Ann: Renounceable Rights Issue to raise up to $15.8M, page-187

HI Franciscus.

Table 1 Key Metrics....The PFS has three cases, based on a base iron ore price of US$110/t fro 62%. they have IRR of 14%, 17% and 20%. No one will fund a large mining project with such risk at 14% IRR so I suggest it needs US$120/t. the 20% IRR head grade improvement case is not proven at PFS level. Therefore it is solid ground I would say to suggest it needs US$120/t to lift the 14% to a "decent return" . There is no point arguing semantics....$110 or 130/t means it is not at the front of queue.

Your other point about $120 and the premium is i think confused. The table says $110/t for 62% so the metrics presented have definitely included the companies version of the premium.

Your point about the iron ore price is fair enough......who knows what it will be, however what ever it is, two key points remain for development (not necessarily Share price).... to get funding the funders will need to form a view (usually conservative) on the long term price. AND to form a view they look at what happens if projects with lower incentive price for development get into production and what that does for the long term price forecast (ie makes it fall). This is why the better metric projects get development first.

I hope this explains my post a little better.