Grants Iron Ore Basin, page-6

From HAV’s website:

“Iron ore resource inventory >450 million tonnes which can yield approximately 160 million tonnes of premium >63% Fe product.”

This would include Grants and Maldorky.

To complete the ISV (in-situ value) set, Grants’ and Maldorky’s estimated ISV at current prices is set out in the table below. To be conservative, the industry standard NYMEX traded 62% Fe @ 20/9/17 is used in this analysis. Of course, a higher result would be achieved using 65% Fe.

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6
0	Resource	Qty	UoM	US$/t	FX	ISV $A
1	Fe	160,000,000	tonne	71.96	0.8029	14,340,017,437

The value factors ranging from 2 to 5% are rules of thumb used in the industry to value mineral resources under the VALMIN code (Canaccord, August 2012 Research Report). These generate the following respective estimates for Grants and Maldorky:

	Column 1	Column 2	Column 3
0	ISV Factor	Estimate A$	$A ps diluted
1	2%	286,800,349	$1.51
2	3%	430,200,523	$2.26
3	4%	573,600,697	$3.01
4	5%	717,000,872	$3.76

In addition, Lilydale has a target resource of > 500mt which is excluded from this analysis.

HAV is also included in South Australia's Magnetite Strategy (Post #: 21947228). Being on the SA Govt’s radar is clearly a positive, however , from my web browsing, the ‘current’ Strategy is not clear.

'Twiggy' Forrest/ FMG

Followers of FMG will note that its C1 cost has been reduced significantly over the years from US$48/wmt (wet metric tonne) in FY12 to US$12.82/wmt in FY17 (Source: Slide 7 of FMG’s CLSA 2017 Presentation).

HAV would benefit from this expertise in the event of a JV with FMG rather than ‘reinvent the wheel’.

DYOR