Ann: MOU between Vale and CLE for development Iron Bear Project, page-27

Hi Syd.

Your are almost exactly correct, apart from being entirely wrong of course.
It’s not about replacing low grade ores at all.What Cyclone is doing is taking a magnetite deposit and processing that into DR (Direct Reduction) pellets. This product, which is graded at around 70% Fe, can then be fed into a DR Steel making facility. This obviates the need for traditional coal fired steel making, by using gas and/or hydrogen through an electric arc furnace process to make steel. Basically, it will be able to produce green steel.

The market for this type of product, DR pellets, is expected to double by 2030. Most importantly, there is a premium of about $63 USD/ton for the product, with an estimated extra $15 USD/ton of cost, generating a net cash profit of about $48 USD/ton.

A final note; there is magnetite and there is magnetite – a special minerology is required to make it viable to turn into the right sort of pellets. The Iron Bear project’s ground doesn’t have ‘the nasties’ that constitute most of the global magnetite deposits. Cyclone have produced pellets with the optimal characteristics and we expect the market to welcome this with open arms.

Hence, the interest from the big boys such as Vale.

Cheers

U