Ann: Response to ASX Aware Query, page-8

From the reply to the ASX aware letter.

Quotes

“Consistent with the Prospectus disclosures and the Response Email, the Company does not consider the Hamersley Iron Ore Project (Project) to be material at the date of Settlement and this response letter (Letter).

This is primarily because of the mining information presently available in relation to the Project.


The board of directors of the Company (Board) believe that further work in respect of the geology and economics of the Project would need to be undertaken to meaningfully demonstrate value.


Bulk commodity projects and, in particular, iron ore projects require full mine to port and customer logistics solutions at a cost point that enables the commodity to be saleable.

At present, the Project cannot demonstrate this.


Whilst the Project is located within range of rail infrastructure owned by third parties (which would require access agreements),

the Project is in a challenging geographical location.


As at Settlement and the date of this Letter, the Company does not have an economic and technically feasible logistics solution (as demonstrated though independent expert studies and supported by a quality JORC compliant resource statement).


The Company’s recently announced 7-hole drill program has been devised to:

(a) meet minimum expenditure requirements so as to ensure the tenement is held in good standing;


For the reasons set out above, the increase in iron ore prices may in the future result in the Project being material to the Company, but this would only be known if the Company were to undertake a significant exploration program (beyond the 7 hole drilling program which has been disclosed to the market).



It is noted that this position is consistent with that of previous boards of the Company which have, for the past 3 years, unsuccessfully sought to acquire other mining projects believing the Project to be of limited value.



In addition, the Project has been written down to nil value in the Company’s accounts.



On the basis that the Project itself is not deemed material, the Board likewise believe that the Settlement is not material.



If, and until, the Board considers the Project to be of sufficient intrinsic value (based on the completion of geological and economic works, coupled with favourable iron ore prices), the Board will not consider the Project material.” End quotes.