First Iron Group holds two 25 year exploration and production licences, Petrovskoe and Glubochenskoe South, which contain significant deposits of iron ore.

• The Petrovskoe deposit contains a JORC Code compliant inferred magnetite resource of 596.7 Mt from which the company Directors intends to build a 14-15mtpa underground iron ore project, with production scheduled to commence in 2015.
• The Glubochenskoe South deposit contains a JORC Code compliant indicated and inferred magnetite resource of 64.8 Mt and oxide resource of 29.2 Mt.

The Company's assets are located in the Kurgan region of the Russian Federation, adjacent to the border with Kazakhstan. The Kurgan region was identified by the Company as a strategic location for its iron ore operations due its proximity to market, established infrastructure, common geology and positive local supply and demand fundamentals. The region is close to several major Russian steel mills, and the projects are close to the Trans-Siberian Railway, which provides access to China and international iron ore markets both east and west.

MATERIAL	CLASSIFICATION	TONNES (mt)	FeTOT (%)	FeMAG (%)	S (%)
Petrovskoe
Magnetite	Inferred	596.7	27.6	16.2	2.5
Total Magnetite		596.7	27.6	16.2	2.5
Glubochenskoe South
Magnetite	Indicated Inferred	49.2 15.6	30.4 28.9	22.2 20.4	3.2 3.8
Total Magnetite		64.8	30.1	21.8	3.4
Oxide	Indicated Inferred	27.7 1.5	35.2 37.8	3.3 1.4	1.0 0.5
Total Oxide		29.2	36.4	3.2	1.0
Total Assets
Magnetite	Indicated Inferred	49.2 612.3	30.4 27.6	22.2 16.3	3.2 2.5
Total Magnetite		681.6	27.8	18.7	2.8
Oxide	Indicated Inferred	27.7 1.5	35.2 37.8	3.3 1.4	1.0 0.5
Total Oxide		29.2	36.4	3.2	1.0
Total Indicated		76.9	32.1	15.4	2.4
Total Inferred		613.8	27.7	16.3	2.5
Total		680.7	28.2	18.2	2.6

The map below indicates the location of Petrovskoe and Glubochenskoe in relation to other iron ore deposits and regional infrastructure.


The Petrovskoe and Glubochenskoe iron ore deposits lie within the Valerianov trend, which has a reported strike length of 700 km and extends in a north northeast direction from north-west

Kazakhstan through the Kurgan region. The Valerianov trend is separated into two regions, the Turgai Region hosting ENRC's Sarbaisky, Solovskoye and Kacharsky iron ore operations in Rudni, approximately 50 km west of Kostanai, Kazakhstan, and the Glubochenskoe Region situated in Kurgan. The Glubochenskoe Region hosts the Glubochenskoe and Petrovskoe iron ore deposits, as well as several other deposits owned by the Kurgan government. Historically reported iron ore resources according to the Soviet classification system on the Russian side of the Valerianov trend are noted at some 1.6 Bt.

The Kurgan region is in close proximity to some of Russia's largest steel mills, including the Magnitogorsk ("MMK") steelworks, 603km; the Novokuznetsk ("NTMK") steelworks operated by Evraz, 567 km; Mechel's Chelyabinsk ("TMK") steelworks, 207 kms and Metalloinvest's Urals Steel ("OKMK"), 731 km.


Petrovskoe enjoys favourable access to well established infrastructure. It has direct access to a paved road, only 5km from the main branch of the main proposed sales route, the Trans-Siberian Railway, and has access to an available power supply from KrasniyUralets and also from Yurgamish (8-10 km north-east of the deposit). Such access and readily available infrastructure means that, in contrast to many pre-revenue mining projects in Africa, Brazil, Australia and Russia, a relatively low level of infrastructure spending is likely to be required to bring the Petrovskoe deposit into production.

Glubochenskoe is located only 3km away from the paved road and 7km from the required power supply at the local village of Polovinnoe. It is approximately 75 km from Shumikha, the nearest railway station and a substantial depot of the Trans-Siberian Railway, and approximately 70 km from Petrovskoe.

The Trans-Siberian Railway provides a year round link to transport iron ore products to markets all over Russia and also to China.

First Iron's geographical location with the nearest major steel mill located 207 km away and less than 750 km from 3 additional major steel mills (which in some cases are currently importing ore from up to 3,000 km away in Russia), and only 1700 km from China (which is importing huge volumes of iron ore from overseas markets such as Australia and Brazil) make it well positioned to access both Russian and Chinese demand - driven in both cases predominantly by demographics, urbanisation, rising consumer demand and infrastructure needs - and underlines the potential of the Kurgan region to develop into a major new iron ore province.