HAV Iron Ore Deposits

As "The Transaction" is largely about HAV’s iron deposits having decided that it was time to relook at the possible value of these deposits. In an effort to ensure validity and having co-opted the services of a mining engineer and an iron ore metallurgist. All data is from ASX announcements, and have attempted to make any necessary assumptions conservative.
HAV’s expenditure on drilling and assaying of the Maldorky and Grants deposits, combined with metallurgical work on Maldorky was >$3 million (C Giles, pers comm 2018). Further, HAV has since obtained a Mining Lease for Maldorky conditional on gaining a Native Title Agreement. SIMEC liked the location of HAV’s deposits (near rail line and near surface), the in-ground grade, and in particular the product grade and recovery. For more than a year SIMEC has been undertaking due diligence on Maldorky and Grants concentrating on metallurgical techniques and ensuring representative samples via additional drilling. It is possible that SIMEC may have already spent around $2 million on this work. Would SIMEC do this work and propose a transaction to the value of $100 million without considering that HAV’s iron deposits have far greater value?
Amazingly, the BDO evaluation of the iron deposits attributed little value to them. In fact, Maldorky was valued at $2 million, Grants at $0.4 million (and Grants Basin so low that no figure was specified). This is despite the Maldorky deposit being at an advanced stage with a Mining Lease granted.
Looking at the facts for these deposits. Maldorky has 147 Mt at 30.1% Fe. Independent metallurgical work by both HAV and SIMEC has resulted in a 65% iron product; SIMEC obtaining 40% recovery and HAV marginally less. Theoretically, 58.8 Mt of saleable product at 65% Iron (Fe) could be produced. Grants contains 304 Mt at 24% Fe. The lower grade will result in a lower recovery. Assuming a conservative 30% recovery 91.2 Mt of saleable product could conceivably be produced. Therefore, these deposits could possibly produce 150 Mt of saleable product. Using the current 62% Fe price of >US$80/tonne (>A$115), rather than the significantly higher price obtained for 65% Fe, still places a substantial value on the potential product. However, there are a multitude of costs in mining, beneficiating and transporting the product to port. A possible value can be gained by considering a simpler perspective. If one assumes that HAV could profit by just $1 per tonne, then the value of these existing deposits could be A$150 million to HAV.
However, this is ignoring the “mother” of Grants, namely Grants Basin. Grants Basin is huge and drilling has shown this deposit to be continuous and consistent. Assuming that this deposit is indeed continuous and consistent our calculations suggest that around 3,000 Mt have already been indicated. Assay data indicate a grade of around 24% Fe (the same as for Grants - after all, it is the “mother”. With an assumed recovery of 30%, 900 Mt of saleable product may be produced. Again, if HAV were to make just $1 per tonne, HAV could potentially gain A$900 million!
It is easy to understand the potential that SIMEC / GFG see in HAV’s iron deposits. But, where is the value or potential for existing HAV shareholders in the proposed Transaction?