10 BILLION TONNES TOTAL RESOURCES ACHIEVED FROM MAJOR MAIDEN RESOURCE ESTIMATE FOR WESTERN HUB

Transcription

1 23 March 2011 The Companies Officer ASX Limited 2 The Esplanade Perth WA 6000 Dear Sir 10 BILLION TONNES TOTAL RESOURCES ACHIEVED FROM MAJOR MAIDEN RESOURCE ESTIMATE FOR WESTERN HUB A substantial increase in Fortescue Metals Group s Resource Inventory to billion tonnes (bt) positions the company as one of the world s major resource houses; A maiden resource estimate for Fortescue s Western Hub of 625 million tonnes (); These resources have resulted from drilling of 4 targets within the Western Hub area. Another 10 targets have been delineated with drilling to commence in May. Ongoing mapping in the area is expected to identify further targets. The combined resources of the Western Hub and the Solomon Hub determine the necessity of the second port in Fortescue s Two Port, Three Hub Strategy; and All ores in the 10.03bt Resource Inventory are typical of other existing mined and marketed Pilbara ores. Fortescue Metals Group ( ASX: FMG Fortescue ) has increased Resources substantially across its Pilbara projects. The increase to a 10.03bt resource inventory achieves one of the world s major resource holdings in a record time with the majority of Fortescue s 87,000km 2 of Pilbara tenements still unexplored. The 625 maiden resource estimate for Fortescue s new Western Hub cements the company s determination to proceed with its planned Pilbara Port at Anketell Point. These Resources are additional to the 1.03bt at Nyidinghu announced on 25 February Maiden Resource Estimate for Western Hub The initial resource estimate for the Western Hub area totals 625 at grades of 58.8% Fe; 5.44% SiO 2 ; 3.06% Al 2 O 3 ; 0.091% P and 6.61% LOI. The resource includes 275 of Bedded Iron Deposit (BID) hosted within the Brockman Iron Formation (Brockman), 212 of BID hosted within the Marra Mamba Iron Formation (Marra Mamba) and 137 of Detrital Iron Deposit (DID) associated with the BID mineralisation. Further details of this resource estimation are supplied in Attachment 1. These deposits occur along a strike length of approximately 35 kilometres starting a few kilometres southwest of the Brockman 2 minesite operated by Rio Tinto Limited. Fortescue Metals Group Limited ABN ACN ADDRESS Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004 TEL FAX fmgl@fmgl.com.au

2 The eastern portion of the area is called Flying Fish and hosts mainly Marra Mamba ores. The western portion is named Eliwana. It hosts all the Brockman ores and a small amount of Marra Mamba ore. DID is related to the BID ores and distributed in roughly equivalent proportions. Several additional targets have been identified within the Western Hub and drill testing of these is planned to commence during the June Quarter. The ores appear to be typical of other Pilbara ores of the same types and it is expected that a good quality product can be made available to the market when the project is developed. Metallurgical test work to confirm this has commenced. Increase of Resources at Solomon Hub Serenity: Further drilling within the Serenity prospect (western portion of Solomon Hub) has resulted in an increase in the Inferred Resource by approximately 100 with the updated estimate of the Serenity resources now standing at 1.1bt. Again these resources are typical of Pilbara ores and it is expected that good quality products will be produced. Naturally, further work will be undertaken to confirm this and support design parameters. Further details of this resource estimation are supplied in Attachment 1. Mt MacLeod: Mt MacLeod is a new prospect within the Solomon Hub containing Marra Mamba ore. It is located approximately 20 km south of the main Solomon mining area. The deposit is totally covered by recent alluvium and does not outcrop at all. The discovery was made by drill testing selected stratigraphy located in suitable structural positions. An Inferred Resource has been estimated totaling of 121 at grades of 58.0% Fe; 4.25% SiO 2 ; 2.77% Al 2 O 3 ; 0.050% P and 8.68% LOI. Details are given in Attachment 1. Substantial potential targets for further discoveries under cover remain to be tested. This discovery boosts the viability of the Solomon Hub by providing a source of low phosphorus ore should it be required. Further details of this resource estimation are supplied in Attachment 1. Firetail: Further infill drilling at Firetail prospect (Brockman BID) has increased the Indicated Resource by 50 and the overall resource by 8. The updated Indicated Resource for Firetail is now 194 at an average grade of 58.6% Fe; 6.47% SiO 2 ; 2.71% Al 2 O 3 : 0.107% P and 6.27% LOI. This further strengthens the Solomon Project with further resource for conversion to Reserve. A Reserve announcement is expected in May Further details of this resource estimation are supplied in Attachment 1. Fortescue is very pleased to have its Resource inventory now over 10bt. We look forward to adding further tonnes as we test our already defined targets during the 2011 year. Yours sincerely, Fortescue Metals Group Mark Thomas Company Secretary

3 Attachment 1 - Geological summary Western Hub - Geology The Eliwana/Flying Fish prospect forms part of Fortescue s Western Hub and is located in the Hamersley Ranges region of Western Australia, approximately 80 kilometres to the north-west of Tom Price township. Outcropping geology extends from the Dales Gorge, Whale Back Shale and Joffre Members of the Brockman Iron Formation, to the Newman, Mt MacLeod and Nammuldi members of the Marra Mamba Iron Formation. Both the Brockman and Marra Mamba iron formations are known to host large tonnages of Iron ore deposits elsewhere in the Hamersley ranges. Mineralisation on the outcropping or buried extents of these Bedded Iron Deposits (BID) is the primary focus for ore deposits in the Western Hub, however outcropping and drilled mineralised intercepts of Channel Iron Deposit (CID) and Detrital Iron Deposits (DID) have also been recognised throughout this region, and will add to the total resource base. Exploration operations by Fortescue within the Western Hub has focussed on exploring the outcropping mineralised areas plus interpreted extensions (predominantly BID), and the valley systems (CID and DID). This has resulted in the discovery of large tonnages of all of these three classic Hamersley Province Iron deposit types (DID, CID and BID). In certain areas the DID s will overly a thick sequence of CID material which in turn may be underlain by BID material. Within the Eliwana/Flying Fish prospect, the mineralisation covers a relatively narrow zone with an average width of 2km and a strike length of approximately 50km. Mineralisation follows the roughly east-west outcropping of southerly dipping Marra Mamba and Brockman units, and extends to depths up to 160m. A total of 28,638 one metre samples from 700 Reverse Circulation drill holes were used in the Eliwana/Flying Fish estimate. This Inferred Resource is based on a nominal drill pattern of 400 by 100m. All samples were analysed by SGS Laboratories in Perth using XRF techniques. Modelling Approach Eliwana/Flying Fish The Eliwana/ Flying Fish block models were built with using 100m x 50m x 1m and 200m x 50m x 1m blocks, which reflect local drill spacing and orientation. Subcelling was down to a cell size of 5m x 5m x 0.25m was used along domain boundaries to better resolve the domain interface. Estimation was conducted using Ordinary Kriging for all geological domains. Orientations were measured from interpreted stratigraphy and data continuity was measured from variogram maps created for each domain. Geostatistical analysis was conducted on each identified domain for the purposes of data and model validation. Median density values obtained from downhole geophysical density logging vary between 2.2 and 2.8 depending on geological unit and appropriate values were used for each unit.

4 Table 1 Eliwana/Flying Fish Resource estimate (Western Hub) DID BID (Marra Mamba) BID (Brockman) Total Solomon Hub The Solomon Hub is located in the Hamersley Ranges region of Western Australia, approximately 60 kilometres to the north of Tom Price township. Outcropping geology in the region is the Dales Gorge, Whaleback Shale and Joffre Members of the Brockman Iron Formation (Brockman) which are known to host large iron ore deposits within other regions of the Hamersley Ranges (bedded iron deposits or BID). Minor outcrops of Marra Mamba Iron Formation (Marra Mamba) are also known in the region, however are predominantly covered by recent alluvium. Incised into this bedrock geology are large channel systems, typically one to two kilometres in width, and stretching for tens of kilometres. During the Tertiary period weathering and erosion of the generally iron rich surrounding bedded material deposited iron ore fragments and detritus into these channels (termed Channel Iron Deposits or CID), and this material has subsequently been buried, preserved and enriched. Through Fortescue s interpretation of drill hole results, the CID deposits can be subdivided into an upper hard ore CID and a lower ochreous CID. Portions of the Upper CID unit have been affected by weathering and have been separated out as hardcap. Clay lenses are observed as semi-discrete bands often several metres thick, sometimes of a poddy nature although often traceable between drill holes. The material overlying the CID material is of younger age and has also been eroded from iron rich material. This clastic material is concentrated into horizons of elevated iron grade termed Detrital Iron Deposit (or DID), which forms part of the sequence of overlying later Tertiary aged alluvials. Exploration operations by Fortescue within the Solomon project region (RC and diamond drilling) have focussed on exploring these valley systems and the Brockman Iron Formation. Fortescue s exploration has discovered large tonnages of all of these three classic Hamersley Province Iron deposit types (DID, CID and BID) as well as some cemented alluvial material known as canga. In certain areas the DIDs will overly a thick sequence of CID material which in turn may be underlain by BID material.

5 Serenity prospect (Solomon Hub) Updated resources This announcement is based on the results of recent work in the Serenity project area and includes previously announced Resources. Mineralisation is a mixture of BID (Brockman), CID and DID. The mineralisation is hosted within or adjacent to a generally north-south striking channel system, which varies in width from 200m to 700m. The horizontal mineralisation within the channel is broken up into Upper CID and Lower CID. The bedded mineralisation occurs predominantly along the base of the channel. Mineralisation is exposed or under recent cover, and extends to depths up to 120m. A total of 39,013 one metre samples from 1054 Reverse Circulation drill holes were used in the Serenity estimate. This Inferred Resource is based on a drill pattern of 100m by 200m to the north and 100m by 400m to the south. All samples were analysed by SGS Laboratories in Perth using XRF techniques. Modelling Approach - Serenity The Serenity block models were built with using 50m x 100m, 200m x 100m and 50m x 200m blocks, which reflect local drill spacing and orientation. Subcelling was down to a cell size of 5m x 5m x 0.25m was used along domain boundaries to better resolve the domain interface. Estimation was conducted using Ordinary Kriging for most geological domains and Inverse Distance cubed was used in geological domains with limited data. Orientations were measured from interpreted stratigraphy and data continuity was measured from variogram maps created for each domain. Geostatistical analysis was conducted on each identified domain for the purposes of data and model validation. Median density values obtained from core measurements and downhole geophysical density logging vary between 2.27 and 2.8 depending on geological unit and appropriate values were used for each unit. Table 2 Serenity Resource estimate DID Weathered CID Upper CID Lower CID BID (Brockman) Total 1,

6 Firetail Prospect (Solomon Hub)- Updated Resources This announcement is based on the results of recent work in the Firetail prospect and includes previously announced Resources. The Firetail prospect is located in the eastern portion of the Solomon Hub. The most common ore type at Firetail is bedded iron ore hosted by the Brockman Iron Formation. In some zones this is overlain by iron rich gravels, DID, interpreted to be locally derived. A small area of CID is located near the centre of the valley. Bedded mineralisation occurs along both limbs of an open anticline (plunging shallowly to about 290 degrees). Each limb shows mineralisation along a strike of approximately 7km in length and around 700 metres in width. Mineralisation occurs from surface and extends to depths up to 150 metres. A total of 65,264 one metre samples from 1,869 Reverse Circulation drill holes were used in the Firetail estimate. The Measured Resources are based on a minimum drill spacing of 50 x 50 metres, the Indicated Resources are based on a drill spacing of 100 by 50 metres. Inferred Resources are generally based on a drill pattern of 100 by 200m. All samples were analysed by SGS Laboratories in Perth using XRF techniques. Modelling Approach - Firetail The Firetail block models were built with using 25m x 25m x 1m blocks. Subcelling was down to a cell size of 5m x 5m x 0.25m was used along domain boundaries to better resolve the domain interface. Estimation was conducted using Ordinary Kriging for all geological domains. Orientations were measured from interpreted stratigraphy and data continuity was measured from variogram maps created for each domain. Geostatistical analysis was conducted on each identified domain for the purposes of data and model validation. Median density values obtained from core measurements and downhole geophysical density logging vary between 2.5 and 2.9 depending on geological unit and appropriate values were used for each unit. Table 3 Firetail Resource estimate Measured Indicated Inferred Total

7 Measured BID (Brockman) Total Indicated DID BID (Brockman) Total Inferred DID CID BID (Brockman) Total Total Firetail DID CID BID (Brockman) Total

8 Mt MacLeod Prospect (Solomon Hub) Mineralisation is within the Mt Newman Member of the Marra Mamba Iron Formation. The mineralisation follows fold axes (trending roughly east-west). The two main mineralised zones are approximately 5km in length and around 500 metres in width. Mineralisation is under recent cover from a depth of 10 metres from surface and extends to depths up to 60 metres. Mineralisation is open along strike. A total of 9,174 one metre samples from 166 Reverse Circulation drill holes were used in the Mt MacLeod estimate. This Inferred Resource is based on a drill pattern of 200 by 800m to the north and 400 by 200m to the south. All samples were analysed by SGS Laboratories in Perth using XRF techniques. Modelling Approach Mt MacLeod The Mt MacLeod block model was built using 400m x 100m x 2 m blocks. Subcelling was down to a cell size of 5m x 5m x 0.25 metres was used along domain boundaries to better resolve the domain interface. Estimation was conducted using Inverse distance cubed for all geological domains. Orientations were measured from interpreted stratigraphy. Geostatistical analysis was conducted on each identified domain for the purposes of data and model validation. Median density of 2.6 cm/g 3 was used for the mineralisation. This estimate has been classified as inferred for all units. Table 4 Mt MacLeod Resource estimate BID (Marra Mamba) Total All drill hole data is collected and stored in digital format with appropriate validation checks to ensure integrity of the database. QA/QC techniques are those as standard for all Fortescue operations, being an average of one field standard per 100 samples submitted to the laboratory, and an average of three duplicates taken per 100 samples.

9 Table 5 - Solomon Hub Summary Resource Table Kings - Measured Indicated Inferred Sub Total 1, Firetail - Measured Indicated Inferred Sub Total Serenity -inferred 1, Sheila Valley - Inferred Mount MacLeod - Inferred Total 3,

10 Mt Resources Measured Indicated Inferred Total Cloudbreak/ Christmas Creek 167 1, ,143 Chichester Other Eliwana/ Flying Fish Glacier Valley/ North Star 310 2,153 2,464 Nyidinghu 1,032 1,032 Solomon Hub ,172 3,071 Total 275 2,911 6,843 10,030 Location of Fortescue Pilbara Tenements

11 Location of Maiden Western Hub Resources Location of Solomon Hub Resources

12 The information in the report to which this statement is attached that relates to Mineral Resources is based on information compiled by Mr Stuart Robinson, Mr Mark Glassock and Mr Clayton Simpson who are all Members of The Australasian Institute of Mining and Metallurgy. Mr Stuart Robinson, Mr Mark Glassock and Mr Clayton Simpson are full time employees of Fortescue Metals Group Ltd and provided geological interpretations for Mineral Resource calculations and compiled the exploration results. Mr Robinson, who is a Fellow of The Australasian Institute of Mining and Metallurgy, and Mr Glassock and Mr Simpson who are Members of The Australasian Institute of Mining and Metallurgy have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Robinson, Mr Glassock and Mr Simpson consent to the inclusion in this report of the matters based on his information in the form and context in which it appears.