Ann: Notification regarding unquoted securities - HVY, page-7

@Sandsman you are absolutely correct for the post above, I did not factor in dilution nor royalties- mainly because the numbers are so overwhelmingly bullish for the point i wanted to make -next chart stop area about 60c) That they don't matter so much.-

However, to be fair, let's reforecast more conservatively based on and including your two points above.- (royalties and dilution)

I shall forecast based on what the expected PFS should say (which is based on an improved SS by around 30% due to the PG resource being enlarged 30% since the SS was completed. -Fair enough?

According to expected improved PFS let's say the NPV goes up to A$300 million and expected post-tax profitability at A$42 mill per year starting in 2027?-with a 20year min life and capex of A$110 million to go into production.. I think that's fair and reasonable based on what we know pre-PFS .

1. ROYALTIES _ Management has said they do not intend to give away more than 3% of production for royalties - but to be conservative let's call that 10% - on 40 mill that's A$4 mill - leaving A$36 mill left of post tax profit per year.

to pay out 4 mill at 20% annual return -presumes they will take in A$20 mill in royalty funding (3 of which is already in)- so A$17 mill more.

The capex required as per SS is A$110 mill that A$72 million for the plant and A$38 for other stuff.

According to the MOU letter by Altradius, they can fund the A$ 72 million for the plant purchase. (but let's say they only fund 80%? to be conservative) That's A$58 million.

so that leaves A$50 mill to obtain. - 17 mill is via royalties as above - leaving A$33 million to find.

Let's imagine they get A$3 million only in local grants for infrastructure development - they need A$30 million.

Let's imagine they get zero in Bank financing (and that's being conservative)

and lets imagine they can get A$5 mill in upfront payments for early offtake agreements (personally, i think due to the extreme nshortage of alliuvial garnet and Indian suppy now out the game and GMA mine depleting badly (and GMA acting like slave masters over their buyers- they should get more ) but lets be conservative and say they just get A$5 mill.?)

2. DILUTION by CR: So now they still need A$25 mill to get into production. By this stage in the project's development, realistically, the HVY market cap should be at least 25% of its expected final NPV, right? That's reasonable to cheap, . So 25% of 300 million = A$75 million divided by 68 million shares -= 1.10 per share.

So HVY would need to do a discounted CR and do it at a 10% discount to market and issue 25 million new shares at 1$? Is that fair?

now they have 68 million shares +25 million shares = 93 million shares - to be conservative, let's add in A$8 million more for working capital and call it 100 million shares out and are fully funded now to go into production for the next 20+years to make a post-tax profit of 38 million per year

HVY should conservatively go to at least a 6x pe of that profit figure (just off PG mine now) so it should reach around 38mill x 6 A$228 mill.

(just to double check RDG next door went to an A$210 million market cap just before they went into production -and subsequently screwed up cos they underfunded and unbder researched their plant- HVY next door value thir GMA mine on the books at USD 500 million 2 years ago when it was depleted- so a marklet cap of A$200 million is quite reasonable to cheap given its peerr valuations at this stage.- and this also 100% discounts HVY's new RED HILL respources discovery that has the potential to be bigger than PG resource, it also discounts 100% any "new deal" they may announce.

so there we have it - reasonably conservatively taking into account Royalties plus dilutions to get into operation, HVY should end up with around 100 million shares out and a market cap of A$ 200 million - which equals 2$ per share.


my own personal target is A$ 2$ per share...... if nothing more good happens to HVY - that's still a 7X from here at 32.5 cents.

But the point of my post above was to say the chart indicates a next move up to around 59-60 cents for its next consolidation level. - and that still seems pretty reasonable or even cheap under this fully diluted full royalty scenario doesn't it?

thats why I didn't go into all this in the above post. I study this company a lot as I am now one of the major shareholders. Im trying to end up with 3.5 mill shares at just under 20cents average- for A$700k k invested - then on the way up at over 75c to 1.50 I intend to slowly drop around 1 mill shares to try to get my capital back and a small profit- and sit with 2.5 million shares and hopefully collect fat dividends (which could be as much as 20 cents per share per year as per my current calcs.)

That said, knowing Adam Schofield a bit from having had a few chats with him, I get the feeling he likely won't just stop with PG mine only and IMO should continue to lead this company on to bigger and better things. So hopefully my potential 4$ per share forecast in the post above can also come to fruition someday.