Hawsons Iron : HIO BFS Expansion

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BFS to assess increased Hawsons Iron Project capacity from 10 Mtpa to 20 Mtpa

Hawsons Iron Ltd (HIO) advises that it has extended the scope of the Hawsons Iron Project's Bankable Feasibility Study (BFS) to incorporate assessment of a 20 million tonne per annum (Mtpa) option that potentially offers significantly lower operating costs, improved Environment, Social and Governance (ESG) outcomes, and increased project value.

Key points

• As a result of the Mineral Resource upgrade to 400 Mt (Oct 2021):

1. BFS scope extended to investigate larger project from 10 Mtpa to 20 Mtpa o A deep-dive analysis to include the 20 Mtpa project
   o Project economics expected to be significantly improved
   o BFS budget raised by $12.4 million as a result of additional works
   o Additional funding available through LDA Capital $200 million equity facility, if required

PFS (2017) based on	BFS Scope extended to assess
10 Mtpa iron ore project	20 Mtpa iron ore project
(Transport Option 1)	(Transport Option 2)
Slurry pipeline to Broken Hill	Underground slurry pipeline direct to port
Rail from Broken Hill to Port Pirie	No rail
Barge trans-shipment of ore from Port Pirie	Shipment of ore from port alternative/s
	in the Eastern Spencer Gulf

• Preliminary assessment of Transport Option 2 reveals:

1. Potentially significant transport operating cost savings offsetting higher capital cost o Doubling production offers significant improvement in project value
   o Potential ESG benefits associated with pipeline and port alternatives
   o Additional studies incorporated into existing delivery schedule timeline

The HIO Board has approved expansion of the BFS scope to include assessment of a 20 Mtpa option, based on preliminary work that indicates improved economies of scale for the Hawsons Iron Ore Project. The additional work planned increases the BFS budget by $12.4 million.

This will enable an assessment of both the 10 Mtpa rail and the 20 Mtpa slurry pipeline options to be completed through the BFS.

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Executive Chairman, Bryan Granzien said the BFS additional cost included an estimated $5 million for the pipeline and port component and $7.4 million for an associated Environmental Impact Study, process engineering and regulatory approvals.

"This is a compelling opportunity to maximise the value of the Hawsons Iron Project," Mr Granzien said. "It has been enabled by the Mineral Resource upgrade announced on 19 October 2021, which increased Indicated and Inferred Resources by nine and 18 per cent respectively, compared to the 2017 Preliminary Feasibility Study (PFS)."

"We have custodianship of this world-class asset and we owe it to our shareholders and all other stakeholders to investigate a 20 Mtpa operation to unlock the full potential of this world-class and large-scale iron ore resource."

Mr Granzien said independent consultant, KPS Innovation confirmed that the outer boundary of the total resource had yet to be fully defined, even though the economic pit-shell is now significantly larger than that used in the PFS. (Refer ASX announcement dated 19 October 2021: Hawsons Iron Mineral Resource upgrade.)

"Preliminary work has identified a direct-to-port slurry pipeline as a 20 Mtpa transport option," he said. "Whilst the expanded scope will assess the economic viability of this option, we expect the transport cost savings may be significant and we also expect a reduced-carbon logistics footprint and other ESG benefits.

"As you would expect, a 20 Mtpa option would increase the total capital cost for developing the Project. However, the potential benefits are so compelling, the option warrants thorough evaluation. Both the 10 Mtpa and 20 Mtpa options and ways to mitigate risk are being assessed," he said.

Mr Granzien said the PFS had capped production at 10 Mtpa due to the carrying capacity of the existing rail export route.

"The scale, quality and homogeneity of the Hawsons' orebody and the demand for high- quality magnetite due to the shift to green steel enables us to consider transport options to remove that capacity constraint," he said.

"A direct-to-port slurry pipeline offers Hawsons a higher level of autonomy and potentially opens up the Braemar minerals province for further development.

"The assessment process will look at port options in Eastern Spencer Gulf. Modelling and reevaluating PFS assumptions, will enable us to select the optimum scale and transport option to take Hawsons Supergrade® product to market.

"Importantly, if required, the equity financing Put Option Agreement with LDA Capital Limited announced on 22 December 2021 can cover the cost of extending the BFS scope."

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Mr Granzien said the Company was leaving no stone unturned to select optimal solutions for power, water, transport, processing and tailings management.

"This is crucial because of the emerging business environment that encompasses new technologies, ESG considerations and decarbonisation strategies," Mr Granzien said.

Key Activities for the March Quarter 2022

Priority BFS works this current Quarter include:

• Site resource investigations, including completion of resource, geotechnical and hydrogeological drilling works and post-drilling rehabilitation following mobilisation of additional rigs on double shifts and a re-prioritisation of the drilling program. Drilling teams continue to perform exceptionally well to overcome rain and COVID interruptions
• Analysis of drilling results to provide improved confidence of Indicated, Inferred and Measured resources to progress mine design
• Appointment of consultants for mine design, process plant, facilities, services, slurry pipeline and port transport options
• Reassessing against current market conditions all aspects of power, water, transport, process, and tailings management
• Progressing Environmental Impact Studies and engagement with New South Wales and South Australian Governments
• Preliminary discussions with potential project financiers, including financial institutions, steel mills and commodity trading houses prior to completion of the BFS

Released by authority of the Board

Hawsons Iron Limited

21 February 2022

For further information:
Media contact:	Investor Relations contact:
Kerry Bailey, Corporate Communications Lead	Mr Greg Khan, CFO/Company Secretary
E:[e-mail]	E:[e-mail]
P: [phone]	P: [phone]

About Hawsons Iron Limited

Hawsons Iron Limited (ASX: HIO) is an iron ore developer and producer listed on the Australian Stock Exchange. The company is focused on developing its flagship Hawsons Iron Project near Broken Hill into a premium provider of high-quality iron ore products for the global steel industry.

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The Hawsons Iron Project is situated 60km southwest of Broken Hill, New South Wales, Australia in the emerging Braemar Iron Province. Prefeasibility Study (PFS) results for its Hawsons Iron Project completed in 2017 showed it capable of producing the world's highest-grade iron product (70% Fe), making it the world's leading undeveloped high-quality iron ore concentrate and pellet feed project. Leading research firm Wood Mackenzie in Q2 FY 2019 rated the project one of the world's best high-grade iron ore development projects excluding replacement or expansion projects owned by the established miners.

For more information go to https://hawsons.com.au.

Follow Hawsons on Twitter:https://www.twitter.com/HawsonsIron

Follow Hawsons on LinkedIn:https://www.linkedin.com/company/hawsonsiron/

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Company update

Hawsons Iron Project

Bankable Feasibility Study (BFS)

Monday, 21 February 2022

hawsons.com.au