Ann: Clarification to Update provided on August 23., page-8

This is my understanding of where we are at as of now. Some quotes from previous releases to help gain clarity.

“We are initially focusing on mining the high grade pods which allow Magnum to start generating cash flow quickly and accelerate the development, size and scale of the mine to take advantage of the record iron ore prices."
- DSO is off the table at current pricing. I'm not sure what the dynamics are here as I would have thought that the current pricings are very attractive even if it has fallen we are still at historically high prices but maybe not "record prices".

"The purpose of the offtake arrangement would see Anglo American purchase a minimum of 560,000 tonnes and up to an estimated 800,000 tonnes of the direct shipping ore (“DSO”) - 62% and/or 65% fines produced from Buena Vista (“Production Phase 1”) and secure the right of first refusal for the purchase of 100% of the production of iron ore concentrate, hot briquetted iron (HBI) and pig iron from the project (“Production Phase 2”)."
- I'm to deduce from this latest announcement that Anglo still want the iron ore concentrate which is what Phase 2 was always about. They obviously wanted the concentrate & to get 100% first refusal they were prepared to take DSO & funding. Where this is going we won't know until further update's.

"In addition, the agreement would provide Anglo with an option to assist in the financing for the development of Production Phase 2 at Buena Vista."
- Are Anglo still going to be keen to fund the infrastructure to get their first refusal on iron ore concentrate? I feel this is the question that we are all hinging on.

"Anglo American understands the Phase 2 focus, with the Mandate Letter and Term Sheet signed applicable to both phases. As announced on August 23, the DSO is unlikely proceed as planned due to the iron price, and will be on an opportunistic basis depending on the international market price. The work undertaken for DSO phase 1 is not lost and relevant for phase 2. Anglo American are very much committed to the Green Iron production strategy.In addition, the agreement would provide Anglo with an option to assist in the financing for the development of Production Phase 2 at Buena Vista."
- I think the wording here is that we are ontrack for Phase 2 with Anglo funding/involvment which was scheduled to complete Q3 2022. Just hope I'm not being purposefully mislead by this statement. (It happens) Just the word 'option' is a bit non-commital.

In short still hinging on Anglo deal. If it goes through with funding & prepayment for the first right to refuse the iron ore concentrate then we are still on track to get Phase 2 completed & then proceed to the green steel project. So no big deal if your investment time line is 12 months + & your investment thesis is the green steel low carbon footprint that this company is heading towards & the world is looking for more & more.

If the Anglo deal goes south then we are in for I would think at best a few CR & share dilution to get Phase 2 off the ground. Remember two of the BOD are in this too as they bought $500,000 of shares between the two of them at last CR @ 0.15. They are going to want to make this work. t worst we are heading for a shelved project. Would be dissappointing as surely they werent banking the longterm project on 'record prices' only that these prices would prevent CR & dilution in the interest of short term share holder value - "We expect this fast-track Direct Shipping Ore (“DSO”) strategy to bring value to our shareholders, limit shareholder dilution and also help fund the expansion of the mine and growth plans for future HBI Green Steel product."

Not sure this announcement is going to help the SP much but IF in the next 12 months this project is well ontrack still then 5-6c a share now would be a good profit. Also is steel demand going to increase as we come out of this covid lock down over the same 12 months?

Interested on others opinion as Im a bit on the fence. I still havent overcommitted to this company as yet & I'm not sure how this will play out but as my investment timeline is 1-3years......?

DYOR