Ann: Scoping Study - Port Gregory Garnet Project, page-92

OK, got around to putting ear plugs in and fully reading your diatribe. I mentioned earlier that over-confidence was a terrible trait for investors, and your bull thesis is riddled with over-confident assumptions and inaccurate conclusions imo. You asked " I have invested $200k in this dog stock. Why??"... a really good question got me scratching my head. Seems to me you either have more money than sense or neither. TBH, your rabid belief looks more crazy dangerous than crazy brave. As Mark Twain well said, "it's not what you don;t know that gets you in trouble, it's what you know for sure that just aint so".

Might turn out you're right though, so I'm going to fact check the arguments for HVY one at a time. Much of the investment hypothesis rests on nearology and 'rumours' that GMA are running out of garnet resources which makes HVY a TO target and/or simply makes room for a new mine. Let's start by reviewing the geology, nearology and importance of HVY's shiny new mineral resource.

GMA were the pioneers, mining Port Gregory over 35 years. Assuming people on HC are stupid is often a fair assumption, obviously, but I suggest usually not the case in commerce. First I looked into RDG, HVY and GMA along the Port Gregory strand lines to get an idea of what's going on. Picture tells a thousand words, here is HVY EL 70/5934 sitting between approx 8km of GMA Mining Leases to the south and 5km of GMA Exploration Leases to the North.


Not sure how many years left, but GMA still have approx 3km of the main West and East strands to mine (green and blue) before it runs into RDG ground. Question... do you think GMA is stupid and pegged/kept barren leases nth and sth of HVY's over all these years when they were the first mover in the area? Or is it more likely the HM strands/dunes that HVY drilled out (+/- others) are present over this >10km of similar dune system that GMA pegged and kept? Firmly suggest that the entire strand/dune system along the coast shown on this map contains similar garnet mineralised strands and dunes, albeit of varying grade and thickness etc.

RDG infilled old drilling from Westeralian Sands and Iluka from the 90's and Haddington Resources early noughties, plus Garnet Australia in 2016 to quickly expand their resource to 438Mt @ 4.3% THM (only in the dark red Menari and Menari Nth tenements). To be fair, Menari is probably the second best deposit in the area, never held by GMA and thus until recently still undeveloped. GMA would have known what Australian Garnet had at Menari but chose not to bid, or was outbid, by RDG. GMA's southern Mining Lease especially indicates they were somewhat relaxed about having enough resources to continue the operation for years to come, even if not of the same high grade quality that Menari West and East strands hold. RDG strand/dune system below, from just above sea-level up to 50-60m above SL along strike, similar to what GMA have mined south along my solid red line.

HVY's resource sits higher up the dune sequence, above ~55mRL for the eastern dune and between 60-100mRL for the Eastern dune (note the grade colour chart is different between the two companies). GMA's Mining and Exploration leases along strike from HVY will likely have similar shallow and patchy style mineralised strand/dune systems higher similar elevations, not the thicker, compact HG strand/dunes mined in the past by and soon by RDG. There is a reason GMA have mined 15km of the skinny western system first obviously...


So rumours are easy to spread, but I wouldn;t put $200k at risk on the chance GMA have all the ground along strike from HVY but nothing on it. HVY's tenement was first drilled by GMA, 52 holes, though I don't know if they dropped the ground because their tenements along strike were better or because they were drilling another company's tenements but didn;t see enough value to deal on them?

Just going off the size of GMA granted mining lease to the south being 3-4 time the strike of HVY one would have to guess GMA have approx 500Mt of similar grade ore as HVY lined up for later. Basically GMA and RDG look to have another 50 years of mining resources under their belts each, so why would they be in any rush to take over HVY? One thing with mineral sands is that there's lots of it, cheap and easy to drill and prove up, then everyone thinks wow... that's special. Usually it's not special, and not special without a plant to monetise it which is the biggest hurdle.

Garnet has another hurdle... size of the market and marketing! The reason great deposits like Menari sit around undeveloped for 30 years is because it's a small market, only so many can fit in, and the only way to make good money is by controlling or having tight relationships with the upstream marketing companies that control who buys what garnet at what price. Dinner beckons, that's all for another post.