Kalgoorlie Nickel ProjectKalgoorlie Nickel ProjectAn Emerging World Class Nickel Producer

Annual General Meeting 2004

Forward Looking StatementsForward Looking StatementsThis presentation contains “forward-looking statements”. Such forward-looking statements include, without limitation, (i) estimates of future earnings, the sensitivity of earnings to nickel and other metal prices and foreign exchange rate movements; (ii) estimates of future nickel and other metal production and sales; (iii) estimates of future cash costs; (iv) estimates of future cash flows, the sensitivity of those cash flows to the nickel and other metal prices and foreign exchange rate movements; (v) statements regarding future debt assumptions; (vi) estimates of future capital expenditures and (vii) estimates of resources and statements regarding future drilling programs.Where the Company expresses or implies an expectation or belief as to future events or results, such an expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, nickel and other metal price volatility, currency fluctuations, increased projected production costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as political and operational risks, government regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Report for the year ended 30 June 2004 and Half Year Report for the six months to 31 December 2003 as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any revision to any “forward-looking statement” to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. The Company has recently released the results of an Independent Resources Estimates and Scoping Study. The Company wishes to make it clear that at this stage (i) none of the Company’s Resources have been converted into Reserves and (ii) a bankable feasibility study been yet to be completed on the Kalgoorlie Nickel Project (“KNP”).

JORC Code 1999 Compliance The information in this report that relates to Mineral Resources is based on information compiled by Norman Mathew Longworth, who is a Member of the Australasian Institute of Mining and Metallurgy. Norman Mathew Longworth has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 1999 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr. Longworth is a fulltime employee of Heron Resources Limited, employed as Exploration Director.

AustraliaAustralia’’s Next Major Nickel Producers Next Major Nickel Producer

100% owner of the Kalgoorlie Nickel Project (“KNP”)Australia’s premium nickel laterite project

Large strategic land holdings

Recently completed its ultramafic and nickel resource acquisition strategy

Inferred Mineral Resource of 891mt grading 0.74% and 0.05% Co at a 0.5% Ni cut-off

Estimated 6.6mt of contained nickel

Positive screen upgrade results confirm Leach Feed Grade (“LFG”) >1.5% Ni is likely

Oretest to complete independent testing

Now aggressively advancing towards production

Company SnapshotCompany Snapshot

HRR Share Price and Nickel Spot Price (Jan 2003 – Oct 2004)

7.4%(%)MBM Corporation

11.3%(%)OMG Cawse

26.4%(%)Ian Buchhorn

Key Shareholders

0.27($)Share Price

154.11(m)Shares on Issue

($m) 42.5Market Capitalisation

Source:

IRESS, Management estimates

Directors

Craig Readhead Non Executive ChairmanIan Buchhorn Managing DirectorMathew Longworth Exploration DirectorAllan Trench Non Executive Director

Directors

Craig Readhead Non Executive ChairmanIan Buchhorn Managing DirectorMathew Longworth Exploration DirectorAllan Trench Non Executive Director

1 Subject to shareholder approval, fully diluted

0.08

0.13

0.18

0.23

0.28

0.33

01-Jan

-0312-

Feb-03

26-Mar-

0307-

May-03

18-Jun

-0330-

Jul-03

10-Sep-

0322-

Oct-03

03-Dec-

0314-

Jan-04

25-Feb-

0407-

Apr-04

19-May-

0430-

Jun-04

11-Aug-

0422-

Sep-04

$

7

8

9

10

11

12

13

14

15

16

17

US$ / t ('000)

NICKEL HRR

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Project

PT Inco

KNPKon

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Tanjun

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Murrin

Murrin

Cawse

San Feli

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Mt Keit

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Mt

World ClassWorld Class

Source:

0.050.74891Total

0.0480.72725Inferred

0.550.83154Indicated

0.0790.9612Measured

Co%Ni %Tonnes MtResources

Kalgoorlie Nickel Project

Ravensthorpe

Kalgoorlie Nickel ProjectNo. 2

Murrin Murrin

Excellent LocationExcellent Location

WA is independently assessed to have the world’s best conditions for nickel projects

HRR has the largest tenement holding in the Kalgoorlie region of the Eastern Goldfields mining province

Predominantly within a 100km radius of Kalgoorlie

MINARA

BHP

Ravensthorpe

Heron’s tenement holdings dwarf those of its Australian “peers”

100% ownedUnencumbered

Tenement Tenement Holdings Holdings

Heron

Resource DistributionResource Distribution

Premium Ore TypesPremium Ore Types

Goethite and siliceous mineralisation - 80% of resourceGood rheology

Good settling properties

Low acid consumption above MgO discontinuity

Dominantly suitable to screen upgrade LFG of >1.5% Ni

Nontronite mineralisation - 20% of resourceSuitable to SAL process

Poor rheology

Poor settling properties

Moderate to high acid consumption

Variable suitability to screen upgrade

Ore typesOre types

Silica PlatesSilica Plates

Amenable to Screen UpgradeAmenable to Screen UpgradeSCHEMATIC LATERITE

PROFILE COMMONNAME

IRON CAP

ManganiferousGoethite

SiliceousGoethite

Transition

SaproliteSerpentine

FreshRock

APPROXIMATE(%)

Ni Co Fe MgO

<0.3 <0.1 >50 <0.5

0.3to

1.5

0.1to

0.2

40to50

0.5to5

1.5to4

25to40

5to15

1.8to3

10to25

15to35

0.02to0.1

0.3 0.01 535to45

PAL

SAL

MgO Discontinuity

EXTRACTIONPROCESS

Magnesite

Goethite

Silica fragments contain 0.3% Ni

Nickel rich clays contain:

Goethite up to 1.7% Ni 0.2% Co

Mn oxides up to 8% Ni 2% Co

Nontronite up to 4% Ni

Ni Serpentine up to 12% Ni

Chlorite up to 15% Ni

Initial Screening ResultsInitial Screening Results

Ability to upgrade mineralisation is a key valuation driver

1.5% LFG targeted

Positive laboratory screen upgrade testing now completed

Mineralisation averaging 0.95% Ni screened to 1.64%

The best upgrade results are yet to come…

0.56

0.660.67

0.510.540.60 0.56

0.950.75

34mEOH28mEOH31mEOH

400m

Ferruginous Duricrust

Siliceous ore - 0.56% NiSaprolite ore - 0.81% Ni

1.04

1.681.31

0.940.96

0.980.871.661.18

34mEOH28mEOH31mEOH

400m

Ferruginous Duricrust

Siliceous ore - 1.10% NiSaprolite ore - 1.27% Ni

1.61

2.101.87

1.161.211.45 2.03

1.33

34mEOH28mEOH31mEOH

400m

Ferruginous Duricrust

Siliceous ore - 1.44% NiSaprolite ore - 1.49% Ni

0.720.35

0.33

1.09

0.42

0.77

1.041.100.46

1.09

HWRC0179AHWRC0178

HWRC0177314640mE 314720mE

0 20m

Unscreened

-0.50mm Screen

-0.18mm Screen

Results from Heron’s Highway Prospect

Textbook Screening of Siliceous OreTextbook Screening of Siliceous Ore

After Elias 2001

Ni Grade %

0

10

20

30

40

50

60

70

80

90

100

0 0.5 1 1.5 2 2.5Screen size (mm)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

% Mass passing

% Ni recoveryNi grade %

%

Typical Upgrade By Screening

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Screen size in mm

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Metal RecoveryMass PassingNickel Grade %

Typical Screen BehaviourTypical Screen Behaviour

Recovery and Mass Passing % Ni Grade %

Proposed Screening Flow SheetProposed Screening Flow Sheet

Blendedfeed

hopper+25mm

-25mm

6mmscreen

rejects

Scrubber trommel Jaw crush to12.5mm

1mmscreen

rejects

1mmscreen

rejects

Attritioner

1mmscreen

rejects

Cyclone

-75µm

Autoclave feed

Thickener

Simple flow sheet design

Off the shelf technology

Proven by publicly available data from Cawse and Ravensthorpe

Minimal technical risk

No magic required

Beneficiation• Siliceous goethite & saprolite• Standard Cawse screen circuit• Coarse Silica reject pit backfill• Finer Screen, higher LFGMetal Extraction• Acid plant: acid, steam, power• Murrin PAL Autoclave- proven• Saprolite neutralises PAL acid• Saprolite 15,000 tpa Ni nil costMetal Precipitation• Murrin CCD & Neutralisation• Cawse Hydroxide Precipitation• Nil Technology risk• Ni–Co–OH premium refinery feed

Mining & Ore Preparation• Low cost bulk mining• Progressive waste backfill• Ore from pit to ROM Pad• Blended ROM ore fingers

SaproliteOre Stockpile

GoethiteOre Stockpile

Backfill to Mine Pits

Coarse Rejects

CrushedSaproliteStockpile

CrushedGoethiteStockpile

Primary Crusher

Milling

RejectsRejects

Cyclones Cyclones

SaprolitePrimary Crusher

SaproliteCircuit

Milling

Benefication

Saprolite Thickener Goethite Thickener

SAL Acid Plant

Tailings Storage FacilityTailings Neutralisation

Underflow

Secondary Neutralisation

Nickel/CobaltHydroxide Precipitation

Washing andHydroxide Filtration

Nickel-CobaltHydroxide

SaproliteNeutralisation

Steam Heat

Sulphuric AcidSulphuric Acid

Sulphur

GoethiteCircuit

Autoclaves

CCD Circuit

Proposed KNP Flow SheetProposed KNP Flow Sheet

Environment, Safety and CommunityEnvironment, Safety and Community

EnvironmentMinimise foot print of operationMaximise resources utilisationMaximise water recycling Maximise energy efficiency

SafetySystematic planningAttention to system design and material selectionExperienced workforceSimulation training

CommunityEducation scholarships in place since 2001Funding of the NTP infant health clinicResidential workforce where possible

KNP Check List KNP Check List -- Adding ValueAdding Value

Completed by Sinclair Knight MerzRobust financial modelFlow-sheet identified - 4th generation technology to be utilised

Order of magnitude Scoping Study

Commenced drillingPre-Feasibility Study

Commenced independent bulk sample screen upgrade study

SGS Lakefield Oretest engaged

Leach feed and recovery resource estimates

Upgrade resources categories

Detailed Pre-Feasibility financial model

Completed by Snowden Mining ConsultantsIndependent Resource Estimates

Second largest in the world 891 million tonnes grading 0.74% Ni, 0.05% Co

Resource Base

SummarySummaryThe KNP has the following key attributes:

ScaleResource acquisition complete – is now the world’s second largest contained nickel resourceAble to support a 50,000tpa Ni-in-conc processing plant over 25 years+

High Grade Mineralogy well suited to screen up gradeLFG of >1.5% for Life of Project

Located in the world’s best region for a major nickel projectLow sovereign riskWell developed infrastructure and mining cultureAble to “piggyback” off the Ravensthorpe experienceProximity to key emerging markets (China and India)

Proven Flow Sheet Similar to Ravensthorpe’s proposed flow sheetOverriding aim of minimising production risk / utilising off-the-shelf technologies

Robust financial profile

Established community leadership

The KNP will be developed into a world class producer of nickel