new rcr report, page-2

Investment Points:

100% focus on REO in Western Australia.

The 100%-owned Hastings Resource (36.2mt) contains 62.5kt heavy rare earth oxides (HREO)—making it a world scale HREO deposit—with two strategically critical HREO's (Yttrium and Dysprosium) dominating in situ value.

REO grades are modest (total REO 0.21%) but comprise 85% HREO's—the highest in situ HREO proportion amongst its REO peers.

Scoping Study (after previous pilot plant work) indicates excellent returns from 1mtpa mine, just selling Y and Dy oxides, generating A$150mpa EBITDA. Project now moving to PFS. Further metallurgical tests are underway at Ammtec.

Technical development team strengthened with Steve Mackowski (ex Arafura (ASX:ARU) G.M. Project Development) joining HAS.

Yangibana (60%): >7km under-explored strike, 9 known REO occurrences. Previous Yangibana drilling confirmed grades up to 3.2% TREO, of which 25% was neodymium. Drilling likely in 2Q12.

Potential for re-rating on strong 1H12 newsflow and very low EV/HREO (contained tonnes) valuation relative to peers.


Investment Comment: There are many REO hopefuls around the globe, most of which will not be able to squeeze into a relatively low tonnage market over the next decade. What gives HAS a better chance than most is the dominance of two strategically important HREO’s, Yttrium and Dysprosium in its REO mix. If it can confirm economic extraction of these HREO’s in its on-going testwork, and, as expected, prices for HREO’s remain strong, then we expect major share price upside, given current lowly