Ann: September 2024 Quarterly Presentation, page-7

A great question and one I asked chatty:

Based on Hastings Technology Metals' latest quarterly report, here’s an updated view on the potential for them to consider Dreadnought Resources’ niobium asset:

Strategic Alignment with Niobium

Hastings recently announced a maiden niobium resource at their Yangibana Project (6.7 Mt at 2,305 ppm for 15,501t Nb₂O₅) and is actively working on a niobium recovery circuit. Given their established infrastructure and focus on rare earths, the inclusion of a high-quality niobium asset could appeal to them as a means to enhance revenue streams, especially given the current high prices of niobium.

Debt and Financial Leverage

Hastings has a debt-to-equity ratio of 57% and remains close to a break-even point, so revenue from a niobium asset could offer significant value. They have recently secured additional funding through loan notes, indicating a willingness to take on further investments if it aligns with their strategic goals. The integration of a high-grade niobium source could accelerate debt clearance, especially given their 5-year loan note facility structured for phased project funding.

Operational Readiness, Proximity, and Compatibility

• Proximity Advantage: Dreadnought’s niobium resource is located near Hastings’ planned Yangibana mine, presenting an opportunity for operational efficiency. This geographic closeness could reduce transportation costs and support shared or coordinated infrastructure, making the addition of Dreadnought’s niobium both cost-effective and logistically streamlined.
• Existing Infrastructure: Hastings has long-lead equipment arriving for the Yangibana beneficiation plant, which will process rare earths and may be adaptable for niobium extraction, reducing the need for extensive new infrastructure if they were to bring in additional niobium sources.
• Metallurgical Expertise: Their ongoing metallurgical test work focuses on integrating a niobium circuit, which could facilitate the processing of Dreadnought’s niobium with minimal additional operational changes.

Potential Synergy and Next Steps

• Economies of Scale: Hastings could achieve scale benefits by processing niobium from both its Yangibana project and Dreadnought’s potential supplies, especially with both assets located nearby in Western Australia.
• Partnership Potential: A JV or offtake arrangement could be beneficial, allowing Hastings to expand their niobium output without bearing the full exploration and operational risks. This collaboration could potentially give Dreadnought the cash flow for further exploration while enhancing Hastings' debt management.

The timing, strategic fit, and proximity of Dreadnought’s niobium assets could make a strong business case for Hastings, especially if an arrangement provides cash flow advantages without disrupting their primary focus on rare earths.