Ferrex Plc provided a positive Scoping Study update from its 74% owned 4,192 Ha Malelane Iron Ore Project ('Malelane' or 'the Project') located in the prospective Mpumalanga Province of South Africa with direct access to the port of Maputo in Mozambique. The enhanced economics are primarily a result of improved fines recovery that the Company has been investigating for the last six months. Metallurgical Testwork: The fines metallurgical testwork was conducted under the guidance of DRA, Nagrom and Vulcan Technologies, which are all experienced iron ore processing consultants.

The testwork was undertaken in Australia by Ludowici which are suppliers of the reflux classifiers that the testwork is based upon. The classifiers are a fluidised bed separator that operate on a density principle. They will replace the spirals that were previously costed.

These classifiers are in use in the iron ore, chrome and coal industries worldwide and are rapidly replacing spirals as the preferred device for separation of fines material using density. Results show that an iron yield of 58% and a mass yield of 43% is achievable for the Project through the treatment of the minus 1mm material through the reflux classifiers. Cost Estimates: After further discussions with truck, port and rail operators, the Company has used a price of USD 0.05/tkm for rail haulage costs compared to the previous USD 0.10/tkm.

This, combined with the improved yield, has reduced initial FOB at Maputo costs to USD 44/t and average FOB costs to USD 53.50/t. Capital costs have remained at USD 139 million as the new processing equipment will replace the previously costed fines recovery circuit at no extra cost. As a result, capital intensity has dropped to USD 72/t due to the increase in production caused by the higher fines yield.