• Red Hawk Mining Limited has issued a supplementary targets statement regarding the off-market takeover offer by FMG Pilbara Pty Ltd, a subsidiary of Fortescue Ltd.
• The supplementary statement is dated 5 February 2025 and supplements the original targets statement dated 28 January 2025.
• FMG now holds a relevant interest of approximately 78% in Red Hawk as of the date of the supplementary statement.
• The offer remains conditional and is scheduled to close on 3 March 2025, unless extended or withdrawn.
• FMG intends to waive the bid condition by 17 February 2025, as they hold over 50.1% of Red Hawk shares.
• The offer price has been increased to $1.20 cash per Red Hawk share.
• The increased offer price represents a 46% premium to the trading price of Red Hawk shares on 24 January 2025.
• The increased offer price represents a 54% premium to the 3-month VWAP and a 53% premium to the 6-month VWAP of Red Hawk shares up to 24 January 2025.
• Red Hawk's directors continue to recommend shareholders accept the offer in the absence of a superior proposal and subject to the independent expert continuing to conclude that the offer is fair and reasonable, or not fair but reasonable.
• Red Hawk's cash balance as of 31 December 2024 was $1.3 million, raising concerns about potential equity raises if the offer lapses.
• The directors consider it unlikely that any superior proposal will emerge.
• FMG intends to have Red Hawk delisted from the ASX if it acquires a sufficient interest.
• FMG intends to compulsorily acquire remaining shares if it reaches 90% ownership.
• Each Red Hawk director who owns or controls Red Hawk Shares intends to accept the Offer in respect to the Red Hawk Shares they own or control.

Score: 7

Explanation: The sentiment is cautiously positive. The increased offer price and board recommendation are positive signals, but the risks associated with the Blacksmith Project and potential equity raise temper the overall outlook.

• Red Hawk Mining Limited has issued a supplementary targets statement regarding FMG's takeover offer.
• FMG's relevant interest in Red Hawk is approximately 78% as of 5 February 2025.
• The takeover offer price has been increased to $1.20 cash per Red Hawk share.
• Directors recommend shareholders accept the offer, subject to the independent expert's assessment and the absence of a superior proposal.
• Red Hawk's cash balance was $1.3 million as of 31 December 2024, potentially necessitating an equity raise if the offer lapses.
• FMG intends to delist Red Hawk from the ASX and compulsorily acquire remaining shares if it reaches 90% ownership.
• The increased offer price represents a 46% premium to the trading price of Red Hawk Shares on the ASX at the close of trading on 24 January 2025.
• The increased offer price represents a 54% premium to the 3-month VWAP of Red Hawk Shares up to and including 24 January 2025.
• The increased offer price represents a 53% premium to the 6-month VWAP of Red Hawk Shares up to and including 24 January 2025.

• The offer provides certain and immediate cash consideration.
• The offer represents a significant and attractive premium to historical trading prices prior to the Last Practicable Date.
• The Independent Expert has concluded that the Offer is fair and reasonable.
• The directors consider it unlikely that any superior proposal will emerge.
• Shareholders who have already accepted the offer will receive the increased offer price.

• There are ongoing risks associated with the Blacksmith Project.
• Red Hawk's cash balance as of 31 December 2024 was $1.3 million, raising concerns about potential equity raises if the offer lapses.
• Red Hawk Shareholders risk becoming minority shareholders in an entity controlled by FMG.
• The number of Red Hawk Shares to be traded on ASX may be reduced.
• The ASX market price for Red Hawk Shares may no longer be a reliable indicator of value or be at a lower price should Red Hawk Shareholders wish to sell them in the future.
• If Red Hawk is delisted, Red Hawk Shares will not be able to be traded on ASX.
• If FMG subsequently exercises compulsory acquisition rights, you are likely to be paid later than other Red Hawk Shareholders who accept the Offer.

• Ongoing risks associated with the Blacksmith Project could negatively impact Red Hawk Shares if the offer lapses.
• The potential need for an equity raise if the offer lapses could dilute existing shareholders.
• Remaining a minority shareholder in a company controlled by FMG carries risks, including reduced share trading liquidity and potential delisting from the ASX.
• If FMG reaches 90% ownership, it intends to compulsorily acquire remaining shares, potentially delaying payment for shareholders who do not accept the offer.

The document indicates that the directors do not expect a superior proposal to emerge, and FMG intends to proceed with delisting and compulsory acquisition if it meets the required thresholds.

• The Directors continue to unanimously recommend that Red Hawk Shareholders ACCEPT the Offer, now at the Increased Offer Price, in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Offer is fair and reasonable, or not fair but reasonable.
• The Board reiterates the following reasons to ACCEPT the Offer: the Offer provides certain and immediate cash consideration at a significant and attractive premium to historical trading prices prior to the Last Practicable Date; the Independent Expert has concluded that the Offer is fair and reasonable; there are ongoing risks associated with the Blacksmith Project, and if the Offer lapses and no alternative proposal emerges, Red Hawk Shares may trade below the Offer Price; Red Hawks cash balance as at 31 December 2024 was $1.3 million. If Shareholders do not accept the Offer, then there is a strong possibility that Red Hawk will need to conduct an equity raise and Shareholders may be diluted; and by not accepting the Offer, Red Hawk Shareholders risk becoming minority shareholders in an entity controlled by FMG.

This announcement reflects ongoing consolidation in the mining sector, with larger companies like Fortescue seeking to acquire smaller players to expand their resource base and operational capabilities.

• Takeover premiums in the mining sector typically range from 30% to 60%, placing this offer within the expected range.
• Companies like BHP and Rio Tinto have also pursued similar acquisition strategies to secure resources and enhance shareholder value.
• The recommendation from the board to accept the offer is standard practice when the offer is deemed fair and reasonable by an independent expert.

• Shareholders are advised to accept the offer, which provides immediate cash consideration.
• Employees face uncertainty regarding their roles post-acquisition.
• Customers and suppliers may experience changes in their relationships with the company following the takeover.
• Creditors may see changes in the company's financial structure and risk profile.

• Shareholders need to decide whether to accept the offer before the closing date of 3 March 2025.
• FMG is expected to waive the bid condition by 17 February 2025.
• FMG may proceed with delisting Red Hawk from the ASX and compulsory acquisition of remaining shares if it meets the required thresholds.

• 28 January 2025: Date of the Original Targets Statement and the takeover bid made by FMG
• 4 February 2025: Increased Offer Condition deadline at 7.00pm AEDT
• 5 February 2025: Date of this Supplementary Targets Statement
• 17 February 2025: FMG must waive the Bid Condition by this date
• 21 February 2025: Date for Notice of Status of Bid Condition
• 3 March 2025: Close of Offer Period (unless extended) at 7.00pm AEDT