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IRON ORE - A Review

Registered Office B-302, B 302 117 W t i Westview, B j j Road, Vil Bajaj R d Vile Parle (W), Mumbai 400056

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HIGHLIGHTS OF NAVIS SHIPPING PVT LTD PVT.LTD

Privately held Company. Owned by Professionals. Focus on Trading & Mining . High Growth and in demand sectors such as Iron ore demand Trading, Scrap Metal and other raw material supply for the Iron and Steel industry such as Chrome and Manganese. Expertise in Fertilizer trading specifically Rock Phosphate and Urea from Eqypt to India and Indonesia. dI d i Operating centers in India, Egypt, USA, Turkey and UAE Currently operating a hi-grade CHROME mine in Eastern Egypt. C tl ti hi d i i E t E t Relations with major raw-material customers such as SINO STEEL, SHANGDONG WANBAU, HUBEI PUYANG, HUBEI ZHONGZHANG, GNR, and others from CHINA . Relations with major Iron Ore suppliers in India in the Southern, Eastern and Goa Southern sectors. This includes miners as well as exporters from all the three sectors. Currently operating 2 crushing and screening plants for Iron Ore ROM in Goa, India. Established network of shipping and logistics providers all across the globe.

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AREAS OF EXPERTISE
TRADING
IRON ORE CHROME MANGANESE SUGAR SCRAP FERTILIZER

MINING - FOCUS ON IRON ORE IN INDIA & CHROME IN EGYPT AND TURKEY FOR SUPPLY TO CHINA MARKET.

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IRON ORE THE GOLDEN AGE

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Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in colour from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4), hematite (Fe2O3), f f tit (F ) h tit (F ) goethite, limonite or siderite. Hematite is also known as "natural ore". The name refers to the early years of mining when certain hematite ores mining, contained 66% iron and could be fed directly into iron making blast furnaces. Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel. 98% of the mined iron ore is used to make steel.
Iron Ore Reduced to Iron

SERVICE Existing Iron Ore Trade

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NAVIS is currently supplying iron ore from India and Indonesia to its customers acting as a value added intermediary . NAVIS currently supplies to exporter material from India through its direct relations with several miners as well as operates 2 crushing and screening plants in Goa, India. NAVIS has the opportunity to supply about 1 MMT of ore annually to China through its existing client network.). Existing t E i ti network of clients include companies such as k f li t i l d i h SinoSteel Corporation, Baosteel, PT Resources, GNR, Noble Group, Hatton Group, Zynton, Trafigura, Swiss Singapore, etc. Singapore etc

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CRUSHING & SCREENING PLANTS, GOA, INDIA

SERVICE Long Term Strategy

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Our strategy is aligned with market needs

Investing to meet increasing demand; NAVIS has the opportunity to supply about 1 MMT of ore annually to China through its existing client network. Joint Ventures or Sale Agreements with Miners in India, Egypt, Indonesia, Mexico, Kazakhistan, and other areas. Able to produce and to load iron ore products according to clients needs, focusing on value-in-use to customers; Stability of supply of high quality iron ore in a changing resource base; Long term contracts maximizing NAVISs potential to optmize the steel industry value chain.

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THE MARKET & THE CHINA FACTOR

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NAVIS - FOCUS
NAVISIronOre

INDIA

INDONESIA O S

SOUTHAFRICA/USA/BRAZIL SO C / S /

Primary Pi BUY Focus Markets

CHINA STEELPRODUCTION425MMT STEEL PRODUCTION 425 MMT Curr.IronOreReq:240MMT

JAPAN STEELPRODUCTION 71MMT STEEL PRODUCTION71 MMT

SOUTHKOREA STEELPRODUCTION 50MMT STEEL PRODUCTION50 MMT

Primary SALES Focus Markets

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CHINA: Yesterday China Yesterday

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CHINA: Now

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China T d Chi Today

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The China Factor

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China is the key driver of global iron ore trade Steel production is growing at a rapid rate. Seaborne iron ore demand is growing at an even higher pace pace. Chinas requirement of high quality fines and pellets is increasing due to its need for:

Higher productivity; Efficiency gains; Improvements in steel product quality; Lower emissions.
China is committed to infrastructure development. Improvements have been made that provide the conditions to receive larger volumes of ore more efficiently efficiently.

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Steel Consumption

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Steel consumption in China shows a strong potential for growth

Finished steel consumption per capita China 2003
India I di Brazil
250

Kg 300

179 Kg per capita

China Chi
200

USA
150

EU-15 EU 15
100

Japan
50

South Korea
75 80 85 90 95 00 03 04E

...

10E

200

400

600

800

1000

Finished steel consumption in China may reach 275 Kg/cap by 2010

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Seaborne Iron Ore Demand

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Iron Ore seaborne demand should maintain a higher growth rate than steel and pig iron production
240
W ld St l P d ti orld Steel Production

220 200
1992 = 100

W orld Pig Iron Production Seaborne Iron Ore Dem and

180 160 140 120 100

92 93 94 95 96 97 98 99 00 01 02 03 04E 05E

... 10E

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Seaborne Iron Ore Demand

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Between 2003 and 2010 seaborne iron ore demand will grow 5% p a and China 2010, p.a. will account for 90% of this growth.

CAGR 99-10
740 605
330 180 205

+5.5%

( ) (Mt)
454 World China Rest of the World 347
14

537 452
92

575

484
112 148

+17.6%

411
55 70

333

356

384

360

372

389

395

400

410

+1.3%

... Chinas China s share in world seaborne trade

90

...

99

00

01

... 10E 02 03 04E 05E 10E 02 03 04E 05E 10E 23% 28% 31% 34% 45%

02

03

04E

05E

...

Source: CVRD

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BACKWARD INTEGRATION TRADING TO MINING

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VERTICAL INTEGRATION ECONOMIES OF SCALE

NAVIS is planning to vertical integrate it s its iron ore operations in order to increase the level of control over its inputs and distribution of its outputs. NAVIS plans to achieve the following with its plan to vertically backward integrate: Economies of Scale Economies of Scope Cost reduction Gain Competetive advantage Increase control on the entire Value Chain.
Procurement P t Investment in Iron Ore mines in Indonesia & India. Logistics Shipping Company with Inland transportation and Logistics Capability Ship owning & management company planned. Sales Trading Company with captive supply orders.& SELLING ON FOR (EX PLOT) d & (EX-PLOT) BASIS to deliver short term cash flow and growth.

SERVICE Typical Mi T i l Mineral Value Chain l V l Ch i

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CAPITAL GOODS
Geophysical Drilling Survey, etc Drilling Blasting Hauling, etc Crushing Screening Materials g Handling Smelters Furnaces Casting, etc Rolling Moulding Machining, etc

Exploration

Mining

Mineral Processing

Refining

Value Addition

GIS Analysts Financing,etc Fi i

Mine Planning Consumables Analytical,etc A l i l

Chemicals Process Control Analytical.etc A l ti l t

Reducants Chemicals Assaying

Design Marketing Distribution Di t ib ti

SERVICES

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Iron Ore Value Chain

STEEL DRI/HBI PELLETS

DRI = Direct Reduced Iron HBI Hot Briquetted Iron q

$$

BENEFICIATION WASHED SIZED RAW

SERVICE Typical Mi i P T i l Mining Process

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Clear & Level Area/Remove Topsoil

Blasting

Shoveling

Moving

Crushing

Grinding

Shipping

1. 2. 3. 4. 5. 6.

Blasting Drill blast holes in carefully engineered patterns creating loose material Shoveling Electric shovels load blasted ore into trucks or conveyor systems Moving Trucks or belts move the ore and other materials to crusher. Crushing Crushers break the material down to 30mm 50mm size 30mm-50mm Secondary Crushing/Grinding Ore is crushed to below 10 mm consistency. Shipping Fine ore is transported by belts to stockpile, warehouse, trucks, railcars, or vessel.

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Typical Mine Purchase Process

Sourcing/Selection Several factors are considered other than the price and estimated reserves. These factors could be site location, proximity to jetty/port, inland transportation, export regulations, country risk, availability of labor and equipment and many other such factors. Site Visit/Sampling Once the site is decided, a site visit is conducted decided by a qualified team and random samples are taken to verify the initial claims made by the mine owners. At this time all ancillary factors affecting the mining operation are checked and verified. MOU/Price Negotiation /Regulatory Approvals On successful verification of the reserves a Memorandum of Understanding (MOU) is signed with the mine owner and a token amount is paid to the owner . The balance to be paid after detailed survey of the mine. Survey/Drilling Program A comprehensive drilling program is conducted to verify a cross-section of the mine property in order to estimate the amount of extractable ore from the ground. This survey creates the basis of the mine development plan or the mining plan. Purchase On receiving satisfactory results from the survey program the acquisition of the mine or the mining claim or lease is completed. Mining Plan This is a detailed plan to maximize the profit potential of the mining asset. This could include: Detailed drilling plan, analysis and sampling plan, operational plan, staffing plan, equipment design and engineering plan, environmental studies (if required), prefeasibility a d eas b ty and feasibility study, financial p a co a c a plan community p a , etc. u ty plan, Exploration Once the mining plan is completed, mine is prepared, equipment setup and exploration begins.

2. 2

3.

4.

5. 6.

7.

SERVICE Mining Optimization

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By evaluating the mining value chain from exploration to marketing and leveraging the capabilities of various mining software packages comprehensive mine plans and schedules can be developed for the Life of Mine of projects and operations. These long term plans include mining related capital and operating expenses, resulting in business related information that facilitates the decision making process for any project. Mining Processes supplies a holistic and integrated solution across the value chain ensuring strategic optimization and maximum sustainable value extraction from the iron ore resource base. This will be done by focusing on the following main areas. Strategic Mine Planning Developing mining block models for project evaluation, Defining the inventory of possible reserves (economic pit limits) through the application of open pit optimization methodologies, Selection of the appropriate mining method and technology, Design of mines, waste dumps and related infrastructure, Generation of alternative production schedules incorporating market demand, Reserve estimation

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Growth through Contracting

NAVIS plans to develop the mines and associated infrastructure using proven qualified thrid party contractors where and when possible This will provide several benefits including: possible. Lower CAPEX and financing requirements. Lower Project Risk Quicker time to market. Management time savings Improved project valuation and ability to attract financing Ability to maintain majority control of the mining assets

SERVICE Mine Investments

NAVIS is targeting several countries for its initial mine acquisition program including; INDIA, MEXICO, INDONESIA, USA

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Iron in the Indian soul 23rd July 2006 This week's Indian update casts a critical - and unapologetically alarmist - eye over recent "developments" in the country's iron/steel sector. In Orissa alone, the state government has signed no less than 43 memoranda of understanding (MOUs), lining up nearly US$3 billion worth of projects with a capacity of more than 58 million tonnes iron ore - a majority of which is likely to be exported.

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MINERAL MAP OF INDONESIA

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ESTIMATED IRON ORE RESERVES 2 BILLION TONS

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Mexico has huge amount of reserves. The reserves are located in two belts : NE Part of the Country like La Perla, Cerro De Mercado & Hercules SW Part of the Country
China poaching Latin America's last big mines By Mica Rosenberg, Reuters Rosenberg 30th January 2008 MEXICO CITY - Chinese miners eager to feed a roaring economy with raw materials are buying some of the last remaining big mines in Latin America, where risks are lower than China's other commodities sou ces sources like Africa.Still, there are pitfalls ahead. The choicest known mining resources in the region have e ca St , t e e a e p t a s a ead e c o cest o g esou ces t e eg o a e already been snapped up, while labor unions are independent and quick to strike for a greater share of the boom in commodity prices. The Chinese are scouring the globe for the few remaining mineral deposits since they produce less than half the iron and copper and less than 70 percent of the alumina needed to build huge infrastructure projects from highways to power grids to airports. Earlier this month, China's largest nickel producer, Jinchuan Group Ltd, bought Mexico's biggest untapped copper-zinc deposit from Canadian company Tyler Resources Inc , the latest in a spate of acquisitions across the region. China has invested billions of dollars in Africa in recent years but civil war, coups d'etat, lack of infrastructure and disease hinder mining companies there Latin America by contrast has a long mining there. America, contrast, history and a well-developed regulatory framework to deal with foreign companies, making it a "natural hunting ground" for Chinese investors, said mining analyst Charles Kernot from investment bank Seymour Pierce.

SERVICE Long Term Strategy

1. To create a lease or claims bank exceeding 100,000,000 MT or ore 2. To associate with world class mining partners as well as mine consultants to create a world-class sustainable mining infrastructure. 3. Negotiate a long-term Joint Venture with a major customer of the end product in order to ensure complete buy back buy-back of the extracted ore. This would enable us to procure long-term financing for current operations as well as secure cash for further acquisitions. 4. Augment the trading and ship owning business through acquisitions of the mines.

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y gg pp Recent JVs of Chinese Buyers Aggressive Approach

Sinosteel extends Midwest iron ore sales agreement timeframe
(www.wabusinessnews.com.au) p Updated: 2007-07-30 15:19

China-owned Sinosteel Corporation Group has extended a sales agreement for 1.6 million tonnes of iron ore with Midwest Corporation Ltd to March 31, 2009, the West Perth-based company announced today.

China's Baosteel, Australia's Fortescue reach big iron ore deal

(www.chinamining.org) Updated: 2007-03-27 08:37

China's largest steel mill, B Chi ' l t t l ill Baosteel, and A t li ' F t t l d Australia's Fortescue M t l G Metals Group Ltd (FMG) h have signed one of Australian mining industry's largest deal to supply up to 20 million tons of iron ore per annum. The ten-year deal, which was signed in Perth, capital of the state of Western Australia on March 26, covers a first phase quantity of 11.1 percent up to 5 million tons per annum of FMG's initial production capacity of 45 million tons per annum.

China Steel signs iron ore deal with Brazilian firm

(Asia Pulse) Updated: 2007-06-05 11:00

Kaohsiung-based China Steel Corp. (CSC) signed a four-year contract Friday with Samarco, a Brazilian mining company, under the terms of which the Brazilian firm will sell CSC 1.9 million tons of iron ore pellets from 2008 to 2011

SERVICE OffOff-take Agreements

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NAVIS has already discussed at length with several of its Chinese buyers (steel mills) the potential for long term Joint Ventures for an off take agreement for its entire mining capacity. t f it ti i i it It is our belief that we can pre-book the entire mine capacity through an offtake agreement with one of our potential targets. targets

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Proposed List of Consultants Mining

Since its inception some 40 years ago, Pincock Allen & Holt (PAH), part of the Runge Group, has earned a reputation as a premier international consulting and engineering firm. One of the oldest and most respected organizations within the mining and energy consulting community, PAH has an unparalleled reputation for integrity and for technical commercial, and engineering technical, commercial excellence. Our corporate resume includes over 3,600 successfully completed assignments for many of the world's foremost precious metal, base metal, industrial mineral, coal, and energy operations. PAH reports are widely used to secure project financing and successfully undergo reviews and audits. Met-Chem was established in 1969 as a consulting engineering company with its headquarters in Montreal, Quebec. It is a wholly owned subsidiary of UEC Technologies LLC which is part of United States Steel Corporation, Pittsburgh, Pennsylvania. From the onset of an exploration program through geological evaluation, to mine development and planning, and mine operations, Met-Chem provides a sound approach to the complex puzzle of determining and then developing an economical mining property. Met-Chem's experience in the mining sector covers the full range of services and minerals. Met-Chem works very closely with the Client's team to prepare scoping, pre-feasibility and feasibility studies, full scale mining operations planning, mine closure plans and environmental management plans to stringent guidelines imposed by plans, legislative bodies on mining operations. This work has been successfully provided to clients in the world-wide marketplace. Iron ore client portfolio includes Quebec Cartier Mining, Iron Ore of Canada, Rio Tinto, Cleveland-Cliffs, USS Minntac, USS Keetac, SNIM (Mauritania), Kudremukh Iron Ore Company (India), National Mineral Development Corporation (India), Jindal (India), Steel Authority f India (India), Ji d l (I di ) S l A h i of I di (I di ) CMP (Chil ) CVG FMO (V (Chile), CVG-FMO (Venezuela), L bM l ) LabMag GP (Labrador), Adriana Resources (Quebec) and many others

SERVICE Consultants Mining

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Cost effective access to operational, management and engineering wisdom accumulated during 40 years' experience in a broad range of geological, geotechnical, metallurgical, geographical, infrastructure, services, cultural and market environments. Their clients include companies and mine projects such as Hamersley Iron Pty Ltd (Australia), Iron Knob (South Africa), North Ltd (Australia), Mt. Newman (Australia), Iron Duke Project (Australia), Savage River (Australia), and various gold, zinc, manganese, bauxite mines in countries such as Indonesia, Ghana, Tanaania, Zimbabwe and Guinea.

Sinclair Knight Merz (SKM) is a leading engineering, sciences and project delivery firm, with offices across Australia, New Zealand, Europe, the Middle East, South America and Asia. They work in close partnership with key clients in the public and private sectors, providing independent technical, strategic and commercial advice to deliver a wide range of projects. Their global workforce has been growing steadily and now employ more than 6000 people in 47 offices around the world. They come from a diverse range of disciplines including engineers, planners, architects, economists, scientists, project managers, technicians and administrative staff. They work across seven broad markets: Buildings & Property; Defence; Power & Industry; International Development Assistance; Transport Infrastructure; Mining & Metals; and Water & dust y; te at o a eve op e t ss sta ce; a spo t ast uctu e; ining etals; a d Wate Environment.

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g q p gy Potential Mining Equipment & Technology Partner

CZMT Invest AG is an international company seated in Berlin, Germany, with subsidiaries and representations worldwide throughout Europe, from England via the Czech Republic to Russia but also in Dubai Peru and other places The company is active in Dubai, places. worldwide engineering, project finance and trade. As a result of its diversified portfolio of subsidiaries, shareholdings and joint ventures and the know-how and experience of its highly qualitfied staff, CZMT Invest AG has managed to develop a strong position in these markets. Mining technologies and machinery have been a core business of the company from the very beginning. Therefore, they do not only offer the know-how and technology, but also provide a wide variety of machinery and devices. The production program comprises all equipment required to carry out successful mining operations - successful from the technological, economical and ecological point of view. They can carry out feasibility studies, economic assessments of projects and also arrange for the financing of investment in this field. Due to their long-term experience, our engineers are able to design and develop the best mining method based on geological data of the mine and with special attention to underground mining safety and effectiveness. If the complete range of technology is not required, partial solutions to mining problems may improve the clients situation considerably. Their experience has been proven by the projects implemented and machines manufactured and supplied: tens of thousands of powered support units and individual props, thousands of armoured face conveyors, hundreds of coal ploughs, shearer-loaders, ripping machines, wagon drills, crushers, thousands of kilometres of mining suspended shearer loaders, monorail...

SERVICE Current Status

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NAVIS plans to consolidate its position in the IRON ORE MARKET as follows: 1. Phase I - Moving from value added intermediary to DIRECT seller of iron ore fines in the local region. Investment Target : $5M through a separate SPV with investor to set up trading operations. Secure JV agreements 1-2 mine owners for selling 100% of the ore from their mines 12 through off-take agreements with direct exporters and steel mills. Take minor carried interests in the mines in return for obtaining off-take agreements and /or advances for mine owners. 2. Phase II - Consolidate local position and elevate to shipper status by selling FOB to direct shipper steel mills. Consolidate position as miner through the carried interest position held in mines. Investment proposals to be discussed in person.

SERVICE Current Status

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NAVIS has sourced and scouted several iron ore mines mainly in the following regions: 1. 2. 2 3. 4. Indonesia India South Africa Brazil Currently in discussion with certain financial institutions in India & Indonesia to provide capital for mine purchase as well as working capital. Mining partners and consultants are being negotiated . Investment proposals to be discussed in person.