lcy, nmdc and haw

Hi all this is a snit bit of the latest HAW news letter making reference to MT Bevan.



MT BEVAN IRON ORE PROJECT – DSO HAEMATITE & MAGNETITE
> This project was discovered within an existing HAW gold project. It consists of discrete zones of
Direct Shipping Ore (“DSO”) haematite and much larger, consistent zones of magnetite BIF iron ore.
> The project continues to deliver shareholder value with our joint venture partner Legacy Iron Ore
Limited (“Legacy”) (ASX: LCY) aggressively drilling and announcing a substantial initial resource.
> This JORC compliant Inferred Resource of 617Mt at 32.1% Fe from the initial stages of drilling, with
excellent recoveries and a 69.8% Fe concentrate produced.
> An independent report commissioned by Legacy and released to the ASX, valued the total project
at $174.2m following this JORC compliant resource announcement.
> The second stage of drilling is currently underway and is expected to increase the resource
substantially – drilling is to be completed by early November 2011. A recalculated Resource is
expected in January 2012.
> Under the terms of the October 2010 Farm-In and Joint Venture Agreement, we expect Legacy will
earn a 60% interest in the project by mid-2012, however:
• HAW retains the important and valuable rights to market or enter into offtake agreements
for 40% of all production from Mt Bevan; and
• through the formation of the Joint Venture Technical Steering Committee, with 2 members
nominated by each company, HAW has an equal vote in exploration and development
proposed for the project area.
> Legacy has recently announced a binding Share Subscription Agreement with the Indian stateowned National Mineral Development Corporation Limited (“NMDC”) whereby NMDC has
confirmed its intention to acquire 50% of Legacy for A$18.89m.
> NMDC currently has cash reserves in excess of US$4 billion, and has additional lines of credit
from banking syndicates, including Citibank, which are available for the purchase and financing of
resource projects.
2> According to a recent Legacy ASX release
“…once on board as the largest shareholder of Legacy, NMDC will not only be providing full funding
for the ongoing development of Mount Bevan, but arranging for 100% of the required project
finance as well.”
> NMDC have recently highlighted in an interview with the Indian press on 13 October, 2011:
“State-owned NMDC and Legacy will jointly invest around $1.3 billion to develop Mount Bevan.
Mount Bevan will be its first ever overseas acquisition.
Mount Bevan may need at least $1.3 billion CAPEX investment. Equity part of NMDC and Legacy
will be 30%.
As soon as we complete the acquisition part we will take that up. As it is, they are doing some
exploration there. Once we pump in the money, the work will be stepped up,” NMDC director
(Finance) S. Thiagarajan said.”
> Jupiter Mines Limited (“Jupiter”) (ASX: JMS) has recently commissioned a $44m feasibility
study for its Mt Mason Haematite and Mt Ida Magnetite projects. Both projects are adjacent to
HAW’s Mt Bevan Iron Ore Project.
> Jupiter has announced an intention to commence early stage production of DSO hematite from Mt
Mason, which immediately abuts the southern boundary of HAW’s Mt Bevan tenement.
> A scoping study by Jupiter of the 5.75mt at 59.9% Fe DSO haematite resource at Mt Mason, based
on production of 1.5mtpa of DSO hematite, has been carried out.
> This scoping study indicated a NPV (Net Present Value) for the resource of $109.3m at $110 /
tonne DSO haematite price, and does not include production from HAW’s portion of the shared
orebody.
> Production at Mt Mason is reportedly targeted to commence by early 2013 in line with a planned
Esperance Port upgrade.
> At Mt Ida Jupiter has announced an inferred magnetite resource of 530mt @ 31.9% Fe.
Subsequent scoping studies have indicated an NPV of $ 1.68b over a 20 year mine life.
> Jupiter has said of the two projects:
“..they are a key part of Jupiter’s strategy to become a global supplier.”
• CORPORATE
> Over the past 12 months HAW has been approached by several equity and capital markets parties
with a view to a direct investment in HAW.
> HAW is evaluating the potential of spinning off various projects to realise shareholder value.
> Discussions have taken place with a party on production of DSO hematite. The deposit is located
on the southern boundary with Jupiter’s at our Mt. Bevan project. We eagerly await the result of the
Jupiter’s feasibility study.
> HAW is evaluating the optimum way to fund these very exciting projects. At this stage we are
unable to definitively advise shareholders what combination of debt and or equity will be used.
3In summary several short term important milestones will be achieved:
1. Resource update for the Anglo-Saxon gold project (Nov 2011)
2. Jupiter $44m feasibility study to be completed for its adjoining Iron projects to Mt. Bevan (Q1
and Q4 2012)
3. NMDC of India will become 50% shareholder in Legacy (Nov - Dec 2011)
4. Resource upgrade for Mt. Bevan Iron Ore project (Jan 2012)
5. Commencement of mining at Anglo-Saxon (Q3/Q4 2012)
6. Drilling to take place at HAW key gold projects (Q1 2012)
7. Initial gold resources defined at Yundamindera-Coffey Bore and Deep South (Q2/Q3 2012)
If you have any questions please call Mourice Garbutt, Company Secretary, on 03 9605 5917.