Corp Presentation February I think your comments are on the ball...

Corp Presentation February

I think your comments are on the ball @pe981. My first impression upon reading the presentation was that this is further confirmation that RHK is for sale. Failing an acceptable sale leaves the company no choice but to proceed ASAP to production for both survival and long term sustainability. It would be disappointing if further capital is required to complete the PFS and I also think it disappointing that some shareholders decided to not contribute to the last CR. By not doing so, those shareholders not only helped both TIO and OCJ increase their percentage ownership but may have put the company in a position that they need to raise further funds before the PFS is released (and just watch them whine about it). I find it ironic that some of those that make the most noise about TIO progressively increasing their ownership at a low acquisition price in RHK are the least likely to support any capital raising.

There are many positives in the presentation moving forward. I do, however, have some concerns.

1 - The PFS was due end of March and has moved to April. You can bet that will be last week of April.

2 - The wording of the DFS and FID is concerning as that now says that the FID is targeted Q1 2025! That is not good enough when current IO prices should have the company moving heaven and earth to start production early 2025. The company had said the DFS was due July/ August 2024. Surely FID should closely follow the release of the DFS.

3 - The company says that it is targeting production in 2025. What worries me is that RHK already seems to have already got in the habit of delivering key activities at the latest possible time (Scoping Study) or not meeting earlier set deadlines (PFS). So targeting production in 2025 could simply mean targeting last day of 2025! That is not good enough! Red Hawk needs to be producing from mid year (1st day of June 2025 at the latest) IMO. No excuses! It has been a long 15 years shareholders have waited without a single ton of product being mined and sold.

On the positive side I noted the all in cost of US$65.85 (A$96.83). If current IO prices are sustained that means the CAPEX can be quickly repaid and RHK can ride out any low IO price cycles down to about US$70/t. Current IO pricing leaves an exceptional margin. Although not mentioned in the presentation there may also be an opportunity to haul to Cape Preston East (or West) Port after a few years hauling to Port Hedland. That would be the icing on the cake.

Other positives include the size and quality of RHK’s resources making us the largest Pilbara IO opportunity owned JV a junior. If not taken out by a major RHK could well underpin the development of the proposed Leichhardt multiuser port at Cape Preston East. Also (not mentioned in the presentation), there is a possibility of a pre sold Offtake Agreement to raise some (or all) the capital required to get RHK to production.

The Scoping Study already indicates a sustainable and profitable project for 20+ years with other deposits yet to be included in the resource. Anvil tenements are not even on the horizon at all at this point in time.

Finally I must say that the old regime didn’t produce any positive and informative presentations for years so we must be thankful that RHK is finally engaging with shareholders and the market.

I would also suggest that any CR will be much more likely to be supported if RHK can demonstrate that production is planned for early 2025 rather than late 2025. Let’s hope that the company doesn’t miss another IO boom cycle.