Ann: Strategic Partner Discussions underway on Ha, page-29

re: Ann: Strategic Partner Discussions underw... Tonio I need you to check a few things in your posting.

From the HAS Scoping Study:
"The rare earths products are of 99% purity and attractive to customers as they can be utilised with little further processing."
i.e. HAS is producing 99% purity products so will get full value.

Secondly your valuations don't seem to match the scoping study in terms of products:

"At 1.0mtpa, annual production from the Hastings Project is expected to be:
• 140 tonnes of Dysprosium oxide
• 830 tonnes of Yttrium oxide
• 590 tonnes of a mixed rare earths oxide
• 2,630 tonnes of Niobium oxide
• 6,170 tonnes of Zirconium oxide"

You seem to have valued the Zirconium and Niobium as single products, but you have combined the Dy, Y and mixed Reo and priced it as mixed Reo ($96/kg).

I think you will find that pricing them separately will give a better return because of the Dy content.

The scoping study showed:
"• Compelling economics with a base case net present value (‘NPV’) of A$1.9 billion, an IRR of 26% and payback of 3.6 years for the 100% owned Hastings Project
• Earnings of $223 million per annum represent a gross operating profit margin of 46%"

I appreciate that rare earth prices are very low at present and would alter the SS values, but HAS will be producing into the 2016 market place and all indications are that the value of the Dy produced will have increased significantly by then, if not the other products.

If you are one of the many groups requiring Dy and other products for 2016 and beyond, you would not be too worried about the current economics of HAS. You would be more interested in future economics and securing the product.

I think this is why HAS are confident of securing agreements that will enable them to go ahead.

Their current market cap is less than $9m. If they do get agreements, this value will increase significantly.