August 13, 2010 06:00 AM Eastern Daylight Time

Legend International Holdings Inc Announces Grant of Mining Lease and Project Update

MELBOURNE, Australia--(BUSINESS WIRE)--Legend International Holdings, Inc (OTCBB:LGDI) is pleased to announce that the State Government of Queensland, Australia has approved the grant of Legend’s D-Tree North mining lease ML90190 north west of Mt. Isa, Queensland, Australia. D-Tree North was the first Mining Lease (ML) applied for in Queensland for the Legend Phosphate Project.

The Paradise North Mining Lease application (ML90191) which is the initial focus of the recently completed Paradise Phosphate Project Feasibility Study is expected to also receive government approval and grant early in Quarter 4, 2010.

The grant of the D-Tree North ML is a significant milestone and highlights the confidence and support that the Queensland State Government has for the Legend Phosphate project. The grant of this ML is a good indicator that current applications will also be granted in the same smooth and efficient manner that has been displayed to date by the Queensland Government for Legend’s Phosphate Project.

PROJECT UPDATE

Legend recently announced the positive and robust results of its Feasibility Study for the Paradise Phosphate Project (see announcement dated July 23, 2010). Legend wishes to clarify a number of the key points associated with the capital costs and cash operating margins for MAP/DAP production previously reported for the project.

• CAPEX – US$688 in first 3 years.

The total capital cost of the project has been previously reported as a total of US$808.16 million. The previous announcements however did not clearly outline the timing of these capital needs. Table 1 below shows the estimated timing of capital requirements for the base case scenario as considered by the Paradise Phosphate Project Feasibility Study:

As shown in Table 1 the capital required in the first 3 years from 2011 – 2013 is US$688 million and relates directly to mining and transport infrastructure, with associated working capital, and the construction of the Mt. Isa Phosphate Fertilizer Complex. The beneficiation plant CAPEX of US$120 million is required in years 2016-2017 as the first feed for the fertilizer complex is from high grade material from Paradise North, and does not need to be beneficiated, therefore delaying the need for those capital funds until after 5 years of operation.

The raising of the necessary capital will be conducted in a staged and methodical manner which Legend strongly believes is achievable in the timeline presented. Legend continues to have positive and productive discussions with both Wengfu and other major industry corporations in relation to obtaining the funds needed to meet the project schedule.

• CASH OPERATING MARGIN

Legend has previously reported DAP/MAP cash operating costs of US$321.3 per tonne of DAP production. Using the long term estimated DAP price of US$531/t (fob Townsville using import parity pricing structure which equates to US$445 fob Tampa, FL. Current price as of August 13, 2010 is reported by FMB Group at US$490-500/t fob Tampa) gives a cash operating margin of US$209.7 per tonne of DAP production. This margin however has not included the cash credits which will be achieved from the sale of 15,000 tonnes per year of the value added by-product aluminum fluoride (AlF3). An estimated US$28.55 million per year in revenue from the sale of AlF3 can be added as AlF3 credits to the DAP cash operating margin. This equates to an extra US$47.6/t of DAP production that can be subtracted from the operating costs or added to the cash operating margin which gives a total estimated cash operating margin of US$257.3/t of DAP produced and an effective operating cost of US$273.7/t DAP production.

A US$257.3/t cash margin or US$273.7/t operating cost is significant and puts Legend amongst the lower cost producers. This margin will see Legend achieving US$113 million in after tax profits per year.