Kalgoorlie Nickel ProjectKalgoorlie Nickel ProjectAn Emerging World Class Nickel Producer

Investor Presentation – July 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 2003 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.

Heron Resources LimitedHeron Resources Limited

Heron Resources is poised to emerge as Australia’s next world class nickel producer

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

Global resource of 862mt at 0.74% Ni and 0.05% Co

Committed to lateritesSystematically acquired laterite tenements since 1997

Stopped drilling program to focus on acquiring projects / land for “cents in the dollar” of costs already expended

“Spun off” other gold and base metal interests to fund laterite focus

Most recently acquired the entire Bulong mineral rights in April 2004

Largely completed its ultramafic and nickel resource acquisitionstrategy

Aggressive strategy for taking the KNP project to production

Heron Resources Heron Resources -- SnapshotSnapshotHRR Share Price (Jan 2003 – Jul 2004)

Financial Summary (as at 14/07/04)

10%(%)Chaos Investments

12%(%)OMG Cawse

29%(%)Ian Buchhorn

Key Shareholders

0.25($)Share Price

128.9(m)Shares on Issue

($m) 32.2Market Capitalisation Source:

IRESS, Management estimates

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5,000Vol ('000)

Why Nickel Laterites?Why Nickel Laterites?Excellent macro economic positioning

Nickel demand is expected to outstrip supply for at least the next few years

– World nickel demand 1.2mtpa

– 4 - 5% p.a. growth (7% in 2003)

China and India’s industrialisation will continue to drive demand

Chronic shortage of “world-class” nickel projects

– Long term nickel demand can only be met by a significant increase in supply from laterite projects

Long term nickel demand can only be met by a significant increase in supply from laterite projects

Source: Goldman Sachs JBWere

China has an extremely high dependence on foreign nickel supply to meet current and expected demand

Source: Inco Presentation February 2004

Why Nickel Laterites? (2)Why Nickel Laterites? (2)The world has changed – laterites have been validated

Minara Resources Limited (ASX:MRE) recorded its maiden profit to 31 December 2003

– Only owns 60% of Murrin Murrin yet still commands a market capitalisation of >$1b

BHP Billiton’s (ASX:BHP) commitment to developing the US$1.4b Ravensthorpe project in March 2004

Recent AIM listing of laterite companies have been heavily over-subscribed on significant valuations

Listed laterite companies (globally) have experienced significant share price appreciations

– Except for Heron

Heron Resources will be 4th generation

Laterites are the future~70% world’s quantified nickel resources are laterites but they currently contribute only ~40% of world production

New sulphide and laterite projects have similar operating costs

Nickel consumers are indifferent to processing route

World Class ProducerWorld Class ProducerHeron Resources intends to be one of the world’s leading nickel producers

Critical mass50,000tpa nickel in concentrate processing plant plus by-productLonger term the KNP could potentially support annual production output of ~60,000t –80,000t

Expected favourable construction and commissioning timingRavensthorpe to KNP

Process circuit similar to Ravensthorpe but treating higher grade feed stockComprehensive Bankable Feasibility Study able to build on Ravensthorpe

Low production risk / Utilising off-the-shelf technologiesDe-coupled flow-sheet Multiple process trainOn-site acid plantOff-site refining

Access to existing plants for full scale production testing and cash flow

Refiners aggressively seeking long term supply contracts

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 FlowsheetProposed Flowsheet

Attractive Financial PropositionAttractive Financial PropositionThe recently completed Sinclair Knight Mertz (“SKM”) Scoping Study highlights the KNP’s attractiveness and robustness

25607Post Tax28891Pre Tax%A$m

IRRNPVBase Case - Real, Leveraged Project Returns

Key Assumptions:10% discount rateProject debt / equity mix of 70:30Assumes a AUD/USD exchange rate of 0.65Ni price of US$3.50 / lb (US$7714 / t)Capex - AUD$1.4bAnnual production of 50,000 tpa of Ni in conc (35,000 t p.a. from Cawse style PAL plus 15,000 t p.a. from separate SAL

Under the base case scenario, the KNP will typically generate the following annual financial results:

Revenue of approximately $710mOperating costs of $312mPre tax profit of $276m (post refining and capital replacement charges)

The KNP offers considerable upside potential

Attractive Financial Proposition Attractive Financial Proposition

277151,0551,576US$0.30/lb Ni, US$2.00/lb CoLow Refining Charge224987731,198US$0.50/lb Ni, US$3.00/lb CoHigh Refining Charge276409471,418Full production in Yr 4Short Ramp-up184167101,169Full production in Yr 6Long Ramp-up329181,3181,927A$249MpaLow Opex14180364661A$390MpaHigh Opex337831,1181,629A$1,127MLow Capex173636301,053A$1,761MHigh CapexNA-769-846-927US$2.33 Ni / US$8.00 CoLow Price592,3583,1894,432US$5.25 Ni / US$18.00 CoHigh Price193215208291.25% NiLow Grade298691,2801,9131.75%NiHigh Grade256079151,3871.5% NiBase Case

10%7.5%5%IRR at 30% tax

NPV (A$M) at Discount RateVariableCase

World Class ResourceWorld Class ResourceAustralia’s highest quality nickel laterite project

Highest Australian laterite Ni gradesOre zones have consistent chemistryThickest Australian nickel ore zonesLeach feed grade 1.5% Ni; 15% higher than Murrin Murrin

JORC (1999)Resource Class Tonnage (Mt) % Ni % CoMeasured 12 0.96 0.079Indicated 154 0.83 0.055Inferred 696 0.72 0.048Total 862 0.74 0.05

Table 1Kalgoorlie Nickel Project total in situ Mineral Resources

by Resource Classification

Resource base considerably larger than Ravensthorpe and 10% higher grade

Global resource of 862 million tonne at 0.74% Ni & 0.05% CoUnder-explored – future resource upgrades likely

Amenable to screen upgradeScreen to minimum 130 million tonne at 1.5% Ni for processing2 million tonnes contained nickel metal (US$30b of Ni at current price)

Excellent mix of ore typesPremium metallurgy siliceous goethite, PALNontronite / saprolite for neutralisation, SAL

Tenements are 100% owned

Main resources are unencumbered

MINARA

BHP

Ravensthorpe

Strategic objectiveto dominateProvince

Significant Significant Tenement Holding Tenement Holding

Heron

World Resource ComparisonWorld Resource Comparison

Source: IRESS, Company Presentations

Notes:

Based on publicly available information

Heron information is based on a 0.75% Ni lower cutoff. This assumption has been adopted for comparative purposes only.

Laterites Total KalgoorlieNickel ProjectMurrin Murrin

Ravensthorpe

Cawse

GoongarrieSiberia

Bulong

Guatemala

Goro

TurkeyKalpini

Kazakhstan

400,000,000

350,000,000

300,000,000

250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

00.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.90% 2.00%Grade

Tonnes

WorldWorld’’s Best Locations Best LocationWestern Australia is assessed to have the world’s best conditions for nickel projects Western Australia also offers:

Extensive technical laterite knowledge - Murrin Murrin, Bulong, Cawse and RavensthorpeAble to “piggyback” off the Ravensthorpe experienceWA Mining Act facilitates 42 year tenureProximity to key emerging markets (China and India)

Source: Fraser Institute, Argonaut Capital Limited

Country

Weightings 50% 35% 15% 100%Western Australia 94 96 96 95Chile 92 95 97 94Australia 77 98 99 88Brazil 78 91 97 85Canada 66 92 97 80China 61 90 88 75South Africa 59 87 71 70Turkey 50 85 96 69Kazakhstan 59 74 58 64Indonesia 55 82 10 58Venezuela 48 80 27 56Russia 50 62 57 55Philippines 40 77 54 55Zimbabwe 44 77 3 49

Weighted RankingsProspectivity Fiscal Terms

Sovereign Terms

“Many competing projects are located in less favourable locations such as Indonesia, Philippines, New Caledonia, Guatemala and Kazakhstan”

15

Excellent LocationExcellent LocationWA InfrastructureWA Infrastructure

–Very strong mining culture

–Leading mining service centre

–Secure tenure no sovereign risk

–Rail link with 2 nickel refineries

–Bitumen highway

–Goldfields Gas Transmission

Laverton

MinaraLeonora

)

Menzies

Gindalbie

Coolgardie

121° 122°

Coolgardie

KALGOORLIE

Gindalbie

Menzies

MinaraLeonora

Laverton

–Ports at Esperance & Kwinana

KALGOORLIE

ESPERANCEKWINANA

Significantly UnderSignificantly Under--Valued Relative to Valued Relative to ““PeersPeers””Heron Resources continues to trade at a significant discount to its Australian and international “peers” (both sulphide and laterite)

Source: Company Reports, IRESS, Argonaut Capital Limited, Independent Mining Research

Heron Resources’ planned AIM listing is expected to start to address this value discrepancy

July 2004

($A) (m) ($Am) (kt) (A$/tonne) (A$) (A$) (%)Sulphide Companies - AustraliaJubilee Mines NL ASX JBM 4.18 125 523 46 11,390 357 2.85 46%Reliance Mining Limited ASX REM 0.44 125 55 21 2,643 32 0.26 71%Australian Mines Limited ASX AUZ 0.15 127 18 9 1,975 Western Areas NL ASX WSA 1.07 100 107 48 2,243 84 0.84 28%Mincor Resources NL ASX MCR 0.71 194 138 84 1,643 135 0.69 2%Sally Malay Mining Limited ASX SMY 0.75 151 113 81 1,405 98 0.65 16%Independence Group NL ASX IGO 1.07 110 118 83 1,428 112 1.02 5%Titan Resources Nl ASX TIR 0.30 181 54 94 579 69 0.38 -21%MPI Mines Ltd ASX MPM 1.65 134 222 1,078 206 205 1.53 8%Laterite Companies - InternationalOriel Resources Limited AIM ORI 1.24 164 203 242 841 Minara Resources Limited ASX MRE 2.55 464 1,182 2,434 486 915 1.97 29%Canico Resource Corp. TSX CNI 14.84 41 610 2,245 272 1,041 25.31 -41%European Nickel Plc AIM ENK 0.53 110 58 405 143 141 1.28 -59%Jaguar Nickel Inc TSX JNI 0.52 102 53 2,482 22 Heron Resources Limited ASX HRR 0.25 129 32 6,379 5 608 4.71 -95%

Exchange CodeNi

Resource Mkt Cap /Resource

Share Price Shares Mkt Cap

Na

Na

Na

NPV NPV / Share

Premium /Discount to NPV

Activity (Quarters) Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep DecCompleted Resource Statement Jun-04Completed Scoping Study Jul-04Introduction of Strategic InvestorPre-Feasibility StudyLondon AIM ListingTechnical PartnershipBankable Feasibility StudyOff Take PartnershipConstructionProduction

20082004 2005 2006 2007

Indicative Development MilestonesIndicative Development Milestones

Recent Progress

Released Independent Resource Estimates completed by Snowden Mining Consultants

Released Independent Scoping Study completed by SKM

Continuing to systematically advance towards production

Commencing Pre-Feasibility Study

Preparing for an AIM listing in Q4 FY2004 to fund Feasibility Studies

Technical AppendicesTechnical Appendices

GoongarrieGoongarrie

NickelOre Zones

0 3km

0.5% NiLode Envelope

1.5% NiHigh Grade Core

Daphne MinaSiliceous Ore

Patricia AnneGoethite Ore

Pamela JeanGoethite Ore

Mavis IreneGoethite Ore

Sylvia VirginiaSiliceous Ore

Elsie TynanGoethite Ore

Goongarrie Goongarrie InterceptsIntercepts

2 km

HERONHERON’’S S GOONGARRIE GOONGARRIE

RESOURCERESOURCEGoongarrie South47m, 1.43%Ni, 0.228%Co43m, 1.22%Ni, 0.276%Co50m, 1.37%Ni, 0.203%Co43m, 1.39%Ni, 0.187%Co46m, 1.48%Ni, 0.111%Co39m, 1.42%Ni, 0.253%Co65m, 1.17%Ni, 0.074%Co89m, 1.19%Ni, 0.131%Co86m, 1.23%Ni, 0.081%Co77m, 1.32%Ni, 0.084%Co64m, 1.15%Ni, 0.076%Co48m, 1.41%Ni, 0.127%Co70m, 1.3%Ni, 0.152%Co63m, 1.23%Ni, 0.057%Co67m, 1.28%Ni, 0.076%Co74m, 1.29%Ni, 0.077%Co93m, 1.45%Ni, 0.08%Co57m, 1.28%Ni, 0.101%Co104m, 1.33%Ni, 0.087%Co81m, 1.24%Ni, 0.197%Co71m, 1.39%Ni, 0.15%Co49m, 1.47%Ni, 0.141%Co48m, 1.37%Ni, 0.124%Co59m, 1.33%Ni, 0.126%Co83m, 1.41%Ni, 0.154%Co56m, 1.33%Ni, 0.042%Co

RunRun--ofof--Mine Sections Contain Thick Mine Sections Contain Thick Continuous High Grade Ore Continuous High Grade Ore

0 50m

GSRC873

GSRC874

GSRC875

GSRC876

GSRC877

GSRC989

GSRC926

GSRC927

GSRC928

Pit Outline

0.5%Ni1.5%Ni

1.0%Ni

43m 1.52Ni

32m 1.42Ni

35m 1.37Ni

Section 69 400N

With Locally Spectacular With Locally Spectacular Ore Thickness and GradeOre Thickness and Grade

0 50m

GSRC1035

GSRC570

GSRC571

GSRC1022

GSRC1036

GSRC907

Pit Outline

0.5%Ni

1.5%Ni

1.0%Ni

81m 1.33Ni

80m 1.22Ni

Section 69 600N

23

Contained nickel metalContained nickel metalHeron exceeds World peersHeron exceeds World peers

KN Project(non-screen)

KN Project(screened)