ANNUAL REPORT

CORPORATE DIRECTORY Directors: Stephen Ward (Executive Chairman and Managing Director) Dominic Manganaro (Non-Executive Director) Peter Carroll (Non-Executive Director) Company Secretary: Karen Hauff Chief Financial Officer: Warren Bamford Registered office: Level 14 133 Mary Street BRISBANE QLD 4000 PO Box 15164 CITY EAST QLD 4002 Telephone (07) 3210 7900 Facsimile (07) 3210 7999 Internet: http://www.bemax.com.au Email: info@bemax.com.au Regional offices: Suite 12 41 Walters Drive OSBORNE PARK WA 6017 Koombana Drive North Shore BUNBURY WA 6230 4463 Benetook Avenue THURLA VIC 3498 1/555 High Street MAITLAND NSW 2320 138 Pinnacles Road BROKEN HILL NSW 2880

Auditors: Deloitte Touche Tohmatsu 123 Eagle Street BRISBANE QLD 4000 Legal Advisors: DLA Phillips Fox Level 28 Waterfront Place 1 Eagle Street BRISBANE QLD 4000

Bemax Highlights 2008

Ginkgo wet plant 2008 was an important year in Bemax’s development as a significant player in the mineral sands industry and overall, was a good year in a challenging environment. On 26 May 2008, Cristal Australia Pty Ltd, a wholly owned subsidiary of The National Titanium Dioxide Co. Ltd (together “Cristal”) made an off-market takeover offer for all of the shares in Bemax. Cristal is a private company with headquarters in Jeddah, Kingdom of Saudi Arabia and is the world’s second largest producer of titanium dioxide. On 9 July 2008, Cristal Australia Pty Ltd achieved 90% of the voting power in Bemax and its offer to acquire all of the shares in Bemax at a price of $0.32 a share became unconditional. On that day, changes to Bemax’s board were made as follows: • The Non-executive Directors, Mr Tony McLellan and Mr Bruce McLeod, resigned; • The other Non-Executive Director, Mr Peter Carroll, remained and Mr Dominic Manganaro was

appointed;

• The Managing Director, Mr Tony Shirfan, resigned and remained as transitional Chief Executive Officer until the end of July; and

• Dr Stephen Ward was appointed Chairman and Managing Director. On 29 August 2008, Bemax was removed from the official list of the Australian Stock Exchange. Bemax is now a private company and wholly owned by Cristal Australia Pty Ltd. Bemax’s second half year results for 2008 showed a significant improvement; sales revenue overall for 2008 was A$159 million, up 8% on 2007. The improved trend was the result of consistent operation of both the Ginkgo mine in the Murray Basin and the Gwindinup mine in south west Western Australia, as well as increased sales volumes, prices and more favorable exchange rates. The new Snapper mine is developing well and in accordance with the Project schedule. Bemax thanks bondholders for their ongoing support.

Mineral Sands Market

The mineral sands market comprises two major, although diverse industries: titanium minerals, used primarily for the production of titanium white pigments, and Zircon, for which use in ceramics is the major end use.

Australia is a leading producer of mineral sands and the largest producer of high-value Zircon. In 2008, Australia accounted for more than one third of the world’s Zircon production. The Zircon market is characterized by a concentrated supply side and a fragmented customer base without any vertical integration

The demand for titanium minerals is also concentrated with the principal customers being the world's top five pigment producers.

Bemax in the market

Bemax’s sales of Rutile in 2008 far exceeded the sales results for 2007. Total Sales Revenue for the 2008 year also exceeded revenue for 2007, as set out in the table below.

Sales (t) 2008 2007

Zircon 64,793 70,931

Rutile 75,874 56,038

Murray Basin Ilmenite1 36,807 70,585

Other Titanium Minerals2 216,719 289,994

Total 394,193 487,548

Sales Revenue $Am

Murray Basin 120.4 103.6

Western Australia 38.4 43.4

Total 158.7 147.0

1 Mine site Ilmenite and a processed product from Mine site Ilmenite at the Broken Hill MSP 2 Includes Sulphate and Secondary Ilmenite; and Leucoxene Bemax continues to be one of the top five producers of TiO2 feedstock and also maintained its 5% market share of Zircon production for the 2008 year.

Titanium minerals

The production of titanium minerals is spread across the globe; the major producing countries by volume being Australia, South Africa and Canada. New deposits coming on stream may result in India becoming a greater player in the industry.

In 2008, the industry had an estimated market size of 6 Mt TiO2 units. The estimatedTiO2 feedstock production by leading producers is shown in the chart below. Substitution risk for titanium pigment is very low. The product is non toxic has superior opacifying properties to other pigments, is not recyclable and is resistant to UV.

2008 estimated TiO2 feedstock production

QIT14%Bemax

Resources5%

Titania6%

Other33%

Iluka Resources

19%

Tiwest JV4%

DuPont1%

Indian Rare Earths

4%

Richards Bay Minerals

14%

Source: TZMI

Industry growth is generally commensurate to global GDP, however, there are niche markets with higher growth prospects e.g. titanium metal.

Through to the third quarter of 2008 the pigment industry remained stable with high levels of production. However, the global economic conditions in late 2008 proved challenging and resulted in a downturn in pigment demand. These conditions are expected to remain early in 2009 but with an improvement anticipated as the year progresses.

Zircon

Similarly to titanium pigment, historical demand for Zircon has tracked GDP trends; particularly as Zircon is used in goods which are lifestyle and economic-activity related. There is currently no economical substitute for Zircon in the broad ceramic industry which is by far the largest end use. Production of zirconia and Zircon based chemicals has increased with China now the largest global producer of these products. Zircon sand and Zircon flour continues to be used in castings industries where high quality of the finished casting is required. While the usage of Zircon in steel production in refractories has fallen in Japan; the usage of Zircon in refractories globally remains at an estimated 13% of l usage as shown in the chart below.

2008 estimated zircon end-use consumption

Ceramics54%

Refractories13%

Foundry13%

TV Glass3%

Zirconia & Zr Chemicals

16%

Other1%

Source: TZMI

Developments in Zircon usage in China over the past five years has resulted in an estimated 32% of global consumption now being consumed there for various products requiring Zircon as shown in the chart below. China is now the largest producer of zirconium chemicals globally. Demand for Zircon eased in the fourth quarter of 2008 due to the global financial conditions as production of tile and sanitary ware is closely connected with the housing and construction industries. That demand will improve during the second quarter of 2009.

2008 estimated zircon end-use consumption

Europe29%

North America11%

Japan5%

China32%

Other Asia-Pacific

16%

Other countries

7%

Source: TZMI

Bemax has maintained the 5% market share of Zircon production that it achieved in 2007 for the 2008 year, as shown in the chart below.

2008 estimated zircon production

Iluka Resources (incl CRL)

35%

Exxaro13%

China9%

Bemax Resources

5%

Tiwest JV5%

Other10%

DuPont3%

Richards Bay Minerals

20%

Source: TZMI

During 2008, Bemax continued to focus on development of markets for lower grade titanium minerals, such as Ilmenite, with some success. This program will carry on in 2009.

Bemax Operations and Development

The mining and mineral separation operations of the Company are located in two significant mineral sands provinces in Australia.

Murray Basin Western Australia

Currently operating mines

Ginkgo Gwindinup North Mine

Proposed mines Snapper (expect to commission in Q2 2010)

Gwindinup South/Happy Valley South (expect to begin development end of 2010)

Resource of heavy mineral(1)

94.1 million tonnes at average 3% heavy mineral

16.8 million tonnes at average 8.4% heavy mineral

Reserves of heavy mineral(1)

9.55 million tonnes at average 3.6% heavy mineral

1.38 million tonnes at average 10.7% heavy mineral

Mining technique Dredge (wet) Dry Products Ilmenite, Leucoxene, Rutile

and Zircon Ilmenite, Leucoxene and Zircon

Location of mineral separation plant

Broken Hill Bunbury – North Shore

(1) Resources are presented inclusive of reserves.

Ginkgo mine

2008 Production

Ilmenite production was less for the year due to having only one operating mine in Western Australia in the first quarter; Gwindinup North having only come on line in April 2008, following the completion of the Tutunup and Ludlow mines in 2007.

Production Summary

12 months ended 31 December 2008

12 months ended 31 December 2007

Tonnes

Ore Mined 11,992,108 11,485,729

HMC 681,957 798,593

Zircon 66,570 65,978

Rutile 71,285 57,751

Ilmenite1 191,134 207,264

Other Titanium Minerals2 262,287 255,420 1 Mine site Ilmenite and a processed product from Mine site Ilmenite at the Broken Hill MSP 2 Sulphate, and Secondary Ilmenite; and Leucoxene

Murray Basin Operations and Development

Ginkgo Mine

The Murray Basin operations include the Ginkgo Mine and Broken Hill mineral separation plant, both of which were successfully commissioned in early 2006 on schedule and within budget. In the last quarter of 2008, production in respect of each product was greater than production in the last quarter of 2007. Performance in 2008 finished positively as the operations were optimized progressively through the year.

Ginkgo mine

Broken Hill Mineral Separation Plant

215 km from the Ginkgo Mine is the Broken Hill mineral separation plant, which has direct access to high capacity railway from Broken Hill to Port Adelaide in South Australia for shipping. Broken Hill is an established mining centre with excellent services (e.g. transportation and air services) and infrastructure (e.g. power, roads, and rail). As a new facility this plant operates with high processing availability.

Development

The planning and implementation of the expansion of the northern Murray Basin operations is advancing well. The current focus is the development of the Snapper Mine which is located approximately 10 km from the Ginkgo Mine. Both mineral sands deposits are of similar dimensions and mineralogy, however, the Snapper deposit has almost twice the grade compared to the Ginkgo deposit.

Bemax plans to implement the mining method, improved wet plant technology and on-site processing operations used at the Ginkgo Mine at the Snapper Mine. The Snapper Mine will also share a significant amount of infrastructure, such as roads and power lines that were constructed for the Ginkgo Mine and the mines will have a single overall management structure. Accordingly, this project is viewed as an extension of the existing operations rather than a Greenfield development.

The concentrates produced at the Ginkgo and Snapper mines will continue to be processed through the Bemax Broken Hill Mineral Separation Plant and then for some products onto the Bemax Bunbury Mineral Separation Plant for final processing.

Technical work to confirm the final process design for the Snapper Mine wet concentrator is complete. A contract with Downer Mining Mineral Technologies for the detailed engineering work on the wet concentrator was awarded in mid 2008 and the design is nearing completion.

An Engineering, Procurement, and Construction Management (EPCM) Services contract has been signed with Ausenco Services. As part of these services Ausenco will design the infrastructure, site services, and on site HMC treatment facilities. The design works are progressing well and tendering for procurement will commence in early 2009.

A contract for the design and construction of a new purpose built dredge to be manufactured in the USA was awarded in late 2008 with delivery scheduled for early 2010.

The contract for the construction of the Start-up mining pit and tailings and water storage dams was awarded in the second half of 2008 with completion scheduled for the first half of 2009. This work is to excavate the initial construction pit into which the dredge and wet concentrator will be installed for the commencement of operations. Construction of the haulage access road into the site is also complete.

Given Bemax’s success in developing the Ginkgo mining operation and mineral separation plant at Broken Hill, the Company is confident that increased production from the northern Murray Basin will provide a low-risk expansion opportunity.

Image 1: Excavation of the Start-Up Pit (Left) with Tailings Dam and Water Storage Dam (Right). The Start-Up Pit is at the southern end of the mine path and the mine path follows the access road to the north, widening up to 1.1km in places. The Start-Up Pit is approximately 450m (l) x 350m (w) x 30m (d).

Image 2: Construction of the temporary Water Storage Dam and Tailings Dam Western Australian Operations

Bemax’s mining operations in southwest Western Australia have been tailored to suit the conditions in this area, which are typically smaller operations with shorter reserve mine lives than those in the Murray Basin, but with significantly higher grades.

Mining at the Ludlow and Tutunup South Mines was completed in 2007. The current operations in Western Australia comprise the Gwindinup mine, located 30 km from the Bunbury mineral separation plant. The location of the Bunbury mineral separation plant right at the Port of Bunbury allows Bemax to cost effectively deliver finished products to its customers. Gwindinup Project The Gwindinup project comprises the Gwindinup North and South deposits and extends through to the Happy Valley North and South deposits. The Gwindinup North mine was commissioned in March of 2008 is located only 30 km from the Bunbury MSP and has a four year mine life.

The Gwindinup mineral deposits have been approved for a mine life of more than nine years. The adjoining Happy Valley deposits continue to progress through environmental assessment and public consultation processes to provide further mine life in the same geographical area.

Gwindinup North Mine

Bunbury Mineral Separation Plant

The Company’s Bunbury mineral separation plant was constructed in 1956 and has undergone several upgrades and expansions to make it one of the most versatile mineral separation plants in the world. As a result of its large throughput capacity, in addition to processing HMC and concentrate from our own mines in both WA and the Murray Basin, the Bunbury mineral separation plant also has the capability to process HMC from other mineral sands producers in the region.

Bunbury MSP

Occupational Health & Safety

A safe and healthy workplace is a fundamental requirement to achieving a good working environment. Bemax maintains occupational health and safety policies, which are subject to continual review to ensure that every employee is familiar with his or her role in identifying potential occupational health and safety issues and recommending suitable changes. The performance of the Company was reviewed twice in the past year by independent auditors who confirmed that Bemax complies with Australian Standards in Safety, Quality and Environment.

All of Bemax’s operations have developed safety management systems. The company’s WA Operations have AS4801 accreditation and the Murray Basin operations utilise an integrated Health, Safety, Environment and Quality management system.

The focus on reporting of incidents and hazards has contributed to Bemax having a lost time injury frequency below the industry average. The injury claims rate is below the mining industry average in Australia.

Bemax’s focus moving forward will be behaviour awareness of its whole workforce and management of workplace hazards through Job Safety Analysis programs.

Environment

Bemax is constantly striving to minimise the impact of its operations on the environment. The Company liaises closely at all its operating sites with community and government representatives on environmental issues.

Bemax has environmental policies that comply and, in many areas, exceed the requirements of environmental authorities in terms of the rehabilitation and management of mine sites. Innovative and effective mine site rehabilitation is one of the most acknowledged features of Bemax’s operations. The Company has implemented an Environmental Management System which provides a focused and systematic approach to assessing the environment in which it operates. The Western Australian operations have ISO14001 certification as part of an Integrated Environmental, Quality and Safety Management system. In the Murray Basin, while it has not yet attained formal certification, the Company has adapted certain procedures used in the Western Australian operations to ensure that high standards suitable to its operations are met.

Restoration and rehabilitation at Bemax’s former minesites Sandalwood and Ludlow, Western Australia continues to progress well with expected completion in 2009. The Tutunup South mine is being returned to mainly farmland and the Ludlow mine is in its fourth year of re-establishing a Eucalypt forest complex.

Ludlow rehab

Skilled and experienced management teams lead our rehabilitation programs with a focus on enhancing the land after mining to improve stability, drainage and soil productivity. The Wemen rehabilitation site in the Murray Basin was also completed in 2008 with ongoing revegetation and maintenance.

Bemax is participating in the Federal Government’s Energy Efficiency Opportunities program (EEO). The EEO program involves assessing how the Company uses energy in its operations, identifying cost effective opportunities to improve energy efficiency and tracking energy key performance indicators. In late 2008, Bemax submitted its Assessment and Reporting Schedule as part of the EEO program.

One major rehabilitation technique that Bemax employs is effective soil profile reconstruction. This technique assists with providing a soil type which allows for reestablishment of sustainable native vegetation communities. Overall Bemax operating sites maintained excellent levels of environmental compliance whilst operating in very sensitive locations where impacts on human populations, flora, fauna and hydrology are highly possible.

Community Partnerships

Bemax endeavours to consult with all communities affected by our proposed or existing operations. The Company prides itself on its support of the communities in the areas in which it operates. This support includes financial support through sponsorships, support programs, employment and the indirect economic growth and benefits that flow from significant Company expenditure in and around the local communities of the Company’s operations. Examples of some of the programs the Company supported in 2008 are:

Murray Basin

• Murray Darling Association Environmental Foundation

• All public schools

• Pooncarie Cricket Club

• Broken Hill legacy

• TLC for kids

Western Australia (Bunbury and surrounds)

• Boyanup Township River Restoration Project

• Dolphin Discovery Centre

• Community Donations

Bemax Exploration and Resource Base

Bemax’s mineral resources are located in the Murray Basin of Victoria and New South Wales and the south west of Western Australia.

Murray Basin

Mineral Sands Exploration

Exploration of Bemax’s tenements in NSW and northern Victoria continues and covers an area of greater than 9,000 sq. km.

48,209m of further drilling was completed during 2008, including at the Ginkgo mine and Snapper development sites.. Exploration drilling continues to successfully identify new deposits. A higher grade portion of the Snapper South deposit to the immediate southeast of the Snapper development site is presently included in the resource base. The Phoenix deposit containing over 5.9 Mt of heavy mineral has been discovered in the Balranald licence in NSW.. A resource of 178.5Mt at an average HM grade of 3.3% has been outlined based on a 1% grade cut-off. The Benbow deposit within the Willandra West licence, discovered in May 2008, has a strike length of over 11 kms, an average width of 300 metres, thickness of 7 metres and an average grade of 3.3% HM.. Drilling during 2008 has also extended the Mercury deposit, in the Ouyen area of Victoria, by a further 2.5km to the north. This extension has been added to the resource base.

With incorporation of the new deposits identified in 2008 the Bemax resource base in the Murray Basin, as at 31 October 2008, stands at 94.1 Mt of contained heavy mineral as outlined in the table below.

The Snapper test pit was constructed during 2008. Geological mapping and sampling was carried out by the exploration team during this development.

Bemax product

Gold Exploration

Bemax undertook gold exploration on two of its licence areas. EL 6744 only 5km north of Mildura is a gold licence in NSW based on a major magnetic anomaly initially identified by the NSW DPI as part of its New Frontiers program. Drill testing is expected to commence in 2009. Drill testing of the basement lithology was undertaken on our southern Victorian licences, EL 4970 and 4951. Basement cover is relatively thin

at less than 100 metres and gold mineralisation is known to occur in the area within the basement Stavely Volcanic group.

Resources

Heavy mineral accumulations occur in fine to medium grained quartz sands of the near-horizontal Tertiary formation known as the Loxton Parilla Sands. Geological knowledge is based on detailed lithological logging of drill holes and the geological environment is well understood. All samples analysed have been collected by the air core drilling method and have been analysed by techniques that are standard for the mineral sands industry. Relevant quality control procedures have been implemented. In determining the resource classifications consideration has been given to the perceived geological continuity, drill hole spacing and data quality. Resource estimates are reported at cutoff grades of 1% HM or higher (as noted) and have been estimated by block modelling or in some cases by cross section polygonal methods. For the more important deposits bulk densities have been estimated from a combination of physical testwork and calculation based on HM content. For less important deposits a constant value based on past experience has been used. The majority of resources remain unchanged from those reported in 2007. The additional resources of Snapper South, Phoenix and Benbow as well as the extension to the Mercury deposit have been included based on cross sectional manual estimates at a 1% cut-off. The Ginkgo resource and reserve updates for 2008 have been calculated by mining depletion from the 2007 resource model constructed by A. Heptinstall using Surpac software.

Mineralogy within the new Ginkgo resource model as well as the new resources is based on QEMSCAN. QEMSCAN is an automated image analysis system based on a Scanning Electron Microscope. Mineral identification in this system is based on XRF analysis of individual grains. This method is widely accepted in the industry.

The geological resource and reserve for Snapper remains unchanged since the update in 2006. The geological 3D resource model has been significantly upgraded based on new geotechnical information. However, a reserve update is waiting further mine planning.

Resource / Reserve Reconciliation

The total resource in the Murray Basin has increased from 2,944 Mt at 2.9% HM (86.5 Mt of contained heavy mineral) at 31 October 2007 to 3,185 Mt at 3.0% HM (94.4 Mt of contained heavy mineral) at 31 October 2008. This is despite resource depletion associated with mining at Ginkgo. The increase has occurred with the discovery of the Snapper South, Phoenix and Benbow deposits in NSW plus the extension of the Mercury deposit in Victoria. These deposits increased the resource base by 8.5 Mt of contained heavy mineral, whereas mining at Ginkgo has decreased the resource by 0.6 Mt of contained HM.

The resource and reserve at Ginkgo has been depleted by production from 31 October 2007 to 31 October 2008 of 10.2Mt of ore at an average grade of 6.09% HM which equates to 623 Kt of contained HM. Consequently, the Ginkgo Ore Reserve has changed from 161Mt at 2.68% HM to 151Mt at2.45%. This represents the total change in reserve base as there has been no change to the Snapper ore reserve.

The updated resource and reserve figures are based on mineralogical data derived using QEMSCAN. In 2007 mineralogical grains termed rulox, which are a combination of Rutile and leucoxene, were incorporated in the Ilmenite figure. Based on metallurgical behaviour these grains have been reclassified in the 2008 Ginkgo Reserve figures to be incorporated with Leucoxene. Consequently, the Leucoxene has increased from 8 to 11%.

South West Western Australia

Geology and Exploration

Heavy mineral sands deposits in the South west of Western Australia occur principally as palaeo-strands and associated dunal sands. They have been formed in the period from early Pleistocene to the present day. The strands are associated with a number of old shorelines and it is not uncommon to find multiple overlapping deposits at any one location.

Two prospective regions exist in this area, the Swan Coastal Plain, and the Scott Coastal Plain, on the Southern Coast. The Swan coastal plain lies between the Darling Scarp and the sea, and is a feature of Western Australian Geography, stretching from Geraldton to Busselton. In the region between Perth and Busselton these shorelines occur on the geomorphic feature known as the Swan Coastal Plain. They include the Ridge Hill, Yoganup/Waroona, Capel and Spearwood shorelines and are distinguished by the current day elevations at which they are found. On the South Coast the deposits are associated with the Donnelly Shoreline on the Scott Coastal Plain. Separating the Swan Coastal Plain from the Scott Coastal Plain is the slightly more elevated geomorphic region known as the Blackwood Plateau. Although the southern coast has a number of mineral sands deposits, only two operations have taken place in this province. Bemax is mining and exploring its resources in Western Australia through its wholly owned subsidiary, Cable Sands. Cable Sands has had a lengthy exploration presence in this region, developing projects to supply the Bunbury Mineral Separation Plant. The area is mature in terms of exploration potential but there is still potential for HM deposits to occur that could be economically treated at Bunbury. An exploration program to review remaining potential in the Southwest has been commenced.

Resources

All samples analysed have been collected by air core drilling method and have been analysed by techniques that are standard for the mineral sands industry and that have been employed by Cable Sands for many years in their mining operations. Relevant quality control procedures have been implemented.

In determining the resource classifications consideration has been given to the perceived geological continuity, drill hole spacing and data quality. The deposits are dominated by ilmenite with low rutile and moderate zircon contents. As a consequence the HM cutoff grades used for estimation are generally higher than those used in the Murray Basin and vary from deposit to deposit depending on the local mineral assemblage. The resource estimates have been made using block modelling techniques constrained within interpretations of the mineralisation and after definition of overburden material. The tonnage estimates incorporate exclusions for excessive slimes and oversize contents and HM grades may be locally discounted for potential losses due to induration. Bulk densities are calculated using the HM and slimes contents of the sand. Mining commenced at Gwindinup North in March 2008.

Resource / Reserve Reconciliation

The total resource base in Western Australia has increased during 2008 from 135 Mt at 9.7% HM at 31 October 2007 to 200 Mt at 8.4% at 31 October 2008. This has primarily resulted from a new resource model completed on the Scott River deposit which increased tonnages from 29 Mt at 10.4% HM to 99 Mt at 7.1% HM. The dramatic increase in tonnage and contained HM resulted from application of a lower cut-off grade, inclusion of drilling previously excluded and better interpretation. Resources were also updated during the year for the Gwindinup North and Witcher Scarp deposits. Mining depletion has also been allowed for with the completion of Ludlow and the commencement of Gwindinup North.

The Gwindinup Ore Reserve was upgraded during 2008 to 5 Mt at 9.2% HM compared with 4 Mt at 11.8% HM at 31st October 2007. This is despite mining of 1.0 Mt at 12.1% between March and October 2008. A new reserve was calculated by Adrian Jones for the Gwindinup South deposit in October 2008 which also increased the reserve. Total reserves in WA increased during the annual reporting period from 11 Mt at 11.9% to 13 Mt at 10.7%. An increase in total contained heavy mineral despite mining depletion.

Other Regions

Bemax has two licences covering over 300Sq. km in the South Australian part of the Eucla Basin. These licences lie along the prospective Ooldea Range. Bemax has secured a Joint Venture Agreement with Red Metal Limited on ELs 3147, 3495, 4189 and 4190 which encompass nearly 1500 Sq Km within the Eucla Basin along both the Ooldea and Barton ranges.

Resources Statement

The Mineral Resource estimates appear below in Table 1 and should be read in conjunction with the attached notes. The estimates are published in accordance with the 2004 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code). The Mineral Resources are quoted inclusive of any Ore Reserve estimates.

The estimates for the South west Province of Western Australia were compiled by Mr Alan Heptinstall who is a Member of The Australasian Institute of Mining and Metallurgy and is a full-time employee of the company. Mr Heptinstall has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the JORC Code. Mr Heptinstall consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

The estimates for the Murray Basin Province were compiled by Dr Ray Roberts. Dr Ray Roberts is a Member of The Australasian Institute of Mining and Metallurgy and is a full-time employee of the company. Dr Roberts has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the JORC Code. Dr Roberts consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Several of the resources in the Murray Basin were originally compiled by Mr Diederik Speijers in 2004 and have not been updated since that time. At the time Mr Speijers, who is a Fellow of The Australasian Institute of Mining and Metallurgy, was employed by McDonald Speijers, and was deemed to qualify as a Competent Person as defined in the 2004 Edition of the JORC Code. The responsibility for these resources is now undertaken by Dr Ray Roberts.

Ginkgo dredge

Table 1

SUMMARY OF BEMAX MINERAL RESOURCES AT 31 OCTOBER 2008

Mineral Assemblage Deposit Name

Resource Category

Ore Tonnes

(Mt)

HM Tonnes

(kt)

HM Grade

(%)

SlimesContent

(%) Ilmenite

(% of HM)

Rutile (% of HM)

Zircon (% of HM)

South West WA Province Gwindinup North Measured 15 1,102 6.9 12 88 (a) 9 Gwindinup South Measured 13 951 7.1 13 88 (a) 9 Happy Valley North Measured 3 362 10.8 17 87 (a) 12 Happy Valley South Measured 6 475 8.4 17 88 (a) 11 Jangardup South (b) Measured 25 2,641 10.4 7 83 (a) 10 Kemerton (b) Measured 5 838 15.9 4 86 (a) 5 Indicated 3 293 8.4 4 86 (a) 5 Scott River (b) Indicated 99 7,015 7.1 13 63 (a) 4 Hopelands East (c) Indicated 19 1,986 10.6 10 84 (a) 9 Hassell Beach (b) Indicated 4 530 11.9 4 64 (a) 24 Four Acres Indicated 1 82 11.0 7 82 (a) 8 Inferred 0.2 8 3.6 9 82 (a) 8 Whicher Scarp Indicated 5 492 10.1 16 86 (a) 13 Inferred 1 113 10.9 12 88 (a) 10 Total WA Measured 68 6,288 9.3 10 86 9 Indicated 131 10,398 7.9 12 69 6 Inferred 1 121 9.6 12 88 10 Total 200 16,807 8.4 12 75 7 Murray Basin Province – Victoria Wemen South (d) Measured 11 445 3.9 6 53 27 9 Indicated 1 13 2.2 10 53 23 9 Galileo Indicated 26 1,606 6.2 11 52 15 9 Mercury Indicated 37 2,052 5.5 11 57 19 10 Inferred 6 297 5.3 14 46 19 11 Titan Indicated 9 425 5.0 13 58 14 8 Kulwin Nth Measured Measured 2 186 9.6 8 61 16 15 Kulwin Nth Inferred Inferred 3 253 9.7 12 61 16 15 Murray Basin Province – NSW Cylinder Indicated 35 1,215 3.5 2 59 21 13 Inferred 19 353 1.9 2 58 23 10 Karra Indicated 151 5,738 3.8 5 55 14 12 Finigans Tank Inferred 8 351 4.5 14 51 26 18 Western Strands Inferred 60 1,082 1.8 5 62 14 14 Triangle Indicated 41 909 2.2 4 60 18 12 Birthday Gift Measured 12 409 3.3 4 64 15 10 Indicated 48 1,344 2.8 4 64 15 10 Brigantine Inferred 13 459 3.5 5 55 19 9 Byrnes Tank Inferred 9 235 2.7 3 64 14 10 Dubloon North Inferred 13 459 3.5 2 54 21 11

Blind Pew Inferred 49 1,127 2.3 2 67 11 10 Trelawney Inferred 47 1,227 2.6 3 65 11 13 Cavalier South Inferred 11 342 3.0 2 52 17 10 Cavalier North Inferred 15 536 3.6 2 55 13 15 Jacks Tank North Inferred 13 247 1.9 na 50 12 31 Jacks Tank South Inferred 41 1,066 2.6 na 55 21 15 Murray Basin Province – NSW Ginkgo Measured 135.2 3,899 2.9 2 66 12 10 Indicated 43 856 2.0 2 66 12 10 Snapper Measured 117 6,348 5.4 3 55 16 9 Winchester Inferred 95 3,141 3.3 3 51 17 4 Gallipoli Inferred 335 7,672 2.3 3 50 19 9 Minervah Inferred 62 3,115 5.0 2 49 12 9 Crayfish Inferred 144 2,203 1.5 6 34 40 10 Laburnum Inferred 70 2,049 2.9 4 60 19 9 Somme Inferred 40 658 1.6 4 50 26 11 Coombah Inferred 7 306 4.7 1 63 18 18 Goliath Inferred 65 1,950 3.0 7 44 21 10 Yabbie Inferred 302 5,734 1.9 1 44 16 8 Shamrock Inferred 129 2,967 2.3 4 13 26 13 Campaspe Inferred 113 5,020 4.5 3 55 12 13 Coliban Inferred 52 1,964 3.8 2 43 17 11 Wakool Inferred 53 1,519 2.9 1 39 17 13 Barda Inferred 46 1,851 4.0 3 49 19 9 Massidon Indicated 230 6,105 2.7 12 50 7 8 Inferred 200 4,589 2.3 12 50 7 8 Atlas Inferred 23 1,883 8.4 2 66 15 9 Snapper South Inferred 24 940 3.9 7 46 10 5 Phoenix Inferred 179 5,891 3.3 5 36 6 6 Benbow Inferred 43 1,403 3.3 3 52 18 8 Total Measured 278 11,287 4.1 3 59 15 10 Murray Basin Indicated 620 20,261 3.3 8 55 13 10 Inferred 2,287 62,886 2.7 4 48 16 10 Total 3,185 94,117 3.0 5 50 15 10 Group Deposits Measured 346 17,575 5.0 4 69 10 9 Indicated 751 30,659 4.1 9 60 9 9 Inferred 2,288 63,007 2.8 4 48 16 10 Total 3,385 111,241 3.3 5 54 13 9

Table 2

SUMMARY OF BEMAX ORE RESERVES AS AT 31 OCTOBER 2008 Province Reserve Ore HM HM Slimes Mineral Assemblage

Category Tonnes Tonnes IlmeniteLeucoxene Rutile Zircon

(Mt) (kt) (%) (%) (% of HM) (% of HM)

(% of HM)

(% of HM)

Western Australia Gwindinup North Proved 5 427 9.2 12 86 2 (a) 9

GwindinupSouth Probable 3

321 11.8 13 88 2 (a) 9 Happy Valley North Probable 2

278 13.8 16 84 2 (a) 13

Happy Valley South Probable 4

353 10.0 18 84 3 (a) 12

Total WA Proved 4.7 426.9 9.2 12 86 2 9 Probable 8 952 11.5 16 85 2 11 Total 13 1,379 10.7 14 85 2 11 Murray Basin

Ginkgo Proved 99 3,178

3.21 2 43 11 13 10

Ginkgo Probable 52 520

1.0 2 46 8 13 10 Snapper Proved 117 5,850 5.0 3 46 9 16 9 Total 268 9,548 3.6 2 45 10 15 9 Group Total Proved 221 9,455 4.3 3 47 9 14 9 Probable 60 1,472 2.4 4 70 5 4 11 Total 281 10,928 3.9 3 50 9 13 10 Notes (a) - For WA reserves Leucoxene and Rutile are combined

Notes forming part of the estimates: (a) For deposits in South West Western Australia the Rutile content is typically low and for resources is included with ilmenite. For the Murray Basin resources total Ilmenites include a range of Ilmenites and leucoxene. (b) Environmental approvals yet to be obtained. (c) Close to urban development. Ilmenite has high chrome and fine grainsize. (d) Unmined extension of a recently suspended Wemen dredge mining operation.