Dear ShareholderRAZORBACK PREMIUM IRON PROJECTI am writing to...

Dear Shareholder
RAZORBACK PREMIUM IRON PROJECT
I am writing to you to advise of some matters of interest and information generally
about your Company and the Razorback Premium Iron Project.
Of particular concern to me is that the general public may be misinformed about the Company’s iron ore project and as to the uses and demand for high grade magnetite. Magnetite, or “premium iron”, is an important feed for steel production. There are various rock types from which magnetite is derived and then processed into a high iron grade (>62% Fe) concentrate. Almost all magnetite ores need to be mined, crushed and then ground to a small particle size for extraction of iron concentrate. This typically requires considerable electricity. One outstanding property of Razorback ore is that it is particularly soft compared to the majority of banded iron formation ores targeted by other companies. This feature of our iron ore will put Razorback near the bottom end of the power consumption curve compared to other projects world-wide and in Western Australia. Coupled with Razorback’s proximity to the coast and established infrastructure, this should ensure the viability of the project.
Globally, blast furnaces use in excess of 30% magnetite concentrate as their high quality feedstock. The figure is higher for countries such as China, USA, and Russia where there has been a historic reliance on domestic sourced ore. As those sources deplete, opportunities for Australian magnetite concentrate open.
Magnetite is essential for the production of steel. Direct shipping haematite ores, which Western Australia supplies in large quantities, is blended with the higher grade magnetite to optimise steel production.
The Razorback Project will not require expensive port facilities to load and ship the concentrate to world-wide markets. As it is nearby to the Spencer Gulf of South Australia one option open to your Company is to transfer the concentrate from shore to a permanently moored trans-shipment vessel in deep water by undersea pipeline. This is not new or high risk technology; it has been used elsewhere in the world for many years. Your Company’s executives and workers have completed a detailed pre-feasibility study clearly outlining just how viable the Razorback project is. It has now gained the attention of the South Australian Government who is supportive of the project and offering assistance to us to attract large overseas investors and long term off-take customers.
I urge you as a fellow shareholder to either view the Company’s PFS results on line by visiting our webpage (shown above) or contact your stockbroker or financial advisor and ask them to read and explain the details in more depth. This is not just another magnetite story; it was never an investment for the timid but I believe small companies like Royal with big ideas and good prospects made Australia the country it is today and more importantly what it will be in the future. Stay with us and share in the excitement of this significant opportunity as we strive to create shareholder value for you.
Yours sincerely,
Phil Crabb
Chairman
Level 3, IBM Building
1060 Hay Street, West Perth Western Australia 6005
PO Box 7525
Cloisters Square, Perth
Western Australia 6850
Telephone: +61 8 9322 8542
Facsimile: +61 8 9322 6577
[email protected]
www.royalresources.com.au
ABN: 34 108 102 432