General Industry News, page-196

Results of a PFS for the Mt Bevan Magnetite project were released yesterday. It is a JV with Legacy Iron Ore ASX:LCY, Hawthorn Resources ASX:HAW and Hancock. PFS was funded by Hancock and managed by Atlas Iron for Hancock to earn 51%.

What I found interesting about the PFS is that they announced that the NPV varied from a negative A$740M to positive $3.634M.

The reason for the range is because of the sensitivity associated with forecasting future price for their 70% Fe magnetite (sound familiar). They used a simple low, mid and high price based on differences between 62% and 65%.



What I think is important to note is despite the A$5B capital cost and the variation in NPV based on the different potential pricing of 70% ore, Gina Rinehart believes that it is worth investing more money to complete a DFS. (see article on Hancock Prospecting website https://www.hancockprospecting.com.au/hancock-led-mt-bevan-jv-outlines-5b-development-plan/)

There are few people who know the iron ore market better than Gina and that she is willing to continue to invest in this project says to me that she thinks the future price of 70% Fe ore is most likely to be in the US$150/t to $180/t range.

Hawsons is also likely to have an NPV that will vary based on the forecast price for its product and I think that we can take comfort from knowing that those with better industry knowledge and experience than anyone posting here, are willing to invest in high grade magnetite projects in order secure supply, despite any potential variation in future prices as the variation could be to be upside given future potential demand.