Ann: Commencement of OZ Minerals-HAV Strategic Alliance Drilling, page-60

From the IER:

"The valuation of this asset is challenging:
Kalkaroo is large and very promising copper project located in an attractive jurisdiction (South Australia) with 246Mt of total mineral resources that contain more than 1Mt of copper and 3,000koz of gold (of which nearly half is recognised as ore reserves). OZ Minerals is hopeful that it could turn out to be similar to Carrapateena or West Musgrave where “unloved” projects were able to be transformed into very valuable projects.

When Havilah sought shareholder approval to enter the agreement with OZ Minerals, the independent expert valued Kalkaroo at $400-480 million using DCF methodology. However, this value appears to be an unrisked value that does not take into account development and other risks.

Copper prices are currently well above the levels prevailing at the time of entry into the agreement (i.e. August 2022).

Under the strategic alliance, OZ Minerals will pay Havilah $1 million per month during the 18 month option and alliance period. OZ Minerals has indicated that it expects to spend up to $76 million during the option and alliance period to undertake studies and exploration activities on the project.
In January 2023, Havilah announced that it had agreed to an extension of the strategic alliance and the option exercise period to May 2024 due to unavoidable force majeure event delays to commencement of the work program."

The DCF valuation equates to around $1.40 per HAV share for Kalkaroo only. That is a long way from the current share price despite the ongoing free carried exploration and rising copper price. Add the supply/demand scenario for copper you would have to assume a DCF valuation of $1.40 per HAV share is significantlyderisked.