Ann: Binding Term Sheet Signed for Integrated Tolling and Offtake, page-16

"Is there not still an intrinsic value of $865m-$258m-$225m= $382m + already spent capex ~$162m = $544M intrinsic value, not taking into consideration other net assets ?"... There are a few issues the market has come to accept with this maths, evidenced by the low share price and MC.

1. intrinsic value is based off assumptions of the beholder... insert high RE prices and unrealistically generous off-take terms and bingo, any project can look like a winner. What is the NPV of Yangi on conservative price and offtake terms, and most importantly for first-loss equity risk investors, what is the risk-reward equation for a high risk commodity market project?

2. all too many projects go broke after raising the required equity risk funds to match secured finance, when the project proves more costly to build/operate and/or commodity price assumptions proved too optimistic. Only very few projects barrel ahead with development, spending large amounts of equity on development before the sector demand, supportive pricing and funding has been locked down. The risk of going broke and wasting that sunk development capex is hugely increased in the style of 'crash through or crash' gamble HAS took (massively exacerbated by the NEO double down on bull RE market gamble).

3. If a project is uneconomic at any point in time, the questions become; how economic is it really compared to competitors also looking to muscle into the market, and what is the time option value waiting for the stars to align verses holding costs and dilution over that time period? Many projects simply never get developed because they are too marginal on a capex/opex risk-reward basis vs other deposits better situated to meet commodity demand for investors to risk losing all their money on probably a small return at best.

There is always a chance that the stars align with a quick jump in the RE prices and renewed confidence that price will stay high for a long time, or governement grants bail a project out of trouble, or a rich punter thinks the time-option for improving economic parameters is worth a substantial punt at some value point... or the project sits undeveloped sucking up lots of care & maintenance funds for years as better deposits move ahead and get developed to supply future demand. In the case of the latter, all sunk investment is worth nothing and selvedge value of that investment won;t even cover the C&M costs waiting for a miracle.

HAS is running at ~$5M qtr of corp/exploration/non-capex spend so with continued inflation since may'23 the additional equity funding required is ~+$200M (if the EFA and commercial banks actually commit to the $160M non-NAIF debt finance?). That would seem crazy brave without Wyloo's con-note $220M due in 18 months time, even more crazy until that situation is sorted.

The market is valuing HAS cheaply because the variables they need to change in their favour have gone the other way and don't look like turning around any time soon. HAS still has 18 months until Wyloo decide what they will do with this loan of theirs, and in the mean time the RE prices might rocket or someone with a positive view on RE and the option value of Yangi may lob in a get out of jail bid? In short, there is option value and outcomes that will make investors money at these prices, but there is also a chance that with dilution and failure to get developed that share just keep getting cheaper and cheaper. Like a speccy gamble on an explorer that can go either way with exploration success of failure.... everyone makes their own mind up on the chance of success or failure and whether the share price reflects good or bad risk-return at those .