To provide a little more support comments around value:Champion...

To provide a little more support comments around value:

Champion Iron quarterly results to December were production of 3.6Mt, sales of 3.3Mt (so say 3.5Mt to keep the math simple), with an EBITDA of $88.2M. On an annual basis, this would equate to 14Mtpa with an EBITDA of $350M. Champion currently has a market cap of $3.1B

If the above is multiplied by 7 to get to Cyclone's 100 Mtpa scenario, then on the same basis, Cyclone could generate 98Mtpa (14 Mtpa x 7) and EBITDA of $2.45B ($350M x 7) per annum. If in production (and I do acknowledge that's a big if), 100% of the Iron Bear project could have a market cap of $21.7B ($3.1B x 7).

I also note that Champion Iron is producing 66.3% Fe. Iron Bear is anticipating production at higher grade and also has plans to produce pallets (ASX announcement on 10 October 2024 refers to DR concentrate at 71% Fe with 1.1% silica and pellets at 67.5% Fe with low impurities) and therefore could achieve a higher premium on sales and greater profit.

Therefore, I do not think that an estimate of an NPV at $20B for Iron Bear is unreasonable.

Based on the Vale agreement, Cyclone's 25% share of that could NPV be $5bn, but there would be a discount to that at the Decision to Mine stage and I am suggesting that discount could be 50%, bring Cyclone's share back to $2.5B. I am then further discounting that by ANOTHER 80% to 90% for the time it will take to get there and the risk that we may not get there. That brings my estimate of value back to $250M to $500M for the current market cap of Cyclone.

I acknowledge that there are lots of assumption in there as we do not have as much information as we might like. But I think the comparisons to other companies are reasonable and the best information that we currently have.

Another comparison of value could be to other junior resource companies, which can often have a market cap in the $20M to $100M mark, despite having limited cash to further develop the resource and no clear plan or pathway on how to get into production. For those holding other junior resource shares, feel free to check their market cap's.

Now compare that to the current market cap of Cyclone at $70M. Then consider that Cyclone has:

• a large resource and potential to expand if needed;
• there is access to nearby rail, port and hydro power (three things that can be lacking in other exploration companies and a big hurdle to getting into production);
• it has completed customer trials and will be producing high purity iron that is required for the developing green steel industry - therefore good long term demand and potential extra premium if there is a shortfall of suitable ore for making green steel;
• it has attracted a JV partner that will potential spend up to US$138 million to get to a decision to mine
• the quality of the JV partner - you could not ask for a better JV partner to develop a high grade magnetite iron ore mine than Vale as they provide both funding and expertise
• there is a clear pathway to either production or buy out should Vale prefer to buy out Cyclone's interest at decision to mine stage.

Now go an compare all of that to the hurdles and uncertainty of your other junior resource shares, their challenges to develop their resource, the potential dilution from further capital raises, the time it might take to get to their next stage, their access to rail, port and power, the level of sovereign risk of the jurisdiction that they are in, and what plans they currently have to get to a decision to mine.

My point being given the potential future economics of the Iron Bear project combined with the current JV partner and plan to production (or buy out at decision to mine) means that I think the current market cap should be multiples of the current market cap of $70M.

So whether I look at CLE from a comparison of companies in production or other junior resource companies, the market cap seems very undervalued.