NMP owns the Sandpiper marine phosphate project, approximately 60km off the coast of Namibia, which covers a total area of approximately 7000 km2 in the regional phosphate enriched province to the south of Walvis Bay in water depths of 180–300m.

NMP is placed in a strategic position to also develop a new phosphate province in Namibia and controls a substantial part of the most prospective areas. The area specifically includes all of the central enriched core area, where published regional mapping shows phosphate concentration of more than 20% by weight. These deposits were delineated during regional scientific studies in the 1970s but have remained undeveloped. The deposits occur as unconsolidated sea floor sediments, which now lie within the reach and capability of currently available dredging technology. The NMP JV is focused on an accelerated programme for development of the project. Development efforts to date have included extensive resource delineation, investigations and discussions with several reputable contractors and organisations in the key technical areas of marine mining/dredging technology, beneficiation and potential off take candidates, as well as with local, regional and national government departments and officials, which resulted in the completion of a Definitive Feasibility Study at the end of March 2012.

Mineral Resources

Based on the Mineral Resource development work undertaken to date independent estimates of the current (April 2012) phosphate Mineral Resources are:

Feasibility Study

HIGHLIGHTS

• The Namibian marine phosphate project is potentially economic.
• Operating costs have been estimated at just under US$60/t FOB Walvis Bay for an operation on beneficiated material, ramping up to 3Mtpa.
• Start-up capital costs are estimated at US$326M.
• The beneficiated material is indicated to be suitable for marketing as a direct application product, to fertiliser producers and for the manufacturer of phosphoric acid by the Joint Venture and others.

Project Economics Summary

The financial highlights from the Definitive Feasibility Study over the first 25 years of project operation are summarised as follows:

Feasibility Study Base Case (per UCL Resources announcement)

• DFS Base Case Financial Model: 20 years
• Saleable Rock Phosphate per annum: 3.0Mtpa
• Cash Operating Costs, FOB Walvis Bay: $59.70/t
• Capital Costs (Years 1-3): $326M
• Equity NPV after tax @ 10% discount rate: $297M
• Equity IRR after tax: 23.6%

Sandpiper Marine Phosphate Project

NMP's Sandpiper marine phosphate project on the continental shelf off Namibia is contained within tenements of some 7000km². These cover the core area of phosphate mineralisation delineated by government surveys during the 1970s. There is a considerable further extent of phosphate beyond the Sandpiper project.

The Sandpiper deposit occurs as unconsolidated sea floor sediment containing a mixture of old seashells, mud and phosphate sand. It now lies within the depth capability of available dredging technology.

Having recently completed a successful Definitive Feasibility Study, NMP is now moving into a project optimisation phase while it seeks to gain the environmental approvals that are needed before the project can be initiated.. In addition to current efforts on the definitive feasibility study and resource upgrade, investigations and discussions are also being progressed with several reputable organisations for product marketing to establish key market products and engage with potential off-take candidates.

• Feasibility Study indicates the Sandpiper Project is expected to be technically and economically feasible and has the potential to be a long life project capable of delivering attractive investment returns for the Project owners.
• Feasibility Study envisages steady-state production of 3.0Mtpa of phosphate concentrate product (rock phosphate) grading 27.5 - 28.0% P2O5 over an initial mine life of 20 years, including a two-year ramp up period.
• Increase in estimated Mineral Resource in Measured category to 60Mt at 20.8% P2O5 (at 15% P2O5 cut-off). In conjunction with an estimated Indicated Mineral Resource of 105Mt at 19.6% P2O5 in a sub-area of the Sandpiper Project Mining Lease proposed in the Feasibility Study for initial mining, this provides a mining inventory sufficient for a 20 year mine life. Upgrading of Mineral Resource estimates to Ore Reserve estimates is due shortly.
• Independent marketing study completed by CRU Strategies (CRU) confirms:
  • 3.0Mtpa of rock phosphate from the Sandpiper Project (Sandpiper Product) is expected to be marketable across three market segments, including Direct Application Rock Phosphate (DAPR) and as feedstock for the production of Single Super Phosphate (SSP) and Phosphoric Acid (PA); and
  • Average long-term forecast pricing for Sandpiper Product FOB Namibia blended across the three target market segments is expected to result in an approximate 12% discount (based on both quality and freight differentials) to the price of rock phosphate from the Bayovar mine FOB Peru. The current price of Bayovar rock phosphate is approximately US$145 - 150/tonne, FOB Peru.2 CRU’s long-term real price forecast for Bayovar rock phosphate is approximately US$114/tonne, FOB Peru (stated in March 2012 prices).
• Capital costs to first production for a 3.0Mtpa operation currently estimated at US$326.3 million (stated in March 2012 prices). This estimate excludes the potential capital cost of a small reverse osmosis desalination plant which may need to be constructed early in the mine life, the estimate of which is currently being refined. Working capital requirements are currently estimated at US$60.7 million (stated in March 2012 prices, excluding any financing costs), leading to a total funding requirement of US$387.0 million. Optimisation of capital costs estimates is ongoing.
• Steady-state cash unit operating costs (assuming a 3.0Mtpa operation) estimated at US$59.67/tonne of rock phosphate FOB Walvis Bay (stated in March 2012 prices, excluding Namibian government royalties), which is broadly in line with the October 2010 Scoping Study estimate. The impact of any desalination plant on operating costs will also need to be assessed, but may lead to a reduction to the overall operating cost estimate.
• Further work in relation to the ongoing optimisation of these capital and operating cost items as well as the Project’s water strategy is in progress in order to optimize the project In the interim, total capital costs, including the provision for working capital, are in the order of $US 400 million.
• Financing discussions, approvals processes and general optimisation of Feasibility Study results remain ongoing.
• Following a final investment decision and securing financing for the Project, the estimated construction and commissioning period is 24 months.