ASX ANNOUNCEMENT

18 September 2014

Updated Capital Cost Estimate for PIOP

Pilbara Iron Ore Project

highlights

Western

Australia

• Direct mine capital cost estimate for PIOP of A$726M

for 25mtpa project

• Estimate includes all mine site based infrastructure and construction costs

• Flinders to investigate taking significant capital items off balance sheet

• Estimates to be further refined in Bankable Feasibility Study due by June 2015

The Directors of Flinders Mines Limited (ASX:FMS) advise that it has an updated capital cost estimate for the Pilbara Iron Ore Project "PIOP" in Western Australia, which estimates the direct mine capital costs for a 25mtpa project at A$726m1. This estimate has been developed by an independent tier one engineering firm currently working on a number of iron ore developments in Western Australia.

Capital items making up the new estimate are summarised as follows:

Processing plant and associated infrastructure A$ 384m Site infrastructure including camp, power, water, airstrip A$177m Construction costs including construction camp A$131m Mine site works, prestrip, roads and tailings A$ 34m Total A$726m

Flinders Mines expects to be able to refine this estimate further during the bankable feasibility study process, including the opportunity to take significant capital items such as the processing plant, camp and power plant off balance sheet by investigation of "build own operate" scenarios with experienced contractors.

IAN GORDON

MANAGING DIRECTOR

18 September 2014

1. The direct capital cost estimate of A$726m is for 25mtpa mining project and does not include contingency or owners costs.

For further information please contact:

Ian Gordon - Managing Director
Ph: (08) 8132 7950
Email: info@flindersmines.com
Duncan Gordon - Investor Relations Executive Director - Adelaide Equity Partners Ph: (08) 8232 8800 or 0404 006 444
Email: dgordon@adelaideequity.com.au

Flinders Mines Limited ABN 46 091 118 044 www.flindersmines.com

Level 1, 135 Fullarton Road, Rose Park

South Australia 5067

PO Box 4031

Norwood South

South Australia 5067

telephone 61 8 8132 7950 facsimile 61 8 8132 7999 email info@flindersmines.com

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