2017 Outlook, page-3

Hi Shady,

The linkage between HOR with RNI really makes sense IF (big if) RNI have a nearby copper discovery. If they just find gold then it gets complicated by the MLX/WGX gold rights but if its predominately copper with gold credits that should be OK.

As Fortnum is off the table as a processing site for RNI copper feed, the options available to RNI are to site the new copper plant near the orebody or truck to a nearby processor. If Cuba comes up then using the Degrussa Plant is the obvious solution but if its over to the West at Forrest then building a new plant at HSL (instead of at Forrest mine) may be a logical strategy because it brings the HSL mineral resources into play. The only reason HOR is not in production already is due to economics.... simply too few tonnes of copper to fund the new plant and opex. So the in-situ value (I hate using that term) of the HSL MR, which is presently over $1B worth of copper is meaningless due to it being sub-economic.

However if the available Min Resources from HSL were suddenly doubled by adding the Forrest deposit MR then the economics of re-opening HSL mine change big time.

RNI drilling a Forrest right now so let's hope they hit copper and heaps of it...but maybe not too much as they'll then look to a new plant at Forrest.

The HSL mining lease has some decent rehab obligations outstanding on it since late 1990's so HOR (and DMP in particular) would be keen to see a restart of operations there. A new set of approvals to restart mining operations will be needed IMO.

MF won't let HOR go into VA...he has put in too much cash already and will fund it via the loan facility he put in place in 2015.

Patience is the key to all this for SHs.