Ann: Kalkaroo Project PFS Update, page-19

Our problem, Wanbao looks at the HAV market capitalisation of $52 million and thinks HAV is desperate and therefore should be paying a 'discount' to the 'fair value' of the Kalkaroo deposit.

If I had a seat at the negotiating table, my response would be:

1. If HAV was an unlisted public company, it would not have a market capitalisation. As such, no comparison would, could or should be made;

2. If HAV's market capitalisation was $2 billion, would Wanbao be paying a 'premium' for the Kalkaroo deposit because of that. Of course not; and

3. HAV is not selling the Company, it is selling the Kalkaroo deposit. It is a stand-alone asset. So the market capitalisation of HAV is irrelevant for the purposes of the negotiations.

The NPV calculated from the PFS should be the theoretical ‘fair value’ of the Kalkaroo deposit. This should have been the starting point for the negotiation.

Wanbao maybe arguing it has a higher discount rate than the PFS and/or HAV (for whatever reason), which for Wanbao brings down the ‘fair value’ that it is willing to pay for the Kalkaroo deposit.

Havilah on Friday told us that the PFS did not take into account all the upside, so it believes the ‘fair value’ should be higher. But must now prove it to Wanbao.

HAV fanboy: still drinking the Kool-Aid.

Cheers

These are only my random thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.