective from 1 November 2019. The project is currently on care and maintenance due to the challenging global lithium market conditions and to preserve the value of the world-class Wodgina spodumene ore body. The MARBL JV regularly reviews market conditions with a view to resuming spodumene concentrate production as and when required and as driven by market demand.

Kemerton

MRL, through the MARBL JV, has a 40% interest in two 25ktpa (product) lithium hydroxide processing trains being constructed by Albemarle at Kemerton, located in Western Australia's South West near the regional city of Bunbury. Construction and receipt of equipment are ongoing with a ramp-up to 1,000 people on site. The Kemerton Lithium Hydroxide Plant is on track for completion in late CY21.

Mineral Resources Limited - Quarterly Exploration and Mining Activities Report - July to September 2020 (Q1 FY21)

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MINING EXPLORATION AND DEVELOPMENT ACTIVITY

Wonmunna Iron Ore

During the quarter, MRL agreed to purchase Wonmunna from Australian Aboriginal Mining Corporation Limited (AAMC). Wonmunna is located 80km north-west of Newman and 360km south of Port Hedland. The transaction is subject to an extended escrow period, expiring 7 November 2020. The purchase was for an immaterial cash consideration and a royalty, which MRL will pay AAMC in respect of the first 40m dmt extracted and removed from the area.

In 2018, the project was initially purchased by AAMC from Ascot Resources Limited (Ascot), a company at the time listed on the ASX. The Mineral Resources at Wonmunna are hosted within four primary deposits, North Marra Mamba (NMM), Central Marra Mamba (CMM), South Marra Mamba (SMM) and East Marra Mamba (EMM). The indicated and inferred JORC (2012) compliant resources that sit within these four deposits is estimated at a combined total of 84.3Mt @ 56.5% Fe, as shown in Table 1 below. Wonmunna's JORC (2012) compliant Probable Ore Reserve estimate is focused on the initial mining areas at CMM and NMM. The total reported Probable Ore Reserve estimate as at February 2015 is 28.86Mt @ 58% Fe, as shown in Table 2 below.

The resources and reserve estimates noted above have been extracted from the Wonmunna - Maiden Ore Reserve Estimate as announced by Ascot on 2 February 2015. The announcement contains production targets reported by Ascot that were based on the data available to Ascot at the time, which include a range of assumptions made by Ascot and an assessment of Ascot's capabilities at the time they were reported. These estimates are not reflective of MRL's production targets for the project.

Table 1: Wonmunna Iron Ore Project - Mineral Resource Estimate (in accordance with JORC (2012))

Mineral Resources Limited - Quarterly Exploration and Mining Activities Report - July to September 2020 (Q1 FY21)

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