Ann: MGU progresses towards DSO, page-80

Against a backdrop of rising global infrastructure spending; particularly in the USA where the Biden Administration has proposed a $2 trillion plan - and a steel industry under pressure to lower its carbon footprint - Magnum is well positioned to supply the Western USA steel industry with low carbon hot briquetted iron (HBI) from 2023 and global buyers with high-grade iron ore from Q4 2021.

As Magnum is fully permitted and proximate to rail and port facilities, the project requires minimal capital (~US$12M) to initiate 62% Fe DSO exports by Dec 2021 (40ktpm) and (~US$15M-US$20M) for 65% fines by June 2022 (80ktpm). The key driver of Magnum's NPV is the proposed HISMELT HBI plant. HBI and Pig Iron prices in the USA have historically been far more stable than iron ore spot prices. In addition, China has lifted the import ban on steel scrap - we believe this change plus the transition to electric arc furnaces (lower carbon) away from blast furnaces will underpin increased demand for HBI and Pig Iron in the USA.

Magnum will utilize its internal low-cost iron ore feedstock and locally available "green" energy to produce HBI at a competitive price. There are several price catalysts expected over the coming months. We believe the near-term confirmation of an offtake partner for its iron ore products and a positive bankable feasibility study for the HISMELT HBI plant (~Q4 2021) in conjunction with progress re permitting and an HBI offtake agreement will trigger a substantial rerating of the share.