Hawthorn Resources' Decision to Convert to Royalty

Hawthorn Resources Limited (ASX:HAW) has chosen to exercise its right to convert its participating interest of 19.6% to a royalty in the Mt Bevan Magnetite Project, a joint venture with Legacy Iron Ore Limited (ASX:LCY) and Hancock Magnetite Holdings Pty Ltd. This decision will dilute Hawthorn's equity position to zero, entitling it to a 1.0% royalty of the net Free-On-Board (FOB) revenue once production and sales commence. By opting for the royalty, Hawthorn avoids the need to contribute to the upcoming Forward Works Program and raise additional equity funding in the future.

Managing Director and CEO's Perspective

Managing Director and CEO, Brian Thornton, stated, 'Mt Bevan is a serious next generation iron ore project slated as a key ingredient for Green Steel production in Australia. But with an estimated capex approaching $5B, its not without its challenges including capital intensity and the environmental and social licence approvals required at State and Federal levels. For smaller, lower capitalized companies like Hawthorn, the conversion to a valuable 1% royalty is a logical and sensible decision taken in the best interests of all its shareholders.' The Board also believes that this decision will be in the overall best interests of Hawthorn shareholders in both the short and long term.

Summary of Hawthorn Resources' Decision

Hawthorn Resources (ASX:HAW) has opted to convert its participating interest in the Mt Bevan Magnetite Project to a 1% royalty, avoiding the need for substantial financial contributions and future equity funding. The decision reflects the company's strategic approach to navigate the challenges associated with the project's capital intensity and regulatory approvals. Managing Director and CEO, Brian Thornton, emphasized the significance of the Mt Bevan project in the context of Green Steel production in Australia. The Board anticipates that this transition to a royalty will serve the best interests of Hawthorn shareholders in both the short and long term, aligning with the company's commitment to prudent decision-making and shareholder value.