Business Case Strategy

The Company has applied for tenements in four project areas presenting different value propositions and exploration strategies with the primary aim to identify economically viable bauxite resources.

In conjunction with local communities, environmental and key stakeholders, the Company has developed a two pronged business plan.

Direct Shipping Ore Strategy Bauxite Resources applied to the Environmental Protection Authority (EPA) in 2010 for a proposal to mine bauxite at a rate of 2Mtpa from a site in north Bindoon, Western Australia, and export bauxite to customers using a Direct Shipping Ore strategy. The EPA has since determined that a Public Environmental Review (PER) assessment is required for the mining operation at north Bindoon. As a result, Bauxite Resources has commenced the environmental assessment through a public process, initiating public discussion for the scope of the assessment of the 2Mpta application with a decision on the application approval by the EPA expected in 2012.

Downstream Processing Strategy In April 2011, Bauxite Resources formed a Joint Venture with Yankuang Group Resources forming Bauxite Alumina Joint Ventures (BAJV). The Joint Venture aims to prove up a minimum of 90 million tonnes of refinery grade bauxite resource within three years and complete a feasibility study into the viability of building an alumina refinery in Western Australia (WA) capable of producing at least 1.1 Mtpa.

The BAJV provides Bauxite Resources and Yankuang with an opportunity to create a valuable, long-life project. A refinery would allow the Joint Venture to generate a value added product and secure solid business margins providing protection against potential future market downturns. This strategy allows the Joint Venture to monetise a larger percentage of the bauxite resource and not just the premium grade portion for direct shipment.

Achievement of the agreed program targets would see the feasibility study completed early in 2014 and the refinery construction to be substantially commenced within two years after that. The alumina produced would be attributed 70% to Yankuang and 30% to Bauxite Resources.

Bauxite Resources expects that a successful project would operate for a minimum of 20 to 25 years and potentially, as long as a 40 year project.