Level 1, 37 Ord Street, West Perth WA 6005

heron@heronresources.com.au

+61 8 9215 4444

ABN: 30 068 263 098

Heron Resources Limited

ASX Release 8 April 2014

ASX Release Heron Resources Limited 1 of 3

Simulus Scoping Study Results

Potential Step Change for Kalgoorlie Nickel Project Heron Resources Limited (Heron) is pleased to report on the results of the recently completed Simulus Engineers (Simulus) Scoping Study which investigated the feasibility of a smaller scale 10,000tpa nickel plant utilizing the Simulus Carbon Friendly Nickel Production (CFNP) sulphuric acid leaching and recycling process:

Bench-scale tests confirm between 85-97% nickel recovery using Atmospheric Leach

Sulphuric acid regeneration and recovery of up to 70%

Total project capital cost including infrastructure and 20% contingency A$356 million

C1 cost US$3.56 per pound of nickel (A$3.96 per pound)

Capital intensity US$14.54/annual pound of nickel – this capital cost reduction is major advancement for the KNP

Kalgoorlie Nickel Project (Heron 100%)

History

The Kalgoorlie Nickel Project (KNP), located in a 150km radius north and east from Kalgoorlie, Western Australia, has a total nickel laterite Mineral Resource of 796 million tonne (Mt) grading 0.70% nickel and 0.048% cobalt. Vale Inco farmed in to the KNP between 2005 and 2009, expending $34.5 million to deliver a valuable Pre-Feasibility Study (PFS) data set comprising some 95,000 metres of drill data, a JORC-compliant Mineral Resource estimate, and detailed geo-metallurgy modelling. Vale Inco concluded that a High Pressure Acid Leach (HPAL) was the preferred flowsheet for developing the KNP. The Vale Inco study was of a very high quality and has provided the key source data for subsequent studies.

The current Simulus Scoping Study utilizes only 31Mt of the available 796Mt KNP resource, providing for significant flexibility for future studies in plant location, ore types utilized and production scale.

Feasibility Studies

Prior to the current Simulus Scoping Study, there have been two previous feasibility assessments on the KNP:

Vale Inco 2009 PFS, HPAL flow-sheet, 2.50 million tonnes per annum (Mtpa) leach feed, pre-production capital costs of A$2.1 billion for 22.2 thousand tonnes per annum (Ktpa) nickel production in Mixed Hydroxide Product (MHP), operating costs of US$4.54/lb of nickel; and

Heron (with consultants) 2010 PFS optimization, HPAL flow-sheet, 3.75Mtpa leach feed sourced from high grade beneficiable ore, pre-production capital costs of A$2.8 billion for 36.7Ktpa nickel production in MHP, operating costs of US$4.17/lb of nickel.

Both Vale Inco 2009 and Heron 2010 only accessed ore from four of the 15 separate KNP deposits, confirming the potential due to extensive resource base for longer mine-lives and more aggressive screening to increase the nickel Leach Feed Grades.

Based on reviews of the 2009 and 2010 studies, Heron concluded that that the most practical path towards economic production from the KNP would include the following conditions:

Atmospheric Leaching under ambient to low pressure, to minimize high-cost materials of construction (as required for HPAL), and maximized use of “off-the-shelf” components;

Optimization of proven sulphuric acid leaching technology;

Maximization of process water recycling and sulphuric acid regeneration; and

Commencement of commercial production at smaller scale (initially to consider a 10Ktpa potential operation), with the flexibility to expand through the use of modular plant design.

ASX:HRR

Issued Shares 253M

Share Price $0.145

Market Cap $36.7M

Cash (Dec 2013) $37.5M

Investments $ 3.5M

TOTAL $41.0M

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Heron Resources Limited

ASX Release 8 April 2014

ASX Release Heron Resources Limited 2 of 3

Simulus Scoping Study

With the Atmospheric Leach and recycling requirement for the KNP flowsheet, Heron retained Simulus and its related company CFNP to undertake sulphuric acid-based hydrometallurgical testwork on various KNP ore-types.

The Simulus technology seeks to change the KNP economics through the recycling of a large component of the sulphuric acid, thereby vastly reducing the amount of neutralizing agents required in nickel hydrometallurgical processing.

Initial bench-scale testwork on three representative samples from KNP deposits showed nickel recoveries of between 94-97% for clay-rich and saprolite ore types and 85% for the iron-rich limonite ore types. Acid recoveries for initial bench-scale tests were up to 70%, combining membrane recovery, iron sulphate hydrolysis and magnesium sulphate calcining.

The current Scoping Study has examined the flow-sheet characteristics for a 10Ktpa commercial scale nickel production plant, utilizing Atmospheric Leaching and acid recovery technology.

Heron received a draft Scoping Study report on 9 March 2014 comprising process design criteria, process flow diagrams, a mass balance, a capital and operating cost assessment (for the processing plant only), and recommendations for future optimization work. An independent peer review of the study was completed on 18 March 2014, confirming the favorable capital and operating cost estimates from the study. This review also highlighted several further optimization options which were incorporated into the final Scoping Study report, received 28 March 2014.

Simulus Flow-sheet

The KNP Optimized Flow-sheet as designed by Simulus can be summarized as follows:

Milling

Single stage crushing, beneficiation and scrubbing, followed by milling

Leaching

Atmospheric leach (4-6 agitated tanks)

Acid recovery

Two stages of membrane recovery and medium pressure autoclave for iron removal and supporting plant

Trim neutralization

Neutralization tanks (SO2 and magnesia based)

MHP production

Precipitation tanks, thickening and filtration, bagging and storage

Supporting processes

Raw and process water supply and distribution, power, acid production, water recovery and magnesia regeneration, ancillary processes

Simulus Capital Cost Estimate

Simulus estimated a plant capital cost of A$236 million (+/-30%), with Heron estimating total capex including utility supply, site access, mining set-up, TSF, accommodation, EPCM and Owners Costs at A$356 million.

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Heron Resources Limited

ASX Release 8 April 2014

ASX Release Heron Resources Limited 3 of 3

Simulus has estimated process plant capital from its “off-the-shelf” supplier responses. Heron generated non-plant costs by scaling down the 2010 capital estimates (from the Heron PFS Optimization, typically applying a factor of 0.45 based on a generally accepted industry scaling formula).

For the base case 10Ktpa of nickel production, the estimated capital intensity is US$14.54/annual pound of nickel production, which is a “step-change” improvement in the overall KNP economics.

Summary of Results

Comparing the 2014 Simulus Scoping Study to each of the Vale Inco 2009 and Heron 2010 study outcomes:

TABLE 1

PROJECT PHYSICAL DATA

Parameter Vale PFS

January 2009

HRR PFS

Optimization

February 2010

Simulus Study

April 2014

Capacity Mtpa Leach Feed 2.5 3.75 1.0

Mine Life (years) 34 35 22

Average Ni Production tpa (in MHP) 22,200 36,700 10,000

Overall Opex US$/lb Ni (C1 cost) 4.54 4.17 3.56

Pre-production Capex A$M 2,102 2,834 356

Overall Capex US$/annual lb Ni 40.45 36.10 14.54

Forward Program

The results of the Simulus Scoping Study are very encouraging with the result that Heron has now committed to undertake further feasibility work on the KNP as follows:

Up-scaling of the current study from 10Ktpa to 20Ktpa to assess the impact of economies of scale on both operating costs and capital costs, including a revised mining plan and estimates for mining capital and operating costs;

Additional bench-scale acid leach tests will be carried out at the Simulus Kewdale facility on the mining inventory identified in the up-scale study on the full range of KNP ore types, aiming to better characterize geo-metallurgical performance under Atmospheric Leaching conditions;

Subject to the results of the up-scale study, Simulus will be commissioned to commence Front End Engineering Design (FEED) for a 1-3 tonne per hour pilot plant to treat KNP laterite ore;

A pilot plant location study will be implemented, which will include the Heron Bulong Boulder Block site to access exposed high grade ore within Heron’s pit and at grass in ore stockpiles; and

Heron will commence partner studies, seeking a potential funding partner to commercialize the “KNP Optimized Flowsheet”.

The KNP feasibility program will continue in parallel with the current Heron Resources Limited-TriAusMin Limited merger implementation program. The merged company will have the Woodlawn base metal project as its development focus, but monetizing the considerable option value of the KNP will remain an on-going priority.

Ian Buchhorn Managing Director

The information in this report that relates to Feasibility Studies is based on information compiled by Ian Buchhorn who is a Member of the Australasian Institute of Mining and Metallurgy. Ian Buchhorn is a full time employee of Heron Resources Limited and has sufficient experience that is relevant to mineral economics and the style of mineralization and type of deposit under consideration, and to the activity that is being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ian Buchhorn has consented to the inclusion in this report of the matters based on his information in the form and context that it appears.

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