Mr. Mark McCauley reports

MELIOR RESOURCES INC. RESTART OF THE GOONDICUM MINE

Melior Resources Inc. has commenced the restart and upgrade of the Goondicum mine. Highlights of the restart include:

• Increased throughput of the processing plant by 50 per cent to approximately 2.8 million tonnes per annum;
• Installation of additional equipment to enhance product quality, plant recovery and availability;
• Construction of a new access road to the mine, reducing haulage distance to port by approximately 35 per cent, or 100 kilometres.

These upgrades will build on the $120-million (Australian) of historically invested capital and will result in increased production and significantly lower operating costs than those previously achieved by the mine. These upgrades and higher production rates are expected to position the mine's cost base in the lowest quartile, ensuring economic production across market cycles.

Once restarted, the Goondicum mine will use basic open-pit mining and processing techniques to produce approximately 200,000 tonnes per annum of ilmenite and associated apatite from its resource base of 1.9 million tonnes of indicated and 1.93 million tonnes of inferred in situ ilmenite resource. The operation will employ approximately 80 personnel directly and through direct contractor relationships from the local service centres of Monto and Bundaberg.

The precommissioning capital budget for the restart is $13-million (Australian) which will be invested over an eight-month construction period, this will be followed by a subsequent phase of commissioning and ramp-up. As of June 30, 2014, Melior held $18.5-million in cash which will be used to use finance these capital costs. Product sales have been underpinned by letters of intent with several key customers, many of which were previous customers of the Goondicum mine.

Mark McCauley, chief executive officer of Melior, commented: "We are excited to commence the restart of the Goondicum operations. It is a substantial milestone for Melior and will position the company as a significant low-cost producer of high-quality ilmenite ensuring that we are well positioned to capitalize on the increasing demand for titanium dioxide feedstocks."

We seek Safe Harbor.