vale delivers strong pfs report to heron

Highlights

• Project sized for up to 36,000 tpa of nickel in intermediate product with a mine life estimated at 34 years.

• High pressure acid leach (HPAL) flow sheet selected as the best leaching technology for the project with high Ni and Co extractions of approximately 96% and 93% respectively, and low acid consumption of approximately 280 kg/t.

• Cash operating cost estimate of US$4.42 per pound of nickel (including cobalt credits).

• Capital cost estimate of US$1.5 billion dollars.

• Heron notes Vale has only considered 4 of the 14 deposits defined by Heron to 2004 that make up the KNP within the Pre Feasibility Study (PFS)

• Heron believes additional project enhancement will be obtained through the inclusion of the remaining 10 deposits and other optimization opportunities.

• Vale has estimated the cost of a Bankable Feasibility Study (BFS) to be US$50.5 million.
Vale has until 30July 2009 to commence the BFS.

• New resource estimates have been produced for Highway, Goongarrie Hill, Goongarrie South and Siberia North deposits
These estimates have added approximately 25% more tonnes and
16% more Ni metal compared with previous Heron 2004 estimates.

Heron Resources Limited (ASX:HRR Heron) is pleased to announce initial summary details of its Kalgoorlie Nickel
Project (KNP) contained in Vale Inco’s, a wholly owned subsidiary of Companhia Vale do Rio Doce (Vale), Prefeasibility Study report received on 30 January 2009. Vale’s study indicates a project producing up to 36,000 tonnes of mixed nickel cobalt hydroxide product via the high
pressure acid leach (HPAL) process, with a CAPITAL COST of
US$1.5 billion and an OPERATING COST of US$4.42 per pound of production based on a 0.75 USD:AUD exchange rate.
Vale’s study is based on a project treating 2.5Mt of beneficiated leach feed ore per annum through a two autoclave leaching circuit over a project life of 34 years.

The report states that Heron Resources owns one of the most prospective nickel laterite tenement packages in the world,
containing a potential resource of 7Mt of nickel metal. The project has some strategic aspects that made it attractive
to Vale Inco: (1) good local Infrastructure; (2) low sovereign risk; (3) access to a skilled labour pool; (4) low
environmental risk for tailings disposal; (5) supportive government, environment agencies and community.

An economic evaluation was not scoped as part of this report. For the base case, the CAPEX has been estimated as
AUD 1,994 million for a plant to create MHP; versus AUD 2,192 million for a plant to create MSP. The average
operational cost over the life of mine has been estimated to be $US 4.42 per pound of Ni in MHP; versus $US 4.59
per pound of Ni in MSP.­