Mr Gupta's Fe needs can be met by HAV, page-5

Clarke,

In thinking more about your comments on CAP, I disagree on a few points but also have a few positives to include for HAV.

Whilst letters of intent have been signed for CAP's production, that is not binding. I'm sure if someone else was willing to put up some funds CAP would be willing to sign something binding and then let those that have shown their interest go binding as well or miss out. Therefore, I think Gupta could still buy into CAP if he wished to diversify his supply options which is good management.

With respect to negotiating with two parties, I don't think this is necessary. CAP is earning a greater percentage by progressing the project with further expenditure. Therefore, investment would be by way of share issue in CAP which then progresses the project and earns a higher percentage (it used to be 60/40 from memory).

I don't know enough about government support to know what difference this makes. CAP was awarded Major Project Status by Australian Government "reflecting the project’s strategic significance to Australia and regional communities in New South Wales and South Australia" (source CAP ASX announcement). Agree better leverage on SA government if wholly in SA - not sure what the Federal government adds.

Whilst you say if Grant's is an elephant and if it gets into production nothing else in Breamar would get into production is like saying to Twiggy and Rinehart that there are enough iron ore mines in Pilbara/WA. Each project will get up or not on its own merits. And I think once one Braemar project gets into production and breaks perceptions (low grade magnetite in Braemar can be profitable) others will follow.

However, I also acknowledge your other points and would like to highlight these potential benefits for HAV's Grant's soap dish and basin.

CAP's Hawsons project has a large amount of overburden. HAV's Grants' soap dish has basically none. Not sure about the basin.

CAP is lower grade and therefore more ore to dig to get same product (which you clearly and correctly highlight). Also CAP is also further from rail etc.

However, despite these negatives compared to HAV's Grants, CAP's Hawson's project PFS shows a 62% equivalent CFR cost to China of US$23.03 (after taking into account premium for 69% content), IRR of 29% and NPV of US$1,091.

My point being this, that despite the negatives highlighted by Clarke (and difference in overburden) CAP project is very profitable. This highlights the potential significance of Grant's - especially if the basin has similar characteristics to the soap dish (low overburden and similar grades).

I think we both agree that while iron ore is not as sexy as copper and cobalt at the moment, it can still be a very profitable exercise especially with China wanting more high grade and low impurity iron ore which HAV can deliver through Grants. HAV's iron ore has largely been ignored by many, but has always been on my radar and good to see its potential starting to shine.